Tag Archives: law

WSJ says Proenergy, Derwick Associates face corruption investigation

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. Continue reading

PDVSA worker jailed for corruption

Dr. Evil voice: Ten thoooooousand bolivars

Dr. Evil voice: Ten thoooooousand bolivars

The crackdown is here! Maduro is serious about the war on corruption. Venezuela news aggregator Etorno Inteligente reports (my translation):

The attorney general jailed engineer Milton Ramón Caldera Rodríguez, apprehended November 5 2013 for allegedly soliciting 18,000 bolivars and approving a security performance evaluation for the company Hidrolab Toro Consultores CA, service provider to Petroleos de Venezuela SA (PDVSA)…

The judge sentenced Caldera to imprisonment at the police station … of Barinas….

On Tuesday, October 30, 2013, the PDVSA engineer may have solicited the amount of 18,000 bolivars from a representative of Hidrolab Toro Consultores CA in order to approve a security performance evaluation. …The company complained to the Servicio Bolivariano de Inteligencia Nacional (Sebin).

On November 5 … Caldera was called to the Altos Barinas hotel where the money was handed over. After receiving the money he was detained by Sebin officers…

18,000 bolivars. The current parallel rate in Venezuela is 55 bolivars to the dollar, even though the government has resorted to its most overt Great Firewall type tactics ever to keep people from knowing that.*

This engineer was detained for demanding a bribe of US$327.27.

Or to put it in upper middle class purchasing power terms, that would buy the engineer a nice steak dinner out for a family of four (3,000), a large Christmas tree (3,000), an off-brand polo shirt (1,100), a Samsung Galaxy S I9000 (3,500) and a new bumper for a Toyota 4×4 (8,000).

Or in even simpler terms: less than the price of a new IPhone 4S.

So please remember that, PDVSA workers. You can’t go demanding bribes. You need to wait for the vendor to suggest it to you.

* Yes, Dolar Today is being blocked by all ISPs, as is the Twitter link-shortener bit.ly. as the brainiac Cuban, Iranian or Chinese people running the country’s censorship program don’t realize that Dolar Today uses goo.gl and that blocking bit.ly just cuts people off from everything else.

Venezuela not as safe a haven as Snowden’s team may think

Yesterday, someone using a computer well protected against cookies and snooping dropped in a few times to read my prior posts on Venezuela protecting fugitives from US justice:

Venezuelan intelligence defends Derwick Associates from the deadly peril of journalism

Venezuela protects guy who allegedly ripped off Citgo

Now I wake up to find that Ed Snowden, fugitive from US justice, may be on his way to the Bolivarian Republic. I really hope that his team isn’t hoping that he will receive the same treatment in Venezuela as that received by the nice people at Derwick Associates, who were accused in the press of overcharging the Venezuelan government, and by Guillermo Clamens, accused in the US of having stolen millions of dollars from Citgo. Continue reading

How much do oil companies save under Venezuela windfall tax cut? (reposted)

(Reposted, because when I posted this the other day, I was using some incorrect assumptions. It’s all much better now. Crummy old version of post can be seen here.)

So Venezuela’s legislature approved the cut in the “special contribution for exceptional international oil prices” or whatever they call it. Windfall tax, in effect. And people wonder, how much do the oil companies save?

I don’t know, since when you save money on one tax you often end up paying more on some other tax. But here’s what the chart looks like on the windfall prices tax, which isn’t a tax but a “special contribution” (meaning it goes right to the presidential slush fund, rather than being shared with state and local governments):

Venezuela windfall oil taxes as of 2007, 2011 and 2013

Venezuela windfall oil taxes as of 2007, 2011 and 2013. Click for full size

At $100 a barrel, under the 2011 rates, oil companies had to contribute $31 a barrel. Under the new rates, you contribute only $21. According to my math, anyway. At $110 a barrel, the difference grows to $10.50 per barrel, and stays there — from there on up, the difference is always $10.50.

Several of the big joint ventures in Venezuela are aiming for output of 200,000 barrels a day. The private partners generally own 40%, so they can count 80,000 barrels a day as their production. At that output, a difference of $10.50 a barrel works out to $306 million a year ($307.4 million in leap years).

But that isn’t exactly how much the oil companies save. Because that $306 million is pretax income, and all sorts of other taxes come in. And to figure that out, you really need to go beyond some dude writing for free on the internet.