Eligio Cedeño: A banker battles Hugo Chavez

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The woman's knuckles whiten as she grips the wheel and jerks the car onto a narrow Caracas street. She has already mapped the safest route out of the city countless times. But tonight she repeatedly checks the rear-view mirror to be sure there's no tail. Even at 3 a.m., lights from the barrios stare down from the hills like all-seeing eyes.

A man slumps low in the passenger seat next to her, his sunglasses and hat hiding his face. With good reason: For eight days, his visage has been splashed across newspaper front pages and TV screens across Venezuela. A government website calls for his capture "vivo o muerto": dead or alive.

They head northwest until the capital's glittering skyscrapers disappear behind El Ávila mountain. Only then does the man begin to relax. For a week he has hidden in a tiny apartment. Before that, there were 33 months in a six-by-nine-foot jail cell. Yet his journey is far from over.


Eligio Cedeno

An hour after leaving the city, the car pulls into an empty sports complex in the resort city of La Guaira. The woman cuts the headlights and parks next to a dirt soccer field overlooking the ocean. As salt spray whips the windshield, she hurriedly opens the rear door. The man unfurls a parachute and attaches it to what looks like a giant metal fan. The two friends exchange a quick embrace. Then he lifts the paraglider onto his back, starts the motor, and soars off into the night.

Several hours later, the small Caribbean fishing village of Adícora slowly stirs to life. It's a week before Christmas, and decorations dance in the wind. On the beach, a handful of fishermen prepare their brightly painted peñeros to go out on the water.

Suddenly, one of the anglers spots a strange black dot against the sunrise. A figure slowly takes shape as the paraglider whines closer. Finally, a middle-aged man in baggy surf shorts and a T-shirt lands on the beach with a soft thud like a Navy SEAL. He pulls off his helmet to reveal an orange and black mop of poorly bleached curls and a gnarly sunburn.

Eligio Cedeño, Venezuela's most wanted man, tosses his flight equipment into the ocean and walks over to the stunned fishermen. "How much to take me to Curaçao?" he asks in an affected gringo accent.

"How much do you have?" one leather-skinned seaman shoots back. The stranger tosses him a rucksack. Inside are 30,000 bolívares, roughly $5,000. "Will that do?"

If the fisherman recognizes his famous passenger, he doesn't let on. Without a word, he pushes his small wooden boat onto the water and fires up the outboard motor. Cedeño — bitter enemy of Venezuelan President Hugo Chávez — jumps aboard.

Cedeño's remarkable escape in 2009 from Caracas to Curaçao and eventually Miami ended a judicial hell in which bogus charges gave way to farcical trials and three years in a windowless cell. His flight unleashed a whirlwind crackdown on judges, lawyers, friends, and fellow bankers — scores of whom have since also fled to South Florida, which boasts the largest Venezuelan population outside the South American nation.

But in a bizarre reversal of fortune, the case of Eligio Cedeño has come back to haunt Hugo Chávez and threaten his grip on Venezuela. Cedeño's imprisonment has shaken the fiery leader's international standing. Meanwhile, an extortion attempt by Venezuelan officials against one of Cedeño's best friends has exposed the corruption at the core of Chávez's Bolivarian Revolution.

Perhaps worse for Chávez, Cedeño has reprised his role as chief backer of the opposition ahead of next year's Venezuelan presidential elections. Armed with $160 million and powerful friends across the Americas, he is the most recognizable face of South Florida's swelling Venezuelan population. It's an exilio vino tinto that, like its Cuban predecessor 50 years ago, will stop at nothing when it comes to unseating the comandante.

Hugo Chávez shifted uncomfortably in his dark suit and tie. Sweat beaded on his broad forehead. Running dead last among four presidential candidates, the military commander-turned-socialist firebrand had agreed to attend a weekly forum called "Get to Know Your Candidate." But the expensive event was the type of capitalist excess that he railed against: a private gathering of executives from multinational corporations and superrich Venezuelan bankers. Chávez sat alone at a table awaiting his chance to tell the oligarchs how they were ruining the oil-soaked country.

