24 February 2013

What do Derwick Associates and Ricardo Fernandez Barrueco have in common? Al Cardenas and FTI Consulting

London | According to reports from The Miami Herald, on Friday, October 17 2008, at 10 a.m., 15 shots were fired at a woman while driving in Carrasquilla, Panama City. Eight shots hit the woman, one bullet entering her temple and exiting through her eyelid, causing permanent left-eye blindness. The woman, miraculously, survived.

This wasn't just another example of Latin America's regular crimes, where robbery is the common goal, but a planned, targeted, assassination attempt. The woman was the wife of Luis Castro, a former security consultant of Ricardo Fernandez Barrueco, the disgraced Boligarch charged with multiple financial crimes by Hugo Chavez's regime in Venezuela.

The Herald claims that Castro requested a formal investigation into Fernandez Barrueco, his brothers Felipe and Gustavo, as well as other staff and managers of Fernandez Barrueco's companies, due to the assassination attempt on his wife. While Castro's accusations did not include evidence about Fernandez Barrueco's direct involvement, it did provide a window into the world of this parvenu billionaire, and of his close connections to the Venezuelan and Cuban regimes. As it turned, Fernandez Barrueco had been the only Boligarch in Venezuela to whom Chavez would personally answer calls. The trust that the caudillo had on him was such, that he was asked to devise an “economic recovery” plan to kickstart Cuba's economy, according to reports from The Herald. That request would allow him to be in the best of terms with the Castro brothers, and high officials of Cuba's dictatorship.

Despite reports commissioned to the ever so chavista-friendly FTI Consulting at the time, that sought to white wash Fernandez Barrueco's image and present him as some sort of legitimate serial entrepreneur, the truth is rather less Hollywood-esque: son of a Spanish immigrant, who had the concession to operate the parking lot of the former Hilton Hotel in Caracas, Fernandez Barrueco was an absolute nobody in Venezuela's business world. In fact, he was an employee of his father, and used to park cars for a living. In doing so, he got to meet all kinds of people, among whom Adan Chavez, Hugo's older brother and mentor. That, and that only, was the reason why he started getting government contracts, small at first, more substantial later. He started off in food-related businesses, then in distribution, through a loan he allegedly got from Sarkis Arslanian. By 2002's general strike, Fernandez Barrueco had a fleet of trucks and some agribusinesses. He put that to good use by siding with Chavez, and using his distribution network and food-producing companies to bypass the general lockout. That brought tremendous dividends. Fernandez Barrueco became Chavez's partner of choice in all imports and sales to MERCAL, Venezuela's multibillion populist program of subsidised food. So successful was his bet, that a 2005 audit, produced by KPGM's Venezuelan representative, concluded that the man was worth $1.6 billion, and had 41 companies in the services, fishing, distribution, agricultural, food, and forestry sectors. From parking cars before 1998, to 41 companies and a personal fortune of $1.6 billion in 2005. Not bad, even Russian oligarchs would be envious.

The 2002 bet was mutual though: Chavez started using Fernandez Barrueco, and his dubiously acquired businesses, as proxies to break Empresas Polar, Venezuela's largest private corporation. By channelling all of MERCAL's procurement to Fernandez Barrueco's companies Chavez thought it would only take some time to get the best of an empire that, for more than 50 years, has been producing and selling leading food and drinks brands in Venezuela.

But Fernandez Barrueco, as all thugs of his ilk, got greedy, and decided to diversify into banking. That was to be his undoing. He purchased four banks: Bolívar Banco, Banco Confederado, Banco Provivienda and Banco Canarias. Then, he used his contacts to get Venezuelan public institutions to move some of the State's money into accounts in these banks. It was reported that, at one point, Fernandez Barrueco's banks held 18% of all Venezuelan State money deposited in private banks. With those deposits, Fernandez Barrueco devised a way to fund his operations, which worked like this:
  • Reflect deposits in balance sheets, so that his banks would look financially very healthy;
  • Use deposits' funds to back up purchase of bonds by companies under his control, through his own brokerage firms (U21 & Interbursa);
  • Either use bonds as collateral for further loans to his companies without required guarantees from his banks; or sell bonds to third parties and syphon the money out of the country;
  • None of these operations were shown in balance sheets, so to make it look as if billions belonging to the State and other clients had never been spent.
Fernandez Barrueco's financial creativity -otherwise known as theft, misappropriation, etc.- departed from other methods used by Venezuelan bankers aligned with the regime. In the latter's case, through well placed government contacts, “bankers” would use legitimate funds to purchase bonds in Bolivares (bonds' value would be denominated at the official exchange rate), flip them internationally in USD, sell USD in the local black market, and pocket the huge differential after giving a portion of ill gotten proceeds to chavista contacts (after all, someone somewhere must decide allocation of bonds). The latest thing, according to a local source, is to purchase bonds, sell and transfer locally (all in Bolivares thus avoiding regulators' attention), and get paid abroad in USD.

