(As reported by Casto Ocando in “Chavistas en el Imperio”, 2014)
This book by Casto Ocando is currently being translated into English and contains nine chapters full of solid information about the corrupt activities of the Hugo Chavez and Nicolas Maduro regime in the U.S.A. I would like to summarize some of its chapters so that readers in Venezuela and abroad can get an idea of the enormous magnitude of corruption prevailing in the Venezuelan regime. Needless to say the Venezuelan regime has not done anything to control or to punish this huge level of corruption. This is a summary of Chapter 4. Any mistake of interpretation is mine:
1. Venezuelan oil imports into the U.S. have gone from 46 million barrels per month in 2003 to less than 24 million barrels per month in 2014. I add that this drastic reduction is part of a corrupt system through which Venezuelan oil exports have been diverted from the U.S. to countries like Cuba, the Caribbean states, Nicaragua and Bolivia, that receive Venezuelan oil at significant subsidies for political reasons. The loss to the Venezuelan nation has been enormous.
2. 1999. California Firm, Earth Tech was accused to pay bribes to an officer of the Venezuelan Petrochemical Institute, a Mr. Enrique Torres Galavis. The case was settled in a “friendly” manner
3. 2003. A U.S. ghost company, Free Market Petroleum, FMP, represented by Senator Jack Kemp (+), and the ministry of Energy of Venezuela signed a contract for the acquisition by that company of 50,000 barrels per day of Mesa crude, a high quality Venezuelan oil. According to the contract this oil would be sold to the U.S. Strategic Reserve but, if this was not possible, it could also be sold to third parties. The Ministry of Energy, Rafael Ramirez, now deceased Senator Jack Kemp and the Venezuelan Ambassador to the U.S., Bernardo Herrera Alvarez, appear as the main responsible for this fraud. The company was, in fact, a vulgar trader without experience, formed exclusively for this purpose and would obtain about $55 million in profits, through commissions on the transaction. In exchange for this windfall, Senator Kemp would become a champion of Hugo Chavez in the U.S. This deal fell through due to the investigations of the Wall Street Journal and other U.S. media.
4. 2005. After the failure of the Free Market Petroleum adventure, Venezuelan Ambassador in Washington Bernardo Alvarez Herrera cooked up another idea, this time, CITGO’s delivery of subsidized fuel oil to certain U.S. communities. This program started with a visit of Hugo Chavez to New York City, where he danced salsa with the neighbors and declared that he was meeting with the American people (not with the U.S. people, he said, but with the members of the Latin American communities living in New York). This program, at a cost of millions of dollars, was designed by Chavez to gain a political foothold in the U.S. and members of the U.S. Congress such as Jose Serrano and Bill Delahunt were recruited for this purpose. The coordinator of the program was Joseph Kennedy II, the son of Robert Kennedy. Some U.S. institutions, such as the Heritage Foundation accused Kennedy of being a Lobbyist for Chavez and the U.S. media, including website Human Events, pointed out that the program lacked transparency and that Kennedy was getting paid some $400,000 per year for his efforts. Kennedy’s company made about $6 million in profits during 2006, the first full year of the program. The investigations also pointed out that some 37 million gallons, at a value of over $90 million were essentially unaccounted for. In exchange Kennedy became one of the strongest pro-Chavez political figures in the U.S. and remains so today
5. In addition Kennedy helped in the creation and operation of a Miami-based company called Petroleum Electronic Pricing Exchange, PEPEX, which became a trading company acting for PDVSA
6. 2007. Presidential hopeful Rudy Giulani was linked to the Chavez’s regime through the legal representation of CITGO by his firm Bracewell and Giuliani. Criticism by the media was so fierce that Giuliani was forced to severe his links with CITGO
7. 2005. A huge financial fraud involving up to $800 million developed on the basis of significant PDVSA debts to contractors. The unpaid bills were acquired by speculators with connections with PDVSA at 60% of their value, which would be later paid to them at a 100% of their value by PDVSA’s officers who acted as accomplices. The persons buying the unpaid bills, presumably including a PDVSA director, Rafael Rosales, did so with third party money mostly collected in the Florida area from “investors”. At a point in time the Venezuelan central government discovered the fraudulent system in progress and closed the doors, leaving bills unpaid and “investors” facing a huge loss.
8. 2005. A new system of operation for the sale of Venezuelan oil became known as Irrevocable Agreements for the Protection of contracts, signed between traders with connections with PDVSA and clients, in clear violation of the laws of the country and of healthy management practices by PDVSA. A PDVSA manager would assign a quota of oil or products to a trader, who would sell it and share the commission with the PDVSA manager. The traders were based mostly in Florida but also in New York, Panama and other locations. About 16 main members of this mafia obtained millions of dollars in commissions, selling PDVSA oil that could and should have been sold directly. The man in charge of marketing for PDVSA was Asdrubal Chavez, a cousin of the dictator, and this practice was never the object of an investigation.
9. 2008. The emergency acquisition of food by PDVSA in the U.S. led to much corruption by PDVSA affiliate Bariven. About $800 million in emergency food acquisition led to contracts being given to companies which paid bribes to PDVSA officers. One of the, Juan Carlos Chourio, asked a bribe of $2 million not to cancel a $195 million contract to a Miami based company called Dexton Validsa Inc. When the company refused the contract was cancelled. Chourio told the company he was a direct envoy of George Kabboul, the president of Bariven.
10. 2007-2008. Cuban companies such as Alimport, Surimpex and Cub Control acted as intermediaries to PDVSA to buy food in international markets, such as Brazil, at substantial mark ups. Two companies in Miami, Exim Brickell and Alox International imported food on behalf of PDVSA. The Chinese milk bought by the first company was contaminated with melamine while the flour and margarine contracts given to Alox were suspended abruptly without indemnity
11. A good portion of the chapter is dedicated to the links between the Chavez regime and Chevron. The author limits himself to a description of such links without passing judgment. The top brass of Chevron apparently decided, early in the process, that it should remain in Venezuela and that it might as well keep the best possible relationship with the government. His representative in Venezuela for some time, Ali Moshiri, became one of Rafael Ramirez good friends. Chevron has supported PDVSA with an injection of about $2 billion at a moment in which the regime needed the money urgently. Although Ocando does not say it, I do feel that that Chevron in Venezuela has crossed the line that divides a commercial relationship from a political supporting role. I do not claim they have been guilty of financial corruption but they are clearly in bed with the Venezuelan regime, one of the most corrupt and damaging governments Venezuela has ever had. And I believe Chevron will pay a price for this in the future.
This chapter does not mention the case of PDVSA’s Pension Fund, raided by a Venezuelan Advisor to PDVSA, using a company incorporated in Connecticut, see:
It does not mention the deposits presumably made by Rafael Ramirez in a Florida Bank, which have never been explained.
It does not mention the significant level of corruption at presidential level in CITGO, see: http://www.soberania.org/Articulos/articulo_6912.htm .
It does not mention the contract with the barge Aban Pearl which has some of the main actors located in the Miami area and other possible actors in downtown New York, see: http://lasarmasdecoronel.blogspot.com/2010/07/mi-entrevista-sobre-el-aban-pearl-en.html .
The book by Casto Ocando is a must read for anyone who wants to see proof of the hyper-corruption prevailing in PDVSA and at the highest levels of the Venezuelan regime.
We will continue summarizing some of its findings for the readers of this blog.