The year was 1998. At age 33, Eligio Cedeño was the youngest man in the room, but by no means was he the least wealthy. With light-brown skin, curly hair, and an aquiline nose, the precocious banker looked like a younger version of the candidate brooding across the room. Curious about Chávez, Cedeño walked over and introduced himself. As soon as he described his childhood in La Bombilla, a ramshackle barrio in an impoverished area of eastern Caracas known as Petare, a light switched on in the future leader's eyes.

"You understand then," Chávez said conspiratorially. "These businessmen have been corrupting our politicians for decades. Look!" he said, sweeping his hand toward Cedeño's friends and business partners. "Venezuela has become an utter embarrassment. What this country needs is for someone to rule with a firm hand." Coming from a man who had launched a coup only six years earlier — and had served two years in jail for the deadly uprising — Chávez's words were no idle threat. They were a road map to revolution.

The half-hour conversation would put Cedeño on a life-altering collision course with the Venezuelan strongman. "Chávez told me exactly who he was," Cedeño remembers. "He was a very bitter person, full of resentment... I realized then that he despised people like me."

Within months of their meeting, Cedeño had become one of Chávez's chief opponents. The banker began funding Claudio Fermín — a centrist, establishment candidate — only to see him plummet in popularity. Chávez delivered fiery speeches denouncing corruption and promising to eradicate poverty. Then, on December 6, 1998, he garnered 56 percent of the vote to become president.

Cedeño was worried, but not surprised. "There were lots of guys like that in my neighborhood, bad guys who always picked a fight with everyone," he says. "I couldn't help but know them because I was their victim. They robbed us, harassed us, did whatever they wanted with us."

As remarkable as Chávez's rise to power was, Cedeño's success was even more spectacular. He was born December 1, 1964. Home was a one-room, dirt-floor house. There was no electricity and no running water. What little money the family had evaporated when his father left two months after Eligio's birth. His mother had to find work as a cleaning lady.

The family was destitute, but Eligio and his older brother Luís excelled at school, where they swapped their one good shirt between periods. After class, one brother would study from a single ragged textbook while the other helped their mom clean office buildings. That education would fuel Eligio's extraordinary rise to wealth and power, but life in the barrio taught him other lessons. Once, when Eligio was 16 years old, he and Luís were walking down Avenida Sucre when kids their age robbed them at gunpoint. Eligio vowed to escape poverty.

Soon he landed a coveted internship with Citibank. He worked long hours studying for a marketing degree on nights and weekends. After five years, he was hired by Banco Internacional, a Venezuelan bank. His meager salary finally afforded him an apartment of his own. When he moved in, the 21-year-old took his first hot shower. He gave his savings to his mother, who still lived in the barrio.

A few years later, Cedeño joined a brokerage firm named Banco Noroco. The quiet, unassuming bookworm was an unstoppable trader. By age 28, he was vice president. "I could calculate the interest on a given type of bond off the top of my head," he says. His brilliance was driven by sheer need. "I was hungry. I had to work in order to buy my family food."

When a 1994 financial crisis claimed 17 of the top banks in Venezuela, Cedeño saw opportunity. He started his own brokerage firm with $2 million in investments. Profits exploded. In 1999, Cedeño pumped $20 million into troubled financial institutions such as Banco Canarias, Bolivar Banco, and BanPro. Three years later, his investments were worth $150 million.

"Eligio is a risk-taker," says Tomás Vásquez Estrella, a close friend and banker who worked with Cedeño at Banco Canarias. "He was easily one of the best traders in Venezuela."

Wealth brought political influence. Against the advice of other bankers, he insisted on speaking out against what he saw as Chávez's Fidel Castro-like takeover of the economy, including price controls, a fixed bolívar-dollar exchange rate, and tight restrictions on foreign currency. He began marching alongside Carlos Ortega — one of the country's most powerful union bosses — and other business leaders opposed to Chávez.

