The decision by Colombia’s Gustavo Petro to put the Barranquilla-based petrochemical company under control of U.S.-sanctioned-and-fugitive Nicolás Maduro not only violates OFAC sanctions but also provides Maduro’s dictatorship with an industrial and financial infrastructure that the Venezuelan regime can and possibly will use for criminal purposes, and against U.S. interests.
Casto Ocando | @cocando
In mid-2005, a group of DEA agents were running an undercover operation in southern Venezuela to investigate a supply route for urea coming from the Morón refining complex, under Pequiven’s control, that was being delivered to FARC middlemen for cocaine manufacture. DEA agents discovered that at least one National Guard colonel was involved in the business, and when the then government of Hugo Chavez learned that the colonel was about to be arrested, it quickly intervened and made an unprecedented decision: expelling the DEA from Venezuela.
The colonel was not the only high-level operator involved: there was also the top brass of the Pequiven company, which then controlled all of Venezuela’s petrochemical facilities inside and outside the country, and the big business of smuggling precursors such as urea.
It was a key moment in Chávez’s decision to open his own path in international drug trafficking, which brought him serious problems with Washington that still continue with dictator Maduro.
One of the facilities controlled by Pequiven is the current firm Monómeros, founded in Barranquilla in 1967 with the participation of Colombian-Venezuelan capital, and which Chávez began to control in its entirety as of 2006.
There is no evidence so far that Monómeros was used by Chávez or Maduro for illicit activities such as laundering of criminal proceeds, as they did with numerous subsidiaries of PDVSA, from Pequiven and Citgo to Bariven and the companies created in more than a dozen countries with the hyper-corrupt Petrocaribe agreement.
But there is also no complete certainty that under Chavismo, during a management characterized by the total absence of transparency, Monómeros was not used to conduct criminal business.
In May 2019, a major change occurred for Monómeros. The company came under the control of the interim government of Juan Guaidó after the then government of Iván Duque endorsed the change of the company’s board of directors.
Five months earlier, on January 28, the entity that controls Monómeros (Pequiven), had entered within the radius of the sanctions established by OFAC against Venezuelan state-owned oil company PDVSA.
The sanctions, which are still in force, prohibit doing business with Pdvsa or any of its subsidiaries, not only by U.S. persons or entities or those with legal or financial connections with the United States, but also by companies or persons who, even without maintaining a presence in U.S. territory, cooperate or promote business with entities sanctioned by Washington, in this case Pequiven, and by extension, Monómeros.
It is not for nothing that Monómeros needed, since 2019, a license from OFAC to be able to operate not only in Colombia but also in the international market, mainly for access to vital financing and raw materials.
The license was recently renewed (at the end of last July), and will remain in force until mid-2023, if there are no changes before then. Without this license, Monomers is simply doomed to bankruptcy.
This is the company that Petro is so determined to “return” to the Maduro dictatorship.
There are multiple reasons to believe that this may be one of the worst decisions of the new Colombian government, which will affect U.S. policies and interests in the region.
The recent acceptance by the Barranquilla Chamber of Commerce of a new board appointed by the regime of Nicolás Maduro is an open violation of OFAC sanctions, particularly Executive Order 13884, which prohibits under threat of sanctions “individuals and entities” that “provide certain support” to promote business with entities sanctioned by Washington, as is the case of Pdvsa and Pequiven.
This could have legal implications for the Chamber of Commerce of Barranquilla, which acted as the main vehicle to guarantee the control of Monómeros by Maduro’s dictatorship.
There has not yet been a pronouncement by the Treasury Department as to whether the OFAC license has technically been violated, or whether it will not be suspended after control of Monómeros was placed in the hands of Pequiven, a sanctioned entity controlled by Maduro, who is also sanctioned by the U.S. and is, additionally, a fugitive from U.S. justice.
But technically, there is no doubt that a violation has occurred that is not covered by Monómeros’ current license.
The decision of the Barranquilla Chamber of Commerce, backed by the Petro government, could open new controversial chapters in the history of Monómeros.
This decision would not only put in the hands of a criminal organization such as the one presided over by Nicolás Maduro, a company with effective mechanisms to produce precursors that can be used for the manufacture of cocaine, which according to the Department of Justice is the main criminal activity of the Caracas regime.
It would also make available to Caracas a financial infrastructure that, like almost all companies controlled by the Maduro dictatorship, has been used for corruption transactions and money laundering from all kinds of illegal activities.
In 2011, a convicted criminal who was detained in La Picota prison in Bogota, revealed that the then board of Pequiven, under the control of former Chavista military officers, was fully involved in the supply of all kinds of precursors, from urea to sulfuric acid and gasoline, to groups controlled by the narco-guerrillas to produce cocaine paste. The criminal, Walid Makled, transmitted all the information to the DEA, including the names of Pequiven’s board of directors with whom he was in contact.
