The iceberg begins to emerge. Odebrecht admits to American authorities that it distributed bribes in twelve international markets, including Venezuela, where most bribes were paid: 98 million US dollars in bribes and kickbacks. At least 35 million of all that money was contributed by the civil engineering company to the last electoral campaign of Hugo Chávez. In court declarations, an informer speaks of under-the-table payments of at least US$ 600,000 in the name of company Andrade Gutierrez. This is just the beginning of the revelations.
Only in Venezuela, US$ 98 million was paid in bribes. Odebrecht, the Brazilian construction giant, not only admitted having bought officials in its country —what had been revealing in the investigations of prosecutors and judges, but that outside Brazil, the Bolivarian Republic was the place where it paid the most bribes to get the best contracts.
Two years ago, the Lava Jato Operation ("Carwash" in Portuguese) has shaken the foundations of the Brazilian establishment. In July 2013, the Federal Police of Brazil tracked the suspicious movements of a man called Alberto Youssef, and by pulling that thread, not only did it find one of the commission agents - the infamous doleiros [black market dollar dealers] - but a cartel of businessmen and political leaders who managed the monopoly of state contracts. But it was not until last Wednesday that some of Odebrecht's management abroad came to light not exactly from Brasilia, but in New York.
Construction company Odebrecht and its petrochemical arm, Braskem, pleaded guilty before the court of the Eastern District of New York for paying bribes of US$ 349 million in Brazil and another 439 million in a circuit of 11 countries, including Africa with Angola and Mozambique, and Latin America with Argentina, Colombia, Ecuador, Guatemala, Mexico, Panama, Peru, the Dominican Republic and, of course, Venezuela, where they spent nearly a quarter of the total spent abroad.
The US Department of Justice announced that the construction company committed to pay the Brazilian, Swiss and American authorities a sum of 3.5 billion US dollars, a record fine for a holding company that used global banking in order to buy contracts and wills.
The accusations on Lava Jato threaten to stir even the president of Brazil, Michel Temer. The Odebrecht issue has revealed a mafia that has undermined the paradigm of its business class. Not in vain, Marcelo Bahia Odebrecht, the heir and CEO of the construction emporium, will spend this Christmas behind bars. This week, however, it was the first time that a state institution has reported the magnitude of the case beyond Brazilian borders, although the document of the US Department of Justice made sure not to give names. Tell the deed, not the doer.
The trailer of the Odebrecht film in Venezuela can still be seen in the 13th Court of the Federal Criminal Court of the city of Curitiba, south of Brazil, where it all began. This is where the testimonies of the famous publicist and electoral campaign advisor, João Santana, and his wife, Mónica Moura are filed. They participated in the campaign for the re-election of Chávez in 2012, which they now recognize was used as a vehicle to inject money.
"The cost of that campaign was approximately 35 million US dollars," Moura said in a testimony she gave on February 24 of this year. The money landed in the global financial system from accounts in the Heritage Bank of Antigua and Barbuda in the name of offshore companies such as Klienfeld Services and Shellbill Finance SA, the corporate facades that Odebrecht used in its bribery circuit.
Considered a guru in electoral counseling, with clients in Argentina, El Salvador, the Dominican Republic and even Angola, Santana was one of the advisors who helped profile President Nicolás Maduro as "the son of Chávez." Now, it is known that his counseling services included - at least in 2012 - funds that came from Odebrecht’s Department of Structured Operations, the firm of which was awarded the 32 most emblematic works in Venezuela that are a business card of Chavismo, namely, the delayed extensions of Metro de Caracas, the second and third bridge over the Orinoco River, as well as the Cacique Nigale bridge over Lake Maracaibo. "These were not recorded as payments for Venezuela's election campaign, with Fernando Migliaccio, Odebrecht's executive in Brazil, directly responsible," said Santana's wife, Mónica Moura, who managed her husband's campaigns.
Many of the works commissioned from Odebrecht are not ready. Last year, Maduro inaugurated line 5 of Metro de Caracas with only one of its ten stations. Not to mention the Manuel Piar Hydroelectric Plant in Bolívar state, better known as the Tocoma dam, which was originally promised for 2010 and is not operative at a time when shortages include power.
Interviewed before the Joint National Assembly Committee investigating the Electricity Crisis, Odebrecht representatives Jorge Faroh and Sergio Nogueira declared on May 25 that the work was almost ready. "Physical execution is at 96%," they said. But then the representatives of the Argentine company Impsa, responsible for the installation of turbines, responded that they had not progressed as they were awaiting completion of the civil works.
