Thursday, May 26, 2005
Oh, thats why?
In the opposition’s self-serving histrionics about how much oil Venezuela is or isn’t producing one little sub-plot has developed. The complaint has arisen that we don’t know what is going on because the state oil company hasn’t submitted its 2003 financial statements. Indeed, they are at this point over a year late. So maybe the opposition does have a reason to bitch.
Well, maybe not. See there is a little detail that has to be remembered. Back in the good old days when the opposition was running everything the then executives of PDVSA were in to finding ways to use their control of PDVSA to make profitable businesses for themselves. One idea they came up with was to set up a data processing company called Intesa. They then had PDVSA outsource all its data processing and information technology tasks to Intesa. And who did Intesa have as one of its directors and shareholders? None other than Luis Guisti, the President of PDVSA up to 1998. Nice little piece of insider dealing there, no?
BTW, another little factoid about this Intesa is that it was partly owned by a U.S. company called SAIC a US company heavily involved in military work and said to have ties to the CIA. That’s too far a field for this post but for those desiring more info check out Soberania.org.
What does any of this have to do with financial statements. Well one of the things that was outsourced to Intesa was all the computerized accounting functions of PDVSA. Nothing per se harmful in that. But then along comes December 2002 and the management of PDVSA goes on “strike”. And who joins them? You guessed it, Intesa. They came up with a whole bunch of rather lame excuses for why they could no longer do their work and joined the strike. They kept the computers, the software, the data and in one fell swoop eviscerated PDVSAs ability to manage its finances (not to mention that most of the PDVSA finance department joined the strike).
The story doesn’t end there. PDVSA went to court to force them to a least give back the software and data so that their finance department would have the information they needed to work with. And sure enough the Venezuelan Supreme Court ordered Intesa to hand it over. Of course the opposition being what it is, Intesa refused.
PDVSA, desperate for the materials, kept pursuing the case and in March 2004 the Supreme Court gave a final order to Intesa to turn everything over to PDVSA. What was Intesas response this time?
So too bad for PDVSA, they aren’t getting back their information, not their ledgers, not their accounts payable, nor receivable, nor anything.
And I wonder if these same people who went on strike and did billions in damage, who destroyed property, and who flouted the law as in this clear example are the same people bitching about the tardiness of the financial statements. Probably. It would be par for the course.
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Well, maybe not. See there is a little detail that has to be remembered. Back in the good old days when the opposition was running everything the then executives of PDVSA were in to finding ways to use their control of PDVSA to make profitable businesses for themselves. One idea they came up with was to set up a data processing company called Intesa. They then had PDVSA outsource all its data processing and information technology tasks to Intesa. And who did Intesa have as one of its directors and shareholders? None other than Luis Guisti, the President of PDVSA up to 1998. Nice little piece of insider dealing there, no?
BTW, another little factoid about this Intesa is that it was partly owned by a U.S. company called SAIC a US company heavily involved in military work and said to have ties to the CIA. That’s too far a field for this post but for those desiring more info check out Soberania.org.
What does any of this have to do with financial statements. Well one of the things that was outsourced to Intesa was all the computerized accounting functions of PDVSA. Nothing per se harmful in that. But then along comes December 2002 and the management of PDVSA goes on “strike”. And who joins them? You guessed it, Intesa. They came up with a whole bunch of rather lame excuses for why they could no longer do their work and joined the strike. They kept the computers, the software, the data and in one fell swoop eviscerated PDVSAs ability to manage its finances (not to mention that most of the PDVSA finance department joined the strike).
The story doesn’t end there. PDVSA went to court to force them to a least give back the software and data so that their finance department would have the information they needed to work with. And sure enough the Venezuelan Supreme Court ordered Intesa to hand it over. Of course the opposition being what it is, Intesa refused.
PDVSA, desperate for the materials, kept pursuing the case and in March 2004 the Supreme Court gave a final order to Intesa to turn everything over to PDVSA. What was Intesas response this time?
The sentence that the Supreme Court gave yesterday to Intesa to reinstall all the information systems that it had taken from PDVSA and return equipment and data that it has in its possession can’t be complied with in practice as just a week ago the company Intesa closed its doors for good and gave away its keys.
So too bad for PDVSA, they aren’t getting back their information, not their ledgers, not their accounts payable, nor receivable, nor anything.
And I wonder if these same people who went on strike and did billions in damage, who destroyed property, and who flouted the law as in this clear example are the same people bitching about the tardiness of the financial statements. Probably. It would be par for the course.
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