PEPwatch Venezuela: Beware Of Government-Controlled Private Corporations 3

Originally published 03.02.06 | We have previously discussed the threats posed by private corporations owned by individuals who front for governments or national leaders, and by the dangers of governmental minority ownership of closely-held companies. In this, our final segment, we cover the private corporation that operates as a de facto government agency, and whose primary activities aid in the implementation of government policy, but in whom both legal and equitable ownership is privately held.

Skim milk masquerades as cream.

Where it suits national policy, private corporations are convenient and anonymous instruments that can perform commercial acts deemed necessary by government. In the intelligence field, such controlled companies are frequently known as proprietaries. They often perform covert or illegal operations, such as money laundering, where the government does not care to be linked to either the activities, or their consequences. Such companies also are utilised in a combination of both overt, traditional and legal business, and “black” operations, but both varieties serve the same master. Today’s analysis of one such organisation is instructive in both understanding the tactics and strategy typically employed, and the investigative tradecraft that is necessary to unmask such a company’s true nature. As we have previously stated, the inability of compliance to timely identify government-controlled companies can be ultimately fatal to one’s institution. In the last article, we identified the Lebanese Muslim Khalil brothers as close associates of Venezuelan national Ricardo Fernandez Barrueco. The brothers own and operate an organisation dedicated to supplying Venezuelan government agencies with seafood, high-technology and military equipment. As we shall see, their operations clearly fall into the de facto government agency category.

Compliance officers please note:

– Khaled Khalil Majzoub, born Galed Khalil Massub, on 26 August 1965, Cedula No. 6290182, sometimes incorrectly shown as 6290185. The validity of his identity document was an important issue in the past with a large North American multinational firm, which terminated its relationship with a firm when Khaled purchased it. Was he really born in Lebanon ? We cannot say, but his birth certificate was not filed until 1970, one day after his brother’s was registered. Khaled is a reputed radical Islamic fundamentalist, and the communications director of Sheikh Ibrahim Bin Abdulaziz Mosque in Caracas .

– Majed Khalil Majzoub, born Massed Khalil Massub, on 23 April, 1970, but incorrectly appearing upon his birth certificate as 23 January, 1970 . His Cedula No. is 13526338. He enjoys close relationships with pro-Chavez politicians and the military.

The benefits of preferred status.

The Khalil brothers, like their comrade, Ricardo Fernandez Barrueco, emerged from obscurity during the early years of the Chavez government, which has favoured certain companies with major contracts, easy access to loans, and tariff-free import licenses. Such preferred companies are assisted in placing their products in the local market through government-funded social programs, through entities such as CASA, the Agricultural Service Program, and PROAL, the Strategic Food Program, both of which bought from the Khalil organisation. The Venezuelan government has also assisted, or conspired with certain preferred companies in tax evasion and customs crimes. We note that the Khalil companies are believed to evaded large amount of taxes, notwithstanding their many lucrative businesses

Evidence of the incestuous ties between the Khalil companies and the Venezuelan government:

– They purchased the Eveba Group, a major seafood provider, from the Castro Iglesias family, a transaction that reportedly was facilitated by Diosdado Cabello Rondon, born 15 April, 1963, Cedula No. 8370825. Sr. Cabello, was formerly Venezuela ’s Vice President, and Minister of Infrastructure, and is presently the Governor of Miranda State . He is one of the most powerful men around Chavez. Also linked to the sale was Adan Coromoto Chavez Frias, born 11 November, 1953 , Cedula No. 3915103. The President’s brother, he is currently Venezuelan Ambassador to Cuba . Distribution of Eveba products is currently being conducted by Molinos Nacionales C.A, a/k/a Monaco , owned by Mexican agro-giant GRUMA, whose recent sale of part of their enterprise to Ricardo Fernandez Barrueco was detailed in our last article. This but another demonstration of the close ties among the New Bolivarian Elite.

– They shipped computer equipment and, reportedly, sophisticated surveillance equipment, to Venezuelan military and intelligence agencies. Majed Khalil, who is said to have a close relationship with Francisco Rangel dating back to the period when Rangel was a general officer, is alleged to have outfitted the situation room, in the basement of the Miraflores presidential palace, with electronic espionage equipment.

– Their organisation was reported, by Venezuelan media, as having supplied Maiquetia Simon Bolivar International International Airport with new radar, communications and navigation equipment. It is also believed by Venezuelan media to be supplying Venezuela ’s military with weapons and other hardware.

– Rumours abound of involvement of the brothers in money laundering, counterfeiting, drug trafficking and contraband smuggling, in concert with corrupt Venezuelan politicians and military officers.

Companies associated with the Khalil brothers are:

In Venezuela:

RIGOMAR AGENTES ADUANALES C.A

HARDWELL TECHNOLOGIES C.A. a/k/a GRUPO HARDWELL TECHNOLOGIES C.A.

QUALCOM TELESISTEMAS C.A.

EMPAQUE VENEZOLANO DE BACALAO, a/k/a EVEBA

AGROINDUSTRIAL PROEBA

PRODUCTOS PISCICOLAS PROPISCA S.A.

DUSTRIBUIDORA AGROMAR C.A.

ANCHOAS DE ARAYA ANDARSA S.A.

RECUPERADORA CASTRO IGLESIAS

AGROFORESTAL BARIMA C.A.

ALIMENTOS DELTA a/k/a ALIDELTA

INVESSIONES OVINOY S.R.L.

RIGOPLAS C.A.

SARDIMAR C.A. NUEVA ESPARTA

PRODUCTOS PISCICOLAS PROPISCA

DESAROLLOS SERFOCA C.A.

GRUPO JARBOL C.A.

In the United States :

HARDWELL COMPUTER INC.

ORINOCO ENTERPRISES, INC.

 In the Republic of Panama :

GENERAL TRADING COMPANY, S.A.

As we have shown, though these companies may appear to be privately owned, their acts and deeds are clearly governmental in nature. Money laundering reporting officers and compliance officers must practise enhanced due diligence when considering account relationships with any company located in a jurisdiction where covert governmental ownership is probable, or where recent events suggest the possibility. Compliance vigilance is made even more urgent by the realities of the post 9-11 world, where nuclear, chemical, or biological agents may be on the hidden agenda of the government-controlled company or its masters. Government-controlled companies are wisely avoided as unacceptable high-risks. Watch out for them.

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