For his involvement in the method described Fernandez Barrueco was charged, arrested, and remains in jail since November 2009. The actual charges are: misappropriation of savers' funds, misappropriation of credits, and criminal association. At the time of his arrest, Fernandez Barrueco's empire had grown to a multinational conglomerate of more than 250 companies in Venezuela, Panama, Curazao, Spain, Ecuador, Guatemala, U.S.A, UK, even Hong Kong. His staff would, for instance, issue instructions so that millions of dollars would be transferred from U21 brokerage firm in Caracas to HSBC's Bristol Branch in the UK, to credit the account of The Winterbotham Trust (Alrena Moxey as front) to further credit Antora Finance's account. In other court documents, it can be read that Fernandez Barrueco's Galopy Corporation International N.V., sole shareholder of previously mentioned banks, had requested to transfer $60 million worth of bonds from Banco Occidental de Descuento (owned by Victor Vargas, another Bolivarian “banker”) to a custody account (no. 026513265700) in Deutsche Bank Trust Co..

Panama-registered Tanker F and Broker F were used as guarantors to multimillion loans given to another myriad of Fernandez Barrueco's Venezuela-based companies. Other businesses named in connection were: Galino, Grufer Holding, and Comercial Atunera. These companies received $200 million worth of illegal transfers and deposits, in September, October and November of 2009 only. While Fernandez Barrueco was sent to jail in Caracas, his brothers were in control of 29 companies in Panama alone.

FTI Consulting, a firm that provides “critical thinking at critical times” didn't find any of it of course. That's how trustworthy and thorough their work is.

It takes a great deal of sophistication to mount an operation like the one Fernandez Barrueco had, for it is impossible for millions of dollars to be transferred to and fro different jurisdictions -some with foreign exchange controls- without active collaboration of banks and authorities willing to turn a blind eye on it. In the case of Fernandez Barrueco, little can be expected from Venezuelan authorities and bankers, but how about HSBC, Deutsche Bank, Metrobank, authorities in the UK, Panama, the U.S., and Spain to name but a few?

And here is where further questions about Al Cardenas's integrity should be made. Tew Cardenas, his law firm, represented Fernandez Barrueco in relation to a jet that was seized by the DEA in Miami in 2007. It was believed that Fernandez Barrueco was also involved in drug trafficking, although this charge was never proven in court. He was, however, found to be guilty of registering a plane under false credentials, reason for which he agreed to pay more than $1 million. His partner, Arslanian, was denied entry to the U.S. In 2006. As noted above, in 2008 the wife of Fernandez Barrueco's security chief was shot at 15 times in Panama. Then in 2009 the Chavez regime arrested the poster boy of the Boligarchs. So how come, having seen all of this unfolding in public, Al Cardenas is now working for Derwick Associates, another group of Bolivarian “businessmen”? How can Al Cardenas, and FTI Consulting, defend whatever integrity and credibility they think to have, in view of their rather indefensible choice of clients?

Not long ago, I published about the baffling disconnect between someone who purports to be an enemy of the Cuban tyrants, someone who has protested the creeping authoritarianism in Venezuela, someone held in high esteem in conservative Republican circles, defending the very worse of criminals from Venezuela, like Fernandez Barrueco, and now defending people of very dubious and suspect credentials, as Derwick Associates. There seems to be quite an established network of support services for Boligarchs in Miami: both Fernandez Barrueco and Derwick Associates retained Tew Cardenas and FTI Consulting. In the latter's case, the company is believed to have also been involved with Moris Beracha, David Osio, Wilmer Ruperti... a true who's who of the lowest class of thugs to have come out of Venezuela in many years.

