Gustavo Cisneros, 54, is the head that shows at the Cisneros Group. He graduated from the School of Business Administration of the Babson College in Wensley, Massachusetts and under his father’s guidance; he got to know every corner of the family’s domain.
Don Diego Cisneros had eight children. Nevertheless, Gustavo and Ricardo, who is vice president of the organization, are the ones who represent the Cisneros Group. Once Carlos Enrique Cisneros used to share the entrepreneurial initiative but he passed away trying to save his sons in the great waters of a Venezuelan river. Moreover, the women of the family have never partaken in these affairs.
The image of Cisneros family does not raise affection in Venezuela. That is why Gustavo is committed to project himself as a modest and accessible business man. Some month ago he tried by assuming himself the announcement of the purchase of “Los Leones del Caracas” one of the most popular baseball teams in Venezuela.
“We want to make Venezuelans happy. Let’s work hard. Here people like baseball and we are going to give it to them. Hear de roar” Cisneros said at that moment in an uncanny informal craze.
Strange for a man who is used to speaking eloquently and in a ceremonial way framed within portentous and that sometimes deceives his will to be amicable. In such discourse, he frequently quotes his father’s phrases and combines them with his philanthropic obsession for the major problems that Latin American education suffers. None of the others Latin-American “magnates” seems to be that concerned about education as he is. In his interventions on the subject, he has exposed overwhelming figures representing this crisis. He says that 45% of Latin-Americans, who access primary school, never finish high school and few of them who do it, cannot understand a 500-word essay.
“As it were not enough –adds Cisneros- a Latin-American teacher makes a bit more than one dollar per hour and during his/her career he/she is hardly ever given courses to update knowledge or materials for teaching”
Since 1979, the Cisneros Group has been related to massive education programs in Venezuela. Due to his effort, “Cl@se”, an e-learning tool, has crossed international borders and offers education services to more than 30,000 schools in Mexico and other 7,200 in Argentina.
As any other magnates from Latinamerica, Cisneros is quite cautious about his image. In the editorial offices of the Venezuelan press, there is somewhat a “not-written” rule that states that any word that is said about Cisneros and his empire has to be carefully revised by editors. To answer questions in an interview for The Wall Street Journal in 1994, Cisneros turned up escorted by his friend Vernon Jordan, a famous lawyer and once a member of the board of director of the Journal.
Despite his similarity to his father concerning optimisms, Gustavo Cisneros has a different style to the founder of the dynasty. A local bottling worker from “Pepsi” summarized the difference between both businessmen: “When Diego arrived at one of the floors of the factory he used to open his arms to hug the foreman; when Gustavo visits us his bodyguards show up ten minutes before he arrives.”
“There is some inaccuracy in that comment” -said a businessman who is close to the family. “Gustavo seldom passes by a bottling factory.”
It is just that things have changed. Gustavo feels more attraction towards power and culture encounters. Two years after his father died, the young businessman and his wife Patricia Phelps were in the list of guest of Ronald Reagan’s celebrations. It is worth mention that Patricia Phelps –with whom Gustavo has three children-, has one of the most complete Latin-American art collections in the world.
How to dream.
Once someone asked Cisneros’ father what the key to his success and the businessman answered: “If you do not dream, you will not be able to consolidate”
Today’s Cisneros learned that to dream one needs to consolidate not only foreign investors but also presidents and ministers; and it seems that they are very efficient. Some people who know them -and who will only speak anonymously- say that if Don Diego Cisneros made a fortune with his wit, his sons have kept it with influences and a sharp sense of long-term investments; al this under a peaceful –and sometimes changing- coexistence with the ones in power.
The Cisneros have withdrew cheques to Adecos and Copeyanos in campaign; courted Felipe González of Spain; were friends of Rafael Caldera, Jaime Lusinchi and of the close entourage of Carlos Andrés Pérez, with whom they stopped having relations. They condemned Chávez’ coup in its time but this year, in May, they have him sing along with Julio Iglesias “Just Once” at the Presidential Palace.
Gustavo has participated in the international consultant committee of the Chase Manhattan Bank accompanied by Henry Kissinger and David Rockefeller. In fact, Gustavo was advisor of the latter concerning political relations with Venezuela. Moreover, Cyrus Vance –once Secretary of State during Jimmy Carter’s administration- used to ask Cisneros as a spokesman.
During the great debate about the renegotiation of the external debt blasted in Venezuela, President Jaime Lusinchi asked for Gustavo’s intervention. By that time and in response to a journalist question about his relation with the president, Gustavo said: “We help each other…” and then he added “So what do we obtain from this? The answer is: probably very little.”
“Any suggestion that his business come from a different thing than hard work and sharp business perspicacity during fifty years of the organization, is absolutely false” warned Cisneros to The Wall Street Journal.
Possibly the most intense fraternity between Cisneros and politicians happened during Carlos Andrés Pérez administration. It is a story of a thirty-year highly supportive relationship that turned into sheer indifference overnight. Being the Minister of Foreign Affairs in 1962, Carlos Andrés Pérez was given the task of struggling against pro-Castro movements and he found Don Diego Cisneros a great ideologist ally who was also upset by Castro.
