Venezuela

Importer accused of jacking up food prices for hungry Venezuelans says he’s innocent

Anti-government demonstrators sit under a bridge that has graffiti written in Spanish that reads "Hunger," during a protest in Caracas, Venezuela, Saturday, July 1, 2017. Demonstrators are taking to the streets after three months of continued protests that has left dozens dead and seen the country's chief prosecutor Luisa Ortega barred from leaving the country and her bank accounts frozen following her mounting criticisms of President Nicolas Maduro.
Anti-government demonstrators sit under a bridge that has graffiti written in Spanish that reads "Hunger," during a protest in Caracas, Venezuela, Saturday, July 1, 2017. Demonstrators are taking to the streets after three months of continued protests that has left dozens dead and seen the country's chief prosecutor Luisa Ortega barred from leaving the country and her bank accounts frozen following her mounting criticisms of President Nicolas Maduro. AP

The controversial businessman at the center of explosive corruption allegations by Venezuela’s opposition-controlled congress is fighting back, saying investigators are knowingly lying to the public amid a hunger crisis and deep political polarization.

Samark López Bello told the Miami Herald that accusations that he overcharged the government by more than $200 million for food imports were a “complete lie” and that he’ll be asking the attorney general — herself under fire for publicly bucking the ruling party — to investigate the case and clear his name.

The push-back comes as opposition deputy Carlos Paparoni released the results of what he called a seven-month preliminary investigation into food imports that allegedly uncovered a web of corruption stretching from Miami to Mexico to Barbados.

Read More: Samark López steps out of the shadows

In a press conference, Paparoni said López’s trading company, Postar, had inflated prices on imported food destined for the country’s neediest — siphoning money from the cash-strapped socialist administration and exacerbating already dramatic food shortages.

López, a 42-year-old importer with deep government and South Florida ties, has been hounded by scandal in recent years. In February, the U.S. Treasury Department blocked some of his properties in South Florida after it accused him of being a front-man for Venezuelan Vice President Tareck El Aissami, who was sanctioned for running a narco-trafficking and money-laundering ring. López says he’s innocent of the charges and is contesting them in U.S. courts.

López rarely talks to the press, but said he decided to speak out because Paparoni’s assertion that he was illicitly profiting from his countrymen’s hunger was too much bear.

“I’m not denying that the parliament has the right to investigate. I’m a democrat and democrats believe in the separation of powers,” he said. “But this has to stop. I cannot let people offend the honor and reputation of Venezuelans who are committed to their country.”

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The alleged corruption scheme revolves around a government program that delivers affordable food directly to Venezuela’s poorest. When President Nicolás Maduro launched “the Local Committees for Distribution and Production of Food,” better known by the Spanish acronym CLAP, in 2016, he said they were needed to bypass a private sector that he accused of hoarding food and sabotaging its delivery as part of an “economic war” to undermine the socialist administration.

Instead, Paparoni said the CLAP program seems to be exacerbating the crisis as it bleeds cash needed to import food and medicine.

“All of our analysis shows us that this program was designed to be incredibly inefficient and increase the opportunities for corruption,” Paparoni said. “I want to make clear that this isn’t a politically motivated investigation. What we’re seeing is that corruption is turning into hunger.”

Following a trail of receipts and invoices, congressional investigators determined that the government overpaid at least $206 million to Postar for imported food in 2017 alone. Despite sitting on the world’s largest oil reserves, Venezuela produces very few of its own goods and imports much of its food.

López, however, provided the Miami Herald with purchase orders, bank transfers and shipping documents that seem to contradict Paparoni’s statements.

He said his entire contract was to deliver three million boxes of food at a cost of $119.6 million in total. However, due to the U.S. Treasury sanctions, he only completed 35 percent of the contract before the operation was shut down. In addition, he says he financed the shipments himself and has yet to be paid for the food sent.

“I’m not asking for a medal. I’m a businessman, not a politician, but what happened is very different from what they’re saying,” López said. “What they’re not saying is that there is a Venezuelan who believes in his country and put his hand in his own pocket to try to do a project to feed his own people.”

Read More: Does President Maduro need amnesty?

Working through his Barbados-based trading company, Postar, López said he originally wanted to fulfill the food order from the United States, which has direct shipping routes to Venezuela, but couldn’t find enough powdered milk.

That forced him, he says, to buy and ship the food from Mexico.

According to documents shared with the Miami Herald by congressional investigators, Postar was allegedly paying $22.22 for a box of assorted food products that cost $12.44 wholesale in Mexico. That same food was then sold to the government’s Corporation for Distribution and Agricultural Services (CASA), which administers the CLAP program, for $42 a box — or a 237 percent markup.

López, however, provided his own set of receipts that showed he was paying between $27 and $30 for the food and selling it at the pre-established price of $39.85 per box. And the cost didn’t include shipping, storage, insurance and other expenses that Postar absorbed, he added.

López said he tries to make a profit of 17 to 18 percent on every one of his deals, and this one was no exception.

“We’re not Martians. We’re normal businessmen using normal jurisdictions to conduct normal business deals,” he said. “This gentleman [Paparoni] is talking about a great conspiracy and the reality is there is no conspiracy.”

Venezuela is considered one of the most corrupt countries on the planet by Transparency International. And it’s a deadly combination of mismanagement, falling crude prices and corruption that are leading to many of the troubles the socialist administration is facing.

Since April, anti-government protesters have been on the streets demanding new elections, the release of political prisoners and humanitarian aid. And more than 80 people have died in the ensuing clashes, many of them killed by security forces.

“When you ask people on the street what they’re protesting for, the vast majority don’t give you political reasons,” Paparoni said. “Their primary issue is hunger.”

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A survey by the Bengoa Foundation, which tracks nutrition, found that 72 percent of the population has lost weight in the last year — with the average loss being 19 pounds.

The CLAP program, in particular, has been shrouded in allegations that the military and other government-insiders have corrupted the scheme, selling the food on the black market at a profit.

“That money that went into corruption is needed in Venezuela to boost national food production,” Paparoni said.

Asked about the efficacy of importing and selling food in a country that has huge swaths of underused agricultural land, López said his role is limited to trying to help the government solve its short-term problems.

“You’re talking to a supplier, not a designer of public policy,” he said. “But we eventually have to migrate to a system of national production, which is what all the other countries do.”

The one thing both men agree on is that the attorney general’s office should investigate the transaction. Paparoni says it will prove that fraud has taken place. López says he will be exonerated.

Those demands might ring hollow. Attorney General Luisa Ortega, who has recently spoken out against the administration’s use of force, has had her assets frozen and been barred from leaving the country as the pro-administration Supreme Court tries to strip her of her powers.

López said that, being a Venezuelan, her office remains his only legal recourse to fight the charges.

“They’ve created a caricature [of me] and started to believe it themselves,” he said. “I’m not a caricature. I’m a real man with real principles, values and rights. And I’ve never been more committed in my life to have those rights respected.”

Follow Jim Wyss on Twitter @jimwyss

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