"The government hated me because I gave openly and without reservations to the opposition," Cedeño says.

Within his first year as president, Chávez had dissolved the national assembly, rewritten the constitution, and begun distributing oil wealth to the poor. The capital was gripped by massive protests. On April 11, 2002, shooting broke out near the presidential palace, killing 20 and plunging the country to the brink of civil war. Chávez was briefly ousted from power in what he and his supporters called a coup. When the president returned a few days later, Ortega organized a massive strike. But Chávez survived again, and Ortega was charged with rebellion and treason. He fled to Costa Rica.

That's when Cedeño's troubles with the government began. In November 2003, officials accused him of helping a small company called Microstar illegally exchange $27 million in bolívares. The investigation dragged on for two years. During that time, Cedeño says, he was pressured by government officials to do business with them in return for dropping the charges. He refused.

Then, on March 1, 2005, state police caught Ortega on the lam near Caracas. (He had returned to lead the opposition.) He was quickly sentenced to 16 years in the fearsome Ramos Verde military prison for leading the anti-Chávez strike.

Cedeño visited often, promising to help with his appeal. "Eligio was one of the few friends of that economic level who had the courage to come and visit me," remembers Ortega, who later escaped and fled the country for good.

Then, in November 2005, prosecutors indicted Cedeño in the Microstar case on trumped-up charges of smuggling and import tax evasion. Eighteen months later, shortly after Ortega's escape, Cedeño was finally arrested.

"They invent the crime to fit the charges," Cedeño says. "The government starts searching for things [against you]. They open an investigation and they wait and see if you belong to the opposition. If you don't belong to the opposition, nothing happens and no one says anything. The corrupt ones are never caught because... they work closely with the government."

Cedeño dialed police Chief Henry Rangel Silva to say he would hand himself over as soon as there was a warrant. He went home to say goodbye to his wife and 1-year-old daughter Valeria. At 7:30 p.m., the phone rang.

Cedeño got into his car and drove to turn himself in.

Black. Pitch-black. Black like the end of the world. Black like despair.

Eligio Cedeño woke with a start in his cot in the Helicoide, a frightening, spiral-shaped Caracas building cut into a mountainside that is the headquarters of Venezuelan political police. But instead of the usual nighttime shadows dancing on the ceiling, he saw nothing. He lifted his hand to his face: nothing at all. He swung his legs to the floor and gazed around his closet-size cell. Cedeño couldn't even make out the small TV set at the foot of his bed. The prison was as dark and silent as a morgue.

God help me. I've gone blind, a panicked Cedeño thought.

Finally, after an hour, he could trace — just barely — the outline of the doorway. Cedeño almost cried with joy.

He had been in the same cell for months, but the late-2007 blackout was new. The president blamed that outage and others that followed on the avarice of "oligarchs." But it was Chávez who, over-reliant on oil revenue, had allowed the electrical grid to rot.

Cedeño was one of only two dozen inmates, ranging from fellow opposition figures to murderers and drug traffickers, in the Helicoide. Even in prison, Cedeño's humble origins and extraordinary wealth earned him wide leeway. Guards looked the other way when he smuggled in a BlackBerry cell phone. They also let him use a spare prison cell — dubbed "the office" — to manage his financial empire and set up family visits on weekends.

But like other inmates, he frequently went weeks without seeing the sun. Once he was forced to clean the prison's air-conditioning system and found massive vents covered in thick, oil-like sludge.

Cedeño's family worried about his safety. But he won over fellow inmates by persuading the warden to buy them exercise equipment.

While other prisoners were working out, however, Cedeño was furiously trying to keep from losing his banks and his trial. Incarceration had already cost him his position at two banks, and the government was constantly threatening to liquidate them. He finally sold Bolivar Banco and BanPro for $160 million, roughly $80 million below market value, to allies of the government rather than lose them without compensation.

