Some individuals excel at handling multiple fronts simultaneously. José Simón Elarba is one of them. While he stands out in various roles that he readily promotes – lawyer, successful businessman, friend of powerful figures across all political and business sectors – he operates another role behind the scenes: that of an intermediary. This connection-making skill is revealed through the Pandora Papers, the leak of over 11.9 million documents from 14 international offshore service providers that were received by the International Consortium of Investigative Journalists (ICIJ) and shared with more than 150 media outlets in 117 countries, including Armando.info in Venezuela.
In 2014, two Chinese telecommunications companies turned to Elarba’s parallel services. One, China National Electronic Import & Export Corporation (Ceiec), hired him for 15 million dollars as an advisor and provider of insider information for securing contracts with Telefónica de Venezuela (Movistar), the private mobile phone, Internet, and TV company, a branch of its Spanish namesake, which is now selling all its operations in Latin America.
ZTE Corporation was the other Chinese company that paid Elarba for services at that time. The bill was for 13 million dollars. In addition to that invoice, the leak includes the transcript of an email exchange that reveals the purpose of the negotiation was to obtain contracts with the state-owned Compañía Anónima Nacional Teléfonos de Venezuela (Cantv).
The details of these transactions were documented in papers leaked from the Panamanian branch of Asiaciti Trust, a fiduciary company based in Hong Kong. This offshore service provider worked for Elarba starting in 2016, with the specific intent of opening businesses in his name in Singapore and the Cook Islands, a South Pacific archipelago. The collateral Elarba presented for these offshore registration actions were receipts totaling 28 million dollars that he received in September 2014 from his Chinese counterparts.
Both Chinese companies had or have some involvement with electronic surveillance and social control activities of the self-proclaimed Bolivarian Revolution. In the case of ZTE, a 2018 investigation by Reuters concluded that it had collaborated in creating the system that operates the government’s Carnet de la Patria program, the main client database of Chavismo. Ceiec is under a sanction from the U.S. Treasury Department for “undermining democracy [by] restricting internet service and conducting digital surveillance” in collusion with Nicolás Maduro’s government.
And both received advice from Elarba in exchange for million-dollar payments in dollars.
The millions speak Mandarin
In the last five years, Venezuelan lawyer and businessman José Simón Elarba has increased his media exposure in Venezuela due to his role as president of Fospuca, a solid waste collection company that primarily operates in three municipalities in eastern Caracas: Chacao, Baruta, and El Hatillo.
The consistent communication strategy, both institutional and personal, is not the only reason for this visibility. He is a partner in a prestigious law firm in Caracas, Gadea, Lesseur & Asociados, which also employs Gerardo Blyde, former mayor of Baruta and current spokesperson for the opposition delegation at the Negotiation Table in Mexico City. He is also a shareholder in the newspaper El Nacional. Following media revelations, Elarba has openly acknowledged his friendship with Carlos Erick Malpica Flores, former treasurer of the Republic and ex-vice president of finance for the state oil company Pdvsa, who is also the nephew of Venezuela’s First Lady, Cilia Flores, sanctioned by Panama for money laundering and terror financing; and with the president of Globovisión, Raúl Gorrín, also sanctioned, but by the Office of Foreign Assets Control (OFAC) of the U.S. Treasury Department.
Singapore caught Elarba’s eye in 2016 due to the profits he made with ZTE and Ceiec. Credit: Roslan Rahman/AFP.
However, none of that hinted at him potentially serving as an intermediary or advisor for Chinese companies looking to do business with Venezuelan firms.
The first hints, on the other hand, would come inadvertently from Nicolás Maduro, long before the Pandora Papers, when, on December 12, 2014, he announced on national radio and television the launch of the National 4G Project, which, in his words, “involves the participation of a group of private companies, both national and international.” During the same speech, then-director of the National Telecommunications Commission (Conatel), William Castillo, mentioned some of those private companies that would be pivotal to the plan: DirecTV and Movistar.
In February 2015, Movistar, through its then-president, Pedro Cortez Rojas, and Maduro’s government, represented by Castillo, jointly announced that the expansion of the broadband network would have Caracas and Puerto La Cruz, in the northeastern state of Anzoátegui, as pilot cities.
