UN demands a fair trial in freedom

After two years and two months in jail, last July 12, the trial began against four executive directors of the taken-over brokerage firm Econoinvest, which was once considered the best in the country. Its history is just one episode out the bunch, in the huge chain of events that destroyed 63 brokerage firms and 60 commission houses; which, according to Minister of Finances Jorge Giordani, was needed to get rid of these "scorpions" because their basis was against the ideology of the revolution. Giordani's wish came finally to life and brought with it the loss of 5,000 jobs.

The initial instrument of the measure was a media campaign in which the executive directors were exposed as perpetrators of all sort of crimes such as: "money laundering," "identity theft," "illegitimate sources of funds," "foreign exchange simulation," "unrecorded operations," and "conspiracy," among others. It was obvious that there was no right to defense or to reply for such serious crimes.

With such background, the four accused would undergo intense legal fights at national and international courts.

Just after a court extended the arrest of the accused for two additional years, they finally arrived at the trial phase that takes place at the Fifth Court of First Instance, presided over by Judge Rodolfo Romero. The Attorney General Office is represented by District Attorney Daniel Guédez, who this time diminishes his accusations to just two charges: Illicit trade of foreign exchange and conspiracy.

These four Venezuelans who now face trial including ideological and political elements, are Herman Sifontes, Juan Carlos Carvallo, Miguel Eduardo Osío and Ernesto Rangel. Two of them founded that company in 1996 in a rented cubicle with a stock capital worth USD 41,861.20. Twelve years later, such investment skyrocketed so well, that this project reached a number of 1,000 employees in its payroll, 70% of whom were shareholders; a client portfolio of 370,000 costumers and a capital worth USD 82,792.20.

The trial

Just a few days ago, the Public Prosecutor Ministry stated in a press article that it counted on 102 evidential elements against the accused. With such huge amount of evidential elements, one can easily believe that the Attorney General Office has a quite substantiated case. Nevertheless, according to  defense attorneys, in those long sessions, District Attorney Daniel Guédez has been relating and describing behaviors that do not match with the accusation and that which is written in the case file.

A review of the case file found that the 102 evidential elements mostly concerned documents of the very taken-over company, namely: commercial records; minutes; payrolls; a copy of the tax registry number; bank accounts; documents of foreign exchange operations, endorsed by the Central Bank of Venezuela (BCV); ledger of trade operations in local currency; account balances; communications with banks; contracts; 11 records of interviews with employees of the group, etc. Among these evidential elements, 21 deal tickets with their respective buying confirmations are found., which leaves in evidence that the foreign exchange operations were recorded by the BCV. According to the defense team, rather than constituting sound evidence against the accused, these documents reveal legal and transparent foreign exchange operations performed by the brokerage firm. It is worth remembering that such system was invented by the very Government to enable the easy flow of the foreign exchange market in a country of foreign exchange control.

According to lawyer Beatriz Di Totto, the District Attorney has attempted to divert the attention and instead of rooting his accusation as he used to-, in the violation of article 9 of the Law on Foreign Exchange-Related Offenses, in force by then; he now attempts to delev into "legal fraud," which, to his mind, is not applicable in the criminal law.

Di Totto believes that the intention of enacting the Law on Foreign Exchange Crimes was the foreign currency trading in the parallel market which was exclusively done through securities and the mediation of the Central Bank of Venezuela. According to the Attorney General Office, Econoinvest traded with securities, not with the intention to invest but to use them for trading with foreign exchange, which was exactly what the Government intended when establishing such mechanism. Such Law was in force until May 2010 when the four managers were already behind the bars, Di Totto indicates.

District Attorney Guédez attempts to hold Econoinvest responsible for the apparent profiteering stemming from the swap dollar, and resulting inflation in the country. He contends that for such reason, parallel exhange rate went as high as VEB 8.2 per US dollar. The District Attorney indicates that because pf the speculative investments made by Econoinvest, inflation was generated; whose preservation in low values represents one of the resources protected by the Law on Foreign Exchange-Related Offenses.

For the defense, none of it is true since the average on exchange trade made during the time of the inquest, maintained an exchange rate at VEB 6.5 per US dollar, quite below speculative numbers. If we take a look at the inflation rate of the last years, we can observe that Econoinvest already operated as a brokerage firm in 2001 while the inflation stood at 12.3% (BCV) almost verging on the lowest historical number. Due to the nationwide oil strike in 2002 and the crisis in 2003, the market collapsed and no relevant operations were recorded. When Econoinvest got back on track in 2004, inflation was at 14.36%. In 2005, it barely rose two points at 16.97% until 2006.

In 2007, a worldwide recession due to diverse factors created a global inflation that kept busy the presidents of major world economies and Latin American leaders. In Venezuela, inflation soared from 16.97% to 30.9 in 2008 and in 2009, four months before Econoinvest's takeover, it was at 25%. But what calls the attention the most, is that since 2010, when all brokerage houses are closed, the inflation continues to escalate at 27.5% in 2010 and 27.9%in 2011. By 2012, a similar inflation rate is expected. For the defense's consultant group, they are accusing a brokerage firm for the inflation that emerged from a worldwide recession.

The UN states it

The United Nations (UN) labeled the imprisonment of the four managers of Econoinvest as "arbitrary and in violation of human rights," and asked the Venezuelan Government the "immediate release of the defendants."

In view of the unfruitful appeals at domestic courts, lawyer Luis Ignacio Ramírez submitted to the consideration of the UN Council of Human Rights the inadmissibility of the imprisonment of the accused.

The application was made at the UN Working Group on Arbitrary Detention, whose jurisdiction came to life under Resolution 1991/42 from the former United Nations Commission on Human Rights.

Notice that Venezuela signed the Universal Declaration of Human Rights on December, 10, 1948 and therefore adopted the International Covenant on Civil and Political Rights (ICCPR), binding upon the parties and ratified by the Venezuelan Congress on May, 10, 1978.

The Working Group pronounced two judgments: Decision 28/2011 of August, 30, 2011, and Decision 65/2011 of November, 23, 2011, referred to the four accused.

In both of them, it is said that the accused are on remand "for having committed acts which, at the time of their happening did not represent a crime. They are being applied the Law on Foreign Exchange-Related Offenses in a retroactive way, an open violation of their right to due process."  They indicate that the arrest "is arbitrary and corresponds to Category III of the Methods of the Working Group, for having violated the human rights contemplated in articles 3, 7, 8, 9, 10 and 11 of the Universal Declaration of Human Rights and articles 2, 3, 9, 10, 14 and 15 of the International Covenant on Civil and Political Rights. That is why the Working Group requested "the authorities of the Bolivarian Republic of Venezuela to order the immediate, conditional release pending trial of the accused."

Translated by Adrián Valera Villani