Tag Archives: electricity

Nervis or El Mundo? Hard to decide whom to trust

Screen Shot 2015-03-20 at 3.21.20 AMWho to believe when it comes to $50 million bribes in Venezuela? Do we believe Nervis Villalobos? Here’s what he told this website in 2013:

Nervis Villalobos, a former deputy minister of energy in Venezuela, denies having carried a message offering a bribe from electricity contractor Derwick Associates to Venezuela Oil Minister Rafael Ramirez.

The allegation against Villalobos appears in a lawsuit filed a week ago by Otto Reich against two principals of Derwick and an alleged associate of theirs. Villalobos called in response to my request for comment on the case.

“I know Derwick very well,” he said. Later, he said “they aren’t unknown to me.” He said it was possible that he had flown in a jet belonging to the company, adding that he flies at times on rented jets and that he doesn’t always know who owns them.

He said he “hasn’t had anything to do with PDVSA, the Ministry, or anything like that” since he left government in 2006. He said his government service left him unable to open a US bank account, and that his name has shown up in several news articles, but that the accusations are false. He doesn’t usually respond because “if one starts to defend oneself against every attack, one ends up going crazy.”

Villalobos said his work usually consists of feasibility studies and other consulting work in the Venezuelan electricity industry.

And here’s what El Mundo, the Madrid newspaper, is reporting today:

The Spanish company Duro Felguera paid a fortune to a Chavista leader for his “oral” consulting in the bidding for a huge contract in Venezuela, according to documentation collected by the Spanish investigation at Banco Madrid.

In the dossier from the Executive Service for the Prevention of Money Laundering (Sepblac) it gives evidence of a suspicious contract from Duro Felguera with Nervis Villalobos, a former deputy minister of energy in Venezuela in the Hugo Chávez administration, according to police sources consulted by El Mundo…

Villalobos’ company didn’t have any documentation, but rather was to provide “general oral information, and could also assemble written reports if deemed necessary,”… Investigators consider it unbelievable to pay $50 million for oral reports…

The goal of the contract, according to police sources, was “advise on the possible granting of a public works contract for a combined-cycle thermoelectric power plant of 1,080 MW (Termocentro).” The new contract was dated 12 April 2011, but meanwhile, 4 May 2009, the company managed to score a construction contract for Termocentro to provide Caracas with power, to be completed in 2013, with a value of 1.5 billion euros…

Duro responded yesterday with “this is about a totally normal and legally notarized contract.” They added that “no organ of the state has requested information about this from Duro Felguera, nor have we been object of any investigation.”

…Villalobos moved money at will in the Spanish affiliate of the Andorran bank, where he had on hand 3 million euros in his accounts. In April 2012, he transferred $2 million to another account of his in Miami and in March 2014 got Banco Madrid to lend him 1 million euros to buy a home in Spain, using shares of a Venezuelan company in the Islands as collateral.

Nervis come clear things up, I thought you said you did feasibility studies.

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Front page of El Mundo (Madrid): Chavista leaders named in Spain laundering probe

Screen Shot 2015-03-15 at 11.43.11 PMI have rarely been so surprised by a news story as I was by this article in El Mundo, from Madrid. I’ll translate the key portions, but if you can handle a bit of ye olde español please click through and read it there. I’m sure many people contributed to this crackdown but one of the few to put name and face to his criticisms of this group of alleged thieves has been Alek Boyd. Dude, take a bow.

Chavista bigwigs investigated for laundering in Banco Madrid

…Police sources assure El Mundo that a dossier in the hands of the Anti-Money Laundering Commission touches on at least three ex-deputy ministers of Venezuela, the ex-intelligence chief, an ex-executive of the state oil company PDVSA, and a businessman considered close to Chávez, who has handled funds in Spain that allegedly derived from massive bribes in exchange for contracts from the Venezuelan regime.

