New documents show that the Hong Kong-registered company is one of Nicolás Maduro’s favorite to do business. While there are companies in the Venezuelan private sector that wait years for the payment of foreign currencies, in 2017, this company obtained at least two contracts for the supply of over 20 million of the boxes that the Government sells at subsidized prices, and it invoiced 113 million dollars to the Ministry of Food in just one day. The papers also confirm the connection of this company with Fondo Global de Construcción (Global Construction Fund), a network built by Colombian entrepreneurs Alex Nain Saab Morán and Álvaro Enrique Pulido Vargas, through which they obtained contracts under Hugo Chávez for the construction of prefabricated houses.
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The luck of the businessmen in the Venezuela of Nicolás Maduro is unequal. While large transnational or Venezuelan companies are dying, those focusing the intermediation on the import of food for the state program of the Local Supply and Production Committee (CLAP) bill hundreds of millions of dollars in a single day. At least, that is the case of Group Grand Limited, a company originally registered in Hong Kong in 2013 and later on in Mexico, connected to the business network built by Alex Nain Saab Moran and Álvaro Enrique Pulido Vargas, two Colombian entrepreneurs who have been contractors of Chavismo.
For the dummy company, the serious supply crisis and the hunger of the Venezuelan people turned out to be a gold mine. In early 2017, it sold tons of food to the Venezuelan government through the State Government of Táchira, after Nicolás Maduro approved 340 million dollars from the National Development Fund (Fonden) for the then governor of that entity and current Minister of Foreign Trade, José Gregorio Vielma Mora to purchase ten million food combos. From January 8 to 30 alone, Comercializadora de Bienes y Servicios del Estado Táchira (Cobiserta) received at least 212 million dollars.
That was just the beginning of a larger business, according to new documents obtained for this report. The contract signed between the firm of Hong Kong and Cobiserta, represented by the then Army Colonel José Salvador Bolívar Pérez —detained last April and investigated for possible acts of corruption, was not the only one that Group Grand Limited achieved. Months later, the company sealed agreement 0086-2017 with the Venezuelan Foreign Trade Corporation (Corpovex), the state-owned company that centralizes public imports, chaired by Major General Giuseppe Yoffreda Yorio, for the supply of 11 million 500 thousand "food combos" for the Corporation for Food and Product Services (Cuspal), attached to the Ministry of Food. The invoices confirm the dimensions of the business.
In
just one day, on September 29, 2017, Group Grand Limited quoted Cuspal nine
commercial invoices amounting to just over $ 113 million dollars for the sale of
canned tuna, pasta, corn flour, tomato sauce and mayonnaise, among other of the
eleven products included in the CLAP boxes that the Government sells at
subsidized prices among the poorest and that it uses as the flagship against the
alleged "economic war" by local entrepreneurs. Moving the cash register like
that in a Venezuela marked by an uninterrupted contraction for the last four
years, the paralysis of exchange control - effective since 2003 - and the
collapse of its international reserves, is an accomplishment of just a few
companies.
For instance, Alimentos Polar faces constant stoppages in its industrial plants because the Venezuelan government has failed to pay 130 million dollars for the import of raw materials for the last three years. "We have 449 applications for Foreign Currency Clearance Authorization (ALD) awaiting response, which have an average of 1,095 days in Cencoex. This implies that our international suppliers have not been paid. Many of them have suspended credit lines to Venezuela for these delays," says a recent report by the company belonging to Empresas Polar, the largest private group in the country.
The story of Group Grand Limited, however, is a happy one. The invoices for January and September total 325 million dollars, but sources familiar with the CLAP business say that the two contracts signed with the Venezuelan government exceed 600 million dollars in exchange for 21 million combos. They also affirm that Group Grand Limited also supplies other essential products to other state agencies. Everything has been possible without a factory, with few workers and without fixed headquarters, at least in Caracas, and in the strictest silence.
It was only in last year’s August that its name became public. At that time, Prosecutor General Luisa Ortega Díaz, dismissed by the Government of Maduro, said that the company was run by Colombian entrepreneurs Alex Saab Morán and Álvaro Pulido Vargas on behalf of president Nicolás Maduro. "We have conducted an investigation on the CLAP food bags delivered in Venezuela by a company registered in Mexico under the name of two people. The company is Group Grand Limited and presumably belongs to the president of the Republic," Ortega Díaz said to unleash a scandal.
