Chavez top ally resigns after brother arrested in banking scandal

By Branko Brkic 7 December 2009

One of Venezuelan President Hugo Chavez’s closest allies has resigned in a scandal that has shaken the nation’s banks, triggering a purge of businessmen with ties to the government. Science and technology minister Jesse Chacon’s brother was arrested following the closure of a bank he headed up. Chavez said the move shows there are no political untouchables when it comes to corruption. Last week Venezuelan authorities closed seven small banks because of poor governance and unexplained funds, with Chavez threatening to nationalise the country’s financial system. Now ratings agency, Moody's, has downgraded two major Venezuelan banks, one private and one state-owned. Our own Trevor Manuel wouldn’t care about what Moody’s thinks, but after Chavez stepped back from threatening nationalisation and made peace with owners of the nation’s top private oil-exporting banks, the markets recovered (surprise, surprise). Read more: The New York Times