From the Organized Crime and Corruption Reporting Project, June 12:
Plunging Venezuela into the Dark
This year’s blackouts in Venezuela weren’t the first time the country’s citizens were forcibly acquainted with the dark.....MUCH MORE
Drought and crumbling infrastructure in 2010 drove the electric system to the brink of collapse: Pre-arranged power cuts snarled traffic in major cities, hospitals were unable to provide dialysis to kidney patients, and the government’s working hours were slashed.
Venezuelans became accustomed to living by candlelight — and they made their anger known through huge pan-banging protests known as cacerolazos.
The socialist leader of the oil-rich country, Hugo Chávez, presided over an unprecedented deterioration in public services, and his popularity was at an all-time low. He blamed the power cuts on everything from Colombian spies, to people who sang in the shower (the country depends largely on hydroelectricity), to the political opposition, whom he called “the squalid ones.”
“The squalid ones are hoping it won’t rain, but it’s going to rain, you’ll see, because God is a Bolivarian!” Chávez proclaimed, using his preferred term for his political movement. “God cannot be squalid. Nature is with us.”
Chávez found more immediate earthly assistance in the “Bolichicos,” the nickname for a group of elite and well-connected young men from upper-class families.
Sensing an opportunity amid the chaos, two Bolichicos, then-29-year-old Alejandro Betancourt and his 26-year-old cousin Pedro Trebbau, decided to start their own electricity company called Derwick Associates.
According to José Aguilar, a member of the Ricardo Zuloaga Group, a think tank that has examined power-supply contracts awarded in Venezuela, neither man had experience in the energy sector, nor did OCCRP journalists find any evidence of such. (In an email, the company told OCCRP that both its shareholders and its employees had “enough proven experience to compete for all Derwick’s contracts,” although it did not elaborate further.)
Whatever the case, Derwick enjoyed a meteoric rise. It won US$5 billion in contracts from state energy companies in just 14 months from 2009 to 2011, including 11 projects to build new plants and one to modify an existing facility.
Each contract was awarded without a competitive bidding process, because Chávez had suspended Venezuela’s normal procedures due to the energy emergency. The contracts also included advance-payment provisions that meant Derwick didn’t have to put up money to buy equipment, and usually didn’t pay up front for installation or construction, according to Simon Saturno, a Venezuelan electrical engineer who conducted an analysis of Derwick’s work for the anti-corruption organization Transparencia Venezuela.
“Each purchase was the subject of a contract and each contract, depending on the options that Derwick offered, established a payment method that could include an advance, a sufficient advance so that Derwick could buy the equipment,” Saturno said.
(In a statement to Venezuelan prosecutors in 2013, Betancourt denied this and said Derwick had put up all the capital for all its projects, even advancing funds for some of them.)
According to a 2013 lawsuit filed by former U.S. Ambassador to Venezuela Otto Reich against Betancourt, Trebbau, and another alleged associate, the company paid massive bribes to land the contracts. (The lawsuit was later dismissed.)
A few years later, although the government’s huge investment in power infrastructure had initially stabilized the crisis, Venezuela was still experiencing frequent blackouts.
One thing had changed, though: The Derwick Bolichicos were now very wealthy. Starting in 2010, three companies closely associated with Betancourt and Trebbau were founded in Spain and began making costly real estate purchases.
In 2011, a company called Derwick Associates International was registered, with both men listed in administrative roles. In 2012, the company registered the purchase of a 1,396-hectare hacienda in Toledo; the estate includes an old castle and was traditionally used as a hunting ground for the aristocracy. Although the sale price was not available in public records, the company, which has since changed its name, declared over 30 million euros in assets in 2017.
Trebbau is also the main administrator for another company founded in 2010, Eiffel Real State, which owns a lavish apartment in one of the wealthiest neighborhoods in Madrid, just behind the Prado Museum and near El Retiro park. Eiffel now has assets of over 3 million euros. And Betancourt and his mother, Lilia-Cristina Lopez, are administrators of a similarly named company, Guanabana Real State, which owns another luxurious apartment in central Madrid and has declared assets of over 1 million euros.
According to the complaint filed by Reich, the former U.S. ambassador, Betancourt also owns a $11.5 million penthouse apartment in New York City, which he bought in 2012 through a Delaware-based company, according to New York property records. And in 2016, the businessman led a group that invested 50 million euros in a fashionable sunglass company, Hawkers, that has partnered with soccer star Lionel Messi to design a line of eyewear....
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