One can only hope that responsible authorities will sometime start asking questions to companies / individuals involved, follow procedures, and applying current legislations, so that these "businessmen" room of manoeuvre is restricted to the confines of shit holes like Venezuela.

21 February 2013

Censorship: Derwick Associates Style

London - After regrettable decisions by PJ Media and the Daily Caller to self-censor my findings on Derwick Associates having retained ACU Chairman Al Cardenas's law firm as legal counsel, I thought fitting to leave a record here of threat letters sent by Hector Torres, on behalf of Derwick Associates, to bloggers and journalists. For some reason, Torres's Venezuelan clients think that they are above and beyond legitimate criticism, they think they can pocket millions of dollars of public money and no one, nowhere has the right to question their actions. Think again...

To Cesar Batiz, whose gmail account appears to have been hacked this week, Torres sent (in English) the following communication:
Dear Mr. Batiz,
We represent plaintiffs Derwick Associates Corporation ("Derwick"), and its two founders, Leopoldo Alejandro Betancourt Lopez and Pedro Trebbau Lopez, in an action currently pending in the Circuit Court of Florida against defendants Oscar Garcia Mendoza, Venezolano De Credito, S.A., Banco Universal, Rafael Alfonzo Hernandez and John Does 1-10 (together, "Defendants") (the "Action").  A copy of the Complaint filed in the Action is attached to this e-mail for your reference.
I am writing in further response to your e-mail yesterday afternoon to Domingo Guzman Lopez of Derwick. 
As noted by Mr. Guzman, you clearly are misinformed with respect to purported investigations concerning Derwick by various United States government agencies.  First, Derwick can declare categorically that no agency of the U.S. government, including the FBI, the Department of State, the Treasury Department or Homeland Security has requested any information from Derwick nor, to our knowledge, is there any basis for the assertion that you appear -- mistakenly -- to accept as fact, that one or more of those agencies have made any inquiries about Derwick, its founders or its operations.  To the contrary, as alleged in the Complaint, the Defendants in the Action have engaged in a malicious campaign to defame Derwick and its founders and it appears that any claim concerning such investigations by the U.S. authorities is merely another component of that defamation campaign. 
We are certain that if you examine the basis for your assertion concerning such an investigation, you will learn that the source is someone affiliated or working in conjunction with one or more of the Defendants in the Action.  Some of the proxies that are being used by those Defendants include, among others, Alek Boyd. 
Moreover, as you certainly know, disseminating an assertion that Derwick is under investigation by U.S. authorities is an extremely serious matter that could cause significant, irreparable harm to Derwick's reputation and business. Accordingly, we request that you disclose the source of your information so we can address this issue directly.
Further, as you know, Derwick has responded directly to your e-mails and remains more than willing to respond to any reasonable questions you may have concerning its operations.   
Thank you for your anticipated courtesy and cooperation.
Very truly yours,
Hector Torres
It can reasonably be concluded by emails to me, that the Daily Caller was also threatened with legal action. At the very least, that's five instance where Derwick Associates have sent menacing communications to bloggers and journalists, in a clear attempt to censor any and all criticism about its illegal activities in Venezuela.

In a coming article, I shall be exposing the recurrent professional relations between Al Cardenas, the alleged dyed-in-the-wool Republican, and the worse of Venezuela's Bolibourgeois criminals.

18 February 2013

Hugo is back!

London - There's been a great deal of controversy lately about Hugo Chavez's condition. All of it, whether from chavista officials, Venezuelan opposition voices, or observers, was either manipulation or speculation in my opinion. It continues to be so. Chavistas honchos allowed into the first circle (Diosdado, Maduro, Jaua, Arreaza, Ramirez) are just saying whatever their Cuban handlers are telling them to say, while Venezuelan opposition politicos, media, and other observers are, quite simply, clueless about Chavez's real condition, for no one has been able to penetrate / infiltrate the Castro's hold on information related.

Anyone who's ever been to Havana and spent time with dissidents would know that information control is perhaps the only thing at which Cuba excels. That being the case, the only thing left to do was / is wait, for whatever information coming out. Today we've learned that Chavez is back. That was to be expected. The question is whether he's well enough to carry on with his 'revolution'. I think he is getting there.