The Venezuelan state, through Cantv, also announced an investment of 158 million dollars, and according to Maduro’s statements, would raise 728 million dollars solely from the “allocation of 4G spectrum to Movilnet, Telefónica, and DirecTV.”
Previously, in the 2000s, Hugo Chávez had opened doors to his geopolitical allies in certain technological areas, including China.
Thus, by 2006 both Ceiec and ZTE had a presence in Venezuela through contracts with the state backed by agreements between both countries. Since 2009, the latter has been a co-owner of Venezolana de Telecomunicaciones (Vtelca), the manufacturer of low-cost cell phones that Hugo Chávez popularized under the friendly nickname of Vergatario.
On the other hand, Ceiec is not, as a recent report by the organization Global Witness regarding the export of Chinese surveillance systems to Venezuela warned, “just another technology company: It is one of China’s largest military contractors and one of the few defense firms authorized by the Chinese government to sell abroad.”
To both sign the advisory contract and to receive transfers of his fees, Elarba represented himself through Sylo Investments LTD, registered under his name in 1999 in the British Virgin Islands, one of the world’s main tax havens.
The contract with Ceiec required Sylo, according to the clauses, “to demonstrate its capacity by providing all essential information, such as the client’s budget, the technical and financial offers from other competitors, documents, and other data, advice, consultation, and any other requested services.”
The objective was explicit: to obtain projects and contracts with Telefónica de Venezuela C.A., the legal entity of Movistar in Venezuela. It stated that its mission was “to provide the service in order to help the party win bids and secure the contract award.”
The contract highlighted what the representatives of Ceiec considered Elarba’s credentials for assuming the advisory: good knowledge of the market and “relationships with many public and private entities.” A month later, in October 2014, the Chinese state company Ceiec deposited 15 million dollars for the advisory services into Sylo’s account at the Banque de Luxembourg.
Armando.info sent an email to Movistar’s communications department to get their view on these negotiations and Elarba’s role. There was no response. A request was also made to José Simón Elarba, to which there has been no reply, sent on September 16 and 24, respectively, to his email and physical office.
Among the documents leaked from Asiaciti Trust, there is also detailed information about the transfer from ZTE to Sylo Investments in a payment receipt for 13.8 million dollars, dated September 30, 2014. Although the file does not specify which company Elarba approached ZTE with, it is publicly known that this is one of the main suppliers to Cantv, and Elarba, as corroborated by Jorge Antonio Reyes, one of its lawyers in a leaked email, although without specifying the exact date, had been an advisor to the national telecommunications company. This was the other party that completed the 28 million dollars that Elarba received from Chinese companies during that period in 2014.
In the last quarter of 2014, Elarba issued more receipts for advisory services to companies connected to telecommunications, although for smaller amounts. In November 2014, Sylo received 2.5 million dollars from Sanamar LLC, based in Miami, USA. A specialized import information site, Panjiva, details that one of the transactions of this company was completed in the months following this payment: in June 2015, when it moved 32 containers of appliances from the United States to Venezuela.
In early December 2014, the Panamanian company Vexcon Trading Corp. transferred 2.4 million dollars to Sylo, as specified in a receipt issued by Elarba’s company. In total, Sylo’s account, which had José Simón Elarba as the final beneficiary, received 33 million dollars before the end of that year.
Elarba showed interest in opening other companies in tax havens, according to other leaked documents. One example was an application form from March 2016 for the incorporation, also in the British Virgin Islands, of a company called Astoria Universal LTD. Overseas Management Company INC (OMC Group), based in the same tax haven and another of the 14 offshore service providers included in the Pandora Papers leak, acted as the agent.
The explicit reason for establishing this company in March 2016 was “to buy real estate for private use, specifically a condominium apartment in New York.” The letter of reference for OMC Group’s representative in Panama was issued by Rafael Urquía II from New York, on behalf of the reputable firm Fox Horan & Camerini LLP, which has had, among others, Colombian singer Shakira as a client.
Although the documentation does not specify when Elarba bought the apartment in New York, in a November 2016 email, eight months after Astoria Universal LTD was established, Jorge Reyes stated that part of Elarba’s fortune also included a property in that northeastern U.S. city.
