Venezuelan Attorney General's Firm Steps Against Corruption
By Editorial by Misión Verdad
Sunday, Oct 8, 2017
|Tarek William Saab took over the Attorney General’s office in the middle of unprecedented turbulence for that institution and in an extremely critical national political context. This confluence of exceptional circumstances preceded what is now one of the most exceptional chapters in Venezuela’s political history, and beyond Saab himself, extends to the concerted push by the whole government to straighten out the State from the inside.
Once the Venezuelan opposition got a majority in the National Assembly in 2015 and with Luisa Ortega as the Attorney General, an institutional coup got under way whose piecemeal dismembering the State from the inside was meant as a conspiracy required to facilitate the violence and confrontation anti-Chavismo forces needed and implemented through 2017. These were convulsive times for Venezuelan politics, symbolized by unprecedented circumstances.
On its first day of work, on August 5th 2017, the National Constituent Assembly (NCA) unanimously approved the proposal by Diosdado Cabello to replace the then Attorney General, Luisa Ortega Díaz. In response, Ortega Díaz refused to go and she was supported by opposition legislators in the National Assembly.
At that moment, designated by the NCA, Tarek William Saab took over as Attorney General under the burden of its recent history, because Luisa Ortega had used her office to plot against the State and also sown within that body of the Republic’s Moral Power a complex web of corruption, extortion, culpable negligence, impunity and support for politically motivated violence.
The cases currently investigated by the Attorney General of the Republic are diverse and derive from many sources, but they all have a common denominator in that they all deal with attempts to damage the country’s public life and to embezzle public resources. They address determined attacks on the economy, public order and the stability of the government.
Sponsored impunity and the violence through 2017
In the violent context of 2017, when national and international anti-Chavismo tried to push the country into civil war, violent activists implemented a plan of war using paramilitary violence aimed at the State. Tarek William Saab insists that his predecessor “acted using impunity to favor hate crimes”.
He stressed, “The Attorney General’s office acted as if it were completely turned in on itself and its public declarations made it an accomplice to the violence. History will record the premeditated impunity with which the Attorney General’s office acted to submerge this country into a war situation.” The key determining factor for this combination of exceptional circumstances and Saab’s first steps as Attorney General was that to foment a war scenario in Venezuela it was necessary for the country’s institutions to collapse and break up. Luisa Ortega tried to undo all the legal defenses of the Venezuelan State and society at a time when intimidation and violence were severe and present.
Corruption and impunity in the embezzlement of foreign currency
When he gave his report to the NCA in the Federal Legislative Palace after his first month’s work, Attorney General Saab mentioned the case of Cadivi-Cencoex and noted that under Ortega 80% of charges against companies caught out in irregularities for misuse of foreign currency were dismissed and only 20% suffered the relevant penalties.
Saab argued that these companies, mainly food businesses, massively inflated prices of imports approved by Cencoex. He went on, "For me, much of the drama our country is living through originates in this matter of Cadivi-Cencoex". He highlighted that accounts needed to be frozen, money repatriated and those involved detained, saying, “the former Attorney General who covered this up and shelved it is the main person responsible.”
Accordingly, in a press conference on September 27th, the Attorney General’s office reported that 900 companies had benefited by overvaluing chemical products obtained via foreign currency transactions facilitated by Cadivi-Cencoex, of which 19 are under investigation by the Attorney General’s office. He detailed three cases in particular:
"We have carried out four inspections of Bates Hill C.A. Corporation which handles funeral arrangements. It registered a subsidiary in Panama via which it diverted foreign currency. From that Panamanian company, 25 further subsidiary companies were created diverting US$17.2 million.” Saab went on, “The brothers Juan Miguel and Andrés Lozano Espinoza were arrested for these actions and are in custody because they are presumed to be involved in criminal conspiracy, illegally obtaining foreign currency and money laundering.”Saab added that they received more than US$15 million by “taking advantage of procedural simplification. I don’t they could have done this without accomplices.”
