Photo: Money Mover retrieved

Back in 2015, the Banca Privada d’Andorra (BPA) became subject of an international money laundering investigation, which partly involved “…the development of shell companies and complex financial products to siphon off funds from Venezuela’s public oil company Petróleos de Venezuela (PDVSA)”, according to the U.S. Financial Crimes Enforcement Network (FinCEN).

More than three years later: “A judge in Andorra has charged 28 people, including former officials in Venezuela, with money laundering offenses over a kickbacks-for-contracts scheme that plundered $2 billion from the Venezuelan state oil company between 2007 and 2012…

“…14 Venezuelans, including former deputy ministers Nervis Villalobos and Javier Alvarado, as well as Luis Carlos de León-Pérez, a former official at a state-run electric company in Caracas.

The judge places Diego Salazar, the high-powered cousin of Venezuela’s longtime oil czar Rafael Ramírez, at the top of the alleged scheme.”

Villalobos and De León were arrested in Spain last year, at the request of U.S. authorities. He pleaded guilty in a Houston federal court almost two months ago, but Villalobos must first face trial in Spain before being extradited (it was already authorized in January).

Meanwhile, Alvarado is still free and Salazar was arrested in Venezuela last December allegedly for the same case, although it seems more likely to be because of the Maduro-Ramírez rift.

That wasn’t the only development regarding the case in the last few days: Two other former PDVSA officials pleaded guilty in a Houston federal court for their involvement in the case.

Spanish newspaper El País details how the scheme took advantage of the Venezuelan State, through public companies and diplomatic services in order to control public contracts:

“Established by former chavista leaders and functionaries of the State’s oil company, the scheme charged +10% commissions to companies, especially Chinese, that later were favored with PDVSA contracts…

“Through some thirty offshore companies in fiscal paradises like Switzerland or Belize, the funds were moved into Andorra, a country with a population of 78,000, with banking secrecy until last year. In order to avoid suspicions, the group camouflaged their income under the umbrella of advisory works that—according to the investigators—didn’t exist.”

But that could simply be the tip of the iceberg for “The Andorran connection” as The BPA was allegedly involved in another high-profile bribery scheme with regional implications: The one involving Brazilian giant Odebrecht. You know, the one Quico thought was cool. The Andorran judge in charge of the case even went to Lima last year to follow the money trail.

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28 COMMENTS

  1. Tip Of The Iceberg: $ 2bill, spread among 28 people (chicken feed); !0% commissions (what self-respecting Ven. Chavista public official would even stoop over to pick up this lowly pocket change from the pavement?–even pre-Chavez the going rate was 20+%); middling-to-low-level officials. The true rape of the Country’s coffers is virtually unimaginable in size/greed.

    • You took the words right out of my mouth.

      Except…

      The charges just have to prove 10% to get a conviction. Even if it was 30%, that might make it easier for the “defendants” to make a case, based on some ledger sheet.

      It’s like charging someone with assault, instead of attempted manslaughter.

      • Mind you:

        Media sales reps…be they print, radio or TV…are the lowest forms of life. Well, THEY’RE not, but the jobs they’re doing are.

        And they know it.

        They lie about number of ad impressions, pass-along readership, ratings, etc. It’s the only way they can make a living. I always pitied anyone in ad sales, regardless of the media.

        But kickbacks to make the sale? Doesn’t happen, because of the system.

        Every transaction is closely monitored by several sources.

    • Wasn’t Hector Navarro- who with Giordani wanted investigation of the stolen $300 billion- the guy that wrote praises of North Korea?

      Yup. A view into the brain of the “intellectuals” of XXIst. Century Socialism in Venezuela

      “Socialism maintains itself, with great efforts, in China, where it could end with centuries of hunger and misery, in North Korea which, although isolated and solitary, has managed to have a solid economy (!!!), as well as in Latin America itself, in Cuba, with 30 years of an inhuman economic blockade , but whose achievements in health, education, science and culture are a spine that bothers the power of the North”

      There you have it, this is the intellectual depth of analysis of the world situation by Giordani et al. in 1994.

      Hector Navarro AND Jorge Giordani were co-authors.

  2. Venezuela was just SO voluptuous that she couldn’t be ignored. Now look at her….hard to believe, just how hard do you have to ransack and pillage to do what they did to this place? Totally un-fucking-believable.

  3. My former employer secured a contract in Venezuela back in the eighties or early nineties. At that time a “Mr. 5%” took 5% off the gross amount paid by the customer. The identity of “Mr. 5%” was a closely-guarded secret, but we did learn that he was ethnic Lebanese. The contract left my employer with a bad taste in the mouth, and we never again bid for a Venezuelan contract. So Odebrecht may well have taken a pre-existing (and pre-Chavismo) racket to a (much) higher level.

