SEC finds scheme to rob Venezuelan people, misuses term “massive”

The SEC charged bond traders with running a bunch of fake trades to get commissions and rob the Venezuelan people. The take was, as usual, shared with the revolutionary people’s power executives charged with protecting the pueblo, and as usual, the officials in charge will be protected. (Thanks to commenter Jau for pointing this out.)

Anyway it’s an interesting read. It starts:

Washington, D.C., May 6, 2013 — The Securities and Exchange Commission today charged four individuals with ties to a New York City brokerage firm in a scheme involving millions of dollars in illicit bribes paid to a high-ranking Venezuelan finance official to secure the bond trading business of a state-owned Venezuelan bank.

According to the SEC’s complaint filed in federal court in Manhattan, the global markets group at broker-dealer Direct Access Partners (DAP) executed fixed income trades for customers in foreign sovereign debt. DAP Global generated more than $66 million in revenue for DAP from transaction fees – in the form of markups and markdowns – on riskless principal trade executions in Venezuelan sovereign or state-sponsored bonds for Banco de Desarrollo Económico y Social de Venezuela (BANDES). A portion of this revenue was illicitly paid to BANDES Vice President of Finance, María de los Ángeles González de Hernandez, who authorized the fraudulent trades.

The annoying thing about the situation is that the SEC calls this a “massive kickback scheme.” They are talking about a country where quite likely billions of dollars a year are taken in kickback schemes. Sadly, $60 million is a drop in the Venezuelan bucket.

And since nobody else seems to have mentioned it in English, yes, that’s the same BANDES that employed Alejandro Andrade as president during this same period. (H/T Corina.) Unreliable, unsourced reports said Andrade is “behind” the recent purchase of Globovisión, Venezuela’s most politically conservative television station, but I don’t have any evidence that this is so.

US-Venezuela fuel trade plummets

Both ways, this month.

US purchases of oil and refined products from Venezuela fall to 601,000 barrels a day in February. Other than a couple months of oil strike 10 years ago, the February purchases were the lowest by the US since February 1986, according to the US Energy Information Administration.

Please examine closely to determine trend

Shipments of southbound fuel also slowed dramatically, with conventional gasoline shipments from the US to Venezuela falling to 7,000 barrels a day from 113,000. That’s a 94 percent decline. That, plus the recovery of MTBE shipments (from 0 in January to 22,000 barrels a day in February) indicate Venezuela’s refineries are getting back on line.

 

Personal to US Department of the Treasury

I already told you, this guy is just misunderstood. No matter how many times you re-read the article, that won’t change. He did not, repeat not, offer Diosdado Cabello mutual benefits in return for a management contract of Citgo. That was inserted in the mail by someone else. He was hacked, ok? What part of hacked do you and Anthony Weiner’s wife not understand?

Back to our normally scheduled silence…

The most misunderstood man in Puerto Rico (PDVSA, Enfusa)

Click for PDF of letter

Messages supposedly sent to Diosdado Cabello, president of Venezuela’s legislature, were disclosed over the weekend on various websites opposed to the Venezuelan government. The hack appears real: the documents attached there would be tough to forge, such as the full report of an opinion poll or internal campaign documents. So far, Cabello himself hasn’t commented publicly on the situation, and he didn’t reply to my e-mail for comment.

The messages are mostly boring. Among my few surprises: some Chavistas write to one another in the ALL CAPS that one finds on less-respectable message boards. And IVAD, a Chavista opinion pollster, uses the insulting term “marginal” for people of lower economic class (see page 6 of linked document)*.

The document that most grabbed my attention was a note from a company called Enfusa, in Puerto Rico. The mails show that CEO Manuel Santos first wrote to offer President Chávez and all his closest deputies access to some doctor who has the secret cure for cancer. Then, March 6, another note, with the subject “Vice president Maduro let President Chávez die” — maybe not the most politically correct thing to say about the country’s new acting president.

But the good one was sent March 12 (my translation):

PDVSA faces $100 million lawsuit over ambassador’s alleged con man links

PDVSA, Venezuela’s state oil company, will have to defend itself in US court in a bizarre $100 million case that involves the Venezuelan ambassador to Nigeria, a 2-person law firm in Mississippi, a white-haired Caribbean con man and imaginary tankers full of fuel.

It all started in 2006, when the Nigerian government created a new state fuel import company called Skanga Energy & Marine. Managing Director Christian Imoukhuede approached Venezuelan representatives in his country about buying diesel and gasoline. According to Skanga’s lawsuit, he spoke to Enrique Arrundell, Venezuela’s trade consul, who told him he’d have to work with an agent, rather than buying directly. The agent was a company called Arevenca.

Coincidences

PDVSA, Venezuela’s state oil company, sent a statement at 2:24 pm showing that workers in the western division “continue activities in support of President Nicolas Maduro.” They “reject the violent acts registered in various states of the country that have accounted for the deaths of eight Venezuelans and numerous material damages.”

Then at 4:27 pm, the same company sent a statement saying a small fire in a pump at the Cardón refinery had been controlled.

Reminds me a bit of how the huge pipeline spill in Maturín last year happened on a day when the workers were in Caracas for a political rally, celebrating the 20th anniversary of Hugo Chávez’s failed coup attempt of February 4, 1992.

