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Friday, October 18, 2013

Sports Ministry Fraud a Symptom of Venezuela’s Race for Dollars

Venezuela is investigating athletes on its national motorsports teams for defrauding the government of tens of millions of dollars, Reuters reports.

The nation’s sports minister, Alejandra Benítez, told the Caracas daily Últimas Noticias that her signature had been forged on more than 60 requests for American dollars by members of race car teams, who reportedly claimed the money would be used to import equipment that did not exist or to finance trips that never took place. One athlete, she said, claimed $66 million over the course of a year and a half.

Ms. Benítez, herself a former Olympic fencer, refused to name those responsible because she wanted to “respect them as athletes.”

The announcement comes 10 days after a sports ministry official, Ovidio Almeida, was detained with over 400,000  euros while traveling through Bulgaria. (Mr. Almeida said the money was for a training camp.)

Ms. Benítez had remained silent on that incident for days, but on Friday she said in a comment on Twitter that “the official who arrived in Bulgaria was authorized to take that money to our delegations training in Bulgaria.”

Ms. Benítez insisted one day earlier that “if any official” from the ministry is involved in the latest currency violations, “they will have to pay.” Miguel Pizarro, an opposition legislator in the National Assembly, has called for a full investigation into the sports ministry.

Mr. Pizarro suggested on Twitter that whoever falsified the documents was not likely “a low level official. It must be someone important.”

Venezuela is increasingly cracking down on attempts by citizens to game the country’s currency control system by illicitly obtaining dollars and selling them for a profit. More than a decade of strict currency controls have left Venezuelans desperate for dollars, which can be sold - illegally - for seven times their official rate of 6.3 bolivars.

The most straightforward way of getting greenbacks is to get on the first flight out of the country. Or not. Travelers are allowed to exchange up to $3,000, a sum that could garner $21,000 in the black market. But the rule has spurred a practice known as “currency tourism,” that involves forging plane tickets to claim currency.

President Nicolás Maduro suggested earlier this month that such speculation is part of an “economic war” against Venezuela.

This month the government deployed officials from Cadivi, the national currency board, to check travelers’ documents at the airport, ordering banks to block credit card transactions that come from countries not listed in the original plane ticket. Athletes have an easier time getting approved for the currency exchanges than civilians, though, partly because the government is interested in promoting their international ventures.

A review of the former sports minister’s Twitter feed gives a sense of just how much access race car drivers have to American dollars.

“Signing the Cadivi approval documents  for Alexander Popow of motor racing to attend the 2012 Cooper Tires Prototype Lites Championship for $956,000,” the former minister, Héctor Rodríguez, wrote in December 2011. The same day he posted about approving two additional requests that totaled over $1.5 million.