The Chinese project in Venezuela that promised to feed the country but left millions in bribes to a few people and a widespread hunger

The project was intended to feed millions of people. In Delta Amacuro, a remote Venezuelan state on the Caribbean Sea, a Chinese construction giant has signed an agreement with the late president Hugo Chávez. The company would build new bridges and highways, a state-of-the-art feed laboratory and the largest rice processing plant in Latin America.

The 2010 agreement with the state CAMC Engineering Ltd of China, would also develop paddy fields twice as large as the surface of Manhattan and create jobs for many of the region's 110,000 inhabitants, according to a copy of the contract seen by Reuters.

The state of Delta Amacuro was a great place to demonstrate the socialist government's commitment to empowering the poor.

It would also show how Chávez and his chosen successor, Nicolás Maduro, could work with China and other like-minded allies to develop productive areas beyond Venezuela's generous oil fields. "Power of rice! Agricultural power!", Chávez tweeted at that moment.

Nine years later, the people of Delta Amacuro are hungry. Little work has been done and the rice factory is half-built and works at less than one percent of what has been promised. According to a dozen people involved or knowing the project, it did not produce a single grain grown locally. However, CAMC and some Venezuelan partners have prospered.

Venezuela has paid at least CAMC 100 million dollars for the stagnant plan, according to the project contracts and documents of a survey conducted by prosecutors in Europe.

Thousands of pages of court documents, reviewed by Reuters, are filed in Andorra, the European principality, where prosecutors allege that Venezuelans involved in the projects were seeking to launder the bribes received to help guarantee the contract. The material on the agreement with China, reported for the first time here, includes confidential testimonials, wiretap transcripts, bank records and other documents.

Last September, in an official indictment, a judge of a superior court of Andorra declared that the CACA had paid more than 100 million dollars in bribes secure the rice project and at least four other agricultural contracts.

He sued 12 Venezuelans for crimes including money laundering and conspiracy to launder it.. Among the accused is Diego Salazar, cousin of a former oil minister who, according to researchers, has facilitated contracts. He was also prosecuted at that time. He was the highest representative in China of state oil company Petróleos de Venezuela SA or PDVSA.

Sixteen people of different nationalities were also tried and at least four other Venezuelans, one of whom was an ambbadador in Beijing and is now the country's most important diplomat in London, are currently the subject of the report. an investigation, according to the documents.

The accusation, the names of the defendants and their badociation with Chinese companies were published last year by the Spanish newspaper The country. A review of Reuters records, which are still sealed in Andorra, show how CAMC and other Chinese companies have formed links with many accused and paid them to win projects. that companies often have not finished.

According to prosecutors, bribes have been widely spread and paid via accounts abroad, allowing well-connected Venezuelan intermediaries to benefit from paralyzed projects meant to develop forgotten corners of the country.

Among the other results reported here for the first time:

-CAMC has agreed to develop at least five agricultural projects evaluated in approximately $ 3,000 million, which never ended.

-The company, according to the contracts reviewed by Reuters, received at least half the value of the $ 200 million contract for the rice project and at least 40% of the contract value for the other four developments, a combined total of at least $ 1,400 million for never finished work.

–CAMC has paid more than $ 100 million in intermediary fees; Prosecutors said those payments were bribes that helped the company win contracts in Venezuela.

Neither the CCEA nor any of its leaders have been charged.

In a statement, the Beijing-based company said Reuters that the details and statements contained in court documents include "a lot of inaccuracies", but did not give more details.

The company did not respond to requests for communication with CAMC leaders mentioned in the documents. Reuters He could not reach these frames independently.

"Our company operates in Venezuela in respect of the idea of ​​integrity and strives to carry out each construction project with the best technologies and technologies," said the company in a statement.

The Foreign Ministry of China has declared to Reuters in a statement, "reports" about alleged bribes by Chinese companies in Venezuela "obviously distort and exaggerate the facts, with a hidden agenda".

He did not specify the agenda he was referring to. Cooperation between the two countries will continue, the statement said, on the basis of "mutually beneficial and equitable commercial principles".

Neither the Venezuelan Ministry of Information, responsible for government communications, nor PDVSA, a partner of many contracts, have responded to inquiries from Reuters.

It is not clear when a lawsuit will face those who are being prosecuted. Enric Gimenez, lawyer in Andorra de Salazar, Venezuelan prosecutors said they have negotiated many contracts, told Reuters that your client is innocent of the charges filed.

