Continuing with the question of whether David Boies and Boies Schiller Flexner LLP (BSF) complied with the FCPA in the contract (Engagement Letter) with PDVSA that underpinned the formation of the PDVSA US Litigation Trust, I need to discuss another aspect: potential conflicts and waivers.
Boies managed to have Martínez waive all and every right that PDVSA had regarding the matters related to the Litigation Trust. The Litigation Trust initiated actions against 48 defendants, including some of the largest energy trading houses in the world (Glencore, Trafigura, Vitol, Lukoil). However, Boies reserved BSF’s right to participate, on behalf of the defendants, in unrelated matters. Even if such matters were contrary to PDVSA’s interests. Boies included this display of conflict of interest to presumably take advantage of his chances of earning fees from all parties involved in this dispute.
But the fact that Martínez agreed to matters that were far beyond his competence and main position makes it exceptional. Martínez, as Minister of Energy, did not have the authority to waive sovereign rights in that manner. Such rights belong, in an absolute sense, to the Bolivarian Republic of Venezuela.
PDVSA is a fully state-owned enterprise. PDVSA does not own its assets; these are owned and exclusively controlled by the Bolivarian Republic of Venezuela. International commitments of this type (contracts of “National Interest”) are governed by Articles 150 and 187 (9) of the Constitution of Venezuela, which state that only a Congressional law can approve them (150) or allow the President (Nicolás Maduro) to enter into contracts of National Interest (187.9).
This leads us to the involvement of the Attorney General of Venezuela (“Procurador”), Reinaldo Muñoz, in this Commitment. Muñoz’s actions in this matter are governed by Article 247 of the Constitution, which establishes his duty to advise, defend, and represent “the patrimonial interests of the Republic, needing to be consulted for the approval of contracts of national public interest.”
But there is another issue: the appointment to the position of “Procurador” is governed by Article 249 of the Constitution, which states that the President makes this appointment with the prior approval of Congress. Hugo Chávez supposedly died on March 5, 2013. Maduro was interim president from March 5 to April 19, 2013. Cilia Flores (First Lady) was the “Procuradora” of Venezuela when Chávez died. Six days after Chávez’s death, on March 11, 2013, Cilia appointed her deputy Manuel Galindo as interim “Procurador.” This was not an appointment proposed by the President and approved by Congress. Eventually, Galindo was transferred to another office, again by orders of the Maduro/Flores clan. The “appointment” of Muñoz, as interim since September 6, 2015, also violated Article 249.
Some questions arise concerning Muñoz, given the lack of a) Congressional law (150), and b) approval given to Maduro by Congress (187.9):
Where is the consultation presented by Martínez to Muñoz?
Keep in mind that Martínez, as Minister of Oil and Energy, cannot enter into contracts of national interest. Only Congress and Maduro can do that. Martínez simply lacks the necessary power to have waived Venezuela’s rights to Boies. But Muñoz also does, who can opine on this or that, but cannot personally enter/sign the approval of contracts of national interest.
Could Maduro instruct, through a Presidential Executive Order (“Punto de Cuenta”), either Martínez or Muñoz to do what they did with Boies / BSF? No.
Could Muñoz, as Attorney General, participate in forming the Litigation Trust on behalf of PDVSA/Venezuela? No.
Could Martínez, as Minister of Oil, accept the formation of the Litigation Trust on behalf of PDVSA/Venezuela? No.
Could Martínez, as Minister of Oil, waive the rights of PDVSA/Venezuela in the Litigation Trust? No.
Could PDVSA grant Minister Martínez powers to waive Venezuela’s rights in litigation trusts? No.
Could Attorney General Muñoz empower Minister Martínez to waive Venezuela’s rights in matters of Fiduciary Litigation? No.
This leads me to the only pertinent question here: why would Martínez agree to the clauses of Boies/BSF in the Engagement Letter, a completely biased agreement against Venezuela’s interests?
Someone, somewhere, was bribed. Just as in the action Boies filed through the PDVSA US Litigation Trust, there is no such gift in Venezuela, the most corrupt country this side of Moscow. Without bribes, there are no deals in Venezuela. Glencore, Trafigura, Vitol, Helsinge, Morillo, Baquero, and others certainly bribed to become ‘winning’ offers from PDVSA. Agreements of this kind, like the previous one, cannot happen without the payment of bribes, which is a violation of the FCPA.
How is this totally corrupt deal different from the action presented by Boies? How are Boies and others – in receiving 66% of the income belonging to Venezuela and dispensations of this kind – different from what Glencore, Trafigura, Helsinge, etc. did against PDVSA? This is mega corruption, at an unprecedented level. And David Boies and his BSF, Algamex, Bill Duker, Brennan Group, John Brennan, Meister Seelig & Fein LLP, Vincent Andrews, Edward Swyer, and Wilmer Ruperti are at the heart of the matter. for confirmation…