Not everyday the WSJ graces its front page with news about TQNLQNSPM* stock, though surprisingly it did yesterday. Jose De Córdoba and Juan Forero brought it home with an extensive account on how several U.S. Federal Agencies, including the DEA, are basically closing in on Diosdado Cabello (pictured sporting a chic red beret), for turning the country into a narco-state. As one of Venezuela's foremost authorities on corruption, I am glad that a major U.S. news outlet finally exposed what's been vox populi for quite some time now.

Those who haven't been paying attention will find the piece interesting, specially claims from authoritative sources about Cabello's role in the Sun's Cartel (Cartel de los Soles: so named for it is run by Venezuela's top brass, i.e. those who have suns insignia in their epaulettes):
A leading target, according to a Justice Department official and other American authorities, is National Assembly President Diosdado Cabello, considered the country’s second most-powerful man. “There is extensive evidence to justify that he is one of the heads, if not the head, of the cartel,” said the Justice Department official, speaking of a group of military officers and top officials suspected of being involved in the drug trade. “He certainly is a main target.”
De Córdoba and Forero cite a "Justice Department Official" who said that Venezuela is run by a "criminal organization". That much we also knew. Some key figures were left out however. No mention to Ramon Rodríguez Chacín, or Antonio José Morales Rodríguez (aka "el catre"), who, according to exiled Supreme Court Justice Eladio Aponte Aponte, called him to order the release of Pedro Maggino (from 21:18 in video). The archive comes handy:
"... a trusted reader informs us that Majed Khalil is the bagman of General Francisco Rangel Gomez, former president of aluminium and mining giant Corporacion Venezolana de Guayana (CVG), current Governor of Bolivar state. Hence his deals with CVG. Majed Khalil is also a partner -and best man- of Lieutenant Antonio José Morales Rodríguez (aka "el catre"), godson and aide-de-camp of Hugo Chavez and one of his most trusted men. Morales is currently director of the office of the Secretary of Venezuela's Presidency. Morales has recently been fingered by former Supreme Court Judge Eladio Aponte Aponte as one of the men who ordered him to free an army drug trafficker (Pedro Maggino) caught with 2 tonnes of cocaine in Venezuela.
So it is not only Leamsy Salazar, Cabello's former bodyguard featured throughout, who's witnessed involvement in drug trafficking at the very highest levels, Chavez's very own is also ear-deep in it, despite Oliver Stone's willingness to take a drug trafficker at face value.

U.S. authorities could most certainly tap, at a moment's notice, on a vast network of Bolivarian thugs that have made the U.S. their playground. I'm thinking Francisco D'Agostino, Victor Vargas, Victor Gill, Roberto Rincón, José Zambrano, Rafael Sarria, Pedro Torres Ciliberto and his son Pedro Torres Picón, David Osío, Andrés Coles, Alejandro Andrade, Danilo Díaz Granados, Luis Oberto and his gang... Mind you there's no shortage of Venezuelans -whose ill gotten wealth came from deals with / sanctioned by Cabello- that could reveal the extent of his links to criminal activity. But then again, perhaps those mentioned, and then some, are part of the 56 Bolichoros whose visas have been withdrawn by the U.S. Government and are now singing in a desperate attempt to keep laundered proceeds.

Sources have told me that numerous federal investigations are taking place in New York, Florida, and Texas, where chavista "businessmen" tend to concentrate. Bolivarian "financiers" took to money laundering with such gusto that once public money started drying they thought "maybe we could lend our services to Diosdado's other businesses..."

It does take a while for Uncle Sam to get going, once it does though there aren't many places to hide. In the meanwhile, Cabello must be feeling a bit like Manuel "cara e' piña" Noriega. The U.S. is not about to send the Marines to Venezuela. Nowadays they count on Cuba's G2, Dilma, Juan Manuel Santos and Tom Shannon, to name a few, to do its bidding. Trouble for Cabello, a true TQNLQNSPM if there ever was one, is that outside his sphere of influence (dysfuntional and drug trafficking Venezuelan army) he's got no friends. He hates the Cubans. He has never been bothered with cultivating international allies. He has no charisma. No popular support. He's probably the most hated politico in Venezuela, and it is unlikely that FARC narcoterrorists are going to risk it for him.

