There’s truly nothing as shocking as this; a judge from Florida, U.S. Magistrate Judge Alicia Otazo-Reyes, is challenging the entire legality of the PDVSA US Litigation Trust:
“A federal judge in Florida overturned dozens of subpoenas issued by the Venezuelan state oil company against the defendants involved in a bribery scheme and also stated that she would allow limited discovery on whether the company is capable of continuing with its claims.”
“During a hearing in Miami, federal judge Alicia Otazo-Reyes said she would accept the defendants’ motion to quash the numerous subpoenas from a litigation trust associated with the Venezuelan state oil company, Petróleos de Venezuela SA, as premature because discovery has not yet begun in the case.”
“Judge Otazo-Reyes also established an expedited schedule for discovery regarding whether the trust, PDVSA US Litigation Trust, has the ability to pursue the bribery claims.”
I’ve taken an interest in this topic simply because I believe that the so-called PDVSA US Litigation Trust is a sham, created with the “assistance” of Wilmer Ruperti to settle old accounts. The best indication so far could well be the fact that while the litigation trust prepared its case against 49 defendants, including Trafigura, Glencore, and some of the largest energy trading companies in the world, PDVSA was actively seeking business agreements with Trafigura.
The document establishing the PDVSA US Litigation Trust agreement states that PDVSA had the power to transfer “without recourse” all its “rights, titles, and interests” related to the lawsuits initiated by Boies, Schiller & Flexner. This is, of course, complete nonsense and illegal, as such agreements, especially damaging ones, must be approved by Congress. The Attorney General of Venezuela, Reinaldo Muñoz Pedroza, and (now arrested) Nelson Martínez, who was then the Minister of Energy of Venezuela, signed the agreement. While they did this, the current CEO of PDVSA and substitute for the Minister of Energy, Manuel Quevedo, and PDVSA’s vice president, Ysmel Serrano, were negotiating with Trafigura. A shell registered in Cyprus named Algamex is designated in the agreement to “provide fees, expenses, and costs of the Litigation Trust.” Here’s a good legal explanation regarding the trust’s position.
The position of the Litigation Trust has not only been challenged by the defendants and U.S. Magistrate Judge Alicia Otazo-Reyes. In practice, the top management of PDVSA, the Minister of Energy, and the most powerful intermediaries of power in Venezuela (President Nicolás Maduro, Vice President Tareck el Aissami, and Diosdado Cabello) are ridiculing it.
In email communications, Sebastian Gallie from Trafigura proposed to PDVSA’s top management the creation of an “unincorporated joint trading company” in Geneva, with the stated purpose of circumventing U.S. sanctions. Key executives from Trafigura, Christophe Salmon and Stephan Jansma, were involved in these communications and are sailing very close to the wind here. Neither has responded to requests for comment.
Reuters reported in December 2017 that “PDVSA in talks with Trafigura to exchange more than 10 percent of crude production: documents.” However, what Reuters did not report is that Manuel Quevedo, the CEO and Minister of Energy of PDVSA (a man tied to Diosdado Cabello), had been approved by the PDVSA board to negotiate with Trafigura, which has maintained its business relations with PDVSA. Ysmel Serrano, vice president of PDVSA and representative of Tareck el Aissami, also signed.
The above letter supports that a memorandum of understanding regarding the “Guaranteed Prepayment Facility” of $700 million and the “Unincorporated Joint Trading Company” based in Geneva between PDVSA and Trafigura, the agreement discussed with Trafigura in late September and early October, was indeed signed on November 7, 2017.
Patricio Norris from Trafigura visited PDVSA’s offices in Caracas in late March of this year, weeks after the Litigation Trust filed a lawsuit against Trafigura on March 3.
Documents viewed by this site show Patricio Norris as the Trafigura representative dealing with Manuel Quevedo from PDVSA. Other documents show that Trafigura and PDVSA closed deals under contract no. 37000216 in February and March.
So, questions remain: how can the CEO of PDVSA be dealing with Trafigura, a defendant that PDVSA sued for billions of dollars in losses?
What does such a deal say about the position of PDVSA’s litigation trust in the U.S.?