24 June 2015. Venezuela Corruption Files on Dropbox:
11 June 2015. Sample files:
2015-1495.zip Assorted Derwick Files - Re VZ-US Corruption June 11, 2015 (40MB)
Source's statement revised 8 June 2015 with name and email added as requested.
8 June 2015
Venezuela-US Corruption 14,000 Files Disclosed
Dan Rosenau <dan.rosenau87[at]gmail.com> writes:
Re: Venezuela/U.S. energy sector scandal involving J.P. Morgan, ProEnergy
Services (partially-owned by Obama appointee), Derwick Associates
The U.S. Department of the Treasury's FINCEN recently announced that
Banco Privada d'Andorra was favored by criminal enterprises from Russia,
China, and Venezuela. In the case of Venezuela, government officials reportedly
deposited more than $4Bn into personal accountsmost of it siphoned
off from PDVSA, the state-owned oil company of Venezuela.
I'm painfully aware of the embezzlement and overbilling involving Venezuela's
energy sector given that, until recently, I was employed at Sedalia,
Missouri-based ProEnergy Services. ProEnergy was the contractor responsible
for the construction of one dozen power plants in deals involving gross
overbilling, multiple offshore transactions, and a murky association with
Derwick Associates, a Venezuelan start-up with zero experience in
power plant construction. I'm making available here more than 10GB of material
directly from the company hard drive. The metadata on each document can be
traced directly to Pro-Energy's computers. My hope is that "crowdsourcing"
the enclosed data will allow interested parties to assist in exposing a
multi-billion dollar fraud.
From 2009-2012 ProEnergy billed to the tune of $2Bn almost all of it flowing
from a single client: Derwick Associates. Our company sold more than $1Bn
in turbines (most of them used or refurbished--but sold as new) to Derwick
which then resold them hours later at a significant mark-up to the government
of Venezuela through entities such as their electricity ministry, their Guyanese
state enterprise CVG, their state-owned oil company PDVSA, and the SIDOR
iron-ore producer. In addition to turbine sales to Derwick, ProEnergy
built the power plants that Derwick marketed as their own and for
which both companies overbilled the Venezuelan government in the hundreds
of millions of dollars. According to the Wall Street
Journal, Derwick is now under criminal investigation by federal
authorities and by local authorities in New York. (This prompted Derwick
to immediately hire Adam Kauffmann, former head of the Manhattan DA investigation
division. Kauffmann is already representing several Venezuelan government
officials who embezzled hundreds of millions).
Working in ProEnergy's sales department, I learned our company had hit paydirt
when a group of connected Venezuelans chose to ignore Original Equipment
Manufacturers (OEMs) such as Rolls Royce, Pratt & Whitney, and General
Electric and instead used ProEnergy as a middleman. In other words, a middleman
used a middleman.
Inexplicably, the IT department at ProEnergy had blocked access to internet
sites when I googled "Derwick" and "corruption." This stirred
my curiosity and so I explored the company's shared computer drive for the
term "Derwick." What I found there shocked me: dozens of proposals
to Derwick for generators, for power plants, for upgrades to those power
plants. It was odd given that ProEnergy has never built a power plant in
the United States (ProEnergy fails to meet American standards and so has
offices in places like Angola, Argentina, Pakistan, and Venezuela).
Shockingly, ProEnergy's proposals reflected a mark-up ranging from 20-74%.
In my industry, profit margin usually hovers between 2 and 5%. At these prices
someone was being ripped off. ProEnergy was overbilling Derwick.
My sense of disbelief only grew the more I read. I discovered document drafts
on Derwick letterhead. ProEnergy was writing the proposals and preparing
the invoices that Derwick sent Venezuelan clients for the exact same equipment
described in the proposals to Derwick from ProEnergy. This
included actual invoices from Derwick to Venezuela's state-owned enterprises
like PDVSA. These invoices, the Microsoft Word documents indicated, were
created on ProEnergy computers in Sedalia. On some of the Derwick invoices,
the bank wiring instructions went to bank accounts belonging to ProEnergy.
Some to offshore bank Davos International and others to JP Morgan
in New York.
When I learned that the owners of Derwick were barely out of college and
friendly with the son of the Electricity Minister of Venezuela I realized
why ProEnergy had prepared the Derwick invoices: because our 20-something
Venezuelan clients lacked the technical know-how. After all, how does a person
draft an invoice for a product with no knowledge about the item in
Remarkably, these invoices prepared by ProEnergy and purportedly from Derwick
also revealed mammoth markups over and above the prices that ProEnergy charged
Derwick. So, an item like a set of three FT8 Swift Pac turbines bought
by ProEnergy from Pratt and Whitney for $67.5M were sold one day later
for $78M to Derwick who then sold it two days after that to Venezuela
for $97.5 million. And so in four days an item with a retail cost
of $67.5M had $30M added by ProEnergy and by Derwick Associates. In another
instance three Rolls Royce Trent 60 turbines originally sourced for $66M
from Rolls Royce were sold to Derwick for $79.3M, which in turn
resold them hours later for $97.5M, adding another $31M profit to
the bottom line of both Derwick and ProEnergy. Like these transactions there
are scores of instances on every item imaginablefrom spare parts to
construction costs, from turbines to generators, from transformers to
transportation costs and employee training. I stopped counting the
total on the invoices after two billion dollars.
One colleague told me that the FBI had visited ProEnergy on several occasions.
I was tortured, week after week, knowing that ProEnergy was robbing a nation
where poverty and crime are rampant. I spent sleepless nights agonizing
about what to do. Company-wide layoffs solved my immediate dilemma.
The truth is that with no more Venezuelan cash flow, ProEnergy suffered a
long-standing cash crunch. So much so that Washington, D.C.'s Acon Investments,
made a capital injection into ProEnergy. Acon is run by Obama
appointee to Latin America Bernard Aronson.
Months went by and I could not shake the disgust of what transpired.
I blew the whistle by sharing the information with
Venezuelan investigative reporter Cesar Batiz who verified the material
and allowed a blogger to post some of it on Scribd.
The sensational revelations about money-laundering activities of Venezuelan
energy officials at the Andorran bank would explain why Venezuelan state
officials agreed to overpay Derwick and ProEnergy. The men addressed in
the letters (written by ProEnergy and) and sent by Derwick are
accountholders exposed to criminal charges in Spain for amassing illegal
fortunes in "consulting fees."
It is disheartening that American energy executives would display such appalling
greed and be so quick to partake in the looting of Venezuela. My hope
is that by going public with the 10GB of information more of my former colleagues
will come forward and blow the whistle on one of the most troubling
international scandals in Venezuelan (and Missouri) history. I've learned
that Derwick Associates has persecuted numerous bloggers in Venezuela and
abroad as well as mainstream journalists including having stories about their
misdeeds "spiked" at the Wall Street Journal, Forbes, the
Economist, Huffington Post, and the Miami Herald.
Materials provided, about 13,750 files Zipped and 196 individual files, 10GB.
Available on a USB. Send PGP-encrypted request with postal address to:
Cryptome Public Key
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