“He was a very nice man with a kind mood”, recalled Pérez during an interview with “Punto-com” in Miami.
When Pérez became President in 1974, the Cisneros family consolidated some domestic and international business. They invested –among others- in Banco Latino. The family was part of a selective group of businesspeople who were very close to the government and who were labelled as “The 12 Disciples”. However, things changed during the second administration of Pérez. The popularity of Pérez suddenly plummeted and in February 1992, a group of rebel military officers with bolivarian nightmares wanted to take over power.
A president in trouble
Pérez recalls that that early morning he put his clothes on over his pyjamas and an Admiral who was around broke a window and help him come out of the palace to a non-official car that took him through a city full of rebel tanks. They were looking for a TV station from which Pérez would address the country to confirm that he was still the president of the nation.
A version to that event -that came after the events- says that one of the Cisneros Family called Pérez and told him that their TV station, Venevisión, was at his entire disposal. Pérez denies he was offered that help.
“No, no, no,” he said. “That was not like that. I had to speak to the country and the Military Forces.” Pérez explained that when he was going to a TV station different from Venevisión, the Admiral he was with connected him with them so he decided he would go there.
“I spoke at the cameras and the Minister of Defence called me and told me: ‘Mr. President, they surrendered with your words’”
Having a trembling president in front of the cameras was –in Cisneros’ words- a truly courageous act of the corporation.
“We took the chance for democracy and we won”, said Cisneros.
In 1993, been accused on corruption and embezzlement, Pérez had to leave the presidency. The day after him leaving the Palace, the Cisneros family stopped calling him, Pérez recalls.
“After that moment I did not know anything about them” he reckons. “They broke relations with me. Human condition is very fragile”
In this random game to access power, the Cisneros family ended up paying a high price that affected their faultless image and which was displayed through the countless great achievements that were like prizes of a brilliant business tradition; Ricardo Cisneros was involved in the unruliest financial affair ever in the history of Venezuela: the chaotic bankruptcy of Banco Latino in 1994.
A Venezuelan judge warrant for his arrest and Ricardo was prosecuted on fraud since he belonged to the board of directors of the bank. According to the accusation the board approved credits to companies –some of them Ricardo’s- over the established limits and therefore the funds of the bank were deviate. When the order was released, Ricardo was already abroad so he stayed there.
Gustavo came into scene to face the situation. He said that the only relation linking the bank to the Cisneros Organization was that they had shares for a minimum percentage (2.43 per cent) in the share capital of the bank and that Ricardo, then the Executive Vice-president of the organization, owed 0,003 per cent of the shares. Ricardo was in fact part of the board of the bank but Gustavo underestimated that by saying that he never belonged to such management team. About two weeks ago, Venezuelan justice absolved almost every accused person of the case, including Ricardo.
Behind the scandal there as a “smear campaign orchestrated by the inherits of a imprudent social media that keeps a close relation with Lyndon Larouche and his extremist organization.”
The struggle with Larouche
Larouche is a shady American union leader who has determined himself to pest Venezuelan magnates with a series of accusations, which he audaciously combines with reality and speculation and by means of using for that purpose, his movement in Virginia and the publication of a bulletin called Executive Intelligence Review (EIR). The Cisneros family has had to defend themselves at trials and through the media several times.
According to the Federal Commission of Communication (FCC) the beginning of this dispute can be traced back to January 1985 when some people supporting Larouche were arrested in Venezuela and 200 books of the book “Dope Inc” were confiscated. The book denigrated the Cisneros family by suggesting that it had connections with people and institutions dedicated to launder. Gustavo Cisneros presented a plea to put the book out of the market. That was the beginning of all.
In June 1992, the editor of the EIR, Nora Hamerman, set on the table in the US, something that seemed buried in the legal files in Venezuela. She presented an official request to the FCC in order to avoid the purchase of Univisión by Cisneros. The editor accused them of the harassment that the movement had been victim of. She also submitted documents proving that the Customs Service in Hollywood, Florida, found 50 grams of cocaine on February 14th 1985. Such drug had been found in an executive plane of the Venezuelan Pepsi-Cola Corp. that was operated by a Cisneros’ company (Aeroservicios Alas)
Cisneros answered all objections coming from EIR and despite admitting the incident with the plane “Lear Jet”, the group submitted a document from the Customs Services that stated that the plane had been turned back in and that no charges had been made. None of the accusations succeeded and the FCC authorized the purchase of Univisión by the group.
These incidents seem to have strengthened the businessman. Nowadays, Cisneros is one of the most powerful men in Latin America and one of most influential persons in US. The power aura that he has condensed is described unscrupulously in a news report saying that when Cisneros arrived in Caracas to celebrate Venevisión retaking the first rating place two months ago, “a concrete wall of TV stars opened wide like the Red Sea at Moses’ disposal”
Reyes, G (Agosto, 2001) Gustavo Cisneros. Revista Poder.