As if they were pieces of a broken mirror scattered in many islands around the world, several offshore companies form an oil-trading business network that reveals the trajectory of Alessandro Bazzoni and Francisco D'Agostino. Both of them, together with the Venezuelan telecommunications magnate Oswaldo Cisneros, landed in 2016 in the Orinoco Belt to fill the vacancy of the original partner, Harvest Natural Resources.
"Without a stable market and a fair price, oil investments are difficult," said President Nicolás Maduro in Miraflores, on November 4, 2016. In the televised broadcast, the president broke down, as a trophy, the amount of 10 thousand dollars in private investments announced by Pdvsa, aimed at the Plan Soberano Siembra Petrolera (Oil Sowing Plan), focused on boosting the sharp fall of the state company's production.
A billion of that amount corresponded to Oswaldo Cisneros, the Venezuelan businessman who owns Digitel, who, sitting in front of Maduro, made clear in that afternoon his incursion into the oil world. The presidential assignment was not minor. Cisneros and his share should contribute to triple oil production from wells in Monagas within 5 years.
But Cisneros was not alone there. On the path that led him to the partnership of his company Delta Finance with Pdvsa to promote the creation of the Petrodelta joint venture (of the Orinoco Belt), he was accompanied by Francisco D'Agostino and Alessandro Bazzoni. The former associated with the scandal of the electrical purchases of Derwick Associates with the government of Hugo Chávez, and the later, an unknown Italian businessman.
The signing of the agreement was a surprise to observers of the oil business due to the unexpected incursion of the telecommunications magnate, ignoring the two other entrepreneurs. The case portrays the avid determination of new players, even from other areas, to financially assist Pdvsa and, thus, being part of its businesses by taking the places that traditional partners leave in the country, exhausted from dealing with a declining company and in the midst of a postwar economy.
Neither D'Agostino nor Bazzoni have historical records of professional services in the Venezuelan oil industry. However, their personal information appear in company records in Barbados and Malta, according to documents obtained in a leak from law firm Appleby reported by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalism, better known as Paradise Papers.
Asked about his oil investments, D'Agostino, who is a member of Daycohost and a member of the board of directors of Banco Occidental de Descuento, as well as the brother-in-law of opposition politician Henry Ramos Allup, claimed that his oil business, Element Capital, was excluded from the PDVSA contracting system and, therefore, does not maintain business with the state company.
confirmed that he is a minority partner of Petrodelta and adviser to company
Elemento LTD, which "could only market four PDVSA vessels from February to April
2017". He added that his current relationship with D'Agostino is a social
relationship only. Both denied having business with Derwick Associates, accused
in multiple investigative journalism works for having defrauded the Venezuelan
State with the sale of power plants with surcharge.
It is the area of capital consolidation for oil businesses where Bazzoni and D'Agostino are obvious. In 2015, one year before the announcement in Miraflores, Cisneros, D'Agostino and Bazzoni were already in the belt as part of Petrodelta, as directors of Harvest (PDVSA’s original partner in the joint venture), of which they had bought a part and for which they designed a financing plan with the aim of repositioning the Argentine company in Venezuela.
This participation in the business had its cost. It entailed that company CT Energy Holding, controlled at that time by the three partners, according to documents of the Security Exchange Commission (SEC), bought financial notes to Harvest for about 60 million dollars. Then, the total transfer of Harvest (which already wanted to leave the country) was materialized by the Venezuelans who then became direct partners of PDVSA.
On PDVSA’s side, the path was paved. Harvest had years trying to get rid of his society with the state company, which blocked its attempts demanding more capitalization. "Harvest is an example of a partner that does not have the capacity (financially speaking) to invest in the oil business. They only want the dividend, not to invest," Eulogio Del Pino, then president of PDVSA, told to Reuters.
When CT Energy arrived, PDVSA -eager for fresh money- unblocked the path for the company. The businessman of Italian origin tried for several years to enter the oil business in Venezuela and Harvest's eagerness to leave the country was his opportunity. But Bazzoni raised suspicions among PDVSA officials due to his unknown career, according to a former employee of the state oil company. Also, he did not get the financing, until he associated with Cisneros, said the source.
Documents from the Barbados company register reveal a series of offshore companies with names similar to CT Energy Holding, which finally formed with PDVSA the Petrodelta joint venture. Bazzoni and D'Agostino participate in all the companies as shareholders, directors or company controllers. In many cases, only the "last name" of the company changes: CT Energía Holding, CT Derivatives Corporation and CT Energía Oil and Gas LTD. Some, like CT Energy Holding SRL, have headquarters in Las Mercedes, in the Daycohost building, the company owned by the D'Agostino family.
Others are in Malta and Barbados. England is another location for two joint ventures, Elemento Solutions Limited and Elemento Services Limited. The records indicate that the nature of the companies is the purchase and sale of oil. Cisneros does not appear in them but the partnership of D`Agostino and Bazzoni in CT Energy Holding sealed the financial agreement with Harvest in June 2015 and it entered as a member of PDVSA in Petrodelta in November 2016.
