The Wall Street Journal says US authorities are pursuing a preliminary investigation of Derwick Associates and Proenergy Services for possible banking and overseas corruption violations. No charges have been brought and Derwick denies everything.
Derwick is an exceptionally lucky electricity industry middleman in Venezuela and Proenergy Services is the ultimate recipient of its contracts. Derwick has in the past claimed that I am part of a defamation campaign against it. I’m not. The WSJ story starts thus. I am quoting at greater length than usual, sorry:
NEW YORK—Federal and New York City prosecutors have opened preliminary investigations into a Venezuelan company that became one of that country’s leading builders of power plants during the administration of President Hugo Chávez, as well as into a Missouri-based company which played a key role in its success, people familiar with the matter say.
The U.S. Department of Justice and the Manhattan District Attorneys’ office are probing Derwick Associates, a Venezuelan company that was awarded hundreds of millions of dollars in contracts in little more than a year to build power plants in Venezuela shortly after the country’s power grid began to sputter in 2009, the people familiar with the matter said.
ProEnergy Services, a Sedalia, Mo.-based engineering, procurement and construction company which sold dozens of turbines to Derwick and helped build the plants, is also under investigation, these people say.
The probes are in their initial phases, these people say, and it is possible that both investigations could be closed without criminal charges being brought.
“Neither Derwick nor its principals have been contacted by any U.S. law enforcement agency,” said Derwick President Alejandro Betancourt, in a statement provided by lawyer Adam Kaufmann. “We therefore question whether Derwick is the focus of any active investigation. In the event we are contacted by a law enforcement agency, we will cooperate fully. We are a transparent company and have nothing to hide.”
A ProEnergy spokesperson declined to comment on any investigation and said the company “is committed to doing business in full compliance with all applicable laws, and to cooperating fully with regulatory and legal inquiries.”
Manhattan prosecutors are investigating Derwick and ProEnergy for possible violations of New York banking law, people familiar with the matter say.
Meanwhile, people familiar with the matter say prosecutors in the Justice Department’s criminal fraud section are reviewing the actions of Derwick and ProEnergy for possible violations of the Foreign Corrupt Practices Act, which prohibits offering foreign government officials improper payments in exchange for a business advantage.
Updating with a pro-tip: If you want to get around the WSJ paywall, just use Google to search for a block of text from the story, such as “Act, which prohibits offering foreign government officials improper”. When you see the WSJ link come up, click it. Google pays the freight for the first few days a story is out.
And more later.