When Fidel Castro fell ill, he got treated first by Cuban doctors. What happened then? Real doctors were brought in, proper diagnosis were made, and adequate treatment was administered. The dictator's still around. I think something similar happened with Chavez: his first operation by Cubans was a complete disaster, after which truly competent doctors were drafted. At first, Chavez did not pay much heed to medical counsel, but the cancer eventually caught up with him.

In what would appear to be another feat of extraordinary political calculation, a steroid-pumped up Chavez wrestled with his cancer last year, just long enough to achieve what he wanted: a resounding presidential victory in October. I think he had all this planned all along: win another term, further humiliate the opposition in regional elections, go get well in Cuba for as long as necessary, and come back to ultimately finish off his "work".

I have been speaking with family, friends and sources back in Venezuela in the last weeks and months. They all seem to agree that things have deteriorated dramatically in the last few weeks. But what of the political situation? Chavez, and his designates, continue to control all levers of power in the country. All the ones that matter that is, and that's the only reality people commenting on this issue need to consider.

It's all good to ponder about devaluation, how it affects local and international interests operating in Venezuela, Cuba's poor photoshopping skills, political persecution against powerless foes and so on, but the truth of it is that none of it really matters, for Hugo is back, alive we are led to believe, and is in command. No international partner will stop betting and banking on Hugo, he's got far too much discretionary power for anyone to suddenly say "we're pulling out." And internally, alas, the situation is hopeless: the opposition just does not have punch, it is the epitome of an old, toothless dog.

While Hugo headed back to the military hospital where he will be looked after, he has nothing to fear: as long as he is alive his reign, and hold over Venezuela, will continue regardless. In the past, in almost every instance that has imperilled his hold, Chavez has been conciliatory at first to then further radicalise his positions. Devaluation may seem to some as such radicalisation, but it was a step that needed doing a long time ago. Political opponents however better be warned: Hugo is back!

14 February 2013

Hugo Chavez’s corrupt cronies find GOP friends

A prominent Washington conservative’s law firm is representing a shady Venezuelan company that has close ties to the Chavez regime, meanwhile top conservative news sites self-censor this article.

Al Cardenas, the public figure, is a stalwart Reagan-style conservative. He is head of the American Conservative Union, former leader of the Republican Party of Florida, was chairman of CPAC, and was described recently by the New Yorker as the political mentor to presidential hopeful Marco Rubio. Al Cardenas, the businessman, allows his law firm to do the bidding for one of the most corrupt companies ever to be favored by Hugo Chavez in Venezuela: Derwick Associates.

It is quite difficult to profile side-to-side Al Cardenas the businessman and Al Cardenas the political figure. Despite numerous requests for Cardenas to comment on the baffling discrepancy involving his public and business personas, he refuses to speak with me about it. So it is up to those of us who oppose hypocrisy and aim for a modicum of consistency to keep political leaders honest. Especially when those leaders are so vociferous against “cold-hearted tyrant[s]” and yet see no problem when cronies of the very same “cold-hearted tyrant[s]” line their pockets.

My source for the tip that Al Cardenas’ firm has been retained is a Venezuelan with extensive experience in the energy sector. He claims that Cardenas’ firm represents (first cousins) Pedro Trebbau-Lopez and Alejandro Betancourt-Lopez, the owners of Derwick Associates. I was able to independently corroborate the claim with public information from Miami Dade's County Clerk. When Trebbau-Lopez and Betancourt-Lopez founded Derwick three years ago, they had no previous track record and scant experience in the energy sector. But that didn’t matter. Like Russia’s oligarchs, they became billionaires overnight thanks to questionable concessions with no oversight. In fact, Venezuela's Bolivarian Revolution is known for having created its own brand of oligarchs: the Boligarchs

Thus, Trebbau-Lopez and Betancourt-Lopez went from bored small-town boys with dead-end jobs, to traveling the world in private jets, doing helicopter tourism, spending €22.8 million on hunting farms in Europe and having a 500-guest four-day wedding celebration in Spain --- and an upcoming one in Miami this week. In sum, a true Bolivarian rags-to-riches story.