The leftist government initiated by Chavez and now led by Maduro is currently facing its most serious threat. The leader of the opposition, Juan Guaidó, invoked the Constitution to proclaim himself president in January and has been recognized by the majority of Western democracies.

Last week, in a frustrated uprising, Guaidó searched in vain for the support of the army, a key point of support for the Venezuelan government, to mobilize against Maduro.

The political crisis has been fueled by the economic collapse, hyperinflation, mbad unemployment and the exodus of desperate citizens. Venezuelans suffer shortage of food and medicineas well as frequent power cuts and water, basic elements that needed to be improved through projects such as Delta Amacuro.

The opposition claims that scarcity and endless projects illustrate the type of corruption that has helped to impoverish the country, which had about 30 million inhabitants and was once prosperous.

After an ambitious agreement between China and Venezuela in 2007, Chinese companies have been presented as partners in infrastructure projects and other projects worth billions of dollars. Since then, China has invested more than 50,000 million dollars in Venezuelamainly in the form of oil operations in exchange for loans, according to government figures.

In a speech in 2017, Maduro said that they had agreed 790 projects with Chinese companies in sectors ranging from oil to housing and telecommunications. Maduro said that 495 of them had been completed.

Some developments are blocked due to corruption, said people familiar with the projects; others have been hijacked by incompetence and lack of supervision.

In Delta Amacuro, even government officials acknowledged that a mix of both had ruined the rice project. "The government abandoned the project"says Víctor Meza, State Coordinator of the Rural Development Agency of Venezuela, who has worked with the CCEA."Everything was lost, everything was stolen"

Andorra, whose bank secrecy laws made it a tax haven, opened its investigation into money laundering in Venezuela as part of a broader effort to clean up its financial sector. The indictment is part of a much larger case in which prosecutors allege that Venezuelan officials would have received more than $ 2 billion of "illegal commissions" between 2009 and 2014 by the government. 39 intermediary accounts at Banca Privada D'Andorra, a well-known local bank. like BPA.

The government of Andorra, after the US accused BPA of money laundering, took control in 2015. Since then, the courts have sued 25 former BPA employees for money laundering. money in a number of cases, including investigation of Venezuelan contracts. A spokeswoman for the Andorran government did not want to make a statement about this article.

In addition to the CAMC agricultural project, the Andorran justice department is examining other projects of the company, such as two power plants and four others built by Sinohydro Corp., another Chinese public engineering company. None of these plants has become fully operational, leaving neighboring cities subject to regular power outages.

Sinohydro has not responded to phone calls, emails and faxes for comments.

During a recent visit to Reuters a Delta Amacurothe rice factory was not finished yet. Only one of his 10 silos, half filled, contained grains.

Part of the machinery was operational, but for the processing of Brazilian rice. The surrounding paddy fields were fallow, the laboratory had neither furniture nor use, while roads and bridges had yet to be built.

Tucupita, city of 86,000 inhabitants, capital of the Amacuro Delta, stretches on the shores of Caño Manamo, branch of the Orinoco, one of the largest rivers of South America. In the past, Tucupita was a stopover for ships that sent goods from inland factories to buyers in the Caribbean and elsewhere.

In 1965, the government intervened Caño Manamo. Boat traffic has stopped, fresh water has been withdrawn and seawater has infiltrated inland, degrading the soils of the sea. the region. When Chávez became president in 1999, there remained little agriculture.

"When I was a child, there was rice everywhere"remembers Rogelio Rodríguez, a local agronomist."Now we are not producing anything"

In 2009, Chávez and Xi Jinping, then vice president of China, developed a joint fund that the two countries had created in 2007 with the development agreement. "Will not we be grateful to China?"Asked Chavez at a ceremony of the presidential palace in Caracas.

Promise to supply oil to Beijing "for the next 500 years"He went on a map and pointed Delta Amacuro."Look at XiChavez said, announcing the rehabilitation efforts of the region.

CAMC President Luo Yan and Rafael Ramírez, a trusted Chavez man who led PDVSA and the Ministry of Oil for a decade, were present at the ceremony. Executives and entrepreneurs rushed to participate in development.

Diego Salazar, Ramírez's cousin, was well placed. Salazar's father was a writer and communist guerrilla who later became a legislator and ally of Chavez. His family ties and links to lawmakers gave young Salazar a valuable contact program that he used during a consultation in Caracas.