"Chávez and his lackeys want to be the only relevant force in the country," Cedeño says. "The government doesn't want there to be anything [else] of importance... So if Chávez sees an institution like a bank with such economic power, then obviously it's got to disappear, but in a way that doesn't seem dictatorial: He still has to pretend to be the people's friend."

Cedeño's trial was pure Kafka. He was summoned to court five times, but prosecutors didn't show up. Two judges recused themselves — one after a bogus news story accused her of a romantic relationship with Cedeño. Then, just as a third judge was poised to rule in Cedeño's favor, the supreme court moved the case to another court.

After more than two years behind bars — the maximum allowed by the Venezuelan constitution — a United Nations report blasted the Venezuelan government and called for Cedeño's immediate release. The UN deemed Cedeño's imprisonment "a violation of his right to the presumption of innocence" and blamed prosecutors for the unconstitutional delay. "His preventative detention is arbitrary," the report continued, "and suggests a political intent manifested in a penal sentence without a trial."

(The Venezuelan government did not respond to several requests for comment for this article.)

"The first years were humiliating," Cedeño says. "What happens under Communist regimes is that... in order to deal with international pressure, they accuse you of something heinous."

On December 10, 2009, Cedeño once again appeared in court, and once again prosecutors didn't show up. But the judge, a short woman with blond highlights named María Lourdes Afiuni, was persuaded by the UN report. Amazingly, she agreed to free him on bail. Then a constable asked what do with him.

"He's not going back," Afiuni replied. With that, Cedeño says, he walked into the hall, right past the prosecutors on their cell phones. He said goodbye to the cops and strolled down the stairs and out the front door into the chaotic midday bustle of Caracas. Then he hailed a moto taxi.

As the city's smoggy air smacked his face, he thought of his daughter Valeria. And he pondered sleeping next to his wife again. Minutes later, however, Cedeño received a call. Police had refused his release order. He was a wanted man once again, so home was out of the question.

Cedeño flung open the door to the Alba Caracas Hotel guest room where he had decided to hide out, and flipped on the TV set. Pictures of his face and headlines like, "Banker Eligio Cedeño Flees the Country," flashed on the screen. And there was the country's attorney general, describing his release as a conspiracy or a jailbreak.

Then Judge Afiuni appeared onscreen — in handcuffs. She was charged with "corruption, abuse of authority, aiding escape, and criminal association."

Coño, they arrested the judge? Cedeño thought. Now there was no way in hell he was going to turn himself in again — he would never get out. Police would arrive any minute. Cedeño called a friend and told her where to pick him up. Then he turned off his phone for good.

As Cedeño hid out in western Caracas, he watched a swift and brutal crackdown unfold on his friends, relatives, and colleagues. His employees were interrogated, his house and office ransacked. His lawyer, José Rafael Parra, spent two days in jail while prosecutors considered charging him in what they called Cedeño's "escape."

The next day, Chávez appeared on television in his trademark blue military shirt and crewcut. He wagged a finger self-righteously in front of a portrait of his icon, Simón Bolívar. "María Lourdes Afiuni made a deal with the constables and... one of these bandits that was in prison... a bandit named Eligio Cedeño," he fumed. "This bandit of a judge... didn't say anything to any prosecutor. She sent for the prisoner, put him in the courtroom, and then took him out through the back door. He escaped. Well, she's in jail...This is worse than a murder! We have to give this judge and the people who did this... 30 years in prison in the name of the dignity of this country."

The fallout quickly spiraled well beyond Cedeño's family and legal team. Tomás Vásquez Estrella — Cedeño's close friend and a brokerage firm owner — decided to flee. He had watched friends and colleagues depart the country, and then visited Cedeño in jail for advice on how to keep government auditors at bay. When the witch-hunt began, the portly 36-year-old bought a ticket on the next flight to South Florida. He didn't know if he'd ever return.

"Chávez had declared war on the financial sector," Vásquez says. "I was fighting for my company — and my life."

