Cilia Flores’ Favorite Nephew: The Man behind the Treasury

Carlos Erik Malpica Flores is one of the most powerful civilians in Venezuela because of his resources and positions held. He is the current treasurer of the Republic and administrator of PDVSA finances. He has had an astronomical career as a public official since he joined the government with the help of his aunt Cilia Flores and uncle Nicolás Maduro. For 10 years, he has managed to stay in the dark and carefully watch over the details of his management. His name began to resonate recently, after two young relatives of the First Lady were arrested for alleged drug trafficking in New York. Today, his identity is exposed, as well as a series of businesses in Panama associated with his relatives.
Este reportaje se encuentra disponible también en:
Although
he never appears in public, the name of Carlos Erik Malpica Flores is linked to
a series of recently created businesses. The family of the national treasurer
registered 16 companies in Panama since Nicolás Maduro came to power in 2013.
Quiet, low-profile, is the faceless power. But more importantly, he is Cilia
Flores' favorite nephew.
Truths
and lies are told about the first lady -first fighter in revolutionary-speak.
But a side of her personality seems to admit no argument: she is a woman who
helps, protects and defends her own in all circumstances.
It
barely mattered that in 2008 the press found on the payroll of the National
Assembly—back then under her iron-fist leadership—47 of her family members with
positions in the organization chart. Nor has she seemed to care that on
Wednesday, November 11, 2015, a nephew and a foster child were sent to prison in
New York on charges of conspiring to introduce a shipment of cocaine into the
United States of America, in what has undoubtedly been an unprecedented scandal
in Venezuelan political history. Instead of dissociating herself from this,
Cilia Flores opted to stay home and wait. Some families have a pact of silence
and the Flores is among them.
However,
Franqui Francisco Flores de Freitas and Efraín Campo Flores, those involved in
the drug scandal in the U.S., are not Cilia’s favorite nephews, but the son of
her sister Eloísa, Carlos Erik Malpica Flores, with much more power,
consolidated at the presidential family’s side after his astronomical climb up
the roads of public administration. Pdvsa Vice Presidency of Finance, a position
he reached in late 2014, looks like the pinnacle of a career that began a few
years ago, on September 28, 2005, with the position of Director General of
Administrative Management and Services at the National Assembly (NA), while his
political uncle Nicolás Maduro was chairing the
Parliament.
A
year later, he held a similar position in the Chancery when the then-President
Hugo Chávez appointed Maduro Minister of Foreign Affairs. In late 2012, when
Chávez was already terminally ill and Maduro was second in command, Malpica
Flores joined the Vice Presidency of the Republic as Director General in charge
of that office. Finally, when his uncle ascended into office, he consolidated
his position as administrator of the country's finances. He has been assistant
treasurer, director general of Bandes and Treasurer of the Nation, in that same
order. Nowadays, he manages the national budget, additional credits and many
financial funds that the economists qualify as non-auditable due to lack of
reports and public balance
sheets.

In December 2014, Carlos Erik Malpica Flores celebrated his appointment as director of PDVSA in a nightclub on the Caribbean island of Saint Barth. Photo: Twitter/@pdvsamalpica
When
comparing the number of positions held in the past and the present by Malpica
Flores with those held by the rest of the family that participates in the
Chavista bureaucracy, it is more than evident that he is the most trusted
person of the Venezuelan presidential couple. He has wanted to repay that trust
by avoiding the commotion and scandals associated with the display of power. In
addition to avoiding being photographed in public, he has made sure that there
is no trace of him in private and state media, including internal publications
or websites of the institutions he has worked with.
Moreover,
like many of the presidential family, he does not have accounts in social media.
The tactic has worked for him, as some media confuse him with Temir Porras,
former president of Bandes and former official of the Chancery, and once a
favorite of President Maduro.
But
all that effort to keep his a low profile collapsed with the arrest of his two
relatives in Haiti. A photo shoot taken in December 2014 at a nightclub in Saint
Barth, an island located in the eastern Caribbean, ended the will to
hide.
A Family “Enterprise” in Panama
No
one refers to him by name. He is "Cilia's nephew", the voices of the National
Assembly, the Ministry of Foreign Affairs, PDVSA and business circles in
Valencia, the city where the Malpica and some Flores are settled, coincide.
After his uncle and aunt, the president of the parliament and the president of
the state oil company, he must be the most powerful civilian in
Venezuela.
Those
surrounding him are now aware of this situation and are making the most of it.
Within nine months of being part of PDVSA board of directors, the administrator
met his parents Carlos Malpica Torrealba and Eloísa Flores in Panama, in the
same period (September 2-10) when 10 family businesses were registered in that
city. His aunt, Evelyn Malpica Torrealba, traveled to Panama in previous days,
while his sister came back to Venezuela from that country days after the
business enterprise. The information is based on the analysis of migratory
movements of the family and consultations made in the Public Registry of the
capital of the Central American country. Likewise, it was determined that prior
that curious week of September, the Malpicas had created two companies in 2014
and three in 2015 (from March to August). In October 2015, they added another
one to their substantial
inventory.

