Roberto Rincón was the Steve Jobs of PDVSA contract-rigging. Today, he sits in a U.S. prison cell, having copped to tax, foreign bribery and conspiracy charges in a billion dollar corruption probe as part of a plea bargain to reduce his sentence from over 100 years to under 13.
How did he do it? By building a web of 36 maletín-based companies, with intractable nested ownership structures designed to throw investigators off his scent, able to produce multiple “competing” bids for PDVSA procurement contracts. The case the USDOJ put together shows Rincón as a master at creating the kind of bureaucratic fog corruption needs in order to prosper. That was the art of it, but the rest was more straightforward: Roberto Rincón just bought anyone with the power to decide who PDVSA procured equipment from. In the process, the maracucho businessman built an enormous fortune, on the back of one of the biggest cases of corruption in the Bolivarian republic’s history.
Our buddies at El Pitazo have the whole story, in horrifying detail.
The basic shape of the racket was straightforward. Say PDVSA needs to buy one million widgets. Bariven, PDVSA’s contracting arm, would then invite “qualified companies” to bid for the contract. Rincón, working together with his co-conspirator, Abraham Shiera, and relying on inside-info from Bariven officials he was paying, would get invitations to bid sent to a smattering of his own maletín companies. This would preserve the appearance of a competitive process. But it was rigged.
Rincón and Shiera’s sock-puppets would send “competing” bids for the contract, all of them way overpriced. Their least overpriced bid was guaranteed to win, since he’d make sure no honest companies bid as well. Over the years, ten separate Rincón-controlled companies won fat contracts from Bariven in this way. From the surcharge, he’d pay off his kickbacks and still have plenty of money left over for Ferraris for his kid and garish McMansions and the private plane El Pollo Carvajal flew to Aruba in.
How Breaking Bad was the whole scam? Try this on for size: Rincón actually bought a Car Wash and listed its address as the headquarters of several of his fake companies. A Car Wash. That Breaking Bad.
In this Radio Fe y Alegría interview, El Pitazo’s Fiorella Perfetto explains their investigation into the case.
The narrative is, in César Batiz’s words, “fit for a screenplay”,
In 12 years he built a structure of corruption and wealth that has vanished in eight months behind bars, so close yet so far away from his family’s $7 million Carlton Woods mansion.
You can’t help but gape at Rincón’s tremendous brass balls. In 2010, while living in a house that lived like that, he reported to the IRS he was earning $266,700. (The right figure was more like $6.6 million.) Turns out the gringos don’t like it when you do that: did Roberto never watch the Untouchables?
Scratch that. Who has time for movies when the taking is this good?
What’s amazing is how the Venezuelan state seems totally paralyzed even when faced with the most blatant of crimes. According to the El Pitazo piece:
“The US authorities were in charge of bringing the scam into the open, which at least according to facts verified by the Texas South District Court, amounts to a billion dollars between 2009 and 2014.”
The Venezuelan government has like less-than-zero excuses for failing to investigate this stuff. The gringo authorities have already done all the hard work. The documents are on the record, the affadavits signed, the corrupt Bariven officials are identified. ¿Qué más quieren, coño?
Aquí están, estos son: José Luis Ramos Castillo, Christian Javier Maldonado Barillas, Alfonso Eliézer Gravina Muñoz. And several more. What, do you need a Cedula number, too?
In a country that imports everything, at least we export criminals and outsource the administration of justice.
So how does a corruption mastermind like Rincón get unspectacularly caught by a Texas District Court? Apparently, as was the case for many a cartoon villain, it was a case of hubris:
“But confidence trumped prudence, and in November 2015, Rincón returned to Houston, where US authorities had been investigating him for tax evasion since 2011, according to a source. He was quickly arrested, brought to Court, and sent behind bars without possibility of bail. It has been 8 months since, enough to watch the empire he built in the last 12 years fall.”
An appalling story. But far from the only one, just one in many, many more. It makes me wonder about what our government’s structure truly looks like, and what it would mean to dismantle it. For the full story on Roberto Rincón, take a look at El Pitazo.