In the meantime, several of Bazzoni's previous partners in oil financing businesses (Centauro, Chemoil, Saltpond and Imperial Energy Ventures) opened consultations in anti-fraud courts in Texas and New York, targeting Italian offshore companies due to diversion of funds, breach of contract and failure to comply with of jurisdiction agreements. One of them requires compensation for damages of up to 21 million dollars.
From Barbados, the fall of Bazzoni reached New York. On the Caribbean island, the entrepreneur had incorporated a company called Cinque Terre Financial Group, and a judge ordered liquidation thereof in April 2016 for insolvency and debts. However, the liquidator of Barbados noted that although the liquidation process had begun, Bazzoni opened subsidiaries of the Cinque Terre (peculiarly with the name of CT Energía LTD), both on that island and in Malta.
For the moment, almost nothing is known about the productivity of the alliance between PDVSA and these partners. More than a year after sealing their commitment to boost production, it is a mystery if these unconventional allies who formed Petrodelta contributed to the Oil Sowing Plan.
Since its opening in 2017, the Porsche Design Tower quickly became a symbol of luxury and ostentation in South Florida. Magnates from all over the world retreat behind the discretion of its tinted glass windows and virtually anonymous legal entities. But in recent days, two police investigations into illegal financial flows from abroad placed the building under an inconvenient spotlight. The justice just seized an apartment of over five million dollars from a Venezuelan agent.
The judicial authorities of Switzerland found a connection between the wife and the mother-in-law of the former Venezuelan minister with at least 40 million dollars deposited in eight bank accounts, one of which was shared with one of the main negotiators of bribes and kickbacks between Odebrecht and the governments of Chávez and Maduro. Although they asked the Venezuelan justice to investigate the matter, the courts denied any possibility of addressing the case and the Venezuelan Prosecutor's Office, led by Tarek William Saab, acts as if not aware.
The Venezuelan government has resorted to a myriad of trading intermediaries to provide imported merchandise for the Claps, its star food aid program. With massive purchases in international markets, it poorly satisfies the hunger of popular sectors while safely feeding the financial flows that end in bank accounts in Hong Kong or Switzerland.
Hurried by the drop of oil prices and the collapse of oil production, Nicolás Maduro bets on the Orinoco Mining Arc as a formula to increase the resources that are so scarce in the national coffers. Under the "joint venture" system, the Government has ended up agreeing with companies insufficiently known in the extra-activist industry, like Corporación Faoz. Among the beneficiaries is Gold Reserve, the Canadian mining company that Hugo Chávez expelled from Venezuela years ago. The Paradise Papers filtering shows that both have registered companies in that tax haven called Barbados.
Aside from ethical questions, the logic of a private entity opening an offshore company seems elementary —to declare its profits in a territory where it can pay less tax than it should in its place of origin. But when it comes to a state-owned company like Petróleos de Venezuela, which is not obliged to pay taxes - and therefore does not need to evade them - it is difficult to understand why within its business scheme there is contracting with companies established in tax havens and there is even the creation of their own subsidiaries in these places. What does the Venezuelan public treasury gain from this?
The member of the US Cabinet, Wilbur Ross, is one of the owners of a company that provides maritime transport services to Pdvsa, a client that in 2015 contributed over 11 percent of the profits to his shipping company. Although the official had to get rid of his mercantile properties to hold his position, he kept a participation in that line of business through a complex offshore structure in the Cayman Islands. Thus, he did not only do business with chavista Venezuela, but also with an associate of Russian President Vladimir Putin. Both countries are subject to economic sanctions by Washington.
They lose their freedom as soon as they set foot on any Trinidadian beach, and their “original sin” is an alleged debt that these women can only pay by becoming sexual merchandise. They are tamed through a prior process of torture, rotation and terror, until they lose the urge to escape. The growth of these human trafficking networks is so evident that regional and parliamentary reports admit that the complicity of the island’s justice system in this machinery of deceit and violence multiplies the number of victims.
In front of the curtain of collapse of the major financial group in Portugal, José Trinidad Márquez, a native of Caracas, offered the stellar performance to his lifetime career of fraud. After swindling the high management of the bank, he’s taken refuge presumably in some part of Spain, where the press baptized him as “the golden middleman” or “the man with thousand faces”. With his well trained routine of a petroleum expert, who offers himself to try and arrange business connections with PDVSA, perfected over the course of more than two decades, he’s earned himself millions of dollars, as well as criminal accusations in various countries.
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.
A small bank in Antigua and Barbuda, but controlled by Venezuelans, is at the center of some of the financial operations of Nicolas Maduro’s regime. Created in 2008 and with a diffuse trace for years, North International Bank began to take off in 2016 when it was authorized to operate in Caracas. Since then, it has been channeling millions of dollars to and from the coffers of the revolutionary ‘nomenklatura.’
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.
The former chavista governor of the State of Bolívar from 2004 to 2017 changed overnight from excessive media exhibitionism to low profile. His departure to Mexico completed the circle of the retirement plan he had been preparing while on civil service. He was now staying in the same country where the businesses of his daughter's husband flourished, which he had significantly fostered from his positions in Guayana. Now, with financial sanctions imposed on him by Canada and the United States, Francisco José Rangel Gómez prefers to stay under the radar.