Sun, May 12, 2019 - Page 7 News List

How a Chinese venture in Venezuela made millions while locals grew hungry

Caracas and Beijing agreed to hundreds of projects to kickstart growth in Venezuela, but after billions in investments, little has materialized

By Angus Berwick  /  Reuters, TUCUPITA, Venezuela

In attendance were CAMC chairman Luo Yan (羅幹) and Rafael Ramirez, a Chavez confidante who ran PDVSA and the oil ministry for a decade.

Soon, businesses jostled to get in on the development.

Salazar was well-positioned. His father was a communist guerrilla and author who later became a legislator and Chavez ally. His family ties and connections to lawmakers gave the younger Salazar a valuable address book that he wielded at Inverdt, a consulting firm that he operated in Caracas.

The company was owned by a Panama-based holding company that Salazar had established called Highland Assets, according to testimony that he gave Andorran investigators when they first began probing his BPA account.

From an office a few blocks from PDVSA headquarters, he met often with Ramirez and other top officials, people familiar with his activities said.

Ramirez in 2014 left the ministry and until 2017 was Venezuela’s ambassador to the UN.

Maduro has since then publicly accused him of unspecified corruption, but Ramirez was not indicted in Andorra and has not been formally charged with any crime in Venezuela.

Ramirez lives abroad as a government opponent. He did not respond to e-mails seeking comment and could not be reached otherwise.

At the time of the ceremony with Xi, Chavez was making PDVSA a hub for a growing array of developments, many of them unrelated to oil. For example, a unit known as PDVSA Agricola was created to boost the country’s food supply.

The diversification made PDVSA the conduit through which contracts, and a growing sum of money administered by Banco de Desarrollo Economico y Social de Venezuela, Venezuela’s national development bank, were awarded.

The bank had by 2010 received US$32 billion from the China Development Bank and another US$6 billion from an infrastructure fund created by Chavez, the filings said.

China Development Bank did not respond to requests for comment.

Salazar began reaching out to Chinese executives, offering his services, as a well-connected consultant, to help broker business in Venezuela. He traveled to China monthly and began paying Venezuelan officials there to forge ties with companies, including CAMC.

“My work was to convince them, through meetings, trips and promotion, to sign contracts,” Salazar told Andorran investigators.

People familiar with the case said that Salazar and his alleged associates, before the indictment, agreed to testify in Andorra because they hoped to clear their names.

In his testimony, Salazar told the Andorran investigators that he chose BPA as an offshore bank because he knew other wealthy Venezuelans had done so. Nestled in a quiet valley of the Pyrenees, BPA had a reputation as a discrete money manager for clients from high-risk countries.

After Andorra submitted information requests for its case to Caracas, a Venezuelan court in 2017 ordered Salazar arrested on suspicion of corruption, money laundering and conspiracy.

Citing the Andorran probe, the Venezuelan arrest order said that Salazar sought to “give legal appearance to funds originating from numerous contracts with Venezuelan state institutions.”

A trial date has not been set and Salazar remains jailed in Caracas. A lawyer for Salazar in Venezuela denied the charges before the court.

Gimenez in an e-mail said that Chinese authorities decided which companies would receive funds, and that neither Salazar nor his alleged intermediaries could sway that.

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