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Chavez’s Shady Dealings

As indecent as it seems to find humor in the world’s tyrannies, it’s hard not to, especially when it comes to Venezuela and Iran.

On January 21, Tahmasb Mazaheri, the former governor of Iran’s Central Bank, was arrested by German police at Dusseldorf Airport after he was found carrying a check worth 300 million Venezuelan Bolivars–the equivalent of $70 million–in his hand luggage. Mazaheri, who flew into the German city from Turkey, is suspected of involvement in money laundering. His own explanation is that the check “was designed to finance the Venezuelan government’s construction of 10,000 homes.”

Given Mazaheri’s staggering incompetence in transporting this enormous sum of money, it’s tempting to ask where, exactly, these “homes” he referred to are being built. In Caracas? Or perhaps in Havana, where the Castro brothers have set themselves up as Cuba’s de facto rulers? Maybe in Tehran, where the ruling mullahs have engaged in a love-in with the regime of Hugo Chavez for more than a decade?

So far, Venezuelan Foreign Minister Elias Jaua–appointed after he was resoundingly defeated by opposition leader Henrique Capriles in last December’s election for the governorship of Miranda state–has issued no statement on Mazaheri’s arrest. Nothing, it appears, can stop the constant stream of bulletins from Caracas about the “improving” health of the ailing Chavez, who hasn’t been seen or heard from since he returned to Cuba for cancer treatment more than two months ago. Last Saturday, Fidel Castro himself reassured Venezuelans that their leader was “much better, recovering.” Today, Nicolas Maduro, Chavez’s appointed successor, read what he claimed was a letter from Chavez to a rally in Caracas commemorating the failed coup of 1992 against then-President Carlos Andres Perez. “My spirit and my heart are among you all on this day,” Chavez is supposed to have written, “I’m with you all, wearing my red beret.” Needless to say, visual evidence that Chavez is even still alive has not been forthcoming.

The silence on the part of the Venezuelans, as well as the Iranians, over Mazaheri is understandable. The Chavez pantomime has robbed the Chavistas of any credibility when it comes to telling the truth. Recent polling from Caracas shows that Maduro, a former bus driver and orthodox Chavista ideologue, is both disliked and distrusted by the electorate. One theme that the Venezuelan opposition has capitalized upon is the network of murky relationships Chavez and his cronies have forged with rogue regimes around the world, Cuba and Iran being the most notable, which involve lucrative government contracts as well as oil subsidies that have further sapped the Venezuelan economy.

Indeed, one of the ironies of the Mazaheri affair is that it comes at a time when both countries are undergoing a massive currency crisis. Over the last year, the value of the Venezuelan Bolivar has weakened against the dollar by 53 percent; the Venezuelan journalist Juan Cristobal Nagel has compared Chavez’s economic policies to a “Ponzi Scheme” whose sources of cash are rapidly drying up. As for the Iranians, the value of the rial against the dollar tumbled by 21 percent last week to a record low.

It isn’t yet clear where Mazaheri himself fits into all this. A shady character, he was governor of Iran’s Central Bank for just one year, until President Mahmoud Ahmadinejad canned him in September 2008. A few months later, Mazaheri correctly predicted that Ahmadinejad’s economic reforms would send inflation skyrocketing, an outcome that would hit government employees on fixed incomes particularly hard.

Nevertheless, what is abundantly clear is that the cooperation between Venezuela and Iran remains as strong as ever. Public housing for poor Venezuelans has featured among the myriad collaborative economic schemes between the two countries, but it is the energy and military sectors that are truly significant. Given Iran’s lack of oil refining capacity, Venezuela has stepped into the breach, providing Tehran’s rulers with more than 20,000 barrels of oil per day. In June of last year, Chavez announced that he was building unmanned drones with Iranian assistance. An unnamed Venezuelan military officer said at the time that the drones “are made in this country with military engineers who went to do a course in the sister Republic of Iran.”

Should Maduro formally take the reins in Venezuela, business with Iran is certain to continue as usual, even if Ahmadinejad’s hated rival, Ali Larijani, wins the June 14 presidential election in Iran. Larijani–who is also, like Ahmadinejad, a Holocaust denier–is a true believer in the Chavista view of international relations as a conspiracy masterminded by “Zionism” and the United States. In these circumstances, the only means by which the Venezuela-Iran relationship could be transformed is if one, or both, of these regimes finally collapses.


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