Derwick Associates obtained 12 no-bid contracts (in the space of 14 months) to build power plants in Venezuela. Conservative estimates would put the total amount of contracts beyond $3 billion. Cesar Batiz, an award-winning investigative reporter at Venezuela's largest newspaper (Ultimas Noticias), grew suspicious of Derwick’s business, partially due to the fact that he had previously worked in the electricity sector. Batiz started asking questions about Derwick Associates, questions that any competent journalist would ask: Why was this company favored over others? Why did the government grant so many contracts to a company without a track record? How come no calls for public tenders were made? Who decided what, when, where? How much public money was spent? Have the projects been completed? Who are the people behind Derwick? But Batiz's prodding had dangerous consequences: Hugo Chavez's praetorian secret police (SEBIN) started harassing his ill mother, and him.

Meanwhile, one of Chavez's closest allies, former vice president Jose Vicente Rangel, went so far as to announce on television that the Derwick boys are honest businessmen. He declared that their enemies are enemies of the revolution. So Rangel, a declared enemy of the United States is on the same side as Al Cardenas—defending Messrs. Trebbau-Lopez and Betancourt-Lopez.

Mr. Cardenas's law firm, Tew Cardenas, joined a New York litigator in a global, muzzle-all, intimidatory strategy to protect Derwick Associates and its young owners. Several renowned Venezuelan bloggers, a former Bloomberg correspondent based in Chile, and several international reporters have all received threat letters after inquiring about Derwick or expressing an interest in writing a story. Those in Venezuela have received visits from the feared SEBIN.

Ironically, neither journalist Batiz nor Ultimas Noticias, which has published extensively on the topic, have been sued. Instead, Venezuela's top banker, Oscar Garcia-Mendoza, a prominent opponent of the Chavez regime, is the target of the Tew Cardenas lawsuit. Mr. Cardenas's firm is partnering with Hector Torres, of Kasowitz, Benson, Torres & Friedman LLP, on behalf of Derwick and suing Garcia-Mendoza for $300 million for defamation in Florida. I have been personally included in their lawsuit as a “proxy” of an opposition figure. In a communiqué in Venezuela, they accused me of being "an active agent" in a "propaganda campaign" due to blog posts I have written about their corrupt activities. I look forward to testifying in that lawsuit actually. In addition to paying Tew Cardenas probably a seven-figure sum, Derwick has hired the image “gurus” at FTI Consulting, retained to harass their critics and spy on their detractors. This includes me.

While Mr. Cardenas's mouthpieces argue that he does not have any ties with the Chavez regime and that he is not personally involved in the lawsuit (impossible to believe considering his law firm has only 23 lawyers including Mr Cardenas), Derwick and its lawyers aren’t sparing expenses trying to silence its critics.

When I sent a copy of this article to a conservative website, PJ Media, they asked for an exclusive, stating “Since this is a large story with big ramifications -- we do participate in events with ACU, CPAC, etc. -- we want to make sure this is as bulletproof as possible before running. We're going to read up on all your links, the other reporters pieces, and anything else. We would like to check with Cardenas' firm for comment, and get a handle on how serious the harassment threats have been. Essentially we want the story, and want to do it right. So it will be longer than Monday, and we will trade some emails with you as we get this together.” Several days later, after a few back and forth emails, I received another note from an editor explaining that despite the “blockbuster info” contained in the article “after running it by management, we've decided that it is better for us to stay away from the story.”

Next I went to the Daily Caller, a website known for its exposure of the shenanigans of Senator Bob Menendez. Surely, if they have the courage to expose the next head of the Senate foreign relations committee they will expose Al Cardenas. Wrong again. Despite praising the article as “interesting” and informing me of the day and approximate time it would be published along with a piece from Cardenas -refuting my demonstrable claims- the Daily Caller backtracked, stating “We don't want to get pulled into a legal dispute, and we don't want to find ourselves in the middle of another country's domestic political controversy.”

Obviously, Derwick's lawyers' threat letters are quite effective at silencing critics.

Venezuela's rampant corruption isn't news to Americans, or anyone else for that matter. What's novel is the hypocrisy of the ACU head and most recent CPAC chairman, who is serving as an accessory to the persecution of Venezuela's civil society opposition while defending the worst of Chavez's cronies. Only last year Mr Cardenas was getting handsomely paid to help victims of Chavez's political persecution get political asylum in the U.S. (Mezerhane et al.). Mr. Cardenas, a Cuban who fled his native country at the age of 12 to escape the rule of a communist dictator, is now working for cronies of the biggest supporter of that communist dictator.