For several days, a team of investigative journalists from Venezuela (CLAVEL RANGEL / KATHERINE PENNACCHIO / MARIANELA BALBI / JOSEPH POLISZUK) has been publishing reports about a corruption scandal within the Venezuelan Corporation of Guyana (CVG). Interestingly, I have also published something on corruption at CVG, completely independently. First, I wrote a profile on Andrés René Guzmán, a former taxi driver, ex-evangelical, and ex-fumigator from Argentina who became a powerful businessman in the Southern Cone, thanks to multimillion-dollar deals with the governments of Paraguay, Argentina, and Venezuela.
Next, there was a series of communications between Jorge Cañas (Sales Manager at Ferrominera), Freddy Castellanos (a metallurgical engineer who worked at Ferrominera until 2003), and someone named Patrick Hodgins (a shipping executive who has worked for Rio Tinto, Freight Investors Services, Fortescue Metals Group, and Nidera). They agreed to sell (9 shipments of 70,000 metric tons in 2007 and 7 shipments of 130,000 metric tons in 2008) iron ore (SICLO-1) and Fine Sinter Ferrominera (FSF2007) to the Chinese group JUHUA, through a ghost Norwegian company called Crown Venture.
What’s interesting is that Roberto Wellisch, the thug who controls Palmat C.A., appears to be associated with Andrés René Guzmán in a company called ACBL of Venezuela. Their Argentine branch (ACBL Hidrovías) not only shares an office address with Palmat S.A. of Argentina but also directors (Paloma Lowenthal and Juan de Dios Santucchi).
The matter doesn’t stop there: a fax giving instructions to CVG buyers on where to deposit payments was supposedly sent by Rodolfo Sanz (former president of the CVG) from the office of Alejandro Betancourt Lopez, leader of the bolichicos from Derwick Associates.
Despite what regime spokespersons have stated regarding future aluminum sales, and despite all the false arguments from Nicolás Maduro about his so-called “fight against corruption,” we see how Lieutenant Colonel Larry Aragort Hernandez, Logistics Manager at VENALUM, recently agreed to new deals with Glencore that are detrimental to CVG’s interests.
Few people may have heard of Glencore in Venezuela. This Swiss company was founded by the late Mark Rich, a fugitive from U.S. justice for, among other things, doing business with the Iranian regime while it was still holding American citizens hostage. Eventually, Rich received a “presidential pardon” from Bill Clinton, whose Democratic Party received over a million dollars in donations from Rich’s wife. Glencore is the type of company that basically roams the underdeveloped world, paying bribes to corrupt officials, exploiting workers (including children), dumping toxic waste wherever it pleases, and taking advantage of its size and position in the commodity market. Recently, Tony Blair facilitated the merger between Glencore and Xstrata (Glencore Xstrata plc), making it the twelfth-largest company in the world, dominating copper, zinc, and alumina markets, among others.
Against such a monster, there is little that chavista riffraff can do. The source who leaked documents from Guayana sent the following questions:
1. Why is there still a persistence, despite minister Menéndez and Osorio’s orders, to continue future aluminum sales?
2. Worse yet, in Glencore’s proposal, accepted 100% by VENALUM’s logistics manager (without altering Glencore’s proposed terms), 40% of the dispatch material will be delivered at a $300 discount off the international price (the so-called material with retention, see Glencore proposal), harming the nation, and only 60% will be delivered at market prices (material without retention, see Glencore proposal). This means if a ton is worth $1,800 on the London Metal Exchange (IME price), Glencore receives it at $1,500.
3. The logistics management accepts Glencore’s terms without even negotiating a more favorable counter-proposal for VENALUM’s interests. Moreover, VENALUM workers tell us that the company has not increased production; according to its own workers, it produces only 9 to 10 thousand tons per month. If this is true, how can it continue to mortgage its future to a large multinational?
4. If Maduro wanted proof, here it is (see the dates on the documents). President Maduro is looking very bad by saying that “raw materials will never again be exported unprocessed.” That is not the reality: in this case, the raw material (aluminum) is delivered unprocessed and at a discount.
5. Was this negotiation approved by the relevant authorities, or as with BAUXILUM, was it only framed through exchanges of letters between VENALUM’s logistics management and Glencore?
6. Glencore already controls the import and export of bauxite (at inflated prices), the purchase of alumina (at a discount), and the supply of caustic soda (meaning total control of BAUXILUM), and now they aim to do the same at VENALUM.
7. We demand that the terms of the advance payment agreement with Glencore be made public and audited, including what discount is given to each ton of metal produced by VENALUM and ALCASA.
9. How are we going to recover the country if we keep exporting unprocessed raw materials and at giveaway prices?
10. Once again, we sell cheap and buy expensive; that’s why companies are going bankrupt.
11. Such is the disarray that BAUXILUM, VENALUM, and ALCASA officials are the ones bringing us these documents. They are fed up with the disaster, and President Maduro, apparently those workers don’t believe your call to the “fight against corruption.”
12. Very important: Glencore in its proposal requests pure top meat: high-purity aluminum p1020. While the Venezuelan transforming sector gets the scraps: metal with high iron content. What kind of nationalist and sovereign government is this, when it delivers the best to an international trader and the scraps to the national industry?
13. Since when do we deliver high-purity aluminum at a discount to import raw materials? Is this a common practice in basic companies?