The Miami Venezuelan Maletagate trial part I: Case File Prior bad acts by Defendant Duran

August 28, 2008

We will follow the events in Miami where the trial of Antoninis
associates is starting
(This will be the first of a series)

As part of the trial in Miami, the Prosecutor has introduced
this document, detailing the
corruption history of Carlos Kauffmann and Franklin Duran, as part of the
evidence to be introduced against Duran. Since Kauffmann has been granted
immunity, it is clear that the information comes from him.

The document details how Duran and Kaufmann joined up in
1998 and began conducting business with the Government as a partnership. The
document mentions the Klin Fund in which Duran and Kauffmann each had a 50%
share and which included a 12 year CD at the American Express Bank for US$ 40

Additionally, they purchased Industrias Venoco from its
founders, paying cash for it (US$ 60 million?) and began working tightly with
the post-strike PDVSA. Curiously, Pedro Carmona, Carmona the Brief was the person
which was self appointed President briefly in 2002, when Chavez left office for
three days under what is now called the coup and he worked at Industrias
Venoco his whole life. He left the company to become President of Fedecamaras,
the association of Chambers of Commerce in Venezuela.

These are the specific accusations contained in the
document, which involve million dollar corruption schemes in Venezuela with
Government officials and the private sector:

1.- National Guard officials received kickbacks and
channeled the funds with Kaufmann and Duran. Kauffmann and Duran charge a 10%
fee apparently for fronting for these officials.

2. -Duran and Kauffmann paid kickbacks to these same
officials on contracts for supplies sold by them to the National Guard.

3. – Duran and Kauffmann paid kickbacks to officials in the
National Guard in relation to bonds issued by the Ministry of Finance to the
National Guard to pay old salary and benefit debts with them.

4. -Duran and Kauffmann paid Cojedes Government officials
for placing deposits of funds belonging to that State at particular private
commercial banks.(A racket I described long
ago here
) They received a 10% yearly fee for this, of which 30% was kicked
back to Cojedes State Government officials. Duran and Kauffmann managed the
kickbacks for these high Government officials.

My comment: Recall that the Governor of Cojedes is Jhony
Yanes Rangel, who when the case blew up, defended Antonini
bringing in
the suitcase into Argentina. Yanes said at the time that this
was just terror by the US Government. Recall also that at the time, a local
reporter showed that Kauffmann
had paid
for Yanes Rangel staying at the luxurious Llao Llao Hotel in
Bariloche , Argentina. Yanes Rangel also showed up at a protest in front of the
US Embassy, to defend his friends, who he said were entrepreneurs. Some of
these friends are now providing evidence to the US Government.

5. -Duran and Kauffmann also gave Cojedes Government
officials kickbacks on construction projects awarded to them by the Cojedes

6. -Duran and Kauffmann were involved in a kickback scheme
with high-level Vargas State Government officials. They gave US$ 250,000 to
this high level official and also helped him with his States deposits. In
fact, the State placed its budget at a single private commercial bank, for
which they received a finders fee. A percentage of that fee was kicked back to
these same Vargas officials.

My comment: No names are mentioned, but the Governor of
Vargas State for the period mentioned was Antonio Rodriguez, from Chavez MVR
party. It is extremely unlikely that all of the budget of the State would be
placed in a single bank without his knowledge. Recall Vargas was the State that
was destroyed in late 2000 by floods and has yet to recover despite Chavez

7. -Also in Vargas State, Duran and Kauffmann provided
medical insurance coverage for the states employees. According to the document
millions of dollars were routed to an insurance company. Duran and Kauffmann
received a 20% fee on the premiums as a finders fee and they in turn paid half
a percent to high Government officials.

8. -Duran and Kauffmann received US$ 30 million from Vargas State
and kickback ten percent to two high level Government officials.

9. -Duran and Kauffmann purchase a building in Caracas. The
Venezuelan Ministry of Finance paid them US$ 9.5 million for it. Duran and
Kauffmann paid four high level Ministry of Finance officials US$ 4.5 million in

My comment: This is the infamous Citibank building case (you
can read about it here
or here),
whereby Duran and Kauffmann bought it one week and turned around and sold it to
the Ministry of Finance a couple of weeks later. I should clarify that former
Minister of Finance, under Hugo Chavez, Tobias Nobrega was indicted for this.
However he has not been jailed or tried. (And as far as I know not been banned
from running for office by the Comptroller.)

10. -Duran and Kauffmann colluded with the Ministry of
Finance to restructure debt and gained in excess of US$ 100 million in the
process and paid US$ 23.8 million in kickbacks.

My comment: Well, Andy
Webb reported
on these funny details of the Venezuelan debt buyback in
2003, from which those that had advanced knowledge made a lot of money. I
also reported this in detail
, noting that not only did they know about it,
but also a Venezuelan Government Bank, Bandes, sold these debt instruments to
those in the know ahead of the buyback. Thus, there was twice the corruption in
this case.

11. -Duran and Kauffmann were involved with a kickback
scheme at the Ministry of Education and arranged for part of the budget of that
Ministry to be kept at a certain bank. They received a 5-6% fee for this of
which 50% was kicked back to the officials. They did the same thing with the
FDIC Venezuelan equivalent, FOGADE.

My comment: Well, the Minister of Education for the larger
part of this period was none other than Aristobulo Isturiz, Chavez candidate
to become Mayor of the Metropolitan are of Caracas. Did he know about it? I
dont now, but I doubt he didnt. What this clearly shows is that corruption
reaches all the way to the top, as Chavez has to know about this. BTW the Head of Fogade was
found guilty
of corruption by the National Assembly, he was never jailed or

12. and 13. Vague unspecified charges of kickbacks in PDVSA
and the Judiciary.

The important point here is that thanks to the fortuitous
search of a suitcase arriving in an official PDVSA plane in Argentina, a
suitcase full of cash was discovered. Through this case, a whole pot of
corruption in the hundreds of millions of dollars has been uncovered, involving
just two guys.

How many more suitcases have flown around the world? How
many Durans and Kauffamns are there, that we just simply do not know about?

How many billions have been stolen under the very eyes of
Hugo Chavez and his robolutionaries. Can all this be happening without the
Supreme Being knowing about it?

I can proudly say, that you have read about a lot of this
before in these pages. I was already talking about some of this more than two two
or three years ago. Petkoff in Tal Cual also began talking about it. The rest
of the media, even today, appears to avoid the subject out of fear. Free press?

We now know even more details, confirming that the Chavez
administration has become the biggest cesspool of corruption not only in
Venezuelas history, but maybe probably in the planets history.

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