Time will tell, of course. But before we see the end of this some spectacular fireworks are likely to take place.

*Tipo Que No Lo Quiere Ni Su Puta Madre.


Derwick Associates claims another victory against Otto Reich in NY bribery lawsuit

United States District Judge, J. Paul Oetken, dismissed former Western Hemisphere Affairs Secretary, Otto Reich, jurisdictional claims presented in a bribery lawsuit against Derwick Associates filed by the former diplomat in New York. In a stinging decision, Judge Oetken derides some of Reich's arguments about Derwick's executive Pedro Trebbau, stating:
Plaintiffs offer essentially the same set of facts in support of jurisdiction over Trebbau, with one important exception: Trebbau neither owns nor rents any real estate in New York at all. Instead, Plaintiffs contend, his New York residence is the home of his friend and banker, Eduardo Travieso. Plaintiffs argue that “given Defendants’ wealth and stature, it is simply implausible that they could maintain their extravagant lifestyles in Venezuela—a violent, third- world country beset by rampant blackouts, food shortages and gross poverty.” (Plaintiffs’ Memorandum of Law in Opposition to Betancourt’s and Trebbau’s Motions to Dismiss, at 10 [Plaintiffs’ Memorandum].) And yet Plaintiffs would have the Court believe that a man of Trebbau’s estimable “wealth and stature” permanently intends to crash on his friend’s couch. (bold added)
Judge Oetken's decision is a thing of beauty. It demonstrates, for one, that due process, when functioning as intended, is never encumbered with tangential stuff that has no direct bearing on the issue at hand, which is determining jurisdiction on the basis of facts presented in this particular instance.

Having property, bank accounts, mortgages, visiting, and spending money in a place does not amount, in Judge Oetken's view, to being domiciled in that place. Ed Miliband would disagree though. So while Alejandro Betancourt -Derwick's CEO / $PRE.to third largest shareholder- admits to have just 35% of his total net worth in New York -Reich claims Betancourt keeps $68 million in NY banks- he is not domiciled in New York, and therefore New York courts have no jurisdiction over his affairs, as pertaining to bribery claims against Derwick Associates in the context of this lawsuit.

Reich basically failed to demonstrate that Betancourt and Trebbau were domiciled in New York. That's what it came down to. The lawsuit never got to the juicy part: bribery allegations that could have shed light on the manner in which Derwick got over a billion dollars in 12 no-bid contracts from the Venezuelan State.

In the meantime, US Federal Agencies and the Manhattan District Attorney's Office continue probing Derwick and its commercial activities. I have been told that there's a particular interest in exploring connections to Diosdado Cabello, who appears to have become target no 1 for US law enforcement interested in Venezuela.


Derwick CEO Alejandro Betancourt acquires 10.29% of Pacific Rubiales

Background from Reuters.
Update: Bloomberg sort of confirms what I exposed, but lacks the integrity of describing Derwick's CFO (Orlando Alvarado) as Derwick CFO, claiming instead that Alvarado and his "partner" (boss Betancourt) are "private-sector businessmen with no ties to the government and prefer to remain anonymous"...


Escotet takes a page out of Derwick's book

A visit last week by European Central Bank (ECB) readers to the profile I did on Juan Carlos Escotet took me down a rabit hole. First, repeating the Google search done by the ECB folks led me to discover that my http://infodio.com site had been hacked. Basically, someone sitting pretty in Uzbekistan, or who knows in what beyond-reach-of-Western-law-enforcement's-jurisdiction, uploaded a few files onto my server, hosted by Leaseweb in the Netherlands, to redirect all Google.com, .co.uk, .ca, and .com.au searches for related keywords to an online pharmacy selling Viagra, migraine medicine and another 35 or so products. Just to leave evidence, I recorded a short video.

