How a Chinese venture in Venezuela made millions while locals grew hungry
1 / 9A worker packs rice in the Hugo Chavez rice plant in TucupitaA worker packs rice in the Hugo Chavez rice plant in Tucupita, Venezuela November 27, 2018. Picture taken November 27, 2018. REUTERS/Manaure QuinteroBy Angus BerwickIn Delta Amacuro, a remote Venezuelan state on the Caribbean Sea, a Chinese construction giant struck a bold agreement with the late President Hugo Chavez.
Last September, an Andorran high court judge alleged in an indictment that CAMC paid over $100 million in bribes to various Venezuelan intermediaries to secure the rice project and at least four other agricultural contracts. The result, according to prosecutors, was a far-reaching culture of kickbacks, paid through offshore accounts, in which well-connected Venezuelan intermediaries milked and ultimately crippled projects that were meant to develop neglected corners of the country.• CAMC agreed to at least five agricultural projects in Venezuela, valued at about $3 billion, that it never completed.
China's Foreign Ministry, in a statement to Reuters, said"reports" about alleged bribery by Chinese companies in Venezuela"obviously distorted and exaggerated facts, with a hidden agenda." It didn't specify to what agenda it was referring. Cooperation between the two countries will continue, the statement read,"based on equal, mutually beneficial, and commercial principles.
Last week, in a failed uprising, Guaido unsuccessfully sought to rally Venezuela's military, the lynchpin of support for the unpopular government, against Maduro. In a 2017 speech, Maduro said 790 projects with Chinese companies had been contracted in sectors ranging from oil to housing to telecommunications. Of those, he said, 495 were complete. Some developments have stalled because of graft, people familiar with the projects said; others were derailed by incompetence and a lack of supervision.
The payments, the indictment alleges, passed through accounts held at Banca Privada D'Andorra, a local bank known as BPA. During a recent visit by Reuters to Delta Amacuro, the CAMC rice plant remained unfinished. Only one of its 10 silos, half full, held any grain. Some machinery was running, but processing rice imported from Brazil. The nearby paddies lay fallow, the laboratory incomplete, the roads and bridges unbuilt.Tucupita, a town of 86,000 residents, is Delta Amacuro's capital. It hugs the banks of the Cano Manamo, an offshoot of the Orinoco, one of South America's biggest rivers.
Promising to supply Beijing with oil"for the next 500 years," Chavez pointed toward Delta Amacuro on a map."Look, Xi," he said, announcing an effort to rehabilitate the region. Ramirez left the ministry in 2014 and was Venezuela's ambassador to the United Nations until 2017. Since then, Maduro has publicly accused him of unspecified corruption, but Ramirez wasn't indicted in Andorra and hasn't formally been charged with any crime in Venezuela. He now lives abroad as an opponent of the government. Ramirez didn't respond to Reuters emails seeking comment and couldn't be reached otherwise.
People familiar with the case said Salazar and his alleged associates, before the indictment, agreed to testify in Andorra because they hoped to clear their names. Gimenez, Salazar's lawyer in Andorra, in an email to Reuters said Chinese authorities decided which companies would receive funds and that neither Salazar nor his alleged intermediaries could sway that. Inverdt, Salazar's consulting firm, offered"professional" and"technical" services to many Chinese companies, Gimenez wrote in the email, and that"only a handful of those companies were chosen to carry out works.
Another official who prosecutors say helped Salazar was Rocio Maneiro, Venezuela's ambassador to China and now the country's ambassador to Britain. Maneiro, through a lawyer and in a text message to Reuters, denied helping Salazar and receiving payments from him."Those are assertions with no basis," she wrote in the message. She told an Andorran judge that the signature on the form about the Panamanian company is forged.By early 2010, Salazar's outreach bore fruit.
Soon, Salazar's company was earning over $100 million a year, according to testimony by him and several aides."He had a briefcase full of contracts," Luis Mariano Rodriguez, a Salazar deputy also charged in the indictment, told Andorran investigators.
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