16 October 2012

Derwick Associates & ProEnergy Services

London 16.10.2012 - Further to my two previous posts about Derwick Associates (see here, and here) I sent my last to a few sources in Venezuela, one of which pointed me in a rather interesting direction. It would appear that after all FTI Consulting is going to make a killing with Derwick Associates, if indeed they are involved.

The whole thing came about after repeated power blackouts left much of the country in darkness, so Chavez instructed his minions to solve the problem. Cue in Derwick Associates, meant to have been contracted by various Venezuelan public institutions to install power plants across Venezuela.

A visit to their website lists a number of projects, and contracting institutions (CVG, CORPOELEC, and PDVSA), namely:
  1. CVG - Sidor A
  2. CVG - Sidor B
  3. La Raisa I 
  4. La Raisa II
  5. Guarenas I
  6. Guarenas II 
  7. Picure
  8. Dual Fuel Conversion in Margarita
  9. Las Morochas 
  10. Barinas I
  11. Furrial 
  12. Morichal 
Now, check out, the EPC projects page of ProEnergy Services, and pay special attention to the names of the projects:
ProEnergy Services | Experience Our Energy

Barinas, El Furrial, Guarenas, La Raisa, La Raisa II, Las Morochas, CVG - Sidor A & B, Morichal... So, does that mean that Derwick Associates is getting contracts -without bidding or oversight- through its web of corrupt chavista officials, and then subcontracts ProEnergy to carry out the projects? That could be kosher, but then again, there's this thing called The Foreign Corrupt Practices Act of 1977, which, in no uncertain terms, makes it unlawful to either make payments to foreign officials, or to assist in activities that could lead other parties to corrupt foreign officials. The blurb sums it up quite nicely:
The Foreign Corrupt Practices Act of 1977, as amended, 15 U.S.C. §§ 78dd-1, et seq. ("FCPA"), was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.
Then there's also the Money Laundering Control Act that, while more specific to banking related issues, also criminalises transactions in which US companies profit from unlawful activities abroad. Now, Derwick Associates has, according to Cesar Batiz, overcharged the Venezuelan state in the hundreds of millions of dollars, it has been reported that said overcharge could be of up to $1.5-billion, that is to say, Derwick Associates has engaged in activities that are unlawful in Venezuela (pdf).

So how does that leave ProEnergy Services? And, what will US authorities do about it?

1 comment:

Boli-Nica said...

What is key here is that the guys behind Derwick might have already opened the door to falling under US Jurisdiction - since the rule applies to US Nationals and companies - Moldovans or Russians doing business in Venezuela do not fall under US Federal Jurisdiction. Derwick, on the other hand, already has a Corporation domiciled in Floria, and filing a lawsut in a Florida Court could bring them under US Federal jurisdiction for potential violations of the Foreign Corrupt Practices Act. As in the FBI and US Attorneys might have enough to investigate them.