The full report, dated April 28 2008 and titled Promoting Revenue Transparency examined the published accounts of oil companies in 42 different countries, and ranked them according to whether they were of high, medium or low transparency. Venezuela’s state-owned oil firm PDVSA was given the lowest possible ranking. Transparency International say that “comprehensive corporate reporting diminishes the opportunities for corrupt officials to extort funds”.

PDVSA was directly accused of failing to disclose basic financial information such as their revenues and how much royalties they paid, and of not producing properly audited accounts. The international corporate media considers TI to be a reliable source, despite the fact that almost all their funding comes from western governments and big business. The British government is one of the major donors, contributing £1 million in 2007. Other donors include the US government, Shell and Exxon Mobil. Unsurprisingly, TI’s damning report was seized upon by rightwing newspapers and websites and used as another stick with which to beat Venezuela’s socialist president, Hugo Chávez.

When Dan Burnett, a New York-based blogger who runs the popular Oil Wars website, read the TI report, he almost choked on his cornflakes. Burnett had been analysing PDVSA’s accounts for several years, and regularly writes about the financial information that TI claims does not exist.

I checked the PDVSA website. Burnett was right to be astonished. On page 127 of their financial statement it says that revenue for 2007 was $96.242bn, and that they paid $21.9bn in royalties. On page 148, PDVSA’s auditors state that the accounts were prepared in accordance with international accounting standards. Further research showed that PDVSA’s financial statements are also published in hard copy, and are widely reported in the domestic media, both in newspapers and on television.

I was perplexed. How could Transparency International, which claims that its report was subject to a rigorous “quality control regime” and had been checked for accuracy by “industry experts”, have got it so wrong? I called them and asked.

A spokesperson explained that their report was published two weeks before PDVSA submitted their 2007 accounts on May 12 2008. This explanation implied that TI are unfamiliar with basic financial reporting procedures. Before company accounts can be submitted, the data has to be collated, analysed and audited. It is normal for this process to take several weeks or months. For example, Transparency International’s own audited financial report for 2007 is not yet publicly available on their website.

However, TI’s explanation for their inaccurate report on PDVSA contained a much more serious problem. It was wrong. The March 29 edition of El Universal, a major opposition newspaper, featured a report on PDVSA’s financial statement, together with a photograph of PDVSA’s president, Rafael Ramirez, holding up a copy of the 2007 report and accounts. The information that TI claimed was being withheld by PDVSA, was published four weeks before they made their allegations. Armed with this additional information, I attempted to contact TI’s press spokesperson again for a comment. My calls were not returned.

Despite Transparency International’s less than transparent behaviour, was it still possible that there was an innocent explanation for the errors in their report? I began to wonder whether their spokesperson had got the dates confused and was actually talking about a previous set of accounts.

I checked the historical records which are freely available on the PDVSA website. Their audited 2006 accounts were published on September 8 2007, a full seven months before TI published its report accusing PDVSA of non-disclosure. The 2006 accounts also contained the information that TI claimed was not disclosed. The 2005 accounts were also available, as were all the annual accounts going back to 2000.

In the past, there have been problems with PDVSA’s accounts, and in particular with late submission. In late 2002, just months after the failed coup attempt, PDVSA oil executives went on strike in an attempt to bring down the Chávez government. It became clear that the strike would not succeed, but PDVSA’s operational equipment was sabotaged, causing millions of dollars of damage. A massive amount of data was destroyed, including the files containing PDVSA’s financial information and accounts. PDVSA was forced to rebuild its financial infrastructure from scratch, and for several years this caused delays in producing accounts. However, TI’s accusation is that PDVSA does not disclose information, not that previous accounts were submitted late. This accusation, which forms the basis of TI’s report, is demonstrably wrong.

Transparency International denies that they pursue an anti-Chavez agenda. “We are not a political organisation”, their spokesperson told me. Despite this denial, TI’s Venezuela bureau is staffed by opponents of the Venezuelan government. The directors include Robert Bottome, the publisher of Veneconomia, a strident opposition journal, and Aurelio Concheso of the Centre for the Dissemination of Economic Knowledge, a conservative thinktank funded by the US government. Concheso was previously a director of the employers’ organisation, Fedecamaras. The president of Fedecamaras, Pedro Carmona, led the failed 2002 coup and was briefly installed as Venezuela’s dictator.