    • When I did freelance marketing work for Santa Teresa rum in the states in 1988 (they were trying to bring the brand up here), I was still working my job at a big Madison Avenue ad agency.

      I spoke to trade magazine sales reps about placing some ads, as well as our own experienced media buyers. And they all told me the same thing:

      LatAm companies don’t pay their bills, so it’s payment in advance. And they ALL tried to grab a piece of the media buy, a kickback, for themselves.

      They were so clueless as to not have a hint that Madison Avenue and media buying in the states doesn’t work that way.

  4. Corrupt payments account for only part of the loss to the state entity whose officials get such payments , a much much bigger sum is lost to the entity by paying much higher prices or fees than normal for substandard work or for work that never gets completed or delivered , If 10% is paid to the officials or their partners , 200% plus overcharges are paid to the companies which make the corrupt payments …….., contracts are drafted so the companies can charge extra for made up charges ……., also if they do a shoddy or fraudulent job the state officials make sure that more concientious officials cannot put forward a complaint . Thus a 2000 million corrupt payment can actually involve a loss of 100 billion to the state entity whose officials awarded the contracts….!! Not only that but when the whole scheme breaks down and work is suspended indefinitely attempting to make good on the failed work means that much more money gets spend than otherwise would have been the case.

    • Good example: the autopista to the Oriente: every incoming Govt., Adeco or Copeyano, budgeted it to completion, did nothing for 41/2 yrs., then, just before the new Pres. election, with costs now 5x higher, rushed to build 10-15 kms. to show electors something for their 5 yrs.’ effort.

      • Many people voted in 1998 for El Finado due to his campaigning against corruption. Instead, corruption got worse under his watch.

        The long-term Venezuelan record on corruption is a good argument for privatizing the oil industry. But a privatized oil industry wouldn’t have stopped the corruption of the autopista del Oriente.

        Pundits and commenters all over the world have claimed that the failure of
        Chavista Venezuela does not indicate that Socialism is a failure. The failure of Chavista Venezuela, they inform us, indicates that corruption- not Socialism- can ruin a country. What they ignore is that the more powerful the government, the greater are the opportunities for corruption. A government official in charge of social workers has much less opportunity for corruption than a government official in charge of handing out oil service contracts.

  5. We ain’t seen nothing yet, and never will. Because it’s not only in PDVSA where thousands, yes thousands of top crooks got away with fortunes, it’s everywhere, Corpoelec, mining industries, every industry, almost every business, public and private, you name it.

    There have always been bribes and kick-back in Venezuela. I was in procurement/import with Edelca in the late 80’s, there were guisos left and right, from the contractors to the owners, to the Edelca people, to the customs agents to the Union crooks. Puro guiso. But that was peanuts compared to Chavismo times. In PDVSA there have always been guisos and kick-backs at all levels too, across the board, across countries involved in the contracts. But not this huge. And the Imperio was in charge to actually make PDVSA work, in the end. But PVSA is only part on the mega-thievery and debauchery in Kleptozuela, at all levels, in the entire sourcing and procurement chain, the entire production ladder, from the average obreros/workers/empleados, to mid-managemnt, to top management, across industries, everywhre, especially the public/chavistoide sector, of course.

    It’s GALACTIC, The corruption can only be compared, if that to Iraq’s or some wealthy hellhole like that. Lybia and shit. And it’s probably worse. And I repeat, not just the Chavistas, or the PDVSA crooks, the Ramirezes and such. Almost everyone involved in GUISOS in the past 10-15 years. Including the majority of our beloved “pueblo-people”, yes. They are often culpable and complicit too. They just were able and are able to steal less that Ramirez or Tarek, or Oderbrech thugs. But they stole all they could and continue to do so, millions of Enchufados.

    If you add all of that corruption up, not just chavistas and pdvsa, your laptop would explode. Which is why I always insist in calling a spade a spade: KLEPTOzuela – Klepto-Narcozuela, if you prefer, because now most of the stole BILLIONS come from the galactic drug trade, way more than pdvsa’s diminished oil. Way more.

    • Employees of private companies in Venezuela also engage in corruption , not in the same scale as public ones but also significant , the Owners and Managers themselves will make use of the company resources to obtain gains that harm the company (and their co owners) . It will surprise some that managers in some gringo companies also indulge in corrupt practices for their own benefit ….(the officials have blue eyes but they can be as corrupt as black eye locals) , not as common but it does happen , even in some of the most prestigious ones…..

