Alex Saab's name reappears. The Colombian entrepreneur, linked to the contractor Global Construction Fund, seems to reinvent himself. Thanks to a company registered in Hong Kong, he has managed to sell food to Venezuela for over 200 million dollars in a negotiation approved with Nicolás Maduro’s signature and the intermediation of the State Government of Táchira, led by José Gregorio Vielma Mora. The products, paid with preferential dollars but billed with a surcharge, have been directed to the Local Committees for Supply and Production (CLAP), the flagship program whereby the Venezuelan authorities intend to mitigate hunger.
His has appeared in Barranquilla newspapers more because of his social life than for his business activities in Caracas. In a tuxedo, with a black bow tie and a button on his lapel, he was seen as hardly ever, posing for the May 2, 2011 issue of the newspaper El Heraldo, in one of the weddings of the season. But since then, the name of Alex Nain Saab Morán appears more strongly around the sneaky contracts of chavismo than at parties on the Colombian coast.
First, he stood out as a constructor of the governmental program of Misión Vivienda (Housing Mission); then, as a beneficiary of the Sucre currency - "Chávez’s bit coin;" and now, first no less, in the closed circle of the fortunate who are invited to another party, that of importing food with preferential dollars to subsidize the government food program of the Local Committees for Supply and Production (CLAP).
The welfare plan arose just over a year ago. It began with the disorganized distribution of food bags in popular areas, and has been systematized to the box format. In theory, the censored families receive the box biweekly. It is the Government's response to an economic crisis extended for over three years, with persistent and widespread shortages and triple-digit inflation. "All the power for the CLAPs," Nicolás Maduro insistently goes on about. The measure is also intended to avoid lines of people at the doors of supermarkets in search of price-controlled products and their subsequent resale at informal markets, a practice known as "bachaqueo."
Tracking the boxes for the CLAPs is a confusing journey that leads to an obscure structure, but now it is evident that Alex Saab has at least one slice of this cake. A hundred documents obtained for this investigation prove that he imported food through a company called Group Grand Limited. The intermediary was the State Government of Táchira, under the lead of José Gregorio Vielma Mora, a military who participated in the coup of February 4,1992, -commanded by Hugo Chávez- who had held several public positions during chavismo.
He is the same Alex Saab who in 2015 was questioned —along with his partner, Álvaro Pulido Vargas— for a corruption scandal with his company Global Construction Fund. The Ecuadorian Prosecutor's Office detected irregularities two years ago, and pointed out the simulation and over-invoicing of exports from Quito and Guayaquil to Caracas to take advantage of the Venezuelan exchange control through the Unified System for Regional Compensation (Sucre), created by the governments of the late Hugo Chávez and his Ecuadorian counterpart, Rafael Correa.
According to the inquiries of Ecuador's prosecutors, these operations were linked to the contracts entered into by and between the Global Construction Fund and Venezuelan agencies years ago to build prefabricated houses under the government Housing Mission program. It is not, in any case, the only investigation on the group. A recent publication by journalist Gerardo Reyes in Univisión revealed that both Saab and Pulido are being investigated by the U.S. Drug Enforcement Administration (DEA).
Group Grand Limited was registered in Hong Kong in 2013 and, according to the registration papers, from May 7, 2015 to February 24, 2017, it had Shadi Nain Saab Certain, a relative of Alex Saab, as a shareholder and beneficiary. The connection between both is repeated in two foundations registered on the same day in Panama four years ago, and in company Saab & Company, registered in 2004 in Barranquilla and dissolved in 2014, according to the Chamber of Commerce of that northeastern Colombian city.
The kinship between both is not the only evidence of the relationship between Global Building Fund and Group Grand Limited. The contact address of Shadi Saab, included in the Hong Kong register, coincides with the location of one of the two offices of Global Construction Fund in Centro Galipán in El Rosal, an exclusive financial area in Caracas. The detail of the address will be another signal to follow the almost ghostly presence in Venezuela of Group Grand Limited, a company without Tax Information Registry (RIF) or registration with the National Register of Contractors (RNC).
In the invoices issued by Group Grand Limited to the Goods and Services Trading Company of the State of Táchira (Cobiserta), attached to the Governor’s Office of that entity, the address leads again to the offices of the Global Construction Fund in Caracas. That information was repeated on the company's website, but it was modified just after they were contacted by telephone to ask them to have an interview for this report. "I will contact the legal counsels and they will communicate with you," they said on that occasion. There was no formal response by its representatives on the relationship with Group Grand Limited. Only a source related to the company merely declared being unaware of why the company in Hong Kong had its headquarters in the same address in Caracas. "Global Fund is engaged in construction only," the source affirmed.