In 2014, another investigation by the U.S. Attorney’s Office for the Southern District of Florida revealed that political operators linked to Maduro were using PDVSA industrial facilities, including Pequiven laboratories in Carabobo and crude oil refining plants in Zulia and Falcon, to produce liquid cocaine and ecstasy.
At the same time, these operators were using accounts and commercial transactions of PDVSA and its procurement arm, Bariven, among others, to launder money from cocaine sales in the United States. Some of this money was laundered in exchange houses in Colombian cities such as Cali, Cucuta and Barranquilla. At least one former Venezuelan mayor, Jhonnathan Marín, currently imprisoned in Miami, participated in the money laundering operations on behalf of Nicolás Maduro’s regime, according to DEA investigations.
As if this were not enough, Pequiven — the parent company of Monómeros — has also developed dangerous and close relations with several Iranian arms and military companies, also sanctioned by Washington.
The firm Parchin, controlled by Iran’s Ministry of Defense, has been developing joint projects with Pequiven since at least 2007, including a plant for the manufacture of explosives for military use. Iran also maintains camps with Iranian technicians in the vicinity of the petrochemical complex of Morón, in central Venezuela, controlled by Pequiven, for arms research and development, according to engineers who revealed details of these operations to the U.S. Defense Intelligence Agency (DIA).
Petro’s new ambassador-designate in Caracas, Armando Benedetti, has suggested that if Monomeros returns to Maduro, it could obtain raw material at steep discounts, an open transgression of OFAC sanctions and an extraordinary risk to Colombia’s food security, given the track record of Pequiven and Venezuela’s oil and petrochemical industry in general, of being an inconsistent and unreliable supplier.
The Petro government has circulated the idea that Bogota might eventually acquire Monomeros, but has not clarified where it will get the $600 million at which the firm is valued, or whether it is planning to issue an expropriation decree, much in the style of Hugo Chavez.
Much less has he explained how handing over Monómeros to Maduro will help Colombia achieve this end.
Monomeros was managed between May 2019 and August 2022 -three years- by the so-called interim government of Juan Guaidó, recognized by the United States but disowned by Petro. The first year was full of stumbling blocks, mainly due to OFAC sanctions against its parent company Pdvsa, which limited access to capital and raw materials. However, in 2021 the company recorded — according to Forbes magazine — the highest profits in five years, totaling more than $200 millions in gross earnings.
During the same period, the fertilizer company faced a political infighting, as a result of the ambitions of Venezuelan opposition groups to gain control of the company. There were allegations of corruption that were never proven, and of an alleged hostile takeover that never materialized. Both allegations are currently under the scrutiny of the Office of the Inspector General of the U.S. State and Treasury Departments, after the company itself prepared a detailed 300-page report that was sent to Washington and to President Petro’s team of advisors, according to sources consulted for this report.
The outcome of these proceedings, which demonstrate a greater degree of transparency in the management of the company compared to the Chavista era, remains to be seen.
All the haste with which Petro and Benedetti have acted with respect to Monómeros leads any unsuspecting observer to ask: What is the profit they are getting from this risky operation? Why put in the hands of a government that broke historical records for corruption, promotes organized crime and, according to the latest U.N. report, violates human rights, a strategic company that controls 40% of the fertilizer market for food production, and serves some 800,000 farmers in Colombia?
It is the same question many in Germany asked when the government put the country’s energy security in the hands of dictator Vladimir Putin, a lesson they are now learning the hard way.
Another question is unavoidable: where is the voice of Washington’s current ambassador to Venezuela, Jimmy Story? The diplomat, who is currently facing the dilemma of being ratified for another year in the post or flying to another destination (soon to be known), has remained stubbornly silent in the Monomers and Petro diatribe.
Perhaps, sources familiar with the case suggest, he is awaiting instructions from Washington. But two recent high-level officials point to a much clearer path for the Biden Administration’s Venezuela policy: Deputy Secretary Brian Nichols’ warnings that any concessions to Maduro, including the suspension of sanctions (and perhaps the Monomers license?) can be reversed if he does not comply with the gringos’ demands. A warning that was endorsed almost simultaneously by Juan González, influential advisor to the powerful White House National Security Council for Latin America, and a Biden’s favorite.
But there is no need to wait to know what will happen to Monómeros when Nicolás Maduro effectively takes the helm of the company thanks to the kindness of Gustavo Petro. The company faces an opaque future, conflictive, with high possibilities of corruption in the management of resources, and with the great risk that its financial and technological infrastructure will be at the service of criminal organizations from Venezuela, Colombia and possibly other latitudes.
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