Venezuela - Corruption spillover
Two new investigations into corruption under the Maduro regime demonstrate illicit money moving around the world and impacting politics well outside of Venezuela’s borders.
Two investigations in the past week revealed evidence that corruption and money laundering from Venezuela has infiltrated countries across the hemisphere. That conclusion is not new, nor are many of the names from the investigation. But these investigations piece together new details and evidence of networks of corruption that hint at even larger challenges to come.
Last week’s publications of the FinCen Files led to a series of articles about corruption and money laundering out of Venezuela. Among the findings:
The ICIJ focused on the role of banks, especially the former Banco Espirito Santo, in helping move money from Venezuela to the US and Europe.
Armando.info focused on the corruption networks controlled by Alex Saab, citing a suspicious activity report about $5.5 million dollars transferred from Global Bank of Commerce in Antigua to Banco del Bajío in Mexico.
The Miami Herald reported on Martin Lustgarten, someone who allegedly used currency exchange tricks to launder money for a number of Venezuelans including Raul Gorrin. He currently lives in a condo in Miami.
The Miami Herald also tracked shell companies controlled by Alejandro Ceballos Jiménez in Florida.
Argentine media tracked money controlled by Ceballos to Nestor Marcelo Ramos, a lawyer who is implicated in the Lazaro Baez money laundering scandals.
A second set of investigations under the title of Chavismo Inc was published by a group of journalists and Transparency International. These investigations use court filings around the world to understand how Chavista money laundering networks have moved corrupt funds out of the country. Among the findings:
Money stolen from Venezuela has been used to purchase properties in Spain.
The investigation identified 33 properties in the Miami area related to corruption.
Venezuelan government contractors have been laundering money in properties and construction projects in Punta Cana, Dominican Republic.
Almost three billion dollars from Venezuelans has been deposited in Panama’s banking system including money from indicted and sanctioned officials.
Venezuela owes millions of dollars to companies in Uruguay that may never be repaid.
Above: Network Map related to corruption in Spain from the Chavismo Inc investigation
From money laundering to sanctions evasion
One outcome of all this corruption has been that the money laundering networks built ten years ago have assisted Maduro’s efforts to evade sanctions today. That was seen this week as Iranian ships with gasoline are pulling into port this week thanks to corruption networks set up by Alex Saab that helped move gold.
Corruption in Venezuela has also provided money to help buy political pressure to weaken sanctions and avoid indictments. Alejandro Betancourt of Derwick hired Rudy Giuliani to lobby in the US against indicting his network. Venezuelan money in Spain has likely influenced the political system’s response to Maduro’s abuses of democracy. ALBA money continues to impact politics in Central America.
A decade of political scandals to come
The Venezuelan corruption that has slowly been revealed in recent years is in some ways similar to the Odebrecht investigation, something that not only shook Brazilian politics but led to numerous political scandals and corruption investigations around the hemisphere. There are also areas where the Chavista corruption directly overlaps with Odebrecht.
In the same way we’re still dealing with the fallout of the Odebrecht investigation (for example, it hangs over the indictment of Lozoya in Mexico and the controversy over Rafael Correa running for vice president of Ecuador), these corruption networks in Venezuela likely have years of political fallout to come. Politicians who took money from businesses and executives tied to Venezuelan corruption will face indictments and media scrutiny.
One challenge lies in the names that have not yet been published. Most of the names in the investigations released last week have been known for their corruption for years. A number of them already have indictments and/or sanctions placed on them. Uncovering additional evidence of corruption that occurred five years ago is helpful, but those corruption networks now have new facilitators and shell companies that need to be uncovered. Businesses operating in the hemisphere need to be aware that stolen money from Venezuela is still searching for outlets.
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There is an event tomorrow at the Inter-American Dialogue related to corruption and the humanitarian crisis in Venezuela.
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