The Venezuelan Army Won the Tuna Battle

The Venezuelan fishing fleet and the seafood processing industry went under due to massive imports from the Government. Ironically, the shot underneath the waterline was fired by military officers in charge of overseeing the national sovereignty. A subsidiary of the Savings Bank of the Army imported tuna and other goods. The business was shielded with guaranteed access to Government currencies at preferential rates and alliances with the new business class.
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The
business preferred by the Venezuelan military in the self-named Bolivarian
Revolution is that of food. The origin of this preference could go back to 2004,
when Hugo Chavez created the Ministry of Food. Since then, food dispatch and its
affiliated companies have been directed, almost exclusively, by the uniformed
officers. With Chávez's successor Nicolás Maduro since 2013 in the presidency,
that situation has been maintained to the point that last year he promoted the
Minister of Defense Vladimir Padrino López to the position of head of the
Gran Misión Abastecimiento Soberano (Great Sovereign Supply Mission), a
plan aimed at overcoming – so far, unsuccessfully – the chronic shortage of
food, among other basic consumer products, that Venezuelans have suffered for
years. But the binomial between the military and food has been so significant
that for years, a mirror company of the Savings Bank of the Army imported and
marketed canned tuna thanks to the US dollars and preferential treatment
received while the former Foreign Exchange Administration Commission (Cadivi)
was in place.
Since 2003, when Hugo Chávez imposed a strict exchange
control system due to political reasons, Cadivi was the agency responsible for
allocating foreign currency amounts that private or public companies or
individuals requested for their businesses. By managing currencies in the midst
of a convoluted system of exchange rates and for an import-prone country, those
in charge had virtually unlimited opportunities to participate in corruption
schemes. When President Maduro closed the body in 2013, it was accused by known
former chavismo officials of being the escape window of billions of US
dollars.
At
a point, Cadivi was also governed by the military. Thus, the colonels of the
army Manuel Barroso (promoted to General in 2015) and Víctor Flores Correa,
president and vice president of Cadivi, respectively, paved the way for his
comrades in arms from the Savings Bank of the Bolivarian Army (Caejerb) to
obtain cheap currencies through Inversora Caejer, a subsidiary with the autonomy
of any private company.
Inversora
Caejer was born on February 21, 2008, and was registered by the president of
Caejerb, the then army colonel Antonio Rafael Gutiérrez Campos. The symbiosis
between the savings bank and the company is maintained: the president of one is
also the president of the other. Since December 2012, the then colonel, former
aid-de-camp of Chávez and current brigadier general, Alfredo Román Parra Yarza,
is in charge of both responsibilities, according to the mercantile register of
Inversora Caejer.
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Public
information reveals that the extinct Cadivi paid Inversora Caejer nearly 10.5
million US dollars until 2012, the last year in which Venezuelans enjoyed the
abundance of the oil boom and saw the last re-election of Chávez as president of
the Republic. Then, the National Foreign Trade Center (Cencoex), which replaced
Cadivi since late 2013, paid to the company another 10.7 million US dollars
between January and September 5, 2014. When this second payment streak took
place, the country was already diving into the economic crisis and the cuts in
the allocations of currencies to the private sector were evident. However, there
were no restrictions for the military.
The
amounts paid to Inversora Caejer in those nine months of 2014 exceeded, for
example, the amounts paid to transnational companies like Bimbo, Chrysler or
Johnson & Johnson; to pharmaceutical companies like Laboratorios Farma or
Laboratorios Valmor; and even to major telecommunications operators like the
Venezuelan subsidiary of the Spanish company Telefónica. Although unknown in the
business world, Inversora Caejer emerged as a major player in imports by
systematizing the data of the National Register of Contractors (RNC) and seeking
relationships with the military, where the company appears as a contractor of
Caejerb with a payroll of 15 employees only.
Green Olive Tuna
The
name of Inversora Caejer also appears in the hundreds of pages comprising the
judicial file of the only criminal investigation of the Public Ministry on the
alleged irregularities committed in Cadivi. It is the case against Francisco
Mariano Navas Lugo, also an army colonel and former manager of Cadivi imports
and export monitoring, and his cousin José Daniel Stekman, both arrested since
2013.
Not
even the suspicions arising among the authorities in 2012 were obstacles for the
military company to win the battle of the tuna. It was a loud victory for a
company that was born as a prospective distortion of what is the natural end of
a savings bank.