The company, Inverdt, belonged to a holding company called Highland Assets, established in Panama, which it had created, according to the testimony that Salazar gave to researchers in Andorra.

From an office located a few blocks from the PDVSA headquarters, he met frequently with Ramírez and other senior officials, according to people close to their activities.

Ramírez left the ministry in 2014 and was Venezuelan ambbadador to the United Nations until 2017.. Since then, Maduro has publicly accused him of unspecified acts of corruption, but Ramírez has not been indicted in Andorra nor formally charged in Venezuela.

Now he lives abroad and opposes the government. Ramírez did not answer emails from Reuters looking for comments and could not be contacted.

At the time of the ceremony with Xi, Chavez made PDVSA a strategic center for the implementation of increasingly diverse development projects, many of which had nothing to do with oil. PDVSA Agrícola, for example, aimed to increase food availability.

Diversification has made PDVSA the channel through which the contracts were awarded and a significant sum jointly managed by the National Development Bank of Venezuela. According to documents, the bank had received for 2010 $ 32 billion from the China Development Bank and an additional $ 6 billion from a fund created by Chávez to finance infrastructure projects with oil funds and reserves international. China's Development Bank has not responded to requests for comments from Reuters.

Salazar began to approach Chinese leaders, offering his services as a well-connected consultant. He went to China every month and began paying Venezuelan officials to establish links with companies such as CAMC.

"My job was to convince them at meetings, trips and promotions to sign contracts with my company.to, "Salazar told Andorran researchers.

People familiar with the testimony said that Salazar and his alleged partners, before the accusation, had agreed to declare themselves in Andorra because they hoped to erase their names.

In his testimony, Salazar told investigators that he had chosen BPA because he knew that other rich Venezuelans had done it.

Located in a quiet valley of the Pyrenees, the bank had the reputation of being a discreet fund manager for clients in high-risk countries.

After Andorra submitted information requests to Caracas, a Venezuelan court ordered in 2017 the arrest of Salazar for suspicion of corruption, money laundering and conspiracy.

Citing the Andorran investigation, the Venezuelan arrest warrant indicates that Salazar "is part of a structured group of organized criminals whose goal is to whitewash and give an appearance of legality to funds from numerous contracts with Venezuelan institutions. ". No date has been set for the trial and Salazar is still incarcerated in Caracas..

A Salazar lawyer in Venezuela denied the charges against him.

Gimenez, Salazar's lawyer in Andorra, said Reuters In an email, the Chinese authorities decided which companies would benefit from their money and that neither Salazar nor his supposed intermediaries could have influenced it.

Gimenez, Inverdt, Salazar's consulting firm, offered "professional" and "technical" services to many Chinese companies. "Only a handful of these companies have been selected for work in Venezuela."

According to the indictment, one of Salazar's intermediaries was Francisco Jiménez, a career engineer at PDVSA, who had become the company's envoy to Beijing. The Andorrans had sued him. Salazar contacted him for the first time during a trip to China in 2010, according to Jiménez's testimony in Andorra.

In March, Jiménez signed a "strategic alliance" with Salazar to promote Inverdt in China. Under the terms of your contract, reviewed by ReutersSalazar agreed to pay Jiménez $ 7.38 million in a BPA account that Inverdt helped open. The bank records in the file show that Jimenez subsequently received an additional $ 7 million.

Jiménez, who now lives in Panama, has not responded to phone calls or text messages from Reuters Looking for comments.

Salvador Capdevila, his lawyer in Andorra, declined to comment.

According to prosecutors, one of the officials who would have helped Salazar was Rocío Maneiro, Venezuela's ambbadador to China and today's ambbadador of the United Kingdom to Britain. Maneiro has not been transformed into Andorra. Numerous court documents, including a record of prosecutors in connection with his testimony, clbadify him as "imputed" for the payments they claim to have received from Salazar and for his alleged role in forging contacts with Chinese companies.

In 2010, according to the bank records that are part of the court documents, Salazar made a transfer of $ 30,000 to a Chinese account in his name, citing "services provided by Ms. Maneiro".

Later, Salazar made deposits for a total of $ 13 million in a BPA account owned by a Panama-based company, Maneiro indicated in a disclosure document related to the account that it belonged to him.

An internal report of the BPA Anti-Money Laundering Committee reviewed by Reuters, also included Maneiro as the owner.

