Desiré Obadía, or How to Mass Import and Go Unnoticed under the Chavismo

Sometimes intermediary, others, supplier, but always omnipresent, this Venezuelan is one of the most active and unknown person in the registration of companies in tax havens of the Caribbean. Many of these companies were incorporated ad hoc to do business with Corporación Casa, a food import state entity.
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At
73 years of age, in the autumn years of a fulfilled life, as he says, Venezuelan
entrepreneur Desiré David Obadía Medionies is little known by the public, though
well known in Mossack Fonseca.
In
an internal email of April 2008, Ramsés Owens, a lawyer and, by then, one of the
most senior executives of the Panamanian law firm, urged a subordinate, "Daisy,
PLEASE let's send a message like this before OBADÍA gets mad,..."
Owens
then drew up a profile of the case presented by this recently attracted client,
Obadía, who promises to invoice a lot with the law firm for the registration of
companies, administration and other services of MF product portfolio. However,
out of the blue, Obadía showed himself as demanding and grumpy. Owens recalls
that last week, Obadía had visited the offices of MF in Panama. "I personally
attended him. There was no other person who dared to attend him, considering his
difficult and aggressive personality." But, in his defense, he says in the
letter that the client is going through a difficult moment, "he is separated and
in the process of divorce, and that makes him be in worse mood."
The
account, in any case, represents a business opportunity. Owens explains to his
co-workers at MF that Obadía's company, Escom Limited, trades raw materials
"mainly to Venezuela," and sells "chicken in bulk, wheat, etc." The company must
keep its papers –balance sheets, permits- up to date before the Venezuelan
Customs and the regulatory entities to remain active. Hence, the mission of
Mossack Fonseca, Owens concludes, is to deal with the thorns of Obadía and the
delays of the Consulate of Venezuela in Panama, to prepare the necessary
documents and notarize them. "The Venezuelan consulate wants to find out who is
behind, but this information must be kept hidden," he instructs, "which causes
additional stress. They have no choice but to speculate that he is a Panamanian,
without being able to know that the person behind is actually
Venezuelan."
The
Venezuelan is Desiré Obadía. Since then, in 2008, when he was causing panic
among the employees of MF, until 2015, he opened and managed through the
Panamanian law firm at least a dozen companies in three jurisdictions: the
British Virgin Islands, Panama and Belize. Only in three of them does Obadía
openly appear as a shareholder or director. All three were created to sell food
to an entity of the Venezuelan State, La Casa, S.A. (Corporation of Food and
Agricultural Services), or sell public order equipment to government
offices.
No Place like Home
Obadía,
a Sephardic of French-Moroccan origin, arrived in Venezuela at the age of 14. He
completed his education in Grenada and Martinique, Caribbean islands. He brags
about having travelled "three times around the world" and about his
international raids. Since 1977, he has a store in the first stage of CCCT, the
traditional mall in the Chuao area, in the southeast of Caracas. The store,
Galerías JD, seems to have left behind its best times; the remaining merchandise
- jewelers, leather goods - is in liquidation and part of its original area is
now occupied by a pirate movie stand and a delicatessen sale.

Obadía’s store in one of the main malls of Caracas is in liquidation.
With
that adventurous history, it is a wonder that in 1998 Obadía decided to reinvent
himself. He was an executive of large companies and an industrialist. He left
manufacturing to become an importer. He put it into practice when Hugo Chávez
had already gained power in Venezuela. In addition to his desire to change, the
best endorsement for his new commitment was, as he admits in an interview given
for this story, a politically unpolluted record. "I was an entrepreneur who had
no past, neither adeco nor copeyano (AD or COPEI political party supporter), or
else, because I had never worked with the Government."
He
assures that in 1999, he made his first sale of anti-riot equipment to the
Government. But the best was yet to come. At least, that was his expectation.
Between 2001 and 2004, he changed the name of a company already constituted in
1998 to Jotec S.A., and increased its capital to almost ten million bolivars of
that time (10 billion bolivars today). "I created it with that capital, using a
Bandagro bonus, which the government will never pay, but which is good to use as
capital of companies," Obadía said in an interview last March. "I created a
strong company to sell to the government, but that company never sold anything!
Why? Because I was wrong. In what sense? I did not need a national company to
sell to the Government because I had to sell in bolivars, and then I had to
deliver to the Central Bank the dollars of that purchase at the official rate.
Nobody does that! Then I created the company in the Virgin
Islands."
Indeed,
in 2003, Obadía incorporated a company in the British Virgin Islands,
EscomLimited. Then, he would move it to Panama, which would be the basis of his
operations from April. Why? Because he would then entrust the creation and
management of his legal structure to the law firm Mossack Fonseca, through its
office in Florida.