Once I dealt with that, I came to learn that Escotet had taken half a page ad in a Spanish publication, to announce that he was suing El Confidencial, another media outlet (see below).

This is the sort of the stuff that one just can't come up with, one for the #youcantmakethisshitup series.

Escotet seems to have learned nothing from that other Venezuelan concern that likes to go around threatening journalists, bloggers and the free press with lawsuits. And how's that one turning up? Beyond the particular merits argued by the parties, one thing these Venezuelan thugs seem incapable of recording is that if you mess with the press -free press I mean, not the Venezuelan one- you scream for further probing / attention. And that's exactly what Escotet, who managed quite the coup with Abanca's acquisition, will get.

Members of the free press in Spain, not the ones fêted by Escotet to all expenses paid Caribbean trips, may discover that he lied through his teeth during Abanca's bidding process. They may find, for instance, Escotet's very own words about exchange rates (see below):
So Mr Escotet, think's Wall Street bankers are naïve because, erm, they use the same tricks he does to gain business. What a dishonest, two-bit thug. But what to make of his attack spread in Spain? Not long ago, in the context of claims that millions worth of bribes were paid to Diosdado Cabello by Derwick through Escotet's bank, he put out another spread, in Venezuela, saying his banks operated in 15 countries, and complied with regulations in all jurisdictions.  That's crock of course, but notice how he claims now that Abanca, the bank he bought in Spain, has gone, in the space of less than a year, from failed regional bank to announce more earnings than giant BBVA (Spain second largest), "over 2 million customers and operations in 8 countries." Bold the man is, we got to give him that.

Escotet's beaf with El Confidencial is due to what he perceives to be bad PR. El Confidencial recently published that SEPBLAC, Spain's Anti Money Laundering unit, is keenly investigating both him and his banks. If they follow down that rabit hole, they'll find a pandora world of corruption behind what's surely the wealthiest and most powerful group of operators in today's Venezuela. Having a commanding position in Venezuela's financial arena means that he has dealt with all the thugs, big and small, in the public and private sectors. In Venezuela he silences all but the most obstinate voices, of course, and not-yet-on-the-payroll journalists and independent media are promtly dealt with through the courts.

His clients at Derwick are also on the Slimification path: the latest is that they popped in Mexico -again #youcantmakethisshitup- as "investors" in some energy project. It takes some doing to launder all those ill gotten billions, though it would appear that time's running out for the Boliburgeoisie.


Open Letter to Judge J. Paul Oetken re Derwick Associates

Dear Judge Oetken,

Thanks to my fellow blogger Steven Bodzin, I found out about the latest in the lawsuit brought against Derwick Associates that you are currently dealing with.

I have read most of the documents. The issue of strongest contention between the parties seems to be jurisdiction. Daimler vs Bauman is cited throughout, both in support and opposition to motion to dismiss.

While I am certain that strict rules of due process are applied to this lawsuit, I think it would be travesty if you ruled in favour to dismiss. You won't have trouble finding reason against such motion based on evidence provided by the very party desperately pleading for dismissal. And I am talking about public, readily available, evidence.

As an exercise, you could for instance challenge Betancourt's legal counsel to furnish publicly available evidence to back claim that he voted, presumably in Venezuela, "19 times in the two and a half year period" prior to this lawsuit's commencement in 2013.

You could also read claims made to the Wall Street Journal by one member of Derwick Associates' numerous legal team, Adam Kaufmann, former prominent Chief Investigator of New York's DA Office: "We are a transparent company and have nothing to hide."

Ask yourself: why would a "transparent company" with "nothing to hide" spend hundreds of thousands of dollars in lawyers, precisely and specifically, to stop information about its activities to become public? Does that strike you as "transparent"?