The data in TI’s report was gathered by Mercedes de Freitas, the head of their Caracas bureau and a longtime opponent of President Chávez. De Freitas’ previous job was running a US government funded opposition “civil society” group. The Nation reported on her response to the 2002 military coup: “… on the night of April 12 — after Carmona suspended the assembly — Mercedes de Freitas, a director of the Fundacion Momento de la Gente, a legislative monitoring project subsidized by NED [National Endowment for Democracy, a US government agency], emailed the endowment defending the military and Carmona, claiming the takeover was not a military coup.”

In July 2006, Freitas issued a press release on behalf of Transparency International, which argued against the passing of a draft bill that proposed making it illegal for Venezuelan “civil society” organisations to receive funding from foreign governments, including from the US government. “If it becomes law, civil society would be subject to considerable restrictions, with government allowed to interfere in their objectives, activities and funding sources” the press release asserted.

Documents released under the US freedom of information act show that the Bush administration gives $5m a year to organisations opposed to the Chávez government.

Transparency International has a choice. They can continue to defend their indefensible report and refuse to answer legitimate questions about their activities in Venezuela. Or they can come clean and provide full disclosure. As TI’s own report diplomatically puts it: “Disclosure improves a company’s image, making it less vulnerable to unsubstantiated attacks on its reputation.”

Hugo Chávez, the country’s socialist president, is often blamed for the political polarisation of Venezuelan society. But the fact that the basis of that divide — the polarisation of wealth and power — long preceded Chávez, is proved by the urban landscape.

Suppose it were you in the passenger seat on your way into Caracas. Along the route you would doubtless look out of the window to your right. Were you to do so, you would see rows of ostentatious high-rise apartment blocks with polished windows, some of them with neatly manicured jungles protruding out of each balcony like a series of elaborate Chelsea flower shows rising into the sky. These are the homes of the middle classes. Then, if you turned your head and looked up the mountainside to your left, you would be confronted with reality as experienced by most Venezuelans: the barrio.

It is impossible to describe the architecture of a Caracas barrio by reference to a poor neighbourhood in London, Paris or New York. Seen from a distance, it is as if God had taken a giant wheelbarrow, filled with hundreds of thousands of tiny, half-made cubes and then proceeded to pour the contents indiscriminately over the mountainsides. As the cubes land, they come to rest in no particular order; one perched precariously atop another, all of them somehow defying the force of gravity.

But of course, the barrios were constructed by people: poor people from the countryside who migrated to the city during the course of the 20th century. When they arrived, finding no homes or land at prices they could afford, they squatted on unused land on the sides of the mountains, and began to surround the city with their own makeshift dwellings, built with whatever materials they could lay their hands on: usually a combination of brick, breeze block and tin, or for the less fortunate, cardboard.

The view from my friend’s balcony on the 24th floor of a tower block, situated in the middle-class district of Los Dos Caminos, is spectacular. It is as if I am surveying the city from atop a lighthouse that has been plonked in the centre of a giant misshapen bowl. In the centre, there are streets arranged in straight lines, modern blocks of flats, gleaming shopping malls, and the ever-present traffic jams. Wrapped around the sides of the bowl are the barrios. Three or four kilometres from my vantage point is the Petare barrio, one of the largest in Latin America and home to almost half a million Venezuelans. At night, Petare rises in glittering yellow and white dots like the lights of a thousand Christmas trees. Soon the barrio will sparkle in monochrome, as the government programme of replacing the old yellow bulbs with energy-saving white ones nears completion.

The landscape provides a physical dimension to the sense that Caracas is a city under siege from itself: the better-off, literally, looking up at the poor who look down on the richer citizens. Politically also, Venezuelan society, in the throes of its 21st century socialist revolution, has some features of the siege warfare of previous eras. Those who were formerly socially excluded now have political power; although the wealthy retain much of the economic and ideological power, through their ownership of the private media and other businesses.

Despite Chávez having won 10 elections and referendums (and immediately accepting defeat in the one he lost), the disinformation war against Venezuelan democracy continues unabated. Two weeks ago, one of the presenters on Globovision told his viewers, apparently with a straight face, that a bank robbery in Altagracia de Orituco was the fault of Chávez. Later I watched a talk show where three upper-class pundits announced, again with no detectable trace of irony, that they were planning to march against “hunger and poverty”. Incredibly, they meant their hunger and their poverty.

A few days earlier, I had been shopping in a typical Caracas supermarket in an upmarket part of town. The selection of foodstuffs, fresh, frozen and tinned, stacked high on every shelf, was as impressive as anything offered by Tesco or Wal-Mart. The only product we could not find was milk, which is being hoarded and illegally exported to Colombia by producers and distributors in an attempt to bust government price controls on basic foodstuffs. And despite the sporadic shortages, Venezuelans of all social classes are consuming more food than ever before. In the barrios, state-owned Mercal supermarkets sell food at around half the market price.

