Cocaine And Cash: How Maduro Stays In Power

"Cocaine, Payola" reads the headline of a new Bloomberg report detailing why and how Venezuela's top military brass will likely remain loyal, at least for the near term, to the Nicolas Maduro regime. As intense international pressure led by the United States builds aiming to topple Maduro in favor of "interim president" Juan Guaido — and as what's now an "open secret" of Washington's direct attempts at fostering a military coup a key question is just how cohesive and loyal will the military remain.   

Like with other recent US attempts at seizing upon civil unrest to effect a political outcome through covert means, notably in Syria for example, it is unlikely that the government will fall without the army changing its loyalty from the top down. While the lower ranks of the Venezuelan army attempt to survive on what amounts to $10 a month, the generals remain fiercely loyal as they live large on personal criminal fiefdoms granted by Maduro in the form of "narco-state" perks ranging from drug-running, contracts for hundreds of social housing projects, overseeing ports, money laundering, to fraud. Per the Bloomberg report:

Vladimir Padrino is Venezuela’s defense minister. Gerardo Rangel is a major general in the army. Nestor Reverol is a former National Guard commander who oversees the Interior and Justice Ministry. They are also, according to the U.S. Treasury, drug runners and graft-schemers who operate within the criminal enterprise that is the Nicolas Maduro regime.

Reuters: Venezuela's then interior minister, Tareck El Aissami, right, walks over confiscated cocaine packs presented to the media in Puerto Ordaz in the southern state of Bolivar, June 26, 2011. 

"If Maduro falls, they fall" as one analyst cited the damning report puts it. The military commanders' fates have been so integrated into Maduro's own political survival that even if lower or middle ranking officers defect, “It would be extremely naïve to think they [the generals] are going to do something different” — given further this state of things goes back to Maduro's mentor Hugo Chavez.

During the US Treasury's last May round of sanctions slapped on Venezuelan military officials, Secretary of the Treasury Steven T. Mnuchin expressly emphasized Caracas' ability to weather and circumvent prior sanctions based on extensive drug trade. Mnuchin described at the time "extensive drug trafficking and money laundering activities" among Venezuela's top leadership, including "systemic corruption and a collapse in the rule of law” which allows the majority of society to be robbed by those enjoying the spoils of what's essentially a mafia-state criminal enterprise. 

The US Treasury further noted sanctioned individuals had "facilitated the movement of cocaine into Venezuela and paid Venezuelan military officials on Venezuela’s border with Colombia," which allowed them "to sell the cocaine to other drug trafficking organizations and corrupt Venezuelan officials."

Since 2015, the U.S. has sanctioned over a dozen current and former high-ranking security officials on allegations of corruption, cocaine trafficking and human rights abuses for their alleged roles in cracking down on dissent during anti-government protests.

Maduro has condemned the U.S. sanctions as baseless, the result of fabricated charges. Bloomberg

Earlier this week opposition-held National Assembly leader and now US-recognized "president" Juan Guaido specifically appealed to the military to switch sides following a local and short-lived attempt of 27 officers to lead a revolt on Monday. To encourage more such defections, which so far hasn't appeared to penetrate the top layers of military leadership, Guaido has offered amnesty protection to any officer previously accused of corruption or human rights abuses should they defect. 

Venezuelan officials inspect seized cocaine, via the AP

However, given the very "direct" and "open" way the US administration has called for regime change, this has allowed Maduro to paint the opposition as tainted by a foreign hand. This means the Bolivarian National Armed Forces, still the most important institution that will ultimately determine the fate of this crisis, will likely remain loyal

A Venezuela analyst cited further in the Bloomberg report points out that the amnesty offer “may serve for middle or lower ranks. But for higher ranks, they don’t see that as enough.” The report explains that "Maduro has simply handed them too many lucrative prizes, which the U.S. contends have allowed them to accumulate huge fortunes." 

Guaido's "amnesty offer" at this point remains vague and undefined on specifics, but it's only been announced that he'll "hand in" the measure to the National Assembly, all of which will likely instill little confidence to those officers potentially on the fence.

This is where the drug trade across Venezuela's borders comes in. It will likely only expand amidst the current pressures and ongoing and new waves of sanctions, becoming yet another flashpoint through which the current unrest and external building tensions may explode into war. But if this cash pipeline can be strangled, the dry-up combined with sanctions, denying military commanders the means to enrich themselves, could make all the difference. But this will likely remain merely a long term scenario.