Venezuela High Court Indicts President Perez

The Supreme Court ruled Thursday that enough evidence exists to prosecute President Carlos Andres Perez on corruption charges and turned the matter over to Venezuela’s Senate to determine if there should be a trial.

The indictment was voted by nine members of the court with six abstentions. If tried and convicted, Perez could go to jail for six months to three years. He stands accused of the misallocation of $17 million in government funds.

The 49-member Senate, which under law must act within five days, has scheduled a meeting for today. If, as is widely expected, it orders a trial, Perez will be automatically suspended from office, and the Supreme Court will conduct the trial. Perez, who served a previous term as president in the 1970s, would be replaced by Senate President Octavio Lepage as acting president.

The high court’s ruling was accompanied by the resignation of Perez’s entire 18-member Cabinet. The Ministry of Information said that the ministers have placed themselves at the disposal of an acting president.

Perez went on national television Thursday night. With Cabinet ministers and members of the armed forces high command sitting on either side of him, the president defended his record as a democrat and said that if “I have made mistakes, I have been constant” in defense of freedom and liberty.

His hands shaking and his eyes welling with tears, Perez asked all sectors of the nation to abide by the law, reject violence and avoid turning to the military for a solution to the nation’s political crisis. He said he will not resign and added that he will “hand over the banner of the president” to his elected successor

Perez said he will not ask the Senate to reject the court’s ruling, nor “will I defend myself, because I have done nothing needing defense.”

The Supreme Court’s ruling was greeted immediately by popular acclaim in the streets and glee on the part of Perez’s political opponents, who have been gaining strength since a crisis in his government began building a year ago. Recent public opinion polls have given Perez less than 20% approval.

“It is a sign of a new era,” said Jose Vicente Rangel, a prominent television commentator and failed political opponent of Perez who has made his attacks on the president the basis for a journalistic cottage industry.

“It shows that the past acceptance of corruption is over,” Rangel said in a telephone interview after the decision was announced. “And it shows that Venezuela’s democracy functions, that its courts function, that all of its institutions function.”

Rangel also put the prosecution of Perez in the perspective of a regional, even worldwide attack on official corruption, pointing to last year’s developments in Brazil, where President Fernando Collor de Mello resigned in December, avoiding trial by the Senate. Collor had been impeached by the Chamber of Deputies in September in a multimillion-dollar corruption scandal.

The Perez case, however, seems to be characterized by often-confusing twists and turns.

Unlike the case of Collor, whose private household was said to have received funds from a former campaign manager accused of contract-skimming and influence-peddling, official charges against Perez are limited to administrative irregularities. His severest critics have not been able to show any proof of personal profit by Perez.

Adding to the confusion is the timing. The process is taking place only seven months before elections are scheduled to choose Perez’s replacement and at a time when the president’s economic and political reforms are beginning to show benefits.

Venezuela has a 7.5% current economic growth rate, one of the best in the world, and for the first time since the nation became an authentic democracy 35 years ago, there are popular elections for mayors and state governors, all owing to reforms initiated by Perez.

The 70-year-old Perez, who already has survived earlier charges of corruption, two military coups, deadly food riots and constant demands for his resignation, has denied any wrongdoing from the outset and has blamed his current plight on politics.

The affair began in 1989 when $17 million was transferred from the Central Bank to a special reserve account in the Interior Ministry, allegedly for use in unspecified national security matters.

Along the way, the money was converted from bolivars, Venezuela’s currency, to dollars at a special exchange rate unavailable to the public and then back into bolivars at the higher, public exchange rate. There are suspicions, but no proof, that a profit of $3 million to $10 million was made in the double exchange.

The gist of one of the two charges approved by the Supreme Court is that the detour of the funds into the currency market violated laws prohibiting use of public funds for purposes other than those designated by the budget. The other allegation is that the money was delivered in cash to a Perez aide when it should have been paid by check.

Perez has repeatedly asserted his innocence, although he has persistently declined to explain what matter of national security was involved or exactly where the $17 million went. “It is a matter of national security” and cannot be divulged, he told reporters again this week.

Perez, in an effort to calm fears and tensions that have plagued Caracas this week and perhaps to offset opponents’ assertions that he would try to manipulate his way out of a trial, called for the Senate to act immediately and unanimously to turn the matter over for trial, saying he wants the opportunity to clear his name.

The days leading to Thursday’s decision were filled with rumors and fears of a military coup and street violence. The Caracas stock market lost more than 10% of its value in two days of trading, inflation soared and interest rates climbed to levels from 50% to 80%.

Diplomats and political experts say Venezuela now faces months of political uncertainty, possible violence and certain economic chaos as foreign and domestic investment is expected to come to a near halt.

Still, the tension that brought 5,000 troops into the streets this week seemed to dissolve by the time the court’s decision was made.

Only a relative handful of police and military troops were on guard outside the Supreme Court and around the presidential palace and offices Thursday.

The Associated Press reported that at nightfall Thursday, National Guard troops fired tear gas to disperse an unruly crowd of about 1,000 outside the Congress. The crowd was made up mainly of students and young workers shouting anti-Perez slogans.