PANAMA CITY (AP) - The June meeting was conducted behind closed doors far from the klieg-light attention normally focused on Venezuela.
Around a U-shaped table in a hotel towering above the Panama Canal, U.S. Treasury Department officials distributed a list of suspected shell companies that they believe senior Venezuelan officials have used around the globe to siphon off millions of dollars in food import contracts amid widespread starvation in the oil-rich nation.
That meeting, and several since, is part of a sustained campaign by the Trump administration to pressure President Nicolas Maduro by striking at the wallets of top officials in Venezuela’s socialist administration.
“They know we’re after them, and they know we’re after them on a multinational basis because we’re beginning to see the networks morph and new shell companies stand up and existing ones wound down,” Marshall Billingslea, the assistant Treasury secretary for terrorist financing, said in an interview on the sidelines of the June meeting.
At that session, forensic investigators from the U.S. and three conservative Latin American allies - Mexico, Panama and Colombia - traced transactions by companies believed to be controlled by a government-connected businessman, according to several participants who spoke to The Associated Press on the condition of anonymity because the deliberations were private.
Since Donald Trump became president, dozens of senior Venezuelan officials have been sanctioned over allegations of corruption, human rights abuses and drug trafficking. Last year, Trump even threatened a “military option” to remove Maduro and, with senior aides and Latin American leaders, raised the possibility of invading the South American country.
The focus on food is deliberate, said Billingslea, who led Trump’s national security transition team.
A story published by the AP in 2016 revealed how senior Venezuelan officials and members of the military were enriching themselves by diverting money from food contracts. Since then, as hunger has spread, Maduro has moved to assert even greater control of food distribution, handing out monthly boxes of staples that critics label a form of dictatorial social control.
Maduro said he began distributing the so-called CLAP boxes - a Spanish acronym for Local Committees for Supply and Production - as a way to circumvent an “economic war” being waged by his opponents. But critics say Maduro has essentially weaponized food, distributing the boxes primarily to government workers and supporters.
As Venezuela has fallen deeper into turmoil, the CLAP program has become a tenuous lifeline for millions suffering due to barren supermarket shelves and hyperinflation.
“This goes beyond just corruption,” said Billingslea, who was accompanied in Panama by Kenneth Blanco, the director of the Treasury Department’s financial crimes enforcement network. “This is literally looting the one social safety-net program left.”
Billingslea would not discuss specific individuals or entities on the task force’s radar, but said going after what he believes is money stolen from food imports by Maduro and first lady Cilia Flores is a top priority.
The participants who spoke to the AP on condition of anonymity said a Colombian businessman named Alex Saab was a major focus of the Panama City meetings.
Saab gained some prominence in 2011 after appearing on Venezuelan state TV with the late President Hugo Chavez to sign an agreement to build housing for the government. Investigators say he entered the food business through the Hong Kong-based Group Grand Ltd., which they say bears the hallmarks of a shell company.
Group Grand has been awarded contracts to provide at least 11.5 million CLAP boxes, according to a Venezuelan Food Ministry spreadsheet obtained by the AP.
Prosecutors in both Miami and Colombia have been investigating Saab for more than a year, four U.S. and Colombian officials with knowledge of those investigations told the AP. All spoke on the condition of anonymity because of the sensitive nature of the probe.
Saab’s Miami-based lawyer, Richard Diaz, rejected allegations of any wrongdoing, saying his client has been subjected to undue scrutiny and harsh media coverage because of false testimony leveled against him. He said that if the U.S. had cause to believe the allegations were possibly true, his client would have been charged long ago.
Saab said in a statement that he is being targeted by government opponents looking to sabotage Venezuela’s economy.
“Instead, they should be thankful that despite so much bad press and international blockade there are still businessmen willing to invest and believe in the country,” he said.
The U.S. estimates that at least 70 percent of the CLAP program is being gutted by corruption.
Among the transactions raising red flags is a September 2017 invoice presented to Venezuela’s food ministry by Group Grand for $41 million worth of powdered milk at a price of $6,950 per metric ton - more than double the market price at the time. A copy of the invoice was provided to the AP.
The investigative cooperation between the U.S. and other countries already has yielded some results.
On May 17, three days before Maduro was re-elected, then-Colombian President Juan Manuel Santos, acting on information provided by the U.S., announced the seizure of 15 shipping containers filled with more than 25,000 CLAP boxes.
In testimony to police obtained by the AP, the owner of a Colombian company said he was hired by a Portuguese firm to assemble and ship the boxes to Venezuela’s Corporation of Foreign Trade, which the U.S. Treasury has said is a vehicle frequently used by corrupt officials for embezzling state funds.
Billingslea said Maduro has repeatedly sought to deflect blame for his own mismanagement and refusal to address mounting hunger.
“If they really wanted to feed people, they’d let in the foreign aid that’s been offered,” he said.
Associated Press writers Scott Smith in Caracas, Venezuela, and Barry Hatton in Lisbon, Portugal, contributed to this report.
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