Adios Populism! Cleaning Up Ruins Left By Maduro And Kirchner

Falling revenues, dire financial conditions and voter exasperation have curbed populist-socialist power in Venezuela and Argentina. The opponents have their work cut out for them.

Maduro and Kirchner at a 2013 summit of South American leaders.
Maduro and Kirchner at a 2013 summit of South American leaders.
Danilo Arbilla


BOGOTÁ â€" The recent triumph of the Venezuelan opposition in parliamentary elections was good news. Better still was the voting public's resounding rebuke of the ruling system and the likes of President Nicolás Maduro, parliamentary Speaker Diosdado Cabello â€" a man of highly dubious reputation â€" and Tibisay Lucena, a loyalist appointed head of the electoral authority.

Other news that has received less attention is the continued drop in the price of Venezuelan crude, which fell last week to just over $34 a barrel. But these two bits of news are related.

You can blame Maduro for many things, but perhaps his worst feat was prompting nostalgia for his predecessor, the late Hugo Chávez, through his own mismanagement skills that have led to the country's deterioration. Not that Chavez was really any better. He wouldn't have gotten much farther than Maduro with current oil prices, and without oil prices having hovered around $120 to $130 a barrel during his time in office.

With that much cash, you can buy almost anything, even charisma. You can buy arms and warships from Spain and the United States, negotiate favorable business terms for companies with the friendly Lula government in Brazil, sign big deals with China, Iran and Russia â€" whose scope and consequences have yet to be fully revealed â€" provide cheap oil to needy Central American states or pick up the tab for dysfunctional companies, from Costa Rica to Uruguay.

At $38 a barrel, Chávez and Maduro would likely be in the same predicament. So the terrible legacy Venezuelans face today is bequeathed by two presidents, not one, and a system they installed. That system remains in power, even after the recent election defeat.

The opposition now has an arduous path ahead and must remain united in order to progress. Chavismo is not overcome, only badly injured. It is ensconced in its power den, sharpening its claws. In this setting, the opposition must maintain the unity that brought it to victory.

Hanging on

Generally, the populist and authoritarian regimes that call themselves progressive are loathe to leave power. That's in keeping with their doctrine, but also because they fear returning to the bottom of the heap or being held to account.

The conduct of outgoing Argentine President Cristina Fernández de Kirchner is a perfect example. To begin with, she has thwarted the transition of the incoming government, denying it critical administrative information. Incoming President Mauricio Macri doesn't know what he'll find once he takes office. And in recent weeks, Kirchner has rushed to appoint some 20 ambassadors and hundreds of civil servants, and run up debts the new government must pay in coming months. She even refused to participate in the traditional handover ceremony in the presidential palace.

It is an almost ridiculous attitude that may corroborate popular hearsay about Kirchner's mental health. Meanwhile, her supporters are urging resistance, seeking a remedy for their falling numbers in zealotry.

Like her ideological peers in the region, Kirchner is finding it hard to step down. This lot won't leave before they have trashed the place! And that, after years of failing to make good use of the enormous revenues from a unique period of high demand for their export commodities. They could have invested the money â€" instead of spending it to win political votes, feed their egos and finance extravagant social programs with eminently electoral motives. Expect also an increasing number of revelations about leaders, senior politicians, their partisans and relatives personally enriching themselves.

The pseudo-progressive ideology is on its way out because the cash ran dry and people are exasperated. But make no mistake, they are not giving up. They will bide their time, hoping people have short memories and will be disoriented by their day-to-day problems. And then, right on time, they will resume their perennial discourse of bombast and bleeding hearts.

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Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money but the simplest of errors exposed the scam and limited the damage to investors.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.

Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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