The internationalization died on the shore
All these payments from 2014 coincide with a significant expansion moment for José Simón Elarba. In December of that year, he purchased Fospuca, in partnership with Henry Jesús Camino Muñoz, his stepdaughter’s husband, Mariana Flores Melo.
It was also the year Elarba appeared on a suspicious activity report from the Financial Crimes Enforcement Network (FinCEN), the intelligence unit of the U.S. Treasury Department, for a transfer of 1.48 million dollars that landed, in July, in one of his accounts “without apparent economic, commercial, or legal purpose,” as highlighted in the document. The story of the transaction was recorded in one of the reports from the FinCEN Files series by Armando.info.
By 2016, the waste collection company was valued at around 20 million dollars, according to a leaked email from Jorge Antonio Reyes, part of a total fortune that amounted to 50 million dollars.
“I believe Mr. Elarba’s net worth could be around $50MM, including all assets: cash, properties (in Venezuela, Miami, and New York City, etc.), plane, boats, companies like Fospuca, and other ventures (…) the current value of Fospuca (…) could be around 20MM dollars,” reads the exchange of leaked emails from Asiaciti Trust.
The emails also reveal that this was not the first time Elarba had worked jointly with the Chinese telecommunications company.
Jorge Reyes noted in a November 11, 2016 email, at the request of the customer service director of Asiaciti Trust in Singapore, Joseph McBurney, that Elarba had been legal advisor to Ceiec FZE and a bridge to facilitate transactions with Cantv. “Attached, you will find one of the web pages confirming Ceiec FZE as the main supplier of telecommunications equipment to the Telecommunications Corporation in Venezuela (Cantv). [Elarba] is basically a legal advisor to the Chinese company in Venezuela. As we have explained in the past, Mr. Elarba is a lawyer with over 20 years advising and consulting for major corporations in Venezuela and abroad to do business in Venezuela,” elaborated Reyes.
In addition to Jorge Reyes, another lawyer accompanied Elarba in this transaction. This was Venezuelan Hans Sydow Guevara, a member of the Caracas law firm Tinoco, Travieso, Planchart & Núñez. According to leaked documents and emails, Sydow is a very close advisor to Elarba. Armando.info reached out to him for comments for this report, but received no response.
When and why do all these payment receipts arrive at Asiaciti Trust, the fiduciary from which these documents were leaked? It was in 2016 when Elarba expressed an intention to incorporate companies in Asia and Oceania, by creating a unit trust in Singapore, specified in the documents as a unit trust, and a company in the Cook Islands, dependent on New Zealand in the South Pacific. He needed to demonstrate to the offshore service provider that he had the means to do so.
Elarba updated Sylo’s documents, his company in the British Virgin Islands, to start that expansion. He received assistance from the Panamanian law firm Alfaro, Ferrer, Ramírez & Alemán, mentioned in the Offshore Leaks, a previous ICIJ project. In fact, in the 2017 project, Elarba appeared as a partner of a company incorporated in Barbados, Iberonews Limited.
In mid-2016, there were lengthy email exchanges between Asiaciti Trust brokers, and on behalf of Elarba, lawyers Hans Sydow and Jorge Reyes. As far as the emails show, at least at that moment, Elarba was unable to complete the procedures. Moreover, he left some disappointment at Asiaciti Trust, which charged him 7,500 dollars for the work.
“The reason for not proceeding is related to a particular business that the final client had underway and that no longer has a place. I find it a bit suspicious, but we know that Venezuela’s situation isn’t very favorable right now,” explained Marlee Martiz-Lee, general manager of Asiaciti Trust in Panama, in an email to Jerome Briggs, one of the company’s executives.
However, the attempt, while it did not complete Elarba’s geographic expansion in business, did leave traces of this story. In the documentation presented by his advisors as legal and monetary guarantees for openings in Singapore and the Cook Islands, there were receipts documenting the movements and reaches of Elarba.
All of these factors contributed to the narrative, one of the many surrounding a man who has gained notoriety in recent years both for his waste collection company and his candid photographs with power. A career where connections have been a good fortune.
