Bolivia: Enron and separatism

The decision of the Transredes company (the Shell -Ashmore group that took over from Enron) to hand over the expansion of their Villamontes gas pipeline to the departmental prefecture of Tarija, bypassing central government, demonstrates yet once more how that company has promoted the break-up of Bolivia, an issue of world interest. Faced with that situation President Evo Morales did the very least he could do, namely, decree the compulsory purchase by the State of the hydrocarbons transport company shares.

Thus Enron's presence seems to come to an end. Both under its own name and under its successor's it became a byword for corruption in Bolivia. Remember that when Enron declared bankruptcy on December 2nd 2001 it was described as one of the most corrupt businesses ever in the far-from-clean history of the United States. Enron came to Bolivia under the patronage of (then president) Gonzalo Sanchez de Lozada so as to accelerate the liquidation of Yacimientos Petrolíferas de Bolivia (tr., the State hydrocarbons company). Within months of taking office in 1994, Sanchez de Lozada, in July of that year, signed a memorandum of understanding with Enron to build a gas pipeline from Bolivia to Brazil.

Petrobras, (tr., Brazil's State oil company) tried to push Enron out of the deal by announcing it would fund the work's US$300m cost. Sanchez de Lozada refused to accept the loan, arguing that it was impossible to pay it back. Petrobras answered by saying it would accept payment in natural gas. At that moment. Sanchez de Lozada replaced YPFB, which ought to have become the owner of the gas pipeline on national territory, by the US company.

Enron, then turned itself into part of Transredes, paying for corrupt decision making. Since, Sanchez de Lozada was in the United States, The aymara Vice President, Victor Hugo Cárdenas, issued the decree authorizing the illegal contract with the company. YPFB's top executives turned up working for Petrobras. The Hydrocarbons Superintendent, Carlos Miranda, failed to insist on the installation of a gas liquefaction plant which left Brazil the beneficiary of free additional liquifiable gas. No protest was heard from the YPFB board which included the economist Gonzalo Chavez. Transredes loaned out one of its directors, Carlos Kempff Bruno, to serve as one of Jorge Quiroga's ministers, getting him back later.

Transredes paid out millions in radio and TV campaigns which, by means of clever scheduling, like "good driving" programmes, bought the silence or complicity of otherwise belligerent journalists as well as politicians and civic leaders, especially in Santa Cruz. State audits of the oil companies showed that Transredes failed to honour investment commitments and made anomalous exports as well as unusual payments that happened to coincide with the purchase of banners, t-shirts, fireworks and street bands for ever more aggressive meetings, marches and demonstrations against the national State.

Those who worked for Enron now say the nationalization threatens juridical security and people will stop investing. They never mention how Bolivia was left with no juridical security so as to protect it from being cheated by a multinational buisiness and its employees. If Evo Morales reorganizes YPFB effectively and drops the slogan of converting Bolivia into 36 originating nations he will have found the way to lead the country along the path of the democratic revolution he proclaims.

Andrés Soliz Rada was Minister for Hydrocarbons under Evo Morales - www.patriagrande.org.bo

Translation copyleft Tortilla con Sal

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