The Venezuelan fishing fleet and the seafood processing industry went under due to massive imports from the Government. Ironically, the shot underneath the waterline was fired by military officers in charge of overseeing the national sovereignty. A subsidiary of the Savings Bank of the Army imported tuna and other goods. The business was shielded with guaranteed access to Government currencies at preferential rates and alliances with the new business class.
business preferred by the Venezuelan military in the self-named Bolivarian
Revolution is that of food. The origin of this preference could go back to 2004,
when Hugo Chavez created the Ministry of Food. Since then, food dispatch and its
affiliated companies have been directed, almost exclusively, by the uniformed
officers. With Chávez's successor Nicolás Maduro since 2013 in the presidency,
that situation has been maintained to the point that last year he promoted the
Minister of Defense Vladimir Padrino López to the position of head of the
Gran Misión Abastecimiento Soberano (Great Sovereign Supply Mission), a
plan aimed at overcoming – so far, unsuccessfully – the chronic shortage of
food, among other basic consumer products, that Venezuelans have suffered for
years. But the binomial between the military and food has been so significant
that for years, a mirror company of the Savings Bank of the Army imported and
marketed canned tuna thanks to the US dollars and preferential treatment
received while the former Foreign Exchange Administration Commission (Cadivi)
was in place.
Since 2003, when Hugo Chávez imposed a strict exchange control system due to political reasons, Cadivi was the agency responsible for allocating foreign currency amounts that private or public companies or individuals requested for their businesses. By managing currencies in the midst of a convoluted system of exchange rates and for an import-prone country, those in charge had virtually unlimited opportunities to participate in corruption schemes. When President Maduro closed the body in 2013, it was accused by known former chavismo officials of being the escape window of billions of US dollars.
At a point, Cadivi was also governed by the military. Thus, the colonels of the army Manuel Barroso (promoted to General in 2015) and Víctor Flores Correa, president and vice president of Cadivi, respectively, paved the way for his comrades in arms from the Savings Bank of the Bolivarian Army (Caejerb) to obtain cheap currencies through Inversora Caejer, a subsidiary with the autonomy of any private company.
Inversora Caejer was born on February 21, 2008, and was registered by the president of Caejerb, the then army colonel Antonio Rafael Gutiérrez Campos. The symbiosis between the savings bank and the company is maintained: the president of one is also the president of the other. Since December 2012, the then colonel, former aid-de-camp of Chávez and current brigadier general, Alfredo Román Parra Yarza, is in charge of both responsibilities, according to the mercantile register of Inversora Caejer.
Public information reveals that the extinct Cadivi paid Inversora Caejer nearly 10.5 million US dollars until 2012, the last year in which Venezuelans enjoyed the abundance of the oil boom and saw the last re-election of Chávez as president of the Republic. Then, the National Foreign Trade Center (Cencoex), which replaced Cadivi since late 2013, paid to the company another 10.7 million US dollars between January and September 5, 2014. When this second payment streak took place, the country was already diving into the economic crisis and the cuts in the allocations of currencies to the private sector were evident. However, there were no restrictions for the military.
The amounts paid to Inversora Caejer in those nine months of 2014 exceeded, for example, the amounts paid to transnational companies like Bimbo, Chrysler or Johnson & Johnson; to pharmaceutical companies like Laboratorios Farma or Laboratorios Valmor; and even to major telecommunications operators like the Venezuelan subsidiary of the Spanish company Telefónica. Although unknown in the business world, Inversora Caejer emerged as a major player in imports by systematizing the data of the National Register of Contractors (RNC) and seeking relationships with the military, where the company appears as a contractor of Caejerb with a payroll of 15 employees only.
The name of Inversora Caejer also appears in the hundreds of pages comprising the judicial file of the only criminal investigation of the Public Ministry on the alleged irregularities committed in Cadivi. It is the case against Francisco Mariano Navas Lugo, also an army colonel and former manager of Cadivi imports and export monitoring, and his cousin José Daniel Stekman, both arrested since 2013.
Not even the suspicions arising among the authorities in 2012 were obstacles for the military company to win the battle of the tuna. It was a loud victory for a company that was born as a prospective distortion of what is the natural end of a savings bank.