Eight months after leaving Venezuela, Vásquez sat at a smooth white marble table inside the swanky Mandarin Oriental Hotel overlooking Biscayne Bay. Across from him was Rafael Ramos de la Rosa, a moon-faced Venezuelan official with a gray widow's peak. Ramos was wearing slacks and a white collared shirt, as if on a business trip. But he was already sipping his third whiskey of the sweltering August night.

"You're close to Eligio, so you're fucked," Ramos said matter-of-factly. He set his empty tumbler down and ordered another. When the waiter left, he quickly got back to business.

"I need to resolve this issue with you in this trip," he said.

The issue, it would later come out in federal court, was Ramos's demand for a huge bribe. As Vásquez had feared, the Venezuelan Securities Commission had taken over his company, Uno Valores, on December 17, the same day Eligio Cedeño fled to Curaçao. The Chávez administration was nationalizing large swathes of the financial sector, and Vásquez's firm was a perfect mix of money and connections to Cedeño.

Ramos had served as an auditor after the nationalization, but he wasn't in Miami for Chávez, nor for socialism. He was here for plata. Four months earlier, through an intermediary, he had told Vásquez he would have to pay $1.5 million to get his company back. If the businessman didn't fork over the cash, came the added warning, he would go to jail.

"What I can give you is a weapon to defend yourself," Ramos said at the hotel. "[I need] half of [the money] right now and the other half when [I] speak to [my boss]."

When the conversation ended, Ramos headed upstairs and Vásquez drove off in his Audi SUV. But instead of going home to Sunny Isles Beach, he steered to a parking lot in nearby Brickell. Half a dozen FBI agents congratulated him.

Unknown to Ramos, Vásquez for months had been recording their conversations. At the Mandarin, he used a mike hidden in his designer watch. Two months later, the feds sprang their trap, arresting Ramos moments after he accepted the $750,000 extortion check.

Ramos's bust in Miami had all the justice that Cedeño's arrest in Caracas had lacked. The investigation had begun when Vásquez called his friend Cedeño in June to tell him that he was being blackmailed.

"This isn't Venezuela," Cedeño told his buddy. "You have to report this."

The Ramos case is a rare window into the corruption eating away at the Bolivarian Republic. Although Chávez's social programs have boosted poor citizens' income, widespread graft and malfeasance have negated those advances. Transparency International, a Berlin-based nongovernmental organization that monitors graft, ranks Venezuela as the most corrupt country in the Western Hemisphere.

On a weekday this past July, Ramos — now a frail-looking man in a drab olive jumpsuit — limped into a cavelike courtroom at Miami's federal courthouse. He had been in jail only seven months but looked much older than his 63 years. He had pleaded guilty to extortion and money laundering on April 11 but had yet to be sentenced.

He is among the first corrupt Chávez officials nabbed by the FBI since the president took power in Venezuela 12 years ago; several other cases have implicated members of the inner circle. In 2008, Venezuelan businessman Franklin Duran was caught in Buenos Aires delivering a briefcase full of $800,000 cash to representatives of Argentine President Cristina Fernández de Kirchner, supposedly on behalf of Chávez. And since his arrest last year, alleged drug lord Walid Makled-García has said he has documentation showing Venezuelan officials helped him amass his $1.2 billion narco-fortune. In other words, Ramos won't be the last Chavista tried in the United States.

"Your honor, with all due respect, I am here before you not as a young man full of outrageous ideas or ignorant of my actions," Ramos told U.S. District Court Judge Adalberto Jordan in a deep, nasal wheeze. "I threw away all my credibility... for the possibility of a comfortable retirement and more money."

Ramos paused, his amplified breaths filling the deathly quiet courtroom like Darth Vader. "I was looking for a solution that would make everybody happy, including myself," Ramos said. "However, I didn't think at the time [I] would... turn my back on everything that I had done throughout my life."

On a bench near the back of the courtroom, Ramos's wife wept behind oversize sunglasses. She and their daughter, beside her, both clutched pocket Bibles. Ramos's son, nearer to the docket, stared ahead angrily.

"This has brought my family, my children, problems like loss of employment and problems with the [Venezuelan] regime that is unfortunately in power at this time."