By that time, Armando.info had revealed several of the signs that connected Group Grand Limited with Saab Morán and Pulido Vargas, e.g. the telephone and the company's address in Caracas referred to the headquarters of Fondo Global de Construcción, a company that allowed the entrepreneurs sign a millionaire contract with the late Hugo Chávez for the construction of prefabricated houses; the son of Alex Saab Morán, Shadi Nain Saab Morán, appeared in the incorporation papers of the company in Hong Kong from 2015 to February 24, 2017. Then, the accusation of Ortega Díaz, revealed that in the company registration in Mexico, Enmanuel Enrique Rubio González—son of Álvaro Enrique Pulido Vargas, whose original identity is Germán Rubio, according to the investigations of Univisión journalist Gerardo Reyes—appeared as attorney-in-fact. However, the defense of the entrepreneurs denies their link with Group Grand Limited.
Although the children of the entrepreneurs have disappeared from the records of Group Grand Limited in Hong Kong and Mexico, the documents obtained now provide one more link in the connection between Group Grand Limited and Fondo Global de Construcción, a company whose corporate structure leads to Malta and allowed Alex Nain Saab Morán to sign an agreement with the Venezuelan Government in the Miraflores Palace in 2011 before Hugo Chávez, his counterpart Juan Manuel Santos, and the then Venezuelan Foreign Minister, Nicolás Maduro. In the end, that agreement led to an investigation by the Ecuadorian Prosecutor for various irregularities.
In the contracts signed by Group Grand Limited with the Venezuelan state agencies for the sale of CLAP boxes, Andreina Fuentes Mazzei acts as "legal representative". Following the trail of this lawyer leads again to the offices of Fondo Global de Construcción in Caracas because based on the documents from the Mercantile Registry she is the CEO of the company since 2013 and of another construction company that also uses the same office in the luxurious business complex Centro Galipán, east of the Venezuelan capital.
At the close of this report, neither Fondo Global de Construcción nor Group Grand Limited responded to the request for comments.
The invoices of Group Grand Limited also show striking data, for instance, that the Maduro government paid more in January than in September for several of the products that the company sent from the port of Veracruz in Mexico to the port of La Guaira in Venezuela. On January 19, 2017, Group Grand Limited charged the Government of Táchira $ 4.75 per kilogram of "whole milk powder," but eight months later, it sold each kilogram at $ 6.95 to Cuspal, the company attached to the Ministry of Food, headed by Army General Luis Medina Ramírez. That invoice of September 29 for milk powder totaled 41.7 million dollars.
"What a deal," exclaims a Venezuelan food industry entrepreneur when comparing both invoices. The increase seems incomprehensible, if considering that specialized sites in the variations of commodities report that in mid-September of 2017 the price of "whole milk powder" was around 3 thousand dollars per ton. Today the price is around $ 3,200, which would be $ 3.2 per kilogram. "Mexico does not produce milk powder, let alone to export it. Those international prices are for whole milk, but the milk in the CLAPs is not whole," adds the industrialist.
A chemical analysis conducted by the Institute of Food Science and Technology of Universidad Central de Venezuela (UCV), at the request of Armando.info, agrees with the industrialist and makes that increase of nearly 50% reflected in the invoices of Group Grand Limited even more incomprehensible. This analysis showed that the Mexican suppliers of brands like Macleche, Suprema, Kosland or Rancho Nuevo, to name a few, lied in the nutritional information and sent to Venezuela a product low in protein and calcium, but high in carbohydrates and sodium, and neither own traders nor the Venezuelan authorities took notice of that.
Although the Venezuelan Government did not publicly pronounce on this finding nor revealed which of the ten intermediaries that it hired was responsible for the marketing of those products, on February 21 - just three days after the publication of the report on CLAP’s Bad Milk - the president of Corpovex sent a letter to the Mexican suppliers, complaining about the food quality. After a "Bolivarian, patriotic and revolutionary greeting," Yoffreda Yorio recalled that "the sanitary permit and the certificate of free sale in the country of origin of all shipped food items corresponding to the products of the Local Committee for Supply and Production (CLAP), either in the form of combos or loose cargo, must be submitted to the verification company and Corpovex."
