In the last weeks of 2009 Venezuelan President Hugo Chávez announced that the government would be nationalising eight banks. These banks represented 8% of the financial sector in Venezuela and held a significant percentage of Government deposits.

These Government nationalisations however have not been in response to the global financial crisis- as in some other countries. They have been made in response to a recent investigation into banking practices that uncovered corruption and embezzlement of deposits reaching up into to the highest levels of the Government.

By Denise Dudley, Socialismo Revolucionario Venezuela

Four of the banks that were taken over were owned by Ricardo Fernandez, who was a fervent supporter of Chávez. Fernandez is known as the King of Mercal for his role during the 2003 bosses lockout in which he provided trucks and services to the Government to distribute food. Mercel is the Government owned and operated food distribution service which provides discounted basic food items.

Fernandez has, until now, continued to be rewarded by the Government for his role during this time and forms part of what is known as the ‘Boli- bourgeoisie’- people who have benefited financially through the Bolivarian Revolution.

Among others both from within the public and private sector to be charged with banking fraud is Arne Chacon, the brother of now ex- minister for Science and Technology and close ally of Chávez, Jesse Chacon.

The actual figure of deposits that have disappeared from these banks is yet to be announced and uncovered, however the Government has guaranteed almost all deposits. Such a guarantee can only be fulfilled by using money that the Government may have otherwise had available as public funds.

The Government nationalisation of these banks should be welcomed, as should any measures taken to fight corruption that exists in both the public and private sector. However the best way to combat corruption, as well implementing socialism, is to nationalise 100% of the banking sector under the democratic management and control of the working class.