It’s been public knowledge for years that Pride International Corp. allegedly bribed someone at PDVSA. But this document (linked from the FCPA Professor blog) is the first time I’ve seen how the scheme (no longer just alleged, as Pride has admitted wrongdoing in its deferred prosecution agreement) worked, mechanically. The short story is that the charges show that corruption works exactly how you think it would.
I was going to try and summarize this all but FCPA Prof has already done a fine job of it. Go read.
I just wonder what ever happened to the bribe money. Who was this unnamed director? And where is he now?
Chigüire Bipolar in fine form. An attempt to translate real news follows.
The U.S. and Venezuela are facing a new crisis following the U.S.’s visa revocation against Venezuela’s ambassador. Adding to the tension is Venezuela’s aggressive response: Increasing oil output and overwhelming the imperial stronghold with an unmanageable quantity of crude.
“If the government [of the USA] is going to expel our ambassador, go right ahead!” President Hugo Chavez said during an official ceremony shown on state television. “If they want to cut diplomatic relations, go right ahead! Our response will be radical — working day after day to produce the oil you need, and more, saturating you with gasoline, selling everything we produce from our soil, to see how you look drowing in oil, hahaha.”
For the State Department, the Venezuelan retaliation represents a broad menace. “Our interest is to maintain cordial and diplomatic relations with Venezuela, but we couldn’t ever consume the amount of oil that Venezuela is threatening to sell,” Mark Toner, a State Department spokesman, said Thursday. “If Venezuela brings its plan to fruition, our country will collapse.”
The crisis now in process is a replay of what was seen in September 2008, when Chavez expelled U.S. ambassador Patrick Duddy. The U.S. response at the time was also severe: It began an overwhelming increase in exports to Venezuela.
Venezuela’s National Electricity System Administration Center (Centro Nacional de Gestión del Sistema Eléctrico) was the raw material for a lot of posts in the first months of this website. As Venezuela passed through its deepest electricity crisis in years, the daily reports from that agency allowed us to follow the precipitous decline, and then abrupt re-filling, of the biggest hydro dam. It let us watch as operators tried repeatedly to start up a gas-fired generator at Planta Centro. The monthly reports, meanwhile, gave us an unparalleled view of how much diesel fuel was being burned in power plants, the operating status of the Loma de Niquel nickel mina, and whether utilities were telling the truth that Isla Margarita power plants were down for maintenance.
In a country where critics make sport of questioning official statistics, it was a pleasure to have credible numbers provided by what appeared to be real professionals. Yes, that’s the past tense. The last couple months, the CNG website (still under its old name, OPSIS) has been shut down. The home page says “For restructuring of the electricity sector, this site is under construction.” I wrote to the organization to request the monthly reports and to request that they send me daily reports if possible. The response I got was:
In accord with the communications policy of the institution, it’s necessary to finalize the process of re-engineering the Web portal so that through that platform, the community interested in the electricity sector can have its information requirements satisfied. We apologize for any problems this may cause. Sincerely, remaining attentive to your needs, (spokeswoman’s name)
I asked her for a copy of this “communications policy.” So far no reply.
Brazil President Luis Inacio Lula da Silva is being honored in an odd way — Petrobras is renaming the huge and game-changing Tupi oilfield “Lula.” Yes, the field will enrich Brazil. But it will also spend the next few decades being sucked dry, injected with vapor, and in a worst-case scenario, blowing up and polluting the Atlantic. All while enriching the world’s biggest corporations. No wonder Lula the person pushed back lightly on the honor. Reuters reports:
The company has traditionally given its oil fields the names of aquatic creatures when they become commercially viable. As it happens, Lula also means “squid” in Portuguese.
“I’m proud,” Lula told reporters. “But it’s not my name — it’s a (mollusk).”
Disasters are awful useful. In Venezuela and Colombia, presidents have used flooding as a pretext for implementing
18 months of decree power. While this is usually portrayed as absolute dictatorial power, as I understand it’s essentially a fast-track authority, allowing the executive to write laws and present them for an up-or-down vote in the legislature, rather than going through the usual parliamentary process. In Venezuela, where President Hugo Chavez’s PSUV party will have a majority of the seats in the new legislature taking over in January, that effectively means that the president’s ideas will become law for 18 months. In Colombia, the decree power lasts for a month, according to the always-useful Hemispheric Briefs. (Unsurprisingly I hadn’t even read about Colombia going to decree power except on that blog. O Vennietrans o Vennietrans, how tempting are thy snarkfests.)
To me, the most surprising use of a natural disaster to justify a head of government’s ideology is the one revealed today in Chile, where the government wants to sell off the public sector’s remaining shares in the country’s water companies to raise money for earthquake relief. Now, this justification may sound reasonable, but you have to wonder — if Chile needs to sell off infrastructure to pay for disaster repairs now, with copper at its highest price since the time of the Inca, imagine what it would be like with copper at $3, or $2, or $1 a pound.
UPDATE: I was thinking about how Chile supposedly has this huge “rainy day fund” in case of emergency. For some reason, that reminded me of this.
Hi, this has little to do with Latin America energy and commodities.
Did the full moon provoke today’s earthquake and tsunami in Japan? Most reputable scientists say that there’s no solid correlation between moon gravity and earthquake frequency.
But I started wondering about this when the Sumatra quake hit on Dec. 26, 2004, a full moon — 63 minutes after the moon was most full.
Venezuela’s government published a joint venture agreement between PDVSA and Petropars, Iran’s state oil company, to pump crude from the Dobokubi field southeast of the town of El Tigre, Anzoategui. So far so good, no news here. So why am I laughing? I am laughing because PDVSA has bragged for years about how “the new joint venture model puts an end to international arbitration.” There has been a link with those words permanently on PDVSA’s press page for years.
But this new joint venture isn’t with Petropars’s headquarters in Tehran. It’s with a subsidiary called Petropars UK Ltd., “a company domiciled in the United Kingdom.”
Now why oh why would someone use a UK corporation to partner up with PDVSA? I mean hey, I know that Iran should protect itself. They have reason to worry that some other government in Venezuela will eventually want to abrogate the agreement. But it’s still funny to see how revolutionary brotherhood gets replaced by i-dotting, t-crossing legalisms — and dependence on the hated British justice system — when there’s cash at stake.