Through
Mossack Fonseca, Obadía registered over a dozen companies in Panama: three in
2009, three in 2011, and five in 2012. In 2014, still in the hands of MF, he
created two companies in Belize. It was the year of diplomatic deadlock with the
Government of Panama of former President Ricardo Martinelli, who had then helped
the member of the opposition Maria Corina Machado to be part of an official
delegation of the country of the isthmus to give testimony before the OAS in
Washington. Obadía, feared, with justifiable reasons, that the rupture of
relationships with Panama, where he had registered companies, would harm his
business opportunities.
Thus,
Obadía became one of the Venezuelans with the longest and most extended file in
Mossack Fonseca, as evidenced by the leak that came to the newspaper Süddeutsche
Zeitung in Munich, Germany, and which was accessed thanks to the project led by
the International Consortium of Investigative Journalists (ICIJ). Upon reviewing
the papers, which include official documents and email exchanges, it is verified
that the relationship between the Venezuelan client and his Panamanian service
provider, although mutually profitable, has also been strained. Obadía
frequently appears objecting MF fees, complaining without reserves, he contacts
employees that are not supposed to be his interlocutors, and always writes his
messages in capital letters, which he justifies because of his poor eyesight,
but that are interpreted in the offices of the law firm as a constant scream. In
April 2014, lawyer Olga Santini, in charge of the MF office in Miami, gladly
accepted the handling of the contact with Obadía to be transferred to Panama,
provided that the payment of her commissions is preserved.
In
addition, the communication between Mossack Fonseca and Obadía eloquently
illustrates what was the main idea of ??the business structures to be built.
Almost all the companies were designed to participate in contests to win import
contracts with Corporación de Abastecimiento y Servicios Agrícolas La Casa S.A.,
the organization created by Hugo Chávez to import food products and distribute
them through the Mercal network.

The companies of Obadía were designed to participate in contests and thus win import contracts with Corporación de Abastecimiento y Servicios Agrícolas (Corporation of Supply and Agricultural Services).
In
2008, started - as you can see in the electronic correspondence of MF - the
business streak of Desiré Obadía with Corporación Casa, just at the beginning of
the presidency in that body of the then-lieutenant, Colonel Rodolfo Marco
Torres, today vice president of the Economic Area.
In
August 2008, Obadía asked Mossack Fonseca for help in dealing with a Brazilian
meat supplier, the Quatro Marcos meat processing plant in Sao Paulo –which, four
months later, would be in default on payments -, as it required an assignment of
credit through Deutsche Bank. The matter would be satisfactorily resolved and
the business multiplied. In October of that same year, Obadía urged Ramsés Owens
in MF to "immediately open two companies," but, he warns in the same email,
"They cannot be in my name but they will be in the name of my
relatives".
In
effect, it would ultimately be Greenhill Group and Sanford Global, two companies
incorporated in Panama. In June 2009, Obadía will have its flagship EscomLimited
(created before in the Virgin Islands, but now with a capital of five million
dollars) registered in the isthmus. However, he will first make sure that what
he was about to do will not mean paying taxes. "You already told me that taxes
are not paid in the Virgin Islands," he says in an email of January 26, 2009.
"How will the tax matter be with the companies registered in Panama?" The
advisers reassure him that in Panama only the profits obtained by activities
carried out in its territory are taxed.
In
2012, he faces problems that he reported in an email to Rigoberto Coronado,
lawyer of Mossack Fonseca. "In Corporación Casa, they realized that they have 19
companies with the same address as yours," writes Obadía to Coronado, "9 or 10
of which are mine (...) The problem is that not all of them can have the same
address." MF immediately began to transfer the companies to other physical
addresses and change the directors that could be repeated in the boards of
several companies.
Partners with Rights
Internalizing
the idea of ??losing his low public profile, Desiré Obadía granted an interview
in Caracas, where he displayed unexpected openness and cordiality based on the
papers of MF. He acknowledged that he has done business with Corporación Casa,
and made a list, "I entered into a meat contract, another one for beans, one for
corn." Each of these assignments, he confessed, reported profits close to one
million dollars.
Immediately
tinged that success story with a list of the setbacks and obstacles he had
faced. He says, for example, that he lost money in an operation with the
Brazilian food giant, Sadia. "I still had to ship a thousand tons of a contract
that was for 3,000 or 5,000 tons of meat. I do not remember well. Sadia told me
that they had meat available, already in port ready to dispatch. Then I assigned
it a letter of credit that I had from Corporación Casa, and on top of that, they
asked me for 500,000 dollars as collateral, which I did. But at that moment,
they had problems with Casa for a mortadella that went bad. Then they changed
the damaged mortadella of Corporación Casa for the meat they had in port and
made me look bad... Then, they took six months to send me 500 tons of meet. And
then they told me that the price went up, that they could not continue shipping
meet to me, and they did not. They took three additional months to reimburse me
the $ 500,000 I paid."