In
2012, four years after Inversora Caejer was registered, Cadivi authorized around
8.3 million US dollars to import "whole yellowfin" tuna, "frozen big eye fish in
bulk," "tuna loin in oil," and other sea products aimed to feed the
army.

The National Register of Contractors (RNC) shows the relationship between Inversora Caejer and the Savings Bank of the Bolivarian Army (Caejerb).
According
to the documents included in the file of the Public Prosecutor’s Office, the
suppliers of these goods were the Ecuadorian companies Maviga Inc, PacFisch and
Conservas Isabel, as well as the Panamanian company Queen
Fish.
The
foreign exchange applications to import these foods were only a part of the
company's requests to Cadivi to import from milking machines, video cameras, and
"uninterruptible power supply units (UPS)" to radio navigation equipment, all
purchased from companies like SMB Entreprises Inc, Global Merchandise
Distributors Inc, or JD & FB Equipment and Supllies LLC, registered in
Florida, United States of America, and belonging to Venezuelans. The
applications totaled almost 60 million US dollars and set off the alarm of the
administrators of the exchange system. "In the following months, a large number
of applications began to be generated, specifically 71, whose items and amounts
quickly attracted the attention of the area of ??analysis since they did not
seem to correspond to the frequency, amount and items managed by the
institution," as detailed in the report contained in the judicial
file.
In
addition to Inversora Caejer, on the can label appeared the names of two other
importers of the same product: Imports Almora and Desarrollos Los Cocos Ranch.
It is sort of a business puzzle joined together by tuna.
The
owner of Importaciones Almora is the Venezuelan businessman Adolfo Miguel Lovera
Reyes. That is not the only company that relates him with Inversora Caejer.
Lovera Reyes also owns Importexal Corp, a company registered in Panama in 2007,
which seven years later was one of the Ecuadorian tuna suppliers for the
military. This appears in the records of the port activity prepared by the
Chamber of Commerce of Puerto Cabello (CCPC) based on the information supplied
by the shipping companies. On June 18, 2014, the CMA CGM Alcázar ship from the
port of Manzanillo in Panama arrived at the main port of the country with a
cargo of almost 121 tons of frozen yellowfin
tuna.
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Lovera
Reyes defines himself in his Linkedin profile as "partner-founder" of Importexal
Corp, but the company's description does not include food marketing. "A company
engaged in logistics and development of international trading projects, which
stands out for having private and government clients who require large
quantities of items like toys, school supplies, toiletries and cleaning
supplies, among others." In any case, the company did well as it jumped from an
initial capital of US$ 10,000 to US$ 10 million in 2016.
In
this same social media, Lovera Reyes describes himself as the person responsible
for the tuna brand sold by Inversora Caejer along with his company Importaciones
Almora. "It was initially formed to supply the national market. Then, a tuna
brand named Mar Caribe was created and massively sold nationwide due to its high
quality. In 2015, Importaciones Almora was renamed Group Almora 21 and became a
food exporter which offers, among other products, to ship from the port of La
Guaira the tuna that was previously imported and negotiated with Inversora
Caejer. The company never responded to our interview requests for this
report.
Despite the publication by the entrepreneur, a decree by the Ministry of Health, published in Official Gazette 39.495 of August 25, 2010, confirms that Cooperativa Turmero Azul 657987 obtained the food safety registration to market the Mar Caribe tuna "made" by the Venezuelan company Conservas del Centro. Both Cooperativa Turmero Azul 657987 and Conservas del Centro are also linked to the protagonists of this story -the military of Inversora Caejer.
Luis
Medina Ramírez is the "comptroller" of Cooperativa Turmero Azul 657987, a Major
General of the Army, who ultimately ended up as president of the state company
Corporación Única de Servicios Productivos y Alimentarios (Cuspal) (a productive
and food service company) attached to the Ministry of Food and responsible for
planning public food purchases abroad. Brothers Faroh Cano, owners of Conservas
del Centro in Venezuela, bought in June 2016 the Ecuadorian packer Fishcorp,
another supplier of the tuna sold by Inversora Caejer in
2014.
Millionaire Business
International
trade databases, like ImportGenius, allow quantifying the value of tuna
imports made three years ago by the company of the Savings Bank of the Army. In
2014 only, Inversora Caejer imported tuna for at least 7.13 million dollars.