On May 14, deputy and president of the Comptroller's Office Commission of the Venezuelan National Assembly Freddy Superlano formally filed a complaint in Mexico to the Prosecutor General of that country to start an investigation against the Mexican suppliers that dispatched poor-quality products from Mexico, like the milk powder in CLAP boxes. The doubts and shadows about the business set with the CLAP grew a few days later when the president of Colombia, Juan Manuel Santos, reported irregularities in a batch of over 25,000 boxes with food combos for Venezuela in the port of Cartagena. "Nearly 400 tons of food not suitable for consumption and to be distributed by these political committees of social control in Venezuela were seized in Cartagena. This is the tip of the iceberg of a shameful business involving front companies in Colombia, Mexico and many other countries," warned the president on May 17, from the Nariño Palace.
After the seizure, appeared the name of a Venezuelan entrepreneur, Luis Francisco Sagarzazu, who was the owner of two companies domiciled in Cartagena and responsible for the goods. However, the suspicion of the Colombian authorities is that there is a larger scheme of corruption and other crimes behind. "Front companies, money laundering companies, are being used for acts of corruption and illegal re-export of these foods to the Government of Venezuela," summed up Juan Carlos Buitrago, director of the Colombian Tax and Customs Police, at the press conference offered with the Colombian president.
The president of the Comptroller's Office Commission of the Venezuelan National Assembly asked the Prosecutor General of Mexico to investigate the companies in that country that have shipped poor-quality milk in CLAP boxes for Venezuela.
There is silence in Caracas. No spokesperson has explained why since late 2016 they have paid millions of dollars to shell companies registered in tax havens, like Postar Intertrade Limited, or Million Rise Industries Limited, FB Foods LLC or Welsford Trading Corp, among others, for the sale of around 90 million CLAP boxes that were mainly acquired in Mexico, but also in Colombia, Panama or Brazil, in 2017 alone. From January to May of this year alone, around 20 ships arrived loaded with food combos as part of Maduro's electoral offer for the presidential election of May 20.
Apart from the intermediaries, the scheme has also benefited Mexican companies like El Sardinero, which has shipped thousands of boxes to Group Grand Limited, Deshidratados Alimenticios e Industriales (DAI), Grupo Brandon, Rice & Beans, La Cosmopolitana or Digrava, among others.
"CLAPs are not a temporary measure, they are here to stay," Nicolás Maduro proclaimed last Thursday before the questioned National Constituent Assembly (ANC) in a swearing-in ceremony for the new term of office. It appears that the “cha-ching” of the cash register of Group Grand Limited will continue.
Nicolas Maduro’s main contractor was arrested last Friday, right after landing at the international airport of Cape Verde, an archipelago in the Atlantic, on the gates of Africa. It may be his penultimate trip, if he is finally deported or extradited to the United States, as U.S. authorities expect. It would be the worst of all endings after many years travelling and earning miles but, above all, millions of dollars thanks to opaque corporate structures, whereby he managed preferential currencies, public works, food supplies for the CLAPs, contracts with PDVSA, and even the trade of Venezuelan gold and coal since 2013.
For some months now, parliament members of different opposition political parties have been offering to make informal proceedings on request before agencies like the Colombian Attorney General's Office and the United States Department of the Treasury. They issue letters of good conduct to those responsible for negotiations on the imports for CLAP combos, so that such agencies absolve or stop investigating entrepreneurs like Carlos Lizcano, a subordinate of the already sanctioned Alex Saab and Alvaro Pulido. The fact that the most active defense of the main social program and focus of corruption of the government of Nicolas Maduro comes from the heart of the National Assembly 'in contempt' is just one of the ironies of this story.
Adrián Perdomo Mata has just entered the list of sanctioned entities of the US Department of the Treasury, as president of Minerven, the state company in charge of exploring, exporting and processing precious metals, particularly gold from the Guayana mines. His arrival in office coincided with the boom in exports of Venezuelan gold to new destinations, like Turkey, to finance food imports. Behind these secretive operations is the shadow of Alex Saab and Álvaro Pulido, the main beneficiaries of the sales of food for the Local Supply and Production Committee (Clap). Perdomo worked with them before Nicolás Maduro placed him in charge of the Venezuelan gold.