Upon calling to the new contact details published on the website of Group Grand Limited, the answer was that the company had two headquarters in Caracas. "Yes. The thing is that we run two offices, one in Centro Galipán and one here," explained a woman on the other side of the phone. That time, they give no response as to our interview request either. Finally, after calling to an international phone number that appears on the invoices of Group Grand Limited, a man with a Colombian accent, identified as Carlos, denied the link with Global Construction Fund: "What is that, man? You're wrong, this is a Hong Kong company," he said quickly and promised that he would get back to us within two days about the interview, which never happened.
The green light for the business between Group Grand Limited and the State Government of Táchira turned on on October 10, 2016. That is the date of a punto de cuenta (memorandum requesting approval) whereby José Gregorio Vielma Mora requested Nicolás Maduro the "exoneration of the payment of import taxes, customs fees, Value Added Tax (VAT), 1% taxes, operational and logistical expenses of Bolipuertos," related to a "special food supply plan" that would entail the acquisition of "ten million food combos to be distributed to the Venezuelan people through fair mechanisms, in order to face the economic war promoted by sectors of the national and international opposition.”
Based on the schedule presented in the document, 2 million combos would be delivered in December 2016, and the remaining 8 million between January and February of the current year. Maduro endorsed Vielma Mora’s request and also authorized 340 million dollars for the company of the State Government of Táchira to execute the business plan. The funds would come from the National Development Fund (Fonden), an entity created in 2005 by Hugo Chávez to discretionally manage part of the international reserves and Venezuelan oil revenue, according to the letter from Fonden's Executive Secretary Arlen Piñate to an official of the State Government of Táchira, José Salvador Bolívar.
"Based on agreement No. MPPBF-Fonden-CATF 2016-074, signed between its representative and the Fondo de Desarrollo Nacional, S.A. (National Development Fund), and the memorandum requesting approval without number, of October 10, 2016, approved by the President of the Republic, the currencies approved for a total amount of three hundred and forty million U.S. dollars (USD 340,000,000) for the acquisition of essential goods, including food, must be paid at the exchange rate of the protected foreign currency (Dipro), under the provisions of exchange agreement number 35," says the letter dated October 10, 2016.
The letter from the executive secretary of Fonden reveals the magnitude of the business. The 340 million U.S. dollars approved by Maduro for Vielma Mora exceeded the 274.2 million U.S. dollars that the extinct Foreign Exchange Administration Commission (Cadivi) paid for Polar Foods from 2004 to 2012, or more than half of the 595.2 million U.S. dollars that the division of Cervecería Polar received in the same period, and this is the largest business group in the country. The US$ 340 million equal today a quarter of the debt accumulated by companies grouped in the Venezuelan Chamber of Food Industry (Cavidea) with its suppliers abroad for imports not yet paid by the authorities.
From the papers, it is evident that the Venezuelan Government manages preferential currencies at its discretion, at 10 bolivars per U.S. dollar, an insignificant value if compared to the "curb market" dollar, almost 500 times higher. Saved for Procter & Gamble and MSD Farmacéutica, no private company had foreign currency payments for an amount close to those US$ 340 million in 2015 or 2016. Alex Saab did get a better deal.
Group Grand Limited takes a good part of the US$ 340 million cake. Between January 8 and 30 of the current year, the company issued at least 149 invoices to the company of the State Government of Táchira for about 212.3 million U.S. dollars corresponding to the sale of a total of 95.1 million kg (209,659,611.34 lb) of food —an average of US$ 2.23 per kilo.
In the business Group Grand Limited only acts as a trader and charges in advance. The goods shipped were mayonnaise, beans, canned tuna, pasta, precooked corn flour, refined vegetable oil, tomato sauce, sugar, rice, milk powder and lentils.
entrepreneurs agree that the products are overpriced, considering that they were
bought as wholesale products. For example, Group Grand Limited charged US$ 6.29
per kilo of tuna,
US$ 7.39 for tomato sauce, and US$ 8.17 for mayonnaise, to mention those with the highest surcharge. "The prices are exaggerated, very high," says a food sector entrepreneur after analyzing the bills.