All these Venezuelan bigwigs appear in the list of clients discovered in the Spanish affiliate of the Banca Privat d’Andorra (BPA), without the entity having taken necessary measures to avoid money laundering, a very grave compliance failure under Spanish law…

The Spanish investigation goes beyond information released Monday by FinCEN, the anti-laundering unit in the USA, and gives specific names showing that at least part of the Bolivarian regime’s power structure took advantage of its position of power to do business for itself, behind the back of the pueblo. The US statement said “BPA facilitated transfers in the amount of $4.2 billion” related to Venezuelan public corruption. It didn’t give names.

According to police sources, among the clients at Banco Madrid were the former Deputy Minister of Energy Nervis Gerardo Villalobos. The Spanish investigation connects him with companies in Madeira and the Virgin Islands and he is considered close to Venezuela’s current UN ambassador, the former president of the giant state oil company, Rafael Ramírez…

According to the investigation, Villalobos received “consulting payments” from the Spanish company Duro Felguera, which was chosen in May 2009 for a 1.5 billion-euro contract to build a combined-cycle power plant to provide power to Caracas.

The president of the company that oversaw the contracting, Electricidad de Caracas, and deputy minister of electrical development, was Javier Alvarado Ochoa… The police sources considered it unheard of that Banco Madrid didn’t communicate with Sepblac [Spain’s anti-laundering organization] nor undertake a special examination of these clients. The board of the bank and the bank itself have been reprimanded for serious and very serious offenses [for failing to report possible money-laundering]…

The insurance businessman Omar Farias also appears in the group… Farias ran the Spanish branch of the company Inversiones Porbónica.

In the Sepblac investigations, Farias appears as a key person with possible B accounts in Banco Madrid related with possible shady foreign dealings of the regime. The Spanish entity managed to block a 13-million [euro] operation realized by Farias, but didn’t undertake any investigation, according to sources familiar with the Sepblack dossier, which was presented last Monday to members of the board of Banco Madrid.

The mix of business and regime contacts is personified by another client of Banco Madrid, Carlos Luis Aguilera Borjas, ex-director of security for the government. In Spain, Borjas administered the company CLAB-Consultoría Inmobiliaria and is also one of the main shareholders and board members of Constructora Girardot 53, one of the companies that was blessed in the last decade with contracts to work on the Metro de Caracas, while Chávez was president.

The Spanish investigation is looking into relations between Aguilera and Spanish companies that received large contracts in the Metro de Caracas. In 2008, the Unión Temporal de Empresas (UTE) formed by CAF, Cobra, Constructora Hispánica and the company Dimetronic managed to receive a contract to remodel Line 1 of the metro in the capital for 1.4 billion euros…

Also from Chávez’s security apparatus is another Banco Madrid client, ex Deputy Minister Alcides Rondón.

It is one of the cases where the bank failed to exercise its required [due diligence]… It’s the same in the case of Francisco Rafael Jiménez Villarroel, ex-representative of PDVSA, also when Rafael Ramírez was in charge.

Yes, among those named are Nervis Villalobos, long alleged to be associated with various companies that overcharged Venezuela for electricity generating equipment; Duro Felguera, partner in one of the biggest gold-plated projects; Javier Alvarado, who aside from being head of EDC and Bariven at times is also father of a Bolichico; and a member of the illustrious Rondón family, which includes Rafael Ramírez’s wife (Beatriz Sanso Rondón de Ramírez) and Venezuela’s most powerful man, Diosdado Cabello Rondón.

Not much to add here except that this humble website did the only interview I’ve ever seen with Nervis Villalobos in which anyone asked him directly about alleged corruption. He denied it. Go take a look. (Read the comments, too.)

Oh also, the El Mundo article makes repeated mention of Otto Reich’s lawsuit in the US in which he specifically said that Alvarado’s son was involved in acts of corruption as part of Derwick Associates, the company that was remarkably successful at negotiating deals with the allegedly corrupt electricity industry in Venezuela. When Reich first sued, I was skeptical about how well his case would do. It’s doing pretty well. Derwick has gotten some charges thrown out, but the case is moving ahead, with lots of discovery. The recent court filings have mostly been a long back and forth of sealed documents. But what’s clear at this point is that someone, somewhere is taking notice of corruption in Venezuela’s electricity sector, and it’s not working out too well for those who collaborated with multi-billion-dollar extractions of Venezuelan wealth.