That amount includes the purchase of about 1.25 million kilos (2.76 pounds) of
the product, freight and insurance costs excluded. In other words, Inversora
Caejer paid US$ 5.69 per kilo of tuna.
A
year later, in 2015, the purchases of tuna to Ecuador by the military totaled at
least US$ 1.8 million per 300,000 kilos (661,386 pounds), at US$ 6.015 per kilo,
based on ImportGenius statistics. Although the Government has not
disclosed the currency payment figures for 2015 and 2016, Inversora Caejer does
not appear in unofficial listings for both years.
Inversora
Caejer's breakthrough in the tuna business coincided with the sudden rise of
Ecuador's exports to the Venezuelan market that, on the one hand, aroused
suspicions among the authorities of that country and, on the other, led to the
decline of the traditional Venezuelan fishing industry, which used to be among
the largest in the world. Based on complaints from the Tuna Industry and
Processors Guild, Ecuador's Ministry of Commerce even reported that behind the
boom in the sale of tuna to Venezuela as of 2011 there was an "overvaluation of
exports" and a "concentration of the commerce in a single company to the
detriment of traditional exporters," according to the Plan V portal.
In
Venezuela, the complaint of trade unions and business organizations has pointed
in the same direction. On several occasions, they warned about the inconvenience
of allocating foreign currency to import the canned product, while the
production lines of Venezuelan tuna plants such as Margarita, El Faro, Eveba, El
Peñero, Arrecife and Oriente were paralyzed due to lack of raw
material.
"We
call on the authorities so that instead of granting foreign currency to the
companies importing canned tuna, allocate it to the suppliers of raw material of
the national industry, which generates employment and pays taxes in the
country," said the Venezuelan Chamber of Fisheries (Cavenpesca) in a statement
released in May 2015.
Despite
the capacity to produce 240 million canned tuna each year, the obstacles imposed
by the authorities and the impossibility of timely importing tuna loins caused a
collapse. Therefore, the entrepreneurs complained in the letter that "since the
end of last year" the Ministry of Food "has not approved the import permits
required to be able to replenish tuna loin stocks," a different fate than
Inversora Caejer had.
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U.S. Dollars and Preferential Treatment in Cadivi
In
the judicial file of the investigation by the Public Prosecutor’s Office on the
case of the irregularities in Cadivi there are clues to understand the boom of
the mirror company of the Savings Bank of the Army. "In early 2010, the Savings
Bank of the Army, which received contributions from both the active personnel
assigned to the institution and the placements in the stock exchange, decided to
import a variety of products as a mechanism to obtain additional income; hence,
it expressed the intention to register as a user of the Automated Currency
Trading System," says the report on Inversora Caejer.
The
report states that in the same year, Inversora Caejer filed an initial
application to acquire foreign currency to import "frozen beef", but the
operation was canceled. Then, it "requested to the Ministry of People's Power
for Food the authorization to import under the method of payment on demand."
Even though the company obtained it, it did not continue with the procedure due
to lack of " foreign currency guarantee."
But
the solution was around the corner. "Consequently, and in order to obtain the
privileges and benefits of State companies, Inversora Caejer requested to be
registered in the Automated System of the Commission as a user of the public
sector and submitted registration No. 5828 of 8/14/2010, issued by the Ministry
of People’s Power for Defense, which is an essential requirement to be
included.”
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That
was the key that definitively opened the doors to Cadivi and the much-desired
preferential dollars for the military. The qualification as a public company
guaranteed fast procedures to purchase U.S. dollars or the omission of
requirements that are compulsory to any private company, among other benefits.
"In 2011, Inversora Caejer file during this period seven applications to import
computer equipment and television receivers to sell them at affordable prices to
the members affiliated with the institution, as well as tuna, hake fillets, and
fresh, refrigerated or frozen fish fillets in order to continue supplying to the
same food service of the army," the report said.
A
year later, the alarms of the supervisory bodies set off. In early 2012,
according to the report contained in the judicial file, Colonel Asnoldo Prieto
Chacín, president of the Savings Bank of the Army and Inversora Caejer, met with
Colonel Víctor Flores Correa, vice president of the foreign currency
administration and control of Cadivi, to obtain "the necessary guidance to
continue the import process on its part in order to obtain greater income for
the benefit of the associates," i.e. 11,000, in the case of Caejerb. That paved
the way for the Savings Bank of the Army to also become a large importer of
goods with preferential dollars.