A search for international prices confirms the opinion of the entrepreneur. In supermarkets in Colombia, for example, the tomato sauce that Group Grand Limited billed at US$ 7.39 does not exceed US$ 5. Something similar occurred with canned tuna. Venezuelan supermarkets buy the 140-gram (5 oz) presentation at around 1 to 2 U.S. dollars. The same happens with grains and pasta. "We are buying beans at US$ 0.99 a kilo and they are selling it at US$ 1.77," warned another entrepreneur. "The cost of the pasta we import ranges from US$ 1 to US$ 1.25 per kilo, but they charge it at US$ 2.22." In both cases the surcharge is around 80%.
On numerous occasions, Cavidea has questioned the fact that the Government favors imports of finished products rather than the purchase of raw materials for companies. In that organization they repeat that "with one million U.S. dollars the national industry produces five times more than it would be obtained by imports." Juan Pablo Olalquiaga, president of the Venezuelan Confederation of Industrialists (Conindustria), has a similar position. "The CLAPs sell imported products that generate work in other countries, it is a highly inefficient use of foreign exchange," he said recently in a press conference.
When adding each product sold by Group Grand Limited to the box, the CLAPs - with about 16 kilos of products - would cost approximately US$ 34, which at the rate of 10 bolivars per U.S. dollar, would be equal to Bs. 340, a figure well below between the 12 thousand to 18 thousand bolivars of the official price. These figures have alarmed members of the Venezuelan opposition, who have been reporting corruption in the CLAP system, as well as inconsistencies in prices for months. The figures also bring down the recent version of the Minister of Foreign Trade and Foreign Investment Jesus Faría, who assured that the CLAPs were being imported at the complementary exchange rate (Dicom) set at around Bs. 700 per U.S. dollar.
"We have not received the CLAP since December," a young man told Nicolás Maduro at a televised event in the outskirts of Caracas. Within a few days, the same complaint was expressed during another transmission. This time, a nun from La Vega —one of the many disadvantaged areas in the west of the capital— told the Venezuelan president: "There is considerable food shortage, the CLAP does not arrive since November." Both the young man and the nun were referring to the box with subsidized food that the Venezuelan Government sells to the low-income population through the Local Committees for Supply and Production (CLAP).
Complaints show that CLAPs seem like a matter of chance. But for the entrepreneurs who import the merchandise, they are the jackpot of a lottery. The business is no small thing, if you take into account that the Government intends to cover at least 6 million homes.
"We are bringing products imported by the revolutionary government from several brother countries: Trinidad and Tobago, Colombia, Mexico, Nicaragua and even the United States of America. Comrade Trump is offering me CLAP at a good price," Maduro recently announced amid laughter. "You guys are laughing. There's going to be a surprise."
There is no talk about the entrepreneurs nominated by the Government to bring food. In February, it became known that Samark López, whom the Office of Foreign Assets Control (OFAC) of the U.S. Treasury Department identified as the "front man" of Vice President Tareck El Aissami, is one of the lucky ones. Now it is known that the list also includes Alex Saab, who has been linked to a great international ally of chavismo, nothing less than the former Colombian senator Piedad Córdoba, who was seen a few days ago in Táchira as a guest honor of Vielma Mora.
In 2011, Saab attended a ceremony at the palace of Miraflores in Caracas, as the "legal representative" of Global Construction Fund to seal the agreement that would later turned into millionaire contracts. The ceremony was presided over by Presidents Hugo Chávez and Juan Manuel Santos, and foreign ministers Nicolás Maduro - current president of the Republic - and María Ángela Holguín. Saab sit down with them six years ago, but the papers of Group Grand Limited today reveal other political ties, such as Javier Ernesto Betancourt Valle, who acts as the director of the company but used to held public administration positions, like consul of his country in New York or president of the National Association of Hydrocarbons in the Ministry of Mines.
After doing a booming business with the State Government of Táchira, administrative changes were made in Group Grand Limited to erase the trail of Sahdi Nain Saab Certain. According to the registration papers of Hong Kong, on 24 February of the current year, the company's shares were transferred to Eolo Energies INC and Viladrake International INC, two Panamanian companies registered by law firms in the style of the already famous Mossack Fonseca that lend names of unknown people to appear as directors of other companies. But when the maneuver took place, the millionaire business had already been done.
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.
Even though there are new brands, a new physical-chemical analysis requested by Armando.Info to UCV researchers shows that the milk powder currently distributed through the Venezuelan Government's food aid program, still has poor nutritional performance that jeopardizes the health of those who consume it. In the meantime, a mysterious supplier manages to monopolize the increasing imports and sales from Mexico to Venezuela.
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.