The Miami trial of a Venezuelan businessman, which ended last week with his conviction, provided a rare opportunity to examine the inner workings of an efficient network of corruption operating within nearly every level of Venezuelan government.
Franklin Duran was found guilty by a federal jury of having acted as an illegal agent of the Venezuelan government in conspiring to silence his former partner, Guido Alejandro Antonini Wilson, about the origin of $800,000 confiscated by Argentine customs authorities last year.
Few political scandals in the history of Latin America have ever produced so many details of alleged bribes, commissions and institutionalized corruption through the sworn testimony of those who confessed their involvement.
'COMMON' PRACTICE
The man with the key revelations was prosecution witness Carlos Kauffman, 37, a collector of airplanes and luxury cars who explained how he was able to amass a fortune of more than $100 million through illicit negotiations with Venezuelan government entities.
In a business partnership with Duran that invested and distributed earnings through a string of companies named after dairy products -- Leche Inc, Milk, Klim, etc. -- Kauffman and Duran soon became some of the most prosperous businessmen in Venezuela through corruption. ''It is common in my country,'' he declared while testifying that he paid kickbacks to executives of the state-owned oil company, PDVSA, in order to obtain priority in his purchases of raw materials for his motor-oil company, Venoco.
The maneuvers described by Kauffman began before President Hugo Chávez took power. During the mid-1990s, South Florida became a refuge for about 200 Venezuelan bankers who had fled allegations of diverting $7 billion in public funds to their own accounts.
Kauffman and Duran came up with a scheme under which the directors of the bank oversight agency created to administer the troubled banks, known as FOGADE, would trust them with investing the remaining funds in other commercial banks. The two received significant commissions from the banks, which they shared with FOGADE directors, Kauffman testified.
Duran's attorney, Ed Shohat, repeatedly argued that Kauffman was lying because Kauffman had pleaded guilty in the Antonini scandal earlier this year and promised to cooperate with prosecutors. But the testimonies and evidence presented during the eight weeks of trial also painted a broad picture of influence-peddling, intrigue, bribery, kickbacks and other corruption under President Chávez.
THE INSIDERS
According to Kauffman's testimony:
• He and Duran paid a $1 million kickback to Tobias Nobrega, then Minister of Finance, so that the ministry would would pay them $9.5 million for an office building they had bought for half that amount.
Finance ministry officials also helped the duo to restructure some bonds they• Jesus Bermudez, then deputy finance minister, got $1 million for his assistance with the restructured bonds.
received as partial payment for the building. The bonds increased in value
through the maneuver. Soon afterward, they made an even better deal with the
finance ministry team on another bond restructure that earned them $100
million, of which $25 million went to Nobrega and his collaborators from
2002 to 2005.
• Lenin Aguilera, then advisor to the Minister of Finance, also received a $1 million kickback for the bond restructuring.
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