Furthermore, if we take Derwick's legal counsel's no-jurisdiction argument at face value, why is it so important for them to keep their activities in the USA hidden, if, indeed, they are a Venezuelan concern with no significant interests in the USA? Derwick's associations with US entities, such as ProEnergy Services, did not, in any way, hinder its ability to get public contracts in Venezuela. Quite the contrary. Having hundreds of millions of dollars in different US bank accounts, a considerable portfolio of US properties, US companies and investments, and bona fides from some of the US most reputed banks and law firms allowed Derwick to operate unconstrained from jurisdictional hurdles. In fact, had it not been for what could be termed as the very efficient American services industry, Derwick would have been unable to even acquire property in US soil. For Derwick did not produce letters from their banks in Venezuela, as guarantee for multimillion dollar property purchases. Derwick does not fly internationally in Venezuela-registered planes. Derwick did not execute its contracts by subcontracting Venezuelan, but American companies. As Pedro Trebbau admits, Derwick holds very little capital in Bolivares (Venezuela's official and only currency, subject to official currency controls) in Venezuelan banks.

But then, you must pay special attention to the fact that Derwick initiated legal proceedings against a Venezuelan bank, in New York courts in 2012. This Derwick did voluntarily, without coercion of any sort. No one forced Derwick to start a lawsuit in New York, and by doing so it not only admitted but actively sought the jurisdiction of New York courts to seek redress for a uniquely Venezuelan dispute: i.e. a defamation claim, brought by Derwick against a Venezuelan bank and its execs, for material published in Spanish, in a Venezuelan website, to a Venezuelan audience. Derwick decided to move its case subsequently to Florida, where it failed, spectacularly, at arguing its spurious defamation case successfully. Ultimately, Derwick's claim was dismissed with prejudice by a colleague of yours.

Ask yourself: how come New York court system was a valid venue, from a purely jurisdictional point of view, for Derwick to remedy a defamation case among Venezuelan parties in 2012, but it is not in 2013? I am sure you will agree that Derwick's non-jurisdiction argument is, quite simply, untenable.

Consider also the wider implications of granting a dismissal. As, arguably, Venezuela's foremost anti corruption blogger, I can assure you that there's not a chance of a scandal of this magnitude, that touches so many powerful figures of Venezuela's current government, to be heard in that country totally corrupt court system. Many of the actors involved in this saga are hugely powerful, so powerful in fact, that one of them managed to have Venezuela's Civil Code "reinterpreted" by the Supreme Court, so that a marriage ruling against him -obtained through fraud- was reverted. We are talking about the Chair of Venezuela's Congress, arguably the ruling party's top figure; we are talking about Venezuela's Ambassador to the UN, and former CEO of PDVSA and Minister of Energy; we are talking about owners of Venezuela's largest banks; we are talking about an international criminal organization, for these are not your regular defendants, but folks that, effectively, control Venezuela, for all intents and purposes a failed state.

It may sound impertinent coming from me, but you must put yourself in the proper geopolitical, historical and legal context when ruling time comes. If you are unaware of it, do ask to be briefed on FINCEN's or President Obama's Executive Order about Venezuela. Do find out, if you can, what is currently happening with Derwick Associates in New York's DA's office, the Security and Exchange Commission, Treasury Department, FBI, State Department, Homeland Security and DEA. If you could, check ramifications that touch Derwick, currently being investigated and exposed in Spain's media, with respect to laundering of billions of dollars in Spain and Andorra where actors associated with Derwick are involved. Only today, news broke about one of Derwick's bankers of choice having been singled out as a "priority target" by Spain's Anti Money Laundering Investigation Unit. Another of Derwick's bankers has been named in a Florida lawsuit that the Venezuelan State is bringing for misappropriation of millions of dollars, while a third, father in law of one of the defendants in your case, is actively collaborating with US law enforcement.

Your honour, understand that this is a historical opportunity.

Alek Boyd