Monday, October 6, 2008

Venezuelan Bribery Stars In Trial Over Suitcase Of Cash

A federal trial concerning a mysterious suitcase full of cash has brought revelations about the financial workings of the Venezuelan government.


As U.S. prosecutors rested their case in the Miami federal trial involving a mysterious suitcase filled with $800,000 sent from Venezuela to Argentina, their witnesses have shed light on the financial operations of the government of Venezuelan President Hugo Chávez.

The revelations include descriptions of a complex web of corruption and bribes within Venezuela and a multimillion-dollar slush fund intended for an international ally.

U.S. prosecutors say the $800,000 was intended as a gift from Chávez for the campaign of Cristina Fernández de Kirchner, who is now president of Argentina. The defendant, Franklin Duran, is accused of participating in a conspiracy to silence a Key Biscayne businessman about the money's origins and destination.

One of the witnesses, a Venezuelan businessman who has already pleaded guilty to participating in the alleged cover-up, testified this week that his country's ambassador to Bolivia had told him he had ``$100 million to spend on Bolivia.''

The businessman, Carlos Kauffman, said he was negotiating to sell $12 million worth of anti-riot equipment to Bolivia, to be paid for with money from that fund in a deal dependent on his cooperation in the cover-up.

''I was asked by my government to do something, and I did it,'' Kauffman said of the cover-up. ``It was going to [mean] more contracts, more money, more power.''

He said that the ambassador, Julio Montes, also dangled the possibility that he might allow Kauffman and his associate, Moisés Maionica, to manage the multimillion-dollar fund and earn money off the dividends. Maionica has also pleaded guilty in the conspiracy case and testified in the trial.

Kauffman is the longtime business partner of Duran, who is charged with acting as an unregistered foreign agent of the Venezuelan government. If convicted, Duran faces a maximum sentence of 10 years in prison and up to $250,000 in fines.

Kauffman and Duran have made millions in oil and arms sales involving Venezuela in deals that Kauffman has testified were greased with hundreds of thousands of dollars in bribes. The prosecution argued that the pair had a deep and corrupt history with the Venezuelan government, and that this was their motive for cooperating in the cover-up. Kauffman said that he and Duran paid bribes for information on the location and amounts of raw oil shipments from Venezuela's national oil company, PDVSA, that they needed for their lubricant business, and paid more bribes for each shipment delivered to their company, Venoco.

''It is a common thing in my country,'' Kauffman said of the corruption.

Assistant U.S. Attorney Thomas Mulvihill wanted to introduce evidence of more than a dozen other cases of corruption as part of Kauffman's testimony, arguing that Duran had a personal fortune of more than $100 million that he amassed largely because of business deals that were the result of bribes.

But U.S. District Judge Joan Lenard allowed in only evidence of the deal with the ambassador to Bolivia and the bribes to PDVSA.

The case has international implications beyond Venezuela, said Peter Hakim, president of the Inter-American Dialogue, a Washington policy institute.

''This begins to show there is clearly a pattern of using money in what would normally be called illicit . . . ways to try to influence outcomes in other countries,'' Hakim said. ``It's been very hard to prove anything about how much [Chavez] is spending . . . so that's one of the most interesting things coming out of the trial.''

The Venezuelan government has declined to officially comment on the case.

The scandal that brought Kauffman and Duran to the Miami courtroom began in August 2007, when their friend and associate, Guido Alejandro Antonini Wilson, was stopped at a Buenos Aires airport carrying a suitcase filled with $800,000.

Antonini, of Key Biscayne, was traveling on a private jet paid for by PDVSA, along with a group of Venezuelan and Argentine businessmen and government officials. He said he was carrying the suitcase through customs for other passengers. But U.S. prosecutors say that the money was intended as a gift for Fernández's political campaign. She was elected president of Argentina a few months later.

When Antonini returned to the United States immediately after the incident, he went to the FBI because he feared becoming the scapegoat for the scandal, he said in court. He wore a wire and taped his meetings with Duran, Kauffman and others, leading to their arrests. Maionica, Kauffman and another defendant, Rodolfo Edgardo Wanseele Paciello, pleaded guilty. The fifth, Antonio José Canchica Gómez, is still at large.

In his testimony, Kauffman called PDVSA the ''cash register of Venezuela,'' and confirmed that the money in the suitcase was intended for Fernández.

Fernández's government denies that the money was intended for her. Both she and Chávez have called the U.S. case ''garbage'' -- even as Antonini testified that the $800,000 was only a small part of the illicit cash carried on the plane.

In another moment of bombshell testimony, Antonini said that the day after the money was confiscated in Buenos Aires, he met with Diego Uzcátegui, at the time the head of PDVSA in Argentina. Uzcátegui, whose son was aboard the plane, asked Antonini where ''the rest of the money was,'' Antonini said in court.

''The $4.2 million, he said,'' Antonini testified.

Antonini said that Uzcátegui explained he was ''sick and tired'' of making trips with large suitcases full of money and that the Argentines were going to have to resolve this problem themselves.

Duran's attorney, Ed Shohat, implied that Antonini was lying, asking, ``Isn't it true that you invented the $4.2 million?''

The judge considered the question improper and did not allow Antonini to answer.

The case has taken on political importance in Venezuela among some members of Chavez's opposition, who bring suitcases to street protests to mark their outrage over the case.

One notable element of the case, however, is the lack of a sharper reaction to it in other countries, said the Inter-American dialogue's Hakim. ''The question is, why isn't this creating more outrage in Argentina or in other countries?'' he said. ``It's an object of curiosity in Latin America, but it's almost too easily accepted. . . . I think that's not very encouraging.''

Source: MiamiHerald.Com

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