Maneiro, through a lawyer and in a text message to ReutersHe denied helping Salazar or receiving payments from him. "These are unfounded statements"He wrote in a message to an Andorran judge that the signature on the disclosure form concerning the Panamanian company was falsified.The court ordered an badysis of the signature.In early 2010, the first contacts of Salazar have borne fruit.

Sinohydro, an engineering company, signed in March a $ 316 million contract with PDVSA for the construction of a power plant near the city of Maracay, in the center of the country.

In the contract, Sinohydro agreed to pay Salazar a 10% fee for its badistance. "obtain a favorable and positive position to execute the contract"

The bank's records indicate that the company paid $ 49 million to Salazar's BPA account and $ 72 million after Sinohydro secured new power plant contracts.

The company eventually built four plants, but none met the full specifications of the contract, engineers said.

The plant near Maracay, for example, was to generate 382 megawatts, according to the contract. Instead, it produces about 140 megawatts, according to José Aguilar, former director of the national energy company.

Soon, Salazar's company will earn more than $ 100 million a year, according to his testimony and that of some of his badistants.

"I had a suitcase full of contracts"Andorran investigators Luis Mariano Rodríguez, an badistant of Salazar, said.

"We signed with all possible companies," he said. "Some of these companies did not work," he added.

Reuters He could not reach Rodriguez, who, like Salazar, was also sued for money laundering and involvement in a scheme to launder money. Gimenez, Salazar's lawyer in Andorra, also represents Rodriguez. In his email, he said that Rodriguez was also innocent.

When money began to arrive, Salazar was squandered, paying tens of thousands of dollars for hotel stays and spending millions as gifts. For a million dollars, he bought 83 Rolex and Cartier watches from a Caracas jeweler, according to an invoice in court documents.

In an email from Rodriguez to BPA that justified the purchase, he said that the watches were objects "They were given to family and friends"

In April 2010, the Andorran police began investigating Salazar. The French investigators had asked them about a recent transaction: from their BPA account, Salazar had transferred $ 99,980 to an employee of a Paris hotel, which was "a tip for the services rendered". We do not know what these services were.

In May, discussions on the rice project started.

That month, Rodriguez met Wang Hong, vice president of CACA in Caracas, as shown by the contract signed by the two men. In the contract, they agreed that the CAMC would pay the company Salazar 10% of the contract price to help it "win".

In a few months, PDVSA Agrícola awarded the contract to CAMC, evaluating the rice project at $ 200 million. CAMC has signed another agreement with Salazar to help secure new projects. In June, CAMC had made the first of several deposits totaling $ 112 million in Salazar's BPA account, according to bank records.

The workers started working at Delta Amacuro.

According to project documents for 2012, CAMC received $ 100 million in payments, half of what was agreed. The company sent shovels, compactors and other equipment from China.

But progress was slow. One of the excavators got stuck in the mud and stayed there. The Chinese foremen spoke little Spanish and had problems with the local teams, according to the engineers who worked on the project.

In November, an Andorran court, suspected of money laundering, froze BPA accounts of Salazar, his badistant Rodríguez and six other Venezuelans. In 2013, prosecutors began a one – year effort to interview Salazar and other people.

In 2015, the US Treasury Department started to pressure Andorra to launder money. In a report published at the time, the Treasury wrote that BPA facilitated money laundering from Russia, China and Venezuela. In March, the Andorran government took over BPA.

Oil prices, which had exceeded $ 100 a barrel, fell by more than half that year. The Venezuelan economy sank.

The CCEA brought its team of 40 employees to the site, said the people involved in the project. The unemployed sold the remaining cables and bulbs, said former managers. Despite everything, Maduro sought to do something with the unfinished project.

In February, the Minister of Agriculture, Wilmar Castro Soteldo, inaugurates the rice plant "Hugo Chavez"Cutting a ribbon in front of bags of rice decorated with Venezuelan and Chinese flags, no one from the CACA attended, according to a person present at the ceremony.

Instead of machines capable of handling 18 tons per hour, workers pack imported rice by hand. "There is not a gram of rice planted in the deltasaid 47-year-old Mariano Montilla, who lives on a few crops he can get in bushes near a clogged cbad.

"It looked like a revolutionary idea," he added, recalling Chávez's promise. "Now we are hungry."

(By Angus Berwick – Reuters)