Monthly Archives: December 2012

Get rich quick!

(UPDATED with a few clarifications.)

That headline should attract the right audience for this public service announcement. I’m not going to name names here, but this website gets a huge number of hits and e-mails from people investigating potential business partners. To be clear, I’m not talking about regular people doing serious due diligence — come on down, google away. I’m talking about people with dollar signs in their eyes who are doing a cursory check of the generally unknown person with whom they are about to do a big oil deal. This one was more or less typical, though with better manners and fewer typos than average:

Dear Steven,

I hope my message finds you well.
I came accross your blog while looking for some info about xxxxxxxxxxx, which i could do some business with in the near future.
Do you have some more info you could provide me with in addition to what I found on your website?

Thank you in advance.



The answer to this writer, and to the many other people in similar situations, is that if a deal seems too good to be true, assume it is and call off the deal. If a businessman’s story seems plausible but has no truly independent confirmation, assume it’s false and call off the deal. If an unverified seller asks for money up front, laugh in his face and call off the deal. If a seller tells you what financial instruments to use (listen for terms like MT-103 or irrevocable LOC), assume that they are trying to steal your money and call off the deal.

To keep it very simple, here: If you think your counterparty may be a con man, call off the deal. I have heard enough stories like this one to know that when these deals go south, they go way too far south. Nobody likes to be taken for $10 million. But if you need to rely on asshole bloggers like me to do your due diligence for you because this is the only information you can find about someone, you’ve already answered your own question. Anyone with so little paper trail that you can only find them on this website is probably not a serious businessperson. Of course, there are exceptions. Some people are just private. But trust your gut.

If you have specific concerns or suspicions about someone, of course I’m always happy to hear your thoughts. If you call off a deal based on these basic self-defense tips, I’d love to hear about it — I’m always curious about the sleazy operators and how they get discovered. And if you want to pay me for a due-diligence job, let me know. But the short of it really is very simple. You want to get rich quick? Open a pancake restaurant on the Austral Highway. Don’t do gray-market commodities deals with shady characters.

End of public service announcement.

Derwick Associates aircraft: The limits of secrecy

This is a post about how hard it is to keep a secret when you’re throwing millions of dollars around. But I’ll get to that.

Yesterday, the intrepid Cesar Batiz ran a couple stories about Derwick Associates, a Venezuelan electricity industry contractor with an uncanny ability to win large contracts. There was this short one, which cited data that blogger Alek Boyd and I provided to César showing that US authorities have been poking around on our websites. I am the first to admit that this doesn’t mean there is a formal investigation underway of any of my companies-of-interest, but I think his headline is fair: FBI casts an eye over Venezuelan company.

And then there was a long article, looking in great detail at how Derwick Associates portrays itself in its Florida defamation case against a Venezuelan bank, and comparing that self-portrayal with the documentary record. César: CHAPEAU. Seriously good work on this one. Unfortunately Últimas Noticias has already taken down the story, who knows why. On the recommendation of Alek Boyd, who wrote a nice update on things Derwickian yesterday, I rescued the story from Yahoo’s cache server and am posting it here for my usual reason: Memory holes aid no one. If there is an error in this story, please tell me and I’ll post a note right on it to set the record straight. But to hide this story would be to toss out the baby with his diaper.

Yahoo Cache on La historia íntima de De…idad | Últimas Noticias

Continue reading

Those outlaw diamond mines in Amazon, plus how to launder money

One of the stories that most impressed me before I went to Venezuela was this, by Jens Gould, now with Time in California. He went and looked into the supply chain of diamonds out of Venezuela, and how there was evidence that their origin was being falsified.

Now, Reuters goes where very few reporters from any medium ever bother to go. I posted the photos the other day; now the text is available. Really good solid reporting at this nexus of so many issues: environment, social life, public health, luxury goods, travel, diplomacy, international trade, home economics. It’s a fascinating situation, and it’s good that Reuters is using the resources available to it to pursue stories like this. Would that more moneyed media outlets did the same. Check it out.

“I have diamonds in my blood!” mused one buyer while macaws patrolled the jungle canopy near the village of Parkupik.

