What appears to be a leak of internal documents from Missouri electricity industry contractor ProEnergy Services and Venezuelan contractor Derwick Associates adds to questions about how ProEnergy got deals to sell products made by General Electric, Pratt & Whitney and Rolls Royce to Venezuelan state industries starting in late 2009.
The documents, posted to the website Scribd Nov. 17 by a person using the name “Tomás Lander,” include a proposal dated June 2009 from ProEnergy to Venezuela offering power plants. At the time, Venezuela was suffering periodic blackouts because demand for electricity was growing, a drought was draining hydroelectric reservoirs and the 2008 commodities bust had left the country with limited cash to deal with the crisis.
I haven’t been able to confirm that the documents are genuine. I sent e-mails to Derwick Associates’ press line, ProEnergy CEO Jeff Cannon and ProEnergy chief counsel Scott Dieball, asking them to validate or refute the authenticity of the documents and requesting comment. I haven’t received any response. At a glance, nothing about the documents indicates that they are forgeries. As such, for the rest of this article I will treat them as genuine documents. If ProEnergy, Derwick or anyone else offers any commentary on the documents, I will update this post to reflect their response.
The documents don’t show what happened to that ProEnergy proposal. However, another document shows that two months later, ProEnergy and Derwick agreed to cooperate in seeking work in Venezuela. Their agreement forbids either company from revealing “any and all details regarding transactions between Derwick and ProEnergy, details regarding transactions between a party and third parties, and the payment of fees and commissions.”*
Proenergy, as regular readers will know, has also been building power plants in Venezuela as a contractor for Derwick Associates. I know that PDVSA records can be inaccurate, but for what it’s worth, it says here that none are yet complete, more than four years after the work was expedited under Venezuela’s electricity industry state of emergency.
Now, I read that Proenergy used its Venezuelan experience to land a $100 million gig installing 100 MW of turbines in Newfoundland and Labrador, Canada. According to the local paper, 11 of 13 examples of prior work on Proenergy’s application were jobs in Venezuela.
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 →