The Odebrecht-GAESA money trail

The Odebrecht-GAESA money trail
PABLO PASCUAL MÉNDEZ PIÑA | La Habana | 4 de Enero de 2017 - 11:19 CET.

All the President's Men is the title of a 1976 film that told the story
of how the Watergate scandal was exposed, the ultimate outcome being the
resignation of then-US president Richard Nixon. The misdeeds in
question, revealed in the pages of The Washington Post by journalists
Bob Woodward and Carl Bernstein, played by Robert Redford and Dustin
Hoffman in the film, were divulged to the reporters by the famed
informant known as "Deep Throat." In one scene from the film, the
shadowy, unidentified figure told Woodward to: "Follow the money trail."

Time and time and again, following the money trail is the best tactic
and rule of thumb to track down the fronts, shell companies and tax
havens employed by organized crime to carry out its mischief. But
divulging to the public the possible irregularities by the company
Odebrecht-GAESA in Cuba requires hacking the files of the military
elite, a task beyond the capacity of independent journalism on the
Island, as it lacks the resources, freedom and necessary support to
undertake such an investigation.

After uncovering the corrupt monkey business known as Operación Lava
Jato, still affecting a long list of Brazilian politicians and
businessmen, following the money trail in Cuba is like crashing into the
fences surrounding the Mariel Special Development Area (ZEDM) and the
bayonets of the guards at the country's military institutions, and
running the risk of a long stay in a political police jail cell.

The truth is that after the Brazilian judiciary ordered the
declassification of the contract for the megaport of Mariel, and froze
the financing operations of the National Bank of Economic and Social
Development (BNDES) for the transnational construction group Odebrecht,
the Cuban regime has held its tongue, while other governments and media
in the area - for example, Ecuador and Peru - have reacted by initiating
a process of investigation into the activities of said company in their
respective countries. As this article was being written, for example,
the Peruvian Government had banned bids by Odebrecht.

The special circumstance in the case of Cuba is that Odebrecht is knee
deep in GAESA, the military consortium that controls 80% of the Cuban
economy and enjoys carte blanche to hide the destination and use of the
money it controls, as current General/President Raúl Castro is its
commander-in-chief.

The Ministry of the Revolutionary Armed Forces (MINFAR), perhaps Cuba's
"most prestigious institution" thanks to its history of international
missions and interventions in the major economic sectors, figures
prominently on the list of suspects, as it has not clarified to the
media its involvement in the corruption uncovered by the Lava Jato
investigation.

From the epicenter of the money trail

Nine months after the inauguration of the Port of Mariel by Presidents
Dilma Rousseff and Raúl Castro, in the framework of the second summit of
the Community of Latin American and Caribbean States (CELAC) held in
Havana, the Brazilian portal Spotbnicks published an article by Felippe
Hermes entitled "20 0bras que o BNDES financiou em outros países."

Hermes expressed concern regarding the serious infrastructure problems
that Brazil suffered, while the BNDES, with a treasury constituting 8.4%
of the GDP of the South American giant, funded works in other countries
in the area. He also cited 20 multi-million dollar projects, of which
50% were carried out by the Odebrecht construction company.

The relationship was dominated by the mega-port of Mariel, valued at 957
million dollars, to which BNDES contributed 682. As a curious fact,
according to the article, the Ecuadorian government questioned the
Odebrecht construction company and expelled it from the country due to
defects found in the execution of the San Francisco hydroelectric plant,
and threatened not to pay it for a 243 million dollar loan.

Moreover, the deputy for the Social Democratic Party (PSDB/SP),
Vanderlei Macris, expressed his concern regarding the concession,
starting in 2009 (under President Lula da Silva), of a series of loans
to Cuba, Venezuela, Ecuador, Nicaragua, Peru, Argentina, Colombia,
Panama, Uruguay and Mozambique.

Odebrecht then informed Macris, in the Cuban case, that the BNDES's
financing would go directly into the hands of the Government of the
Island as export credit, to be necessarily spent on the purchase and
financing of Brazilian products and services. The Brazilian
Government's justification is that this negotiation with the Cuban
regime was considered a "win-win," since the investment only permitted
the acquisition of Brazilian supplies.

On the list of BNDES disbursements in Cuba there stands out a series of
works executed by Odebrecht, among them: sugar operation mechanization;
rice harvesting; tourism projects; vehicle purchases and financing for
the pharmaceutical industry, for a total amount of 252 million dollars.
Later the Brazilian Minister of Development, Industry and Trade,
Fernando Pimentel, announced the disbursal of $173 million by BNDES to
finance the expansion and remodeling of five airports in Cuba.

In addition to the $682 million allocated for the construction of the
megaport, $290 million in loans were announced by President Dilma
Rousseff during the opening ceremony of the Mariel Container Terminal
(TCM), designated for ZEDM infrastructure, thus raising the Brazilian
investment in Mariel to the pretty sum of 972 million USD.

A work of research published in this newspaper compared the construction
volumes and equipment at Mariel's container terminal and the variables
of the master plan for the mega port of Moín-Limón in Costa Rica. The
findings reached exacerbated suspicions of a cost overrun of at least
400 million dollars on the construction of the TCM.

The kicker to this thriller is that the TCM can only perform
simultaneous loading/unloading operations on two smaller ships, and its
surface area barely surpasses that of the disabled Havana Container
Terminal, built at a discreet cost of 40 million dollars. It has also
been officially demonstrated that the bay is not deep enough to
accommodate Neopanamax Category vessels. Thus, dredging would call for
another multimillion-dollar investment, which would add more digits to
its $957 million construction price tage. However, the Cuban Government
has not even commented on it, and keeps the details and costs of the TCM
Master Plan top secret.

If the journalist Felippe Hermes was concerned about the BNDES, a bank
conceived as an institution to benefit families, transforming into a
force aggravating inequality and taking from the poor to give to the
rich, Cubans should worry that Mariel has been a terrible transaction,
and that the 400 million overrun for a relatively useless port will end
up swelling various accounts in tax havens. But to bring to light the
probable irregularities by Odebrecht-GAESA by following the money trail
we need a Woodward, a Bernstein, a "Deep Throat" and a clever hacker
able to penetrate the MINFAR's secret files.

It should be noted, even should such a scandal be uncovered, the
prospects of a dictator like Raúl Castro stepping down are nil. In fact,
it is more likely that he will be showered with praise at the General
Assembly of the UN.

Source: The Odebrecht-GAESA money trail | Diario de Cuba -
http://www.diariodecuba.com/cuba/1483525140_27858.html