oil income tripled. The ordinary men incharge of the Venezuelan government wereexposed to extraordinary financial tempta-tions. Faced with a windfall, President Pérezstructured a program that he called “TheGreat Venezuela.” Under that plan, a tropical version of Mao’s “Great Leap Forward,” thegovernment poured close to two billion dol-lars into industrial projects in southern Venezuela, which were designed to triple steelproduction within five years and to build sev-eral new aluminum plants. At one point morethan 300 state-owned companies existed inthe country, none of which was profitable.During the second half of Pérez’s term, as a result of the torrential influx of oil money, cor-ruption spun out of control—it became“democratic.” Up to that moment, graft hadbeen essentially restricted to the ruling clique,but now many Venezuelans started to partici-pate, directly and indirectly, in the abuse andmisuse of public funds. At the end of Pérez’spresidency, and in spite of the oil incomewindfall, Venezuela had managed to fall intodebt to the international banks.From 1975 to 1998 Venezuelan corruptionlevels generally increased and stayed high.Particularly grave was the period of JaimeLusinchi, 1984 to 1994. In her research on cor-ruption, sociologist Ruth Capriles Méndez of the Universidad Católica Andres Bello estimatesthat some $36 billion was subject to misuse anddishonest handling during that presidency,
especially through the foreign exchange con-trols program called RECADI (Régimen deCambios Diferenciales). Several factors con-tributed to soaring corruption:
Weak political and social institutions.
Lack of adequate administrative normsand controls.
Large volumes of income coming frompetroleum production, a wealth essen-tially not earned by the work of themajority of the population but generat-ed by a small group of oil industry tech-nical staff.
Populist political leaders willing topromote a welfare state in order to con-solidate their political positions ratherthan lead the country toward stableprosperity through hard work andsocial discipline. Those leaders per-suaded Venezuelans that oil money “belonged” to the government and thatsome of it could be handed out to thepeople in exchange for political loyalty.Because of that belief, the use of national assets for personal benefit,among both the political elite and thepopulation at large, lost much of itspejorative meaning.The benevolent view of corruption thatprevailed in those decades can be illustratedby a legal decision in a 1982 case of corrup-tion at the Venezuelan Ministry of Agriculture. The tribunal considering thecase dismissed it claiming that “the amountinvolved [some $20,000] was too small inrelation to the total budget of the Ministry.”
In 1997 Pro Calidad de Vida, a Venezuelannongovernmental organization (NGO)doing anti-corruption work, estimated thatsome $100 billion in oil income had beenwasted or stolen during the last 25 years.
Enter Hugo Chávez
As the 20th century came to an end, Venezuela was ripe for significant politicalchange. The December 1998 presidentialelections gave victory to Hugo Chávez. BothChávez and his main adversary, HenriqueSalas Romer, had promised a radical depar-ture from existing politics, which was stillbased on a two-party system alternating inpower and maintaining high levels of bureaucratic inefficiency and corruption.The Chávez campaign platform consisted of three main proposals: convening a con-stituent assembly to write a new constitu-tion, eliminating government corruption,and fighting against social exclusion andpoverty. His adversary, Salas Romer, attackedthe call for a new constitution as populist. Inspite of his excellent performance as gover-
From 1975 to1998 Venezuelancorruption levelsgenerally increased andstayed high.