In 2012, four years after Inversora Caejer was registered, Cadivi authorized around 8.3 million US dollars to import "whole yellowfin" tuna, "frozen big eye fish in bulk," "tuna loin in oil," and other sea products aimed to feed the army.
According to the documents included in the file of the Public Prosecutor’s Office, the suppliers of these goods were the Ecuadorian companies Maviga Inc, PacFisch and Conservas Isabel, as well as the Panamanian company Queen Fish.
The foreign exchange applications to import these foods were only a part of the company's requests to Cadivi to import from milking machines, video cameras, and "uninterruptible power supply units (UPS)" to radio navigation equipment, all purchased from companies like SMB Entreprises Inc, Global Merchandise Distributors Inc, or JD & FB Equipment and Supllies LLC, registered in Florida, United States of America, and belonging to Venezuelans. The applications totaled almost 60 million US dollars and set off the alarm of the administrators of the exchange system. "In the following months, a large number of applications began to be generated, specifically 71, whose items and amounts quickly attracted the attention of the area of ??analysis since they did not seem to correspond to the frequency, amount and items managed by the institution," as detailed in the report contained in the judicial file.
The absence of official figures for 2013—the authorities never published data related to that year—prevents checking how many of the applications approved in 2012 were finally paid in the following year, since in the extinct Cadivi, weeks and even months could passed between the Authorization for the Purchase of Foreign Currency (ADA) and the Authorization for Payment of Foreign Currency (ALD), that is, the final payment of the US dollars. It is clear, however, that in 2014, the military continued importing canned tuna that was sold in private supermarkets with the Mar Caribe label.
In addition to Inversora Caejer, on the can label appeared the names of two other importers of the same product: Imports Almora and Desarrollos Los Cocos Ranch. It is sort of a business puzzle joined together by tuna.
The owner of Importaciones Almora is the Venezuelan businessman Adolfo Miguel Lovera Reyes. That is not the only company that relates him with Inversora Caejer. Lovera Reyes also owns Importexal Corp, a company registered in Panama in 2007, which seven years later was one of the Ecuadorian tuna suppliers for the military. This appears in the records of the port activity prepared by the Chamber of Commerce of Puerto Cabello (CCPC) based on the information supplied by the shipping companies. On June 18, 2014, the CMA CGM Alcázar ship from the port of Manzanillo in Panama arrived at the main port of the country with a cargo of almost 121 tons of frozen yellowfin tuna.
Lovera Reyes defines himself in his Linkedin profile as "partner-founder" of Importexal Corp, but the company's description does not include food marketing. "A company engaged in logistics and development of international trading projects, which stands out for having private and government clients who require large quantities of items like toys, school supplies, toiletries and cleaning supplies, among others." In any case, the company did well as it jumped from an initial capital of US$ 10,000 to US$ 10 million in 2016.
In this same social media, Lovera Reyes describes himself as the person responsible for the tuna brand sold by Inversora Caejer along with his company Importaciones Almora. "It was initially formed to supply the national market. Then, a tuna brand named Mar Caribe was created and massively sold nationwide due to its high quality. In 2015, Importaciones Almora was renamed Group Almora 21 and became a food exporter which offers, among other products, to ship from the port of La Guaira the tuna that was previously imported and negotiated with Inversora Caejer. The company never responded to our interview requests for this report.
Despite the publication by the entrepreneur, a decree by the Ministry of Health, published in Official Gazette 39.495 of August 25, 2010, confirms that Cooperativa Turmero Azul 657987 obtained the food safety registration to market the Mar Caribe tuna "made" by the Venezuelan company Conservas del Centro. Both Cooperativa Turmero Azul 657987 and Conservas del Centro are also linked to the protagonists of this story -the military of Inversora Caejer.
Luis Medina Ramírez is the "comptroller" of Cooperativa Turmero Azul 657987, a Major General of the Army, who ultimately ended up as president of the state company Corporación Única de Servicios Productivos y Alimentarios (Cuspal) (a productive and food service company) attached to the Ministry of Food and responsible for planning public food purchases abroad. Brothers Faroh Cano, owners of Conservas del Centro in Venezuela, bought in June 2016 the Ecuadorian packer Fishcorp, another supplier of the tuna sold by Inversora Caejer in 2014.