Magma Mineral Glob, owned by Walter Jaramillo received almost US$9 million. Currently on the run, Jaramillo is wanted by Interpol.
Without a tax address, the Cooperative Fortezza Da Brazzo RL, whose main partners are Elisaúl Tejada, Isaberio Porta, José Rosario and Laura Muñoz, received US$28 million between 2005 and 2013. They are also wanted by Interpol.
All this has important political implications. The susceptibility of Venezuela’s economy as regards foreign currency characterizes the domestic economic context. Fraud in the highly sensitive matter of foreign currency is very subject to political conspiracy. This reveals a set of relations linked to corruption involving public officials and private businesses and all those who are now under investigation. The issue’s sensitivity required the involvement of the People’s Defense office in these investigations, which had been set aside by the previous Attorney General
These cases indicate an unprecedented situation in the country’s national politics. Reopening foreign currency fraud cases constantly alluded to is an issue which although it may seem merely administrative or one related mainly to economic matters, in reality is a point of honor politically. Within the issue of foreign currency embezzlement lies the highest most pernicious and traditionally corrupt level of Venezuela’s unearned income economy. Chavismo’s leadership have understood this and the reopening of these investigations confirms an indisputable political determination to go after those people at the highest level responsible for the damage caused by the economic war.
The Attorney General has been emphatic about the objective of these investigations, namely, to recover the capital awarded to private companies by the State.
The extortion network and Luisa Ortega’s “private law firm”
The new Attorney General has also undertaken to dismantle what he described as a public office converted into “a private company” serving a network of extortion. He pointed to the existence of a corrupt institutional web operated by prosecutors who offered to drop indictments of people under investigations of the Attorney General’s office in exchange for money in cases that were set aside for no obvious reason.
This case developed to the point where it implicates Germán Ferrer, Luisa Ortega’s husband. Along with the judicial search of their home, available evidence suggests the existence of over US$6 million held in offshore accounts by a group of prosecutors of the Attorney General’s office, coopted for the purpose by Ferrer himself and Gioconda González, Luisa Ortega’s former personal assistant who for many years ran the Attorney General’s office.
The investigation into this extortion network structured from within the Attorney General’s office at the highest level lead to the arrest of the lawyer and owner of the Parra Saluzzo legal firm, José Rafael Parra Saluzzo, who was detained in mid-September accused of criminal conspiracy, extortion and influence trafficking.
According to Saab, this organization dedicated to extortion “was turning into a cartel, a high-caliber mafia similar to organized crime.” He insisted, “It seems impossible that we should have found trading in human liberty from low ranking public officials right up to the highest level in the previous administration” of the Attorney General’s office.
Saab confirmed that among “the most visible crimes of this mafia” were “influence trafficking, payment of commissions and corruption… for which the former Attorney General had a legal firm at her service which can be proven….that a citizen named Parra Saluzzo...his same legal firm appears contracted to handle very notorious cases in recent years, linked to cases of corruption”
The opening of this investigation and what it has brought to light were the trigger for Luisa Ortega and German Ferrer to flee Venezuela. Since then the ex- Attorney General has become a clear propaganda spokesperson against Chavismo, allying herself with institutional instances overseas that have taken part in operations to isolate and politically suffocate Venezuela.
The corruption network in Pdvsa
Tarek William Saab has also taken on what will probably uncover the biggest corruption scandal in the State oil company in recent history. This involves fraud in the State’s flagship oil project, the Orinoco Oil Belt. The Attorney General has undertaken investigations implicating Luisa Ortega Díaz as an accomplice in an alleged embezzlement of the Venezuelan State amounting to at least US$200 million in the tendering of contracts by the Pdvsa State oil company “carried out by the management of the Orinoco Oil Belt”.
