Caracas, September 9, 2023 (venezuelanalysis.com) – A member of Venezuela’s ruling United Socialist Party (PSUV) has urged President Nicolás Maduro to crack down on allegedly corrupt scrap metal dealings.
Gastón Guisandes, a veteran journalist from Zulia state and PSUV activist, penned an open letter to Maduro on Thursday expressing “concern and condemnation” over acts of corruption involving former airforce pilot Bismark Carretero and the Pegasus company in the scrap business.
“As a concerned citizen, I ask myself how these acts of corruption might have taken place without government knowledge or actions,” he wrote. Guisandes pointed to Carretero’s “ostentatious lifestyle” as a sign of ill-acquired wealth.
“I urge you to launch an exhaustive investigation based on the publicly available information,” he went on to state,” while demanding that high-government officials “who have acted with impunity” be exposed.
Guisandes concluded by calling on the executive to “show its commitment to fight corruption and defend the values promoted by (former President) Hugo Chávez.”
Though the letter did not specify any illegitimate dealings, it follows a string of complaints in recent years of irregular sales of state-owned material as scrap, particularly in the industrial areas of eastern Venezuela.
One high-profile case has involved the National Pipe Company (ENATUB), a subsidiary of state oil company PDVSA. The so-called Productive Workers’ Councils at ENATUB have denounced the dismantling of the firm in favor of scrap sales.
In July 2022, the workers reported that one of ENATUB’s pipe-building plants was being disassembled. Months earlier, they called on authorities to investigate the sale of 6,500 API-certified pipes for the oil industry as scrap.
There were likewise complaints about equipment being taken apart to be sold as scrap in major industries such as steelworks company Sidor and aluminum producers Alcasa and Venalum in Bolívar state. State oil company PDVSA has also been a seller.
Unfinished construction works have been sources of scrap material as well. An investigation by a private media consortium claimed that Venezuelan ports exported over 700,000 tonnes of scrap metal between 2019 and 2021.
With a struggling economy under wide-reaching US sanctions, the Maduro government looked to scrap metal sales as a possible source of foreign currency revenue. A 2021 law aimed to regulate and place the scrap business under the monopoly of the state-owned Ezequiel Zamora Ecosocialist Corporation (Corpoez).
However, Corpoez then struck partnerships with private entities to export scrap metal, also as a way to circumvent US sanctions. Additionally, corrupt officials used the centralized framework to attain extra resources at the expense of state assets.
The accumulated material has been shipped from Venezuela’s main ports, with Turkey as one of the main destinations. Market prices vary between US $300 and $700 per tonne, depending on the type of metal.
An investigative piece from news portal 6to Visión found that the Pegasus Group controls about 40 percent of the scrap metal business in Venezuela. The company is registered in the Dominican Republic and presided by Carretero, the former airforce pilot who retired in 2019.
For his part, Carretero rejected the allegations and claimed they were part of an “extortion” attempt.
In March, Venezuelan authorities launched a major anti-corruption operation targeting state oil and heavy industries. Investigations led to more than 60 arrests, including high-profile figures such as a National Assembly deputy and the head of the country’s cryptocurrency agency.
Nevertheless, the Attorney General and other spokespeople made no specific mention of illegal dealings involving scrap metal. In April, PSUV Vice President Diosdado Cabello said the government was going to tackle “scrap metal mafias.”
In the wake of the anti-corruption drive, the Venezuelan National Assembly went on to approve a domain extinction law allowing judicial instances to order the seizure of assets belonging to people charged with corruption.