Coincidences.

Odd items in Chile census

With apologies to those who might have seen this earlier on my Twitter feed, at @guacamayan, here are a few oddities of the new Chile census figures.

Religion: Fewer than half the people 15-29 in the Bio Bio region declare themselves Roman Catholic. That is the only group in the country where Catholicism fails to make a majority. The bulk of those who aren’t Catholic are Protestant/Evangelical.

Migration: More than 60% of the immigrants from the Dominican Republic, Poland, the Philippines and Russia were female, while more than 60% of those from Pakistan, Iran, Morocco, Saudi Arabia, Turkey, Haiti, Egypt, Lebanon, India and Portugal were male. I don’t see much of a pattern there, except that the Middle East-North Africa group tends to be quite male.

Access journalism, done right: The Serafino Iacono case

Tommy Humphreys of CEO.ca traveled in Colombia with Frank Giustra and Serafino Iacono. He got rare face time with Iacono, who as chairman of Pacific Rubiales Corp. and a group of mining and infrastructure companies is a particularly alluring subject for media scrutiny. The article is basically positive and ever-so-cheery (“Net net, the future is bright for Colombia, and Fino and Frank’s Blue Pacific is moving along at a rapid pace.” Fino and Frank? Really? And net net? WTF) but heck, there is a place for this stuff. There’s no harm in hearing the founders of a bunch of companies, giving us their pitch. Sure, the pitch is not very heavy on content, but it’s ok, it gives you some sense of how Iacono and Giustra have done well in Colombia.

What makes this article fun are the subtle digs. Like this one. 

“Colombia is the longest standing democracy in South America,” Fino tells me, his ever-present security detail hovering ominously at our periphery. “I never feel like I’m in danger here.”

Chile census immigration notes

Unsurprisingly, Chile’s 2012 census showed a big increase in immigrants over the 2002 count — an increase of 86 percent to 339,536. That follows a 61 percent increase in the prior 10-year period.

Here is what happened in the last 10 years, in chart form:

These are just the top 10 sources of immigrants — you want the whole list, click here to download. Long story short: Peru, Colombia and Bolivia are sending lots of migrants to Chile, each of those countries more than doubling its migrant populations in Chile. Venezuela also increasing its numbers, but keeping its same rank. The previously dominant Argentine-Chilean population grew more slowly. For all the hype about Spanish immigration to the New World, the numbers don’t reflect any major change in the number of Spaniards in Chile. That is quite different from the number of US-Americans, now over 11,000. The number of Germans fell off a bit, probably because a lot of those immigrants are old and are dying off. And at least one escaped. As a result, El Salvador knocked Germany out of the top 10. As far as movement in the rankings, the big move is from Colombia, up from #10 to #3, with a more than 6-fold rise in population. I am still eagerly awaiting the arrival of a single decent bandeja paisa in Santiago Centro.

UPDATE: Here is a chart of the how many immigrants are in Chile, normalized for the population of their birth countries.

Harvard U company prosecuted & fined for illegal logging in Chile

CIPER, Chile’s top-notch investigative reporting specialist, put out this report three weeks ago and for some reason it has made zero impact in the English press. The only version was a full translation on I Love Chile, a nice enough website, but still. A local holding of Harvard University being prosecuted for environmental crimes in lovely southern Chile? WTF? Do you have any idea how precious southern Chile’s native forests are? And how rare? There is a reason why it is always forbidden to cut native forest in this country. It’s cause during the dictatorship, hundreds of thousands of hectares were turned into tree farms. There is no reason an educational institution should be boosting its endowment at the expense of the little remaining forest we’ve got. Here’s how I Love Chile’s version starts out:

Harvard University Companies Accused of Illegal Logging in Chiloé

Harvard University currently owns 5,475 acres of land in Ancud alone. In Argentina, it owns 208,210 acres.

By Paulette Desormeaux and Josefina Court

Since 2004, Harvard University has created at least eleven companies to exploit the forest industry in Chile. One of these is Agrícola Brinzal, which faces two lawsuits in Ancud. The National Forest Corporation (CONAF) pressed charges against the company for the illegal clearfelling of 189 acres of native forest, and also for breaching the forest management plan – they reforested 181 acres of land with eucalyptus instead of native plant species. The same company received reforestation subsidies from the Chilean government of about CL$114 million between 2007 and 2010.

In December 2011, a small group of farm owners showed up at the Agrupación de Ingenieros Forestales por el Bosque Nativo (AIFBN) in Ancud to share their concerns: a company bought adjoining lands to their properties and was cutting down native forest to plant eucalyptus. Javier Sanzana, one of the forest engineers from AIFBN who works in the tech support program for farming communities, decided to check the lands located in Aguas Buenas, Choroihué and Belben, all in Ancud’s central zone. What he saw left no doubt.

“There were the remains of recently cut trees,” he recalled. Sanzana also confirmed that in some of the zones, there were eucalyptus trees planted less than one meter from streams, and the remnants from the cut trees were blocking some of those streams. (MUCH MORE FOLLOWS.)

Yes, you know what I’m going to say: Click and read the whole thing. And for those of you at Harvard, please ask your admins WTF. The only response they gave to CIPER was “HMC has a policy of not discussing specific investments or investment strategies.” CIPER calls that a “weak” response. I agree.