In a press conference at the end of August this year, Attorney General Saab said, “I place responsibility and accuse the former Attorney General directly of culpable negligence, and I say this very deliberately, in presumed embezzlement of the nation via the tendering of contracts by Pdvsa carried out by the management of the Orinoco Oil Belt between 2010 and 2016.” He further specified that the fraud was carried out presumably “by the directors of the Orinoco Oil Belt, specifically, the managers in charge during the stated period.”
The Attorney General stated that Pdvsa has cooperated in uncovering this case and that they have “discovered tenders for services and supplies with important rates of overcharging” which has merited the start of “a partial investigation”. He confirmed, “We have begun with a sample of 12 contracts involving 10 companies” which he said included Cuferca, the Orient Service Cooperative, Romara Construction Services and Metroemergencias. Saab said they reckon overcharging in the tenders at around 230%.
Likewise, he said he has asked the Auditor General and Pdvsa to appoint auditors to evaluate the tendering process and he stated that the companies’ owners will be asked to clarify the figures. The charges that could be brought against people implicated in this case include evasion of tendering procedures, criminal conspiracy and malicious fraud.
As the case has developed it has uncovered a strong conspiracy to embezzle national assets which resulted in actual losses deliberately caused so as to prejudice the operational processes and the very future of the Orinoco Oil Bet strategic project such that the investigation is regarded as having deactivated an “oil coup” under way against the country’s finances and against Pdvsa’s international joint venture relationships with allied and friendly companies.
One example of this was the arrest on September 19th of Carlos Esteban Urbano Fermín, a shareholder of the Cuferca group and owner of Cuferca Construction. As the La Tabla investigative web site has shown, Cuferca is a company owned by the business group led by Urbano Fermín. It is a conglomerate originally formed by Cuferca Construction together with a transport company and a timber distribution company. Overseas, Urbano Fermín appears as a director of three companies registered in Miami in 2012, including a construction company and the Gran Coque company with links to business involved in handling coke as a byproduct of processing heavy oil. He is also a leading figure in six companies set up in Panama in 2014 and in another company set up in Dominican Republic in 2016.
The Cuferca Group is a partner of the joint venture company Orinoco Logistic Oil Services of which Pdvsa is the majority shareholder, set up in October 2014. Cuferca was investigated for irregularities in the procurement of floating docks for the oil industry, that ended up not being installed, among which tenders were discovered from other Orinoco Oil Belt joint venture companies, namely Petropiar, Petrocedeño y Petromonagas.
José Rafael Parra Saluzzo was hired as a lawyer by Cuferca to advise the company in its defense during the criminal case it faced as a result of an investigation into the floating docks. Venezuela’s Superintendent of Banks, Sudeban, uncovered transactions regarded as anomalous between Cuferca and Parra Saluzzo, resulting in Sudeban issuing a suspicious activity report based on that information last July. That prompted the police authorities to investigate the lawyer.
In fact, the Attorney General, in an interview with Vladimir Villegas asserted that the Parra Saluzzo legal firm also represented the Brazilian engineering multinational Odebrecht in Venezuela in relation to corruption accusations by public prosecutors from various other countries in the region. On the case involving the Brazilian engineering construction company, Saab said Odebrecht will testify to the Attorney General about people linked to the criminal conspiracy, based on working meetings between the new Attorney General’s office and Odebrecht in Venezuela.
It is worth remembering that Parra Saluzzo is also caught up in the extortion network uncovered in the Attorney General’s office and enjoyed close relations, involving frequent meetings, with officials in positions of trust under former Attorney General, Luisa Ortega Díaz. Furthermore, on various occasions, according to sources confirmed by investigative web site La Tabla, he represented opposition leader Leopoldo López in legal matters.
The shock waves sent out by the Attorney General’s actions seem to reach into the highest levels of Pdvsa’s management in the Orinoco Oil Belt, escalating matters to the point where over the last few days a call has been made, ordered by President Nicolas Maduro, for a “clean up” of the State oil company. This can be seen from Saab’s declarations on the results of investigations carried out “either because we have people detained or because there are actions indicating guilt” as he said in his September 25th interview with Vladimir Villegas.