Each
company opened in Panama was registered with an initial capital of US$
10,000. The names of the companies suggest that it is a holding company
engaged in maritime transport,
one of Pdvsa branches: Seaside Services, Maritime Crews Inc., Oceans Investors
Corp., Marine Administration Panama. However, that is just one of at least 30
objectives of each company. The articles of incorporation
of all the companies establish the following objectives: purchase of furniture
and real estate, hiring of personnel and transport services, property research,
appraisals, purchase, sale, mortgage, encumbering of movable and immovable
property, demolition, air and ground transportation, export, import, re-export,
contracting, and participation in public and private
tenders.
The
sister of Carlos Erik, Iriamni, the paternal aunt, Evelyn Milagros Malpica, and
the father, Carlos Evelio, participate in all these companies holding positions
of president, director, subscriber, and treasurer. Evelyn, who presides over 11
companies and runs 16, stands out as the busiest, while Iriamni and her father
opted for less responsibility.
Each
of them is in charge of a company, but act as directors, treasurers or
subscribers of shares in the rest of the conglomerate. Another coincidence in
the business opening week (September 2-10) is that the treasurer, his father and
mother used the same private plane to travel to Panama, but in different trips.
Only Eloísa and Carlos traveled together in the Gulfstream aircraft,
registration No. N896AC, from an aircraft rental company based in Fort
Lauderdale, U.S.A. It is the same jet that Malpica Flores used between July and
September to move to Panama, Fort Lauderdale, Aruba and Barbados. Conversely,
the aunt and sister avoid flying with their relatives. Both travel with
commercial airlines and charter flights.
Panama
has fought for many years against the image of a tax haven hiding bad money. His
government hopes that the nation will be removed from the gray list of countries
with deficiencies in the fight against money laundering and terrorism financing
prepared by the Organization for Economic Cooperation and Development (OECD).
The great number of companies opened in short time by the relatives of a
politically exposed person (PEP), as Malpica Flores, in a territory considered
offshore financial center arises suspicions.

Sources
checked in Panama indicate that the abundance of companies could have an
operational purpose: the opening of bank accounts. The declared object of the
companies suggests that the Valencian family wants to make the most of the
advantages of the import-oriented economy in Venezuela to do
business.
That
may be the reason why the Valencian family, some of which already had experience
as importers, began to leave their jobs since 2014, except Cilia Flores' sister,
Eloísa. The father appears in the file of the Venezuelan Institute of Social
Security (Ivss) as unemployed since August 2014. Evelyn and Iriamni, aunt and
sister, respectively, resigned their jobs a month later and only a fortnight
apart.
The
treasurer does not appear holding any position in the management structure of
the Panamanian companies, which seems consistent with the decision to keep up
appearances. In the past—when there were less obstacles—Malpica Flores was with
his own in the board of companies Inlasa and Redilama, registered in Valencia
and engaged in “business operation of national and foreign product
representation." Both companies were registered with the National Register of
Contractors (RNC) in 2006, but do not currently qualify to do business with the
State.
Between La Viña and Avenida Urdaneta
Carlos
Erik is 43 years old and was born on September 17, 1972. In his passport photo,
he looks like a light-brown skin man, with a thick nose, side hairstyle, without
obvious line, wavy hair, and a wary look. The bitter moment experienced by his
cousins ??in U.S.A. has forced him to take precautions. This week, there have
been changes in the surroundings of his residence in La Viña de Valencia,
Carabobo state, which he shares with his wife Carmen Hurtado, as the neighbors
widely comment. It has been observed typical movements of someone who has made
decisions, such as moving things from their place and moving at night. Until a
week ago, there were always 8 cars, 10 escorts and 4 bikes in front of the
house. Also garbage boxes that revealed a luxurious consumption of groceries -
Moët & Chandon champagne, among others - and clothing. Now, the home is like
the others, alone and guarded by a private guard from a guardhouse a few meters
away.