Something else must have happened for the hydroelectric plant to stand out among the notes that the Federal Police of Brazil found hidden in the mobile phone of the CEO of the construction company. "Tocoma?," asked Marcelo Odebrecht in some notes on his mobile phone that were followed by references to the Venezuelan opposition and even deputy Diosdado Cabello himself, number two of Chavismo.
"Marcelo Bahia Odebrecht warns about illegal payments to the opposition," the police concluded in a report on August 25, which also leaked references to lobby meetings with Cabello that remained on the phone, "Diosdado was in Brazil with The Ambassador. Will he have to take the box?"
However, Odebrecht’s case is not the only one that links Brazilian contractors to the financing of Venezuelan politics. In what has been a series novel, the Lava Jato case shows that even after Chávez's death, the political favors continued.
one of the first condemned denunciations, commission agent Alberto Youssef
confessed that he had sent three payments for the contracts, for which company
Andrade Gutiérrez is responsible in Venezuela. "I did three operations," he
said. "In late 2013 and early 2014, an operation of
US$ 300,000, which I sent to (company) DGX, and two operations of US$ 150,000, which has nothing to do with Petrobras; it was a box-2 operation by Andrade. He was talking to his manager - who asked me to do this - Flávio Magalhaes, and the director of Andrade Venezuela, Alberto (Moreira)."
A year earlier, in February 2009, Simões proclaimed that Venezuela had become the country with which Brazil maintained "the largest surplus" among all the nations of the planet.
The spring of business between Caracas and Brasilia had rationale. In addition to the ideological affinities and personal sympathies between Presidents Hugo Chávez and Luiz Inácio Lula Da Silva, the Venezuelan authorities' compulsion to complete infrastructure projects required a reliable partner.
In another office of Ambassador Simões —in which he reported to the heads of the Itamaraty Palace the results of the visit to Caracas of an official delegation led by Minister of Development, Industry and Foreign Trade Miguel Jorge— the Brazilian diplomat quoted the then Venezuelan Minister of Science, Technology and Intermediate Sciences, Jesse Chacón. According to Simões, Minister Chacón had confessed in a meeting to the president of the Brazilian Industrial Development Association (ABDI), Reginaldo Arcuria - another dignitary of the delegation - that the strategic relationships with Brazil were the most important for the Chavista regime because "[relationships] with Iran are difficult; with China, whatever it is agreed in writing differs from what it is executed; with Russia, the results are unsatisfactory; and with Belarus, distant and not very relevant, we are just getting results."
The series of diplomatic reports can be seen as a series of celebrations for large infrastructure projects granted by the Venezuelan Government to Brazilian contractors. The first one registered in the communications —which does not mean that it was the first contract obtained in Venezuela, only the first one in the sample of cables—dates from 2003. Ambassador Ruy Nunes Nogueira reports regarding a business meeting with the then vice president José Vicente Rangel, that El Diluvio irrigation project in the state of Zulia (western Venezuela) had been assigned to Odebrecht, with a line of credit of 115 million US dollars from the Brazilian National Economic and Social Development Bank (Bndes).
The dance of millions causes dizziness when examining the financing contracts entered into by and between Bndes and the Venezuelan authorities. These are agreements in which the Brazilian entity finances the purchase of materials, equipment and services in Brazil for export to Venezuela, where they will be employed in projects carried out by Brazilian contractors, like Odebrecht.
Jorge Giordani, Nelson Merentes, Alí ??Rodríguez Araque, Rodolfo Marco Torres and Asdrúbal Chávez are some of the authorities of the top Chavista hierarchy that appear signing with Bndes. In general, and despite the nationalist discourse of most of them, they accepted the typical clauses of those contracts in which the Brazilian justice system is established as the jurisdiction where any dispute over the enforcements of the loans should be resolved.
Based on the cables, in 2009 the commercial and industrial relationship between Venezuela and Brazil was so important that President Chávez himself proposed to set up a joint investment fund, similar to the one he had already agreed upon with China. However, the special adviser to President Lula Da Silva, Marco Aurelio García, kept him on a short leash. He warned Chávez that such a thing was not allowed in Brazilian laws. But, to satisfy the Venezuelan leader, he proposed to analyze the concept of an investment agreement.