      • Yes, but the difference is the SCALE of corruption. In the public sectors of every country it’s higher than private sectors. In some countries much higher than others. In Klepto-Narco Cubazuela it was always high, but now it’s Astronomical, i.e. GALACTIC. Has been for, say, 15 years. At all levels, from the lowest to the highest, almost every profession except a few very closely supervised; but my point remains it ain’t just Chavista Top Thieves. No. It ain’t just PDVSA. It ain’t just the 1300 “Generals” and the entire “armed forces, police, sebin, guardia, etc. NO. It’s most of the freaking Populace. Most of them remaining are complicit, culpable. Thus they deserved to some extent what they got: for being so ignorant, uneducated, lazy and corrupt. Yes, el pueblo, in general. Except no one has the guts to say it, much less write about it. Almost no one did here, until I started repeating it ad nauseam.

        The point also is that corruption levels in Klepto-Narco Cubazuela have reached Historic Word Record levels, per capita. Yes, historic. Per Capita.

        That’s how great our people are, in general. Let’s face it. That’s why they ended up worse than freaking Haiti or Zimbabwe. The people. Not just Chavismo. Chavismo was the result of the Pueblo, in general. Corrupt, uneducated.

        How many times will I have to say it, in how many ways?

  6. My first experience with LatAm culture was on a pleasure trip to Mexico as a young lad, way back in 1954. We (mother, father, two kid sisters and me) crossed at Laredo. The Mexican customs officer asked if we were all born in the USA and my mother said no, she was now a US citizen but was born in Canada. We were then asked to park the car and come into a small office for “routine questioning.”

    After about an hour my father asked how long it would be before the “routine questioning” could be taken care of. Well, it was a busy day but he will try to get to it asap.

    A US business type then came through, noticed us sitting patiently, and asked us what the problem was. When my father told him, he jabbered away with the customs guy for about a minute, then asked us if it was worth ten dollars to us to get into Mexico.

    Once the transaction was made, the need for “routine questioning” seemed to disappear and we were welcomed into Mexico.

    • From the link:

      According to Uberti, a USD $500 million operation netted a profit of USD $100 million. Néstor Kirchner and Hugo Chávez then shared the spoils with impunity.

      The former Kirchner official also stated that he once went to the Jorge Newbery Airport, in Buenos Aires, to pick up a bag of money that had arrived via a private flight from Caracas, which he handed over to Daniel Muñoz at Cristina Kirchner apartment in the Barrio Norte sector of Buenos Aires, which was recently raided by the courts.

      The money transfer was at Evita III’s place in Barrio Norte. Ironic, in that Evita I often suggested to her followers that they burn down Barrio Norte. Not that Evita I didn’t fill her pockets just like Nestor and Evita III did, mind you.

  7. I’d imagine that even today every single contract that PDVSA signs has a kick-back mechanism. I was speaking a few weeks ago to the boyfriend of Stepdaughter No. 2. Told me he represented a Chinese company (don’t recall which comany) that sold all sorts of valves to PDVSA. I asked if they included markups to cover to the kick-backs and he said, “yeah, usually on the average of 100% markup over actual costs”. Illegal as hell, but then, hey, it’s Venezuela.

  8. A joke commonly making the rounds in 1970’s Venezuela: The Venezuelan Pubic Works Minister (MOP) visits his counterpart in Mexico City, both go to the top floor of the tallest building, and the Mex. Min. points down, and says, “See that autopista down there?–10% right here”, as he puts his hand in his pocket. A year later, the Mex. Min. of Public Works visits his counterpart in Caracas, they go to the top floor of the Centro Simon Bolivar, and the Ven. Public Works Minister says, “See that autopista down there?” The Mex. Public Works Minister says, “I don’t see any autopista.” And the Ven. Public Works Minister says, putting his hand in his pocket, “100% right here.”

    • Truer than ever under Chavismo. They usually build 10-15%, though, or import a few used power plants from Tanzania to let them rot (Derwick style)

  9. Commenting on the Edelca mention earlier, I was in Poz for many years and money was made not only in the procurement of goods and equipment, but after every hydro project there were massive amounts of equipment that had to be “desincorporado”, I know personally of a gringo/Venezuelan dupla that built an entire business by hiding equipment in the stock yards so no one would bid on it. Then picking it up at prices of gallina flaca. These projects are full of corruption from beginning to end, AND BEYOND.

  10. What Marc said. All made possible (mentioned earlier) by a culture in which any system, any contract, any procurement, deal, sale, etc. is something to game for all you can get. Rules are there only to break. They are not binding. This of course is counter-balanced by the educated (which is way more then 10%), but there’s no in situ model for honesty. Rather you have Chavismo, galactic ladrones who have no shame so long as they get theirs … and fuck you for meddling.

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