First conclusions on the new work of the Attorney General
Based on what is now in the public domain, it is very clear that with Tarek William Saab as Attorney General, his office has done what a great many people in the street have been demanding on corruption, namely focus on the large scale frauds damaging the country’s interests, proceed with cases that merit investigation and take measures that are decisive.
According to the country’s Constitution, not only is the Attorney General’s office the entity charged with the basic rule of law, along with the Supreme Court of Justice, but it also oversees the State’s use of resources with the aim of controlling of the nations overall institutional structure. The involvement of the previous Attorney General in corruption targeting key State entities, like the oil industry and imports of goods using foreign currency issued by the State, clearly imply a premeditated treacherous sabotage of government.
In that regard, Tarek William Saab, as the new Attorney General has taken action. No antecedents in Venezuela’s history as a Republic can compare, as the Attorney General himself has said, with the efforts to combat corruption which President Nicolas Maduro has supported regardless of consequences. “Let whoever’s going to fall, fall”, has been the basic premise of the new Attorney General’s policy as shown by the evidence presented in the press conferences and case briefings noted in this article. Now fugitive, Luisa Ortega Díaz has so far not responded seriously to the accusations against her, specifically the corruption network Venezuelan society nowg sees exposed.
An especially sensitive issue for Venezuelans is the fraud involving oil industry resources, the very heart of the country’s economy and finances, now that a number of well known people have been shown to have acted against the country’s interests. Is it necessary to remind ourselves that 96% of Venezuela’s foreign currency earnings come from Pdvsa? That there has been scandalous abuse in big local oil projects, like the joint venture company Petrozamora, is an example of the sabotage and conspiracy by various people to exploit public resources for their own ends, itself an act of war (now publicly documented) given the consequences.
Pdvsa is one of the most important companies in the world, the biggest in the region and the fifth globally, administering on behalf of the Venezuelan State and Venezuela’s people the world’s largest proven oil reserves. This matter even touches on geopolitical issues, since various companies from different countries are involved in developing local oil resources in the Orinoco Oil Belt, which means the work of the new Attorney General on the anomalies in the Belt is bringing renewed confidence to potential global investors interested in taking part, under constitutional rules, in oil and gas undertakings with Venezuela’s State oil company.
At a time when Venezuelan oil is quoted in Chinese Yuans as an alternative to US dollar extortion, the importance is self-evident of organizing in an orderly way Venezuela’s available resources, especially those in the process of development via agreements with weighty geopolitical players like Russia, China and Iran.
Likewise the long suspected corruption conspiracy involving Cadivi-Cencoex is now finally being uncovered with names, likely charges and investigations under way so as to be able to repatriate capital awarded, for the purpose of importing food, medicines and other important goods, to bogus, off-the-shelf companies whose money is held in off shore tax havens, as Saab himself has explained.
On the other hand, the Odebrecht case has been a fundamental issue, since it is a case originating from the US Justice Department, with its principal jurisdiction in the United States and which has colluded with other countries in the region, aligned with US foreign policy in Latin America and the Caribbean. That collusion aims at delegitimizing and judicializing regional politics, dollarizing them via USAID funding so as to prejudice sovereign judicial policy in those countries caught up in it. The campaign against corruption by Venezuela’s Attorney General’s office under Tarek William Saab has a very different motive from that of the Brazilian prosecutor Sergio Moro, namely to safeguard Venezuela from policies making justice multinational, so as to carry out coups d’etat.
The actions of the reformed Attorney General’s office reassure all of Venezeulan society that, under its new leadership, it will get to the bottom of every case affecting Venezuela’s national security and thus ensure the stability of Venezuela’s rule of law both as a nation and as a State. That was a primary target of the destruction planned by the Pentagon and the neoliberal elite now ruling the United States.
For that reason, at this stage of the US intervention, the work of the new Attorney General is so significant, because defense of the country’s patrimony is as important to the national interest as is the self-management of Venezuela’s resources.
First published in Mision Verdad
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