Garcías’ precautions were not overstated, as diplomatic cables also reveal -despite the huge profits they were betting on- that things do not always worked out for Brazilians in Venezuela. As early as 2004 (the sixth year of the Chavez era), Ambassador Joao Carlos De Sousa Gomes told Itamaraty that two works in the hands of Odebrecht —Line 4 of Metro de Caracas and Metro Los Teques (capital of the state of Miranda, 25 kilometers (15.53 mi) southwest of Caracas) — were slow to obtain the required financing from Bndes due to the "reluctance of Venezuelans" to provide "the required collaterals".
Somehow or other, Brazilians would learn to deal with these obstacles, however extravagant they were. They knew what was at stake.
In his February 2010 communication, Ambassador Simões thought that business would go even better in Venezuela if the decisions were not so centralized in Hugo Chávez. He then reveals that during the two years he represented Brazil in Caracas, he had to take up to 96 steps before Cadivi, the management body of the leonine local exchange control system, to unlock up to 460 million US dollars in payments for Brazilian companies.
A revealing case of how the partnership between Brazilian diplomacy and Odebrecht acted in Venezuela is in another February 2010 cable, where a meeting of embassy officials is related to Sergio Thyssen, director of company Braskem for Venezuela, a petrochemical arm of Odebrecht.
During the meeting, Thyssen complains that Venezuela and PDVSA did not comply with the conditions established for the implementation of Propilsur and Polyamérica projects, agreed with Pequivén (a subsidiary of the Venezuelan state oil company) to be executed in the Jose petrochemical complex, in the state of Anzoátegui (eastern coast of Venezuela).
However, the executive admits that he has already resigned himself to losing the 100 million US dollars that Braskem had invested so far in the project. He fears that if he goes to international arbitration, the Venezuelan government will retaliate against Odebrecht, Braskem's main shareholder in charge of billions of dollars in contracts.
(*)This story was covered and published simultaneously by IDL-Reporteros in Peru, la Prensa in Panama, and www.armando.info in Venezuela.
Two entrepreneurs from Peru, Yosef Maiman and Sabih Saylan, participated as intermediaries in the irregular payments of Odebrecht, through offshore structures, to the former president of that country. They are part of a "shell companies" structure built by Mossack Fonseca, as shareholders of the private cable TV and telephone operator in Venezuela, Inter. Even the Panamanian law firm suspected that it was being used for money laundry. Meanwhile, another firm of the group contracted works with the Chavista State.
Without human rights officers at the ports of entry or legal system that protects the refugee, Venezuelans migrating to the Caribbean island find relief from hunger and shortages. In return, they are exposed to labor exploitation and the constant persecution of corrupt authorities. On many occasions they end up in detention centers with inhumane conditions, from which only those who pay large amounts of money in fines are saved. The asylum request is a weak shield that hardly helps in case of arrest. Yet, the number of those who try their luck to earn a few dollars grows.
The network of intermediaries contracting with the Venezuelan Foreign Trade Corporation (Corpovex) to bring CLAP boxes seems infinite. In Sabadell, a town near Barcelona, a virtually cash shell company got 70 million dollars for outsourcing the shipment of food to Venezuela thanks to the administration of Nicolás Maduro, which buys the contents of the boxes at discretionary prices and without control. Last year alone, the government spent 2,500 to 3,500 million dollars, but only the leaders of the "Bolivarian revolution" know the actual figure.
The chemical analysis of eight Mexican brands that the Venezuelan government supplies to the low-income population through the Local Supply and Production Committee (CLAP), gives scientific determination to what appeared to be an urban legend: it may be powdered, but it is not milk. The fraud affects both the coffers and the public health, by offering as food a mixture poor in calcium and proteins, yet full of carbohydrates and sodium.
Even Diosdado Cabello has false followers. The Government of Venezuela has been able to measure itself in political cyberspace. Hence, it has created an authentic machinery of robots at the service of the governing party in social media that is mainly controlled by public officials and coordinated from ministries. This is the result of several studies, testimonials and applications that measure the "Twitterzuela" convulsion.
Venezuelan Álvaro Gorrín escaped on his yacht in 2009 after the intervention of Banco Canarias, but he and his board members did not resign themselves to losing everything to the Venezuelan government. Between the support of an influential New York law firm and the expertise of Appleby to create companies in tax havens, the then fugitive from the Venezuelan justice drew a strategy to rescue something from the ruins.
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.