He
defines his strategy of creating multiple legal entities to contract with the
State as an almost probabilistic, legitimate and even necessary trick. "Let me
tell you one thing, there are many envious people out there. I do not want to
have a single company that has sold ten times to the Government. That gives room
to speculations. On the other hand, they also do not like buying everything from
the same company. I made several companies with the idea of ??obtaining
contracts that sometimes I did not achieve."
He
denies opening a new company in his portfolio for every possible new operation.
What he has done, he accepts, is to incorporate circumstantial allies into his
companies, as shareholder partners that provide capital to finance their mass
imports. This is the case, for example, of company Markwell Investments, which
he incorporated in 2012. A year later, he included Fabio Méndez Rico, Luis
Alberto Rivas, Roberto Bobby Pocaterra and Tulio Hinestrosa, members of one of
the most powerful importing groups of the last 15 years as shareholders.
Together, they completed through Markwell an operation to import 30,000 metric
tons of yellow corn in 2013.
Obadia on Linkurious.
In
the pages of Obadía in Mossack Fonseca it is worth noting that the same group of
entrepreneurs tried to do something similar through company Langton Trading.
Even though the façade was different, it was again Obadía and its new partners
of the group of Fabio Méndez Rico, who at the end of 2013, tried to import a
shipment of rice.
The
method is used several times. In November 2014, Obadía obtained an $ 80 million
contract from Corporación Casa to import 10,000 metric tons of powdered milk.
The Venezuelan is then associated with the financial adviser and intermediary of
Canadian passport, César Duarte Chiong, whom Obadía included as a shareholder in
another of his companies registered in Panama, Ivoryton, but he resigned his
position on the board of directors in April 2015.
On
September 3, 2009, Obadía had registered company Tradex in Panama, mirror of a
homonymous company in Brazil. With 50-percent share, there is a Brazilian
partner, Marcos Braun, former senior executive of Sadia. Both sought to bring
meat from Brazil to Venezuela.
According
to Obadía, all the last operations were never completed, either due to lack of
space in the silo system and storage of Casa or due to lack of liquidity,
despite the fact that they had the approval of the
Government.
The
formula will have its limitations. It is the case of the warning that in July
2015, the executive assistant of MF, Valery Martínez, made to Obadía, who had
ordered to include Julián Martínez Mora to the board of directors of one of his
companies, Sanford Global. The law firm pointed out to its client that,
according to its due diligence department, Martínez Mora was Treasurer of the
State Government of Cojedes (center of Venezuela). In response, Obadía said by
email, "I do not know if he is the same person; he is not with me anymore.” But
that did not prevent him from asking in the post scriptum, almost like a
mischief," What would be the effect of having a government employee in a
company? I do not plan to have any, but I would like to know.
"
Martínez
Mora was finance director of former governor Johnny Yánez Rangel and, based on
reports of the Argentine press, he traveled at least once to Buenos Aires with
Guido Antonini Wilson, the man who in August 2007 tried to bring into Argentina
800 thousand dollars in a briefcase that the government of Caracas sent to the
then presidential candidate Cristina Fernández de
Kirchner.
When
asked about this during the interview in Caracas, Obadía said that Martínez was
one of the two directors -both with activities in Cojedes- who demanded a
mysterious investor at the Sanford meeting, whose name he said he did not
remember, who approached him to do business together, but they did not
materialize.
Martínez
Mora is not the only open reference to contacts with the Government that appears
in the Obadía file. In 2010, the businessman made a tour in the Dominican
Republic in the name of Emprevén, the parallel company that the borderline
chavista management —led until that year by Alejandro "Alito" Uzcátegui—
organized to corrode Fedecámaras. Accompanied by Rosa Rodríguez, then vice
president of Emprevén, during those days, he offered press statements to promote
an agreement between his organization and the Dominican Council of Commerce
(Consecomercio) to bring products to that island nation under the concept of
Mercal. Obadía was presented as a "supplier of the Government of
Venezuela".
In
2008, Obadía —who had tried to sell public order equipment to General Alcides
Rondón when he was Vice Minister of Security and Interior— managed to mediate
with his company Escom Limited between an international buyer, Petrocommodities,
and the state-owned Carbones del Guasare, when Rondón was already listed as
president of Carbozulia. The loading of the transaction was 500,000 tons of coal
for the Italian market. Obadía does remember this operation, which summarizes as
follows. "I was the one who join the seller with the buyer. I managed to set an
interview to Petrocommodities with General Rondón, and I won a commission from
there." Although, he finished saying that "The commission fell
short".