Derwick Associates wins a round against Otto Reich

In case you’re a wonk, here is the partial summary judgment decision on the motion to dismiss:

Long story short:

Defendants’ [that is, the Derwick Associates guys] motion to dismiss is GRANTED in part and DENIED in part. Claims I and II (RICO) and VII (civil conspiracy) are dismissed.

Defendant D’Agostino’s motion for leave to file a sur-reply is granted.

And yes, this is the part where I note that my initial reaction to Reich’s case was that it was a bit of a reach. Full of interesting claims, ones that I would really like to see demonstrated in court, but boy. He set himself some high legal hurdles.

Update: One reader mails to say I have it all wrong, that the case is going ahead. That is another way to see things. Take it all how you will.

PDVSA boosts electricity supply, in Bolivia

Somehow I missed that PDVSA was building a power plant in Bolivia.

May 19 2014, Santa Cruz, Bolivia – The CEO of PDVSA in Bolivia, Darío Merchán, said the construction and assembly of the Planta Termoeléctrica del Sur, in Tarija, entered its final phase and its launch is forecasted for June… Termoeléctrica del Sur is a project of the joint venture Empresa Nacional de Electricidad Andina and required a $122 million investment, financed by the Bolivian Central Bank (BCB). …160 megawatts…inauguration in a matter of weeks…Energy consumption in the country is rising to 1,200 megawatts and supply is 1,400 megawatts, leaving a 200 MW reserve. Merchán emphasized that the Termoeléctrica del Sur will bring Bolivia closer to its goal of exporting electricity in the medium term.

Now all they need is a power line to the llanos, and Venezuela will be ready for El Niño.

Chile going renewable

This is what we like to see. Here is January’s power mix in Chile, with year-over-year change in the right-hand column:

Chile SIC generation mix change 2013-14

The power generation mix in Chile’s main electrical grid, the SIC, has changed a bit over the past year: Solar generation up 22-fold, wind generation up 3.5-fold, hydro generation up 10%, and thermal — meaning fossil fuels — down 6%. Source here.

Add to that what happened in February. Note that solar power quadrupled month-over-month.

February power mix in Chile

According to Business News Americas, the upshot is that February’s solar energy output in the SIC grid increased more than 100-fold over a year earlier. 

Much more solar and wind power has been approved for construction in the country, so next year the GWh from solar should be even higher.

Nervis Villalobos responds, denies corruption accusation

Nervis Villalobos, a former deputy minister of energy in Venezuela, denies having carried a message offering a bribe from electricity contractor Derwick Associates to Venezuela Oil Minister Rafael Ramirez.

The allegation against Villalobos appears in a lawsuit filed a week ago by Otto Reich against two principals of Derwick and an alleged associate of theirs. Villalobos called in response to my request for comment on the case.

“I know Derwick very well,” he said. Later, he said “they aren’t unknown to me.” He said it was possible that he had flown in a jet belonging to the company, adding that he flies at times on rented jets and that he doesn’t always know who owns them.

He said he “hasn’t had anything to do with PDVSA, the Ministry, or anything like that” since he left government in 2006. He said his government service left him unable to open a US bank account, and that his name has shown up in several news articles, but that the accusations are false. He doesn’t usually respond because “if one starts to defend oneself against every attack, one ends up going crazy.”

Villalobos said his work usually consists of feasibility studies and other consulting work in the Venezuelan electricity industry.

Otto Reich sues Derwick Associates execs, alleging racketeering

I have an unconfirmed lawsuit in which Otto Reich appears to be is suing three people allegedly connected to Derwick Associates, for racketeering. Will be posting much more on it bright and early. Here’s the suit, in case you’re wondering.

Lawsuit

Also yes, if you are on my e-mail subscription list, you received a teaser of what I’ll be publishing. Sorry for taking it down for now — no sense running a whole analysis of a suit if I’m not 100% sure it’s real. Sure looks real, though, don’t it?

(Updated 31 July 2 pm EDT after confirming suit was really filed in NY.)

Much more detail & analysis here.