Yesterday afternoon, the U.S. Department of Justice formally unsealed charges against five former PDVSA officials alleging that they soliciting bribes in exchange for favours from the state-owned company. The charges were filed in a court in Houston, Texas, and are part of an ongoing investigation by U.S. authorities into corruption at PDVSA involving as many as $1 billion.
The charges laid against the individuals are conspiracy to commit money laundering, and money laundering.
The U.S. Department of Justice described the charges against the officials in the following manner:
Charges were unsealed today against five former Venezuelan government officials for their alleged participation in an international money laundering scheme involving bribes made to corruptly secure energy contracts from Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A. (PDVSA). Two of the five defendants are also charged with conspiracy to violate the Foreign Corrupt Practices Act (FCPA).
The names of the individuals and their respective charges are listed below:
- Nervis Villalobos: Charged with one count of conspiracy to commit money laundering and four counts of money laundering.
- Rafael Reiter: Charged with one count of conspiracy to commit money laundering and four counts of money laundering.
- Cesar Rincon: Charged with two counts of conspiracy to commit money laundering and four counts of money laundering.
- Luis Carlos de Leon Perez: Charged with four counts of money laundering.
- Alejandro Isturiz Chiesa: Charged with one count of conspiracy to commit money laundering, and five counts of money laundering.
Out of the five charged individuals, four are in custody while Alejandro Chiesa is “at large”.
According to the U.S. Department of Justice, the five accused “wielded significant influence” inside PDVSA at the time that they are alleged to have committed their crimes. Villalobos, for example, was vice-minister of energy, while Reiter was head of security at the company. Together, the five were known as “the management team”, and are alleged to have worked in unison to solicit bribes from vendors which they then laundered and pocketed.
A press release from the Department of Justice details the accused’s alleged crimes in the following way:
According to the indictment, the management team conspired with each other and others to solicit several PDVSA vendors, including vendors who were residents of the United States, and who owned and controlled businesses incorporated and based in the United States, for bribes and kickbacks in exchange for providing assistance to those vendors in connection with their PDVSA business. The indictment further alleges that the co-conspirators then laundered the proceeds of the bribery scheme through a series of complex international financial transactions, including to, from or through bank accounts in the United States, and, in some instances, laundered the bribe proceeds in the form of real estate transactions and other investments in the United States.
The press release also connects this case to that of Roberto Rincon and Abraham Shiera Bastidas, two Venezuelan businessmen who were accused in 2015 of paying over $1 billion in bribes to PDVSA officials between 2009 and 2014. Both men pleaded guilty to the charges, and have yet to be sentenced. The press release makes it clear that the PDVSA officials that Rincon and Shiera bribed were the five accused in this case.
The Department of Justice also said that this latest round of charges is part of “a larger, ongoing investigation” involving corruption at PDVSA.
The full indictment against the five PDVSA officials can be found here.
Once a world leader in the world of oil exploitation, PDVSA has been plagued by poor management and massive corruption over the past 20 years. Just yesterday, OPEC confirmed that the state company’s sickly decline was continuing, since the company pumped out 2.8% fewer barrels of oil per day in January than it did in December, continuing a downward trend in production.
Investigation Alleged to Involve Rafael Ramirez
The New York Times published an article today suggesting that the billion-dollar corruption investigation by U.S. authorities on corruption at PDVSA may also involve Rafael Ramirez, a leading chavista figure who was the head of the company from 2004 to 2014.
The newspaper cites “an American official familiar with the probe” as saying that Ramirez personally accepted bribes during his tenure as PDVSA chief. The newspaper claims that Ramirez appears in the indictment against the five PDVSA officials unsealed yesterday as “Official B”.
Page 10 of the indictment identifies “Official B” as “a senior Venezuelan government official”.
Man Dies After Seven Months in Hospital from Protest-Related Injury
Angelo Quintero, a man shot in the head during an anti-government protest in Merida state on June 28 of last year, died in hospital in the overnight hours. With his death, Quintero becomes the 137th person to die as a result of the 2017 anti-government protests, which lasted roughly from April 1 to mid-August.
Quintero was shot while participating in a protest on the El Trapichito area of the town of Ejido. It is likely that Quintero was shot by pro-regime civilian groups known as colectivos armados, since the National Guard denies having deployed soldiers to quell the protest in Ejido that day.
Maduro Says Carnival Holiday “Best in Years”
In a tweet sent early this morning, Maduro claimed that the carnival season this year is shaping up to be “the best in years”. As in previous years, the Maduro regime is going to extreme lengths to help ensure that Venezuelans are able to celebrate carnival, a week which has historically been used by Venezuelan families to go on vacation. Given the unprecedented economic crisis affecting the country, a festive carnival week is out of reach for an increasing number of Venezuelans.
The fact did not stop Maduro from sharing the following message:
Good news! Even though some people are saying the opposite, we’ve had the best carnival in years. Millions of families are providing an example of peace and happiness to the world.
Maduro doubled down on the claim in the early afternoon with another tweet in which he said:
Total Success [sic]… we are in the best carnival [season] in a long time… in Peace,with Happiness and Joy we are triumphant [sic]…Thanks Loving Homeland…We Are Venezuela….We Are Indestructible…. [sic]
In fact, the carnival is on track to be one of the worst on record at least for Margarita island, which is the traditional destination for vacationing Venezuelans. An official with the Nueva Esparta tourism association told a local newspaper last week that tourist activity in Nueva Esparta state–which is comprised of Margarita, Coche and Cubagua islands–is expected to be down 85% from last year.
PSUV Official Tweets Images Allegedly Showing “Exodus” Out of Colombia
Minister of Prisons Iris Varela tweeted a series of images this afternoon of the Simon Bolivar international bridge, one of the primary border crossings between Colombia and Venezuela. The images shows a large number of people crossing the border, which Varela suggested are Colombians fleeing the “narco-dictatorship” in their country.
Below, Varela’s tweet along with my translation:
We could say now with these images that there is an exodus of Colombians into Venezuela? IMAGES ARE IN REAL TIME
The images show a mass of people crossing from Colombian into Venezuela, a fact that Varela used to suggest that everyone in the image is a Colombian resident escaping their country into Venezuela.
However, Varela’s assumption flies in the face of the widely-documented phenomenon that are daily trips taken by Venezuelan residents into Colombia to buy food, medicine and other basic necessities to take home with them at the end of the day. Colombian authorities estimate that as many as 37,000 Venezuelans cross into Colombia each day, with the majority of them returning to their homes the same day. This fact makes it likely that a majority–if not most–of the people in the images that Varela tweeted are in fact Venezuelan residents coming back home from a day of shopping in Colombia.
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