A study by Mexican authorities confirms what the palate of the Venezuelans quickly detected: There is something odd in the Mexican canned tuna that comes in the combos of the Local Supply and Production Committee (CLAP). At least three of the brands that the poorest homes have consumed in the country since March 2016, when the state plan was formalized, have high proportions of soy, a vegetable protein that although not harmful, it does not have the same taste and protein contribution of tuna. Behind the addition of soy there is an operation to reduce costs where all the intermediaries, handpicked by the Venezuelan Government to buy the goods, have participated.
Gassan Salama, a Palestinian-cause activist, born in Colombia and naturalized Panamanian, frequently posts messages supporting the Cuban and Bolivarian revolutions on his social media accounts. But that leaning is not the main sign to doubt his impartiality as an observer of the elections in Venezuela, a role he played in the contested elections whereby Nicolás Maduro ratified himself as president. In fact, Salama, an entrepreneur and politician who has carried out controversial searches for submarine wrecks in Caribbean waters, found his true treasure in the main social aid and control program of Chavismo, the Clap, for which he receives millions of euros.
While the key role of Colombian entrepreneurs Alex Saab Morán and Álvaro Pulido Vargas in the import scheme of Nicolás Maduro’s Government program has come to light, almost nothing has been said about the participation of the traders who act as suppliers from Mexico. These are economic groups that, even before doing business with Venezuela, were not alien to public controversy.
When Vice President Delcy Rodríguez turned to a group of Mexican friends and partners to lessen the new electricity emergency in Venezuela, she laid the foundation stone of a shortcut through which Chavismo and its commercial allies have dodged the sanctions imposed by Washington on PDVSA’s exports of crude oil. Since then, with Alex Saab, Joaquín Leal and Alessandro Bazzoni as key figures, the circuit has spread to some thirty countries to trade other Venezuelan commodities. This is part of the revelations of this joint investigative series between the newspaper El País and Armando.info, developed from a leak of thousands of documents.
Leaked documents on Libre Abordo and the rest of the shady network that Joaquín Leal managed from Mexico, with tentacles reaching 30 countries, ―aimed to trade PDVSA crude oil and other raw materials that the Caracas regime needed to place in international markets in spite of the sanctions― show that the businessman claimed to have the approval of the Mexican government and supplies from Segalmex, an official entity. Beyond this smoking gun, there is evidence that Leal had privileged access to the vice foreign minister for Latin America and the Caribbean, Maximiliano Reyes.
The business structure that Alex Saab had registered in Turkey—revealed in 2018 in an article by Armando.info—was merely a false start for his plans to export Venezuelan coal. Almost simultaneously, the Colombian merchant made contact with his Mexican counterpart, Joaquín Leal, to plot a network that would not only market crude oil from Venezuelan state oil company PDVSA, as part of a maneuver to bypass the sanctions imposed by Washington, but would also take charge of a scheme to export coal from the mines of Zulia, in western Venezuela. The dirty play allowed that thousands of tons, valued in millions of dollars, ended up in ports in Mexico and Central America.
As part of their business network based in Mexico, with one foot in Dubai, the two traders devised a way to replace the operation of the large international credit card franchises if they were to abandon the Venezuelan market because of Washington’s sanctions. The developed electronic payment system, “Paquete Alcance,” aimed to get hundreds of millions of dollars in remittances sent by expatriates and use them to finance purchases at CLAP stores.
Scions of different lineages of tycoons in Venezuela, Francisco D’Agostino and Eduardo Cisneros are non-blood relatives. They were also partners for a short time in Elemento Oil & Gas Ltd, a Malta-based company, over which the young Cisneros eventually took full ownership. Elemento was a protagonist in the secret network of Venezuelan crude oil marketing that Joaquín Leal activated from Mexico. However, when it came to imposing sanctions, Washington penalized D’Agostino only… Why?
Through a company registered in Mexico – Consorcio Panamericano de Exportación – with no known trajectory or experience, Joaquín Leal made a daring proposal to the Venezuelan Guyana Corporation to “reactivate” the aluminum industry, paralyzed after March 2019 blackout. The business proposed to pay the power supply of state-owned companies in exchange for payment-in-kind with the metal.
