For Alex Saab, all roads seem to lead to Mexico. The Colombian businessman – and the great provider for Chavism in recent years – who has been marked by the White House as Nicolás Maduro’s financial fixer, is at the center of a diplomatic dispute between Caracas and Washington after having been extradited to the US in October.
Saab faces 20 years in jail on charges of money laundering and his fate will be decided in a Florida courthouse. But his business empire has found a nerve center in Mexico, from where he managed transactions worth millions of dollars using Venezuelan oil and weaved a web of opaque companies to transport tons of foodstuffs.
This week another scheme linked to Saab has come to light, involving the movement of $64 million worth of supplies via shell companies, tax havens and – once again – Mexican companies, according to an investigation by the non-governmental organization Mexicans against Corruption and Impunity. The revelations that have been aired, and those that are still to come, threaten to draw Venezuela’s political and economic elite into the mire – both key elements in the machinery of Saab’s network.
The journalist Roberto Deniz, whose work has been fundamental in unveiling the powers behind the 49-year-old businessman, stated in an op-ed this week that Saab’s trial could be a new Odebrecht case due to the number of Latin American politicians involved in his dealings.
“It is no longer Brazil, but Venezuela, which is the axis of a network of shady business arrangements involving powerful figures in several countries,” says Deniz, who is still under siege from constant attacks by the Maduro government. Saab’s business interests have been investigated by Brazil, Ecuador, Colombia, Switzerland and the UK, among other countries.
Washington accuses Saab of setting up a system of bribes for Chavist government officials, embezzling public funds and transferring $350m from Venezuela to accounts managed by him and his associates overseas. For his part, Saab has pleaded not guilty. In an indictment against five of his associates in the US District Court for the Southern District of Florida, made public on October 7, transfers totaling more than $70m to Mexican companies linked to the CLAP fraud conspiracy – in which Mexico-sourced food supplies were sold on in Venezuela at hugely inflated prices through the government-controlled Local Committees for Supply and Production – are cited.
“The co-conspirators used various companies, which they controlled, to win contracts from the Venezuelan government for the manufacture and export of boxes of food from Mexico and packages of medical supplies from several countries,” the indictment states.
Last June, an investigation carried out by EL PAÍS and Venezuelan digital media outlet Armando.info revealed that the Mexican authorities played a vital role in ensuring a network directed by Saab that moved millions of dollars around the world functioned smoothly. The business was based on a scheme that exchanged Venezuelan oil for foodstuffs produced in Mexico, which was dressed up as agreements for humanitarian aid. The details of these arrangements were never made public but were conceived with the intermediation of Maximiliano Reyes, Mexico’s undersecretary for Latin America and the Caribbean, and facilitated with the participation of the state-run Mexican Food Security bureau (Segalmex), according to documents in the possession of both El PAÍS and Armando.info and interviews with people directly involved in brokering the deals.
“We work on the basis that the businessmen who approach us do so in good faith and wish to have better economic ties in the region,” Reyes said in his defense. However, the scheme added three Mexican names to the US Treasury Department’s blacklist for doing business with the Maduro government and the state-owned Petroleum of Venezuela (PDVSA), as well as coordinating their operations through shell companies and tax havens outside of the international financial system. As another branch of the EL PAÍS-Armando.info investigation revealed, another indication of political involvement is the Saab-linked network also knocked on the door of Mexican Petroleum (Pemex), although the sale of PDVSA crude does not appear to have materialized.
The final tranche of documents on Saab’s business dealings shows that between 2019 and 2020, running parallel to the Venezuelan oil scheme, eight Mexican companies were involved in the export of foodstuffs to Venezuela worth $64m. The supplies were destined for the CLAP, a Venezuela government program to distribute food to vulnerable sectors of society and that had already been under the microscope for the poor quality of the goods and inflated prices. According to the documents, the network used companies that issued fake invoices and importers in tax havens, with political movers accused of corruption and linked to the upper echelons of power in Venezuela.
As far back as 2016, during the presidency of Enrique Peña Nieto, Mexican companies had been identified as monopolizing the export of low-quality products to the CLAP system and were under suspicion of corrupt practices. In 2018, the Mexican Attorney General’s Office (PGR) sanctioned those companies for involvement in a “fraudulent scheme,” but they were spared punishment after reaching “reparatory agreements” that bordered on symbolic. In 2019, with Andrés Manuel López Obrador having succeeded Peña Nieto, Mexico’s Financial Intelligence Unit (UIF) froze the accounts of 19 companies and individuals who were selling foodstuffs to the Maduro government.
The head of the UIF, Santiago Nieto, announced last weekend that he had filed five indictments against 25 individuals linked to the Saab network and the CLAP scheme. Nieto added that the deal struck by the PGR during Peña Nieto’s presidency was illegal and filed another series of complaints with the Secretariat of the Civil Service, the government ministry that acts as comptroller of the federal government. The UIF, which is part of the Secretariat of Finance, is working with the DEA and the US Treasury Department but it is still not clear how far advanced the investigation is, or if there will be formal charges against any serving government officials.
After more than a year in detention in Cape Verde, Saab has seen a Florida judge dismiss seven of the eight charges against him as part of the extradition agreement between the US and the African island nation. The only charge that remains against the businessman is conspiracy to launder money. Maduro has stated that Saab is a martyr and claims that he was a diplomatic envoy on behalf of his government despite for years having denied any links to the businessman.
Maduro’s government suspended negotiations with the opposition in Mexico as the extradition proceedings advanced. Government sources in Venezuela argue that the opacity of the business empire overseen by Saab – who has been painted by Chavism as an “anti-blockade agent” – is the only recourse they have left to get around the sanctions imposed on the country by Washington. While all the interested parties await the upcoming hearings, revelations from court filings in the US and plea agreements that could be in the pipeline, Mexico, Venezuela and the more than 30 countries through which his business dealings passed are bracing for further shocks from the unfolding Saab case.