Interior of the jet where the Treasurer of the Nation travels. Photo: Ijets.eu.
He
qualified as an administrator in December 1999 at Universidad de Carabobo. In
2001, he got a graduate degree in Marketing. Ten years later, in February 2011,
he earned a basic salary of Bs. 13,327 monthly, plus a premium per child and
food tickets for his performance in the position of Administrator III. More than
the salary, perhaps what is striking in the Chancery, where the Valencian worked
as the closest man to Nicolás Maduro, is that the family life pattern changed a
lot with the rise of his political uncle. "Everyone knows that Carlos Erik moved
his family from Venezuela to Panama, and that they have many companies there,"
says a ministry source who knew him well during his years of
service.
In
the Casa Amarilla (Yellow House) he was also known with the long motto of
"Cilia’s nephew". He never arrived early to the office, but rather toward the
end of the day, and a glass of whiskey awaited him at his desk. He stayed in his
office until midnight. He wore guayaberas, blue jeans and Timberland
boots.
His
most visible work, according to some, was the extensive remodeling of the tower
of the Chancery on Avenida Urdaneta and the Yellow House, as well as the
National Assembly. Because of his eagerness to restructure, many accuse him of
destroying property. Part of the extensive black marble floor, characteristic of
the great hall of the ministry tower, former headquarter of Banco Nacional de
Descuento, was broken and removed. In any case it was a work that had a brief
life. After the torrential rains of 2010, the impact of the relocation of the
victims to both buildings -ordered by Hugo Chavez- deteriorated the
renewals.
In
those days, the nephews and children of Cilia Flores, the son of Nicolas Maduro,
returned with their school uniforms, walked through aisles and offices and put
their feet on the old mahogany furniture tables, affirmed a witness of that
misbehavior. The boys ordered food to the chef of the Yellow House as if it were
a delivery service. They were also seen getting out of the ministry parking lot
with brand new SUVs, like Hummers, which had been confiscated by the government
from banks during the 2009 mini financial crisis, sources
said.
While
his cousins ??ran through the corridors, Malpica Flores, due to his
administrative duties, had to deal with the demands of the union of the
Chancery. Although the then Minister Maduro had signed the bargaining agreement
in 2007, Foreign Affairs employees waited almost six years to receive the 25%
salary increase promised to them every 12 months.
The
administrator disbursed the resources agreed with the workers shortly before
completing his management. In those meetings of claims, two sources that knew of
the negotiations affirm that the official did not accept being antagonized. "He
was very arrogant. He listened to us with respect, but did not pay the increases
agreed. Of course, he wore stylish clothing. Always Impeccable," said a former
employee.

The
workers always had doubts about such resources. "We did not know if they were
approved, if they arrived or not. For what they were used and why we were not
paid the salary increases," said an active foreign service official who
remembers Malpica Flores as" the man who almost finishes off the Chancery.
Saint Barth — The Treasurer Island
The
imprisonment of his cousins ??Efraín Campo Flores and Franqui Francisco Flores
de Freitas has uncovered the mysterious veil surrounding Malpica Flores. Without
a suit, dressed casually as when he talked to the union, he appeared in a photo
taken in December 2014 at the best nightclub in Saint Barth (or St. Barthélemy),
a French overseas territory in the eastern Caribbean, north of Guadeloupe. He
was spending time with a group of friends and family. Precisely in that month,
his appointment as a member of the board of directors of PDVSA was published in
Official Gazette. It is worth noting that when Maduro made the appointment on
television, he refrained from pronouncing his maternal
surname.
The
photo was posted on a fake Twitter account in early 2015, but it is more
relevant know in view of the context of the current presidential scandal.
Runrunes, Armando.info, Pitazo and Poderopedia have been able to check with two
independent sources that the man dressed in a white shirt to the extreme left is
Malpica Flores. Right behind him is José Simón Elarba, a member of the Board of
Directors of El Nacional, Elarbas’ son-in-law, Henry Camino Muñoz, and his wife
Mariana.
Elarba
is one of the shareholders who publicly criticized El Nacional for publishing a
release, based on information collected from the newspapers ABC and The Wall
Street Journal, which says that the president of the National Assembly is being
investigated by the United States of America for his alleged relation to drug
trafficking. The entrepreneur is also linked to oil business in the east of the
country.
Malpica
Flores did not respond to several calls made this week asking him to explain the
expansion of his family businesses in Panama and other countries. There were no
answers in the National Treasury Office, located in the parking lot of the
building attached to the Ministry of Finance, where you can get bypassing a pile
of air conditioners and crossing the threshold of a back door. When we called
the next day, the secretary added: "He did not come today or yesterday." The
office of the Vice President of PDVSA, where another letter was delivered, has
not answered either.
His
house in the La Viña development in Valencia was the third place visited. A maid
confirmed that he resided there and kindly received the correspondence. In front
of the house, there were only two cars parked, a low transit street, and
certainly, a community of neighbors who from now on, will not be the only ones
recognizing the face of the person keeping the safe of the country's
finances.
(*) This work is a collective
project of the media ArmandoInfo, El
Pitazo, Poderopedia ,
and Runrunes,
coordinated by Fabiola Zerpa. Covered by journalists César Bátiz, Lisseth Boon,
Cristina González, Alfredo Meza, Katherine Pennacchio, Joseph Poliszuk, Ronna
Rísquez and Ewald Scharfenberg; with the collaboration of Tibisay Romero
(Valencia) and Grisel Bethancourt (Panama). The design was made by Carmen Riera
and Daniela Dávila.