The diamonds he and others purchase will likely end up in trading centers like Tel Aviv, Antwerp, London and New York after being smuggled into neighboring Guyana to obtain falsified papers.

More here, including the “European buyer” saying he may die with a gun to the head or hung from a tree.

Continue reading

Oh, about that Paraguay oil….

What could possibly go wrong, indeed? Aleszu Bajak, whose website kicks my butt and impresses me deeply, just wrote a front page commentary in Latin America Oil & Gas Monitor.

Paraguay jumps the gun with oil strike announcement

Paraguayan President Federico Franco  last week announced his country had  found oil close to the border with  Argentina.  … Franco seems to have  been grandstanding and his comments  look well off the mark. The Pirity Basin  is believed to have potential as an oil  producer, but there has been no drilling  in the area since 1987.  …  Vicente Brunetti, a consultant based in  Paraguay who has written reports for the  United Nations in the past, told LatAmOil  that the announcement was a poor  misjudgement by Franco.  “The announcement is a joke,”  Brunetti said. “It’s based on exploration  that was done 30 to 35 years ago. This  didn’t happen yesterday.”  Oil companies on the ground were  quick to clarify the situation as well. UK-based President Energy, which operates in Paraguay’s arid Chaco region where the oil was allegedly discovered, responded to Franco’s announcement  with caution. “I think the president is  saying this with a lot of optimism and I  wish it were so,” said Patricia Macchi, a  spokesperson for President Energy, in a  radio interview last week. “We’re just  starting and there’s a long road ahead.”   Junior  Energy Minister Hugo Cacace was more  cautious in his choice of words than the  president. “There are just traces of oil in  the Chaco,” said Cacace in a radio  interview. “We need to move forward  with drilling to see if those traces are  enough to produce oil. We know it exists  and the expectations are high.”  … The country has so far failed to  generate any significant interest in its oil  and gas reserves, which has led the government to draw up a favourable  contract scheme for international oil  companies (IOCs) that are willing to invest there. It has a sliding scale royalty  system with a ceiling rate of 14%, and a  10% corporate tax rate.  The Carmen, Los Naranjos and Jurumi  plays in the Pirity Basin are believed to  be the most promising in the country,  although there is also growing interest in  shale gas plays that could draw in greater  investment.

Argentina, Venezuela oil didn’t pan out for you? Try Paraguay

Today’s tweet from Paraguay President Federico Franco:

Buen día Paraguay! Desde los EEUU les comunico que estoy participando en varias reuniones sobre exploración petrolífera. Novedades en breve

That is, Good morning Paraguay. From the USA, letting you know that I’m taking part in various meetings about oil exploration. News shortly.

Paraguay announced its first oil discovery Nov. 26, the same day as its first Lady Gaga concert.

Then, this week, Transparency International rated Paraguay 2nd-worst in the region for corruption, with a score of 25 out of 100 (between Somalia’s 8 and Denmark’s 90).

But hey, what could possibly go wrong?

A note to senders of press releases


No, I’m not interested in a guest post about your new infographic.

I’m not going to write a book review about your client’s new apocalyptic Christian screed.

Gay rights are groovy, but have you ever looked at this website? Thought not.

And while I find it amusing that the US Department of Defense visits this site almost daily, no. I don’t care that there are now US female submarine officers.

If you want your press release carried in news media, it would behoove you to look at those media first.

Have a nice day!

Reuters goes to the outlaw mines in the middle of nowhere, read it, really. The pictures alone make it worth the click.

To get to another mine we had to cross a river that was 196ft (60 meters) wide, with water up to the waist. The clearing made by the miners made it look as if someone had taken a bite out of the jungle. Some people were cutting trees while others, several feet below, were blasting away the jungle floor with a high pressure water hose. They were riding the hose as if trying to tame a wild anaconda.

The hose is very dangerous. Its pressure and its metal nozzle turn it into a lethal weapon for the miners who work barefoot, sunk in the mud. There are no doctors or medical assistance anywhere nearby. In recent weeks two miners died here in the morning and their colleagues were only able to recover their bodies by the next morning. Mudslides, snake bites and tropical diseases are frequent.