On another occasion, I stopped for a cafe negro at one of the multi-purpose street kiosks that are dotted all around Caracas. The usual selection of anti-government newspapers were on display: El Nacional, El Universal, El Mundo, El Nuevo Pais, as well as one or two more moderate organs. Most of them led with an anti-Chávez story, but the headline that grabbed my attention was the one from Tal Cual, a supposedly liberal paper: “Another dictatorship? Never!” it screamed. Last year one of their front page headlines was “Heil Hugo”. Underneath was a photomontage of Chavez in a Hitler moustache. Despite these provocations, neither Tal Cual nor any of the more extreme rightwing papers has ever been subject to any censorship by the Chávez administration. Polls show that the percentage of Venezuelans who are “satisfied with their democracy works” has risen from 35% to 59% during the Chávez presidency. The Latin American average is 37%.

In December, Chávez suffered his first ever electoral defeat. Constitutional changes that would have enshrined participatory democracy and removed the limit on the number of terms a president could serve were rejected by the narrowest of margins in a nationwide referendum. While the opposition vote remained unchanged at four and a half million, over one-third of government supporters opted to stay at home. Many reasons have been advanced to explain this mass abstention — including the milk shortages; high crime rates and corruption; the complexity of the proposals; bureaucratic inefficiency; a poor campaign and complacency.

Undoubtedly, private media propaganda also played its part in confusing supporters of the revolution and shoring up support for the opposition. One man told me that his mother-in-law, a hitherto loyal Chávez voter, had abstained, fearing that if the amendments were passed, the government would nationalise her apartment. I checked the voting records for the middle-class area where I was staying. Some 87% of my neighbours had voted against the proposals. However, it would be foolish for the opposition to draw too much comfort from their referendum victory. Chávez remains overwhelmingly popular in the barrios and provided that the government is able to refocus its efforts on delivery, those of his supporters who abstained will turn out in future elections.

What lies behind the shrill anti- Chávez hysteria (much of it financed by the US government) isn’t a crumbling economy or state repression but the exclusion of the former ruling class and their allies in Washington from the levers of state power. While Venezuela retains many of the features of the pre-revolutionary era, including bureaucracy and corruption, independent surveys show that incomes for the working class and poor majority have risen by a staggering 130% in real terms.

But the changes in people’s lives involve more than just improvements in material living standards. While on a visit to the town of Naiguata on the Caribbean coast, I happened upon one of the 2,000 new clinics which are providing top-quality healthcare to Venezuela’s poor majority. Inside, I spoke to Antonio Brito, a 25-year-old Venezuelan doctor who had recently graduated from the Latin American School of Medicine in Cuba. Doctor Brito told me that of the 94 students in his class, over one-third were from indigenous communities. Those who graduated with him are now serving in their tribal villages. I asked Brito how much a foreigner like me would be charged for treatment. “Here, medical treatment is completely free for everybody,” he replied. “The only qualification is that you are a human being.”

In the mountains of the 23 de Enero barrio in Caracas, I saw more examples of the transformation that is taking place in Venezuela. In one part of the barrio, I saw newly installed gas pipes running up the side of each house. Residents are also being connected to the outside world. In the La Cañada district, I visited a brand new infocentre, which provides computer training and unlimited broadband internet access on 74 terminals, free of charge. One of the facilitators explained that the infocentre is the result of a partnership between the ministry of science and technology and the local community. The ministry provided the building materials, logistical support and computers, and the community built the centre and chose the staff. Five hundred similar infocentres have been opened in the barrios.

Of course, Venezuela’s socialist revolution is not occurring in a geopolitical vacuum. The re-emergence of multi-polarity, specifically the rise of China and the resurgence of Russia, has created economic and political possibilities for third world countries that previously would have been unthinkable. A host of Latin American states, among them Bolivia, Ecuador and Nicaragua, have decisively rejected neo-liberal orthodoxy and US hegemony, and are co-operating through Alba and other mutual trade and investment arrangements. In South Africa, the clean sweep for the left in the elections to the leadership of the country’s governing ANC, was in part inspired by the changes taking place in Latin America.

A popular slogan painted on walls across Latin America is Un Mundo Mejor es Necesario (in English — a better world is necessary). For the first time in a generation, a better world is also becoming possible.