Five minutes later, Judge Jordan sentenced Ramos to 27 months in prison, with eight already served.

"I was angry when I first heard about his sentence," Vásquez admitted later. "The judge was lenient. But his children were run out of their jobs, and his family has been threatened."

Weeks after Ramos's sentencing, Cedeño stands on his 43rd-floor terrace and gazes at the bay. The view from Brickell Key is breathtaking. To the South, Virginia Key glows like an emerald. Dead-calm, dark-blue water leads due east to Fisher Island. But to the north, a thunderstorm hovers over Miami Beach.

"It was important for me not to be just staring at the ocean," Cedeño says. He needs lights, people, places to distract him from thoughts of those endlessly black nights in the Helicoide. He arrived in Miami almost two years ago, after the peñero ride to Curaçao, where a private plane awaited him.

"For some reason, the immigration officer in Curaçao didn't ask to look at my passport," he says. "If he had, they would have returned me to Venezuela. I think it was a sign from the bearded guy in the sky."

Divine intervention or not, Cedeño's ordeal wasn't over when he arrived at Miami International Airport. He was detained for five hours at the airport and then transferred to Krome Detention Center. Two days later, an immigration judge ordered Cedeño released.

He walked out of Krome a free man at last, and his American attorney, Victor Cerda, drove him the agonizingly slow 20 miles to Brickell Key, where his family awaited him. They had left Venezuela a week before, unaware of his whereabouts or his incredible journey to freedom. Now they met him at the door: 20-year-old Jesús, 4-year-old Valeria in his wife's arms, and 10-year-old Mariemilia holding a bouquet of daisies.

"I remember everything about that moment," Cedeño says. "Everything."

So does his wife Eliana. "There is so much uncertainty when the person you love is in prison," she says, her voice breaking. "You're used to going to bed each night as a couple. When he's not there, you're terrified what is happening to him... There were so many times that I thought he would get out, but he didn't. You feel powerless."

"We didn't know what would happen to him at Krome," she says of her husband's dramatic escape from Venezuela. "Chávez was on TV saying that he would bring him back."

Cedeño's legal limbo finally ended May 18, when a judge awarded him political asylum. He's one of about 1,500 Venezuelans awarded that status in the past nine years. In Cedeño's mind, America is everything that Venezuela is not under Chávez.

"Here the laws are respected," he says. "That's why I chose this country.

"I can't go back to Venezuela," he admits. "At least not until Chávez leaves." Unthinkable only a few years ago, the president's ouster looks like a real possibility during next year's election. Last September, Chávez's socialist party garnered only 48 percent of the popular vote in a national election. Even some of Chávez's staunchest international supporters have begun abandoning the president.

American academic Noam Chomsky recently criticized Chávez for his "assault" on democracy, citing the fact that María Lourdes Afiuni — the judge who released Cedeño — remains under house arrest despite no trial and a battle with cancer. Weakened further by his own cancer and flagging poll numbers, Chávez nonetheless recently vowed to rule until 2031.

So Cedeño has once again become chief financier of the opposition. He is vague about the details, but assures his countrymen with the phrase "Todo se arregla siempre" — "Everything works out eventually. "When you fight dictators that make anti-democratic laws, you have to do things that go against those measures."

In the meantime, he's suing the former Banco Canarias employees and Venezuelan officials who he believes set him up, costing him three years in jail and at least $80 million. He thinks there is a good chance his enemies will find him eventually. "I know that there are people watching me," he says, glancing at the tower across from his. "An American agent told me that, as well as sources in Venezuela, there are really evil people after me here."

He pauses as his son Jesús joins him on the terrace. "The Cubans could pull up a speedboat here so easily, grab me, and take me to Havana," he says, staring down at the dark water. But it's Chávez who should be afraid.

"I don't teach my children to hate him," he says, sitting on a long, plush white sofa in the living room.

And what of the president's cancer?

"Karma," Jesús says. "What goes around comes around."

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