International trade databases, like ImportGenius, allow quantifying the value of tuna imports made three years ago by the company of the Savings Bank of the Army. In 2014 only, Inversora Caejer imported tuna for at least 7.13 million dollars. That amount includes the purchase of about 1.25 million kilos (2.76 pounds) of the product, freight and insurance costs excluded. In other words, Inversora Caejer paid US$ 5.69 per kilo of tuna.
A year later, in 2015, the purchases of tuna to Ecuador by the military totaled at least US$ 1.8 million per 300,000 kilos (661,386 pounds), at US$ 6.015 per kilo, based on ImportGenius statistics. Although the Government has not disclosed the currency payment figures for 2015 and 2016, Inversora Caejer does not appear in unofficial listings for both years.
Inversora Caejer's breakthrough in the tuna business coincided with the sudden rise of Ecuador's exports to the Venezuelan market that, on the one hand, aroused suspicions among the authorities of that country and, on the other, led to the decline of the traditional Venezuelan fishing industry, which used to be among the largest in the world. Based on complaints from the Tuna Industry and Processors Guild, Ecuador's Ministry of Commerce even reported that behind the boom in the sale of tuna to Venezuela as of 2011 there was an "overvaluation of exports" and a "concentration of the commerce in a single company to the detriment of traditional exporters," according to the Plan V portal.
In Venezuela, the complaint of trade unions and business organizations has pointed in the same direction. On several occasions, they warned about the inconvenience of allocating foreign currency to import the canned product, while the production lines of Venezuelan tuna plants such as Margarita, El Faro, Eveba, El Peñero, Arrecife and Oriente were paralyzed due to lack of raw material.
"We call on the authorities so that instead of granting foreign currency to the companies importing canned tuna, allocate it to the suppliers of raw material of the national industry, which generates employment and pays taxes in the country," said the Venezuelan Chamber of Fisheries (Cavenpesca) in a statement released in May 2015.
Despite the capacity to produce 240 million canned tuna each year, the obstacles imposed by the authorities and the impossibility of timely importing tuna loins caused a collapse. Therefore, the entrepreneurs complained in the letter that "since the end of last year" the Ministry of Food "has not approved the import permits required to be able to replenish tuna loin stocks," a different fate than Inversora Caejer had.
In the judicial file of the investigation by the Public Prosecutor’s Office on the case of the irregularities in Cadivi there are clues to understand the boom of the mirror company of the Savings Bank of the Army. "In early 2010, the Savings Bank of the Army, which received contributions from both the active personnel assigned to the institution and the placements in the stock exchange, decided to import a variety of products as a mechanism to obtain additional income; hence, it expressed the intention to register as a user of the Automated Currency Trading System," says the report on Inversora Caejer.
The report states that in the same year, Inversora Caejer filed an initial application to acquire foreign currency to import "frozen beef", but the operation was canceled. Then, it "requested to the Ministry of People's Power for Food the authorization to import under the method of payment on demand." Even though the company obtained it, it did not continue with the procedure due to lack of " foreign currency guarantee."
But the solution was around the corner. "Consequently, and in order to obtain the privileges and benefits of State companies, Inversora Caejer requested to be registered in the Automated System of the Commission as a user of the public sector and submitted registration No. 5828 of 8/14/2010, issued by the Ministry of People’s Power for Defense, which is an essential requirement to be included.”
That was the key that definitively opened the doors to Cadivi and the much-desired preferential dollars for the military. The qualification as a public company guaranteed fast procedures to purchase U.S. dollars or the omission of requirements that are compulsory to any private company, among other benefits. "In 2011, Inversora Caejer file during this period seven applications to import computer equipment and television receivers to sell them at affordable prices to the members affiliated with the institution, as well as tuna, hake fillets, and fresh, refrigerated or frozen fish fillets in order to continue supplying to the same food service of the army," the report said.
A year later, the alarms of the supervisory bodies set off. In early 2012, according to the report contained in the judicial file, Colonel Asnoldo Prieto Chacín, president of the Savings Bank of the Army and Inversora Caejer, met with Colonel Víctor Flores Correa, vice president of the foreign currency administration and control of Cadivi, to obtain "the necessary guidance to continue the import process on its part in order to obtain greater income for the benefit of the associates," i.e. 11,000, in the case of Caejerb. That paved the way for the Savings Bank of the Army to also become a large importer of goods with preferential dollars.
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