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Study finds Venezuela criminal enterprise is blunting effects of US sanctions

Antonio Maria Delgado and Jim Wyss, Miami Herald on

Published in News & Features

Venezuela's foreign policy might have started out as an idealistic socialist project to revitalize Latin America, but it has morphed into an enormous criminal conglomerate that operates in multiple countries with dozens of partners and hundreds of phantom companies, according to a new study.

A report prepared by the National Defense University and Washington-based IBI Consultants, argues that Venezuela's Nicolas Maduro essentially leads a political-criminal enterprise that has siphoned billions of dollars from the Venezuelan economy.

The study, titled "Maduro's Last Stand – Venezuela's Survival Through the Bolivarian Joint Criminal Enterprise," also sheds light on why escalating U.S. economic and financial sanctions on Maduro and his allies have failed to dislodge them.

The report's authors argue that the network unites companies, regional structures and Venezuelan political allies in a variety of criminal operations ranging from corruption, money laundering, drug trafficking and gold smuggling.

According to IBI's calculations this criminal "network of networks" racked up between $10 and $43 billion in revenue between 2007 and 2018, most of which was spirited out of Venezuela through various money-laundering schemes, often with the help of the political leadership in places like Cuba, Nicaragua, Bolivia, Ecuador, Suriname and El Salvador.

"This alliance of Bolivarian states together with the FARC (the now defunct Revolutionary Armed Forces of Colombia) have coalesced into what we define as the Bolivarian Joint Criminal Enterprise -- or a consortium of criminalized states and non-state actors working in concert with shared objectives," the report found. "Unless the network is attacked from multiple points simultaneously, the alliance will survive and morph into a more dispersed and sophisticated operation."


The study, written by Douglas Farah and Caitlyn Yates, is the result of a five-year investigation in 11 countries.

Late President Hugo Chavez planted the seeds for the criminal enterprise when he transformed the state-run PDVSA oil company into one of his principle foreign policy tools -- offering his ideological allies in the region subsidized fuel and financing for infrastructure projects. But the opaque nature of the transactions fueled corruption and over the last two decades, those alliances have spawned hundreds of phantom companies that were used as cover for illicit operations, study contends.

According to the authors, the criminal conglomerate not only stole billions of dollars from the coffers of the Venezuelan state, but used PDVSA and its foreign subsidiaries as the central structure for money laundering and corruption throughout Latin America.

Among the activities identified were massive infrastructure projects that never materialized, fictitious oil sales, sweetheart and opaque loans and the purchase of physical assets.


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