HomeNewsBriefVenezuela 'Kingpin' Skimmed Millions From State Food Program: Report
BRIEF

Venezuela 'Kingpin' Skimmed Millions From State Food Program: Report

ELITES AND CRIME / 22 FEB 2017 BY VENEZUELA INVESTIGATIVE UNIT EN

Reports have emerged that a Venezuelan businessman and alleged drug kingpin with ties to the sitting vice president imported state-controlled foods at hugely inflated prices, exemplifying the deep networks of corrupt financial and political elites, who are bleeding the state coffers dry as many civilians go hungry.

Venezuelan businessman Samark López apparently made a huge turnover from importing food at inflated prices for the government-regulated food program "Local Storage and Production Committees" (Comités Locales de Abastecimiento y Producción - CLAP), according to a Runrun.es investigation.

López's company Postar Intertrade Limited allegedly bought 4,509,157 cases of food in Mexico worth $8 each, while the Venezuelan government paid the company over three times more at $35 per case, the news outlet reported. This would mean that for an investment of just over $36 million, López's business was paid nearly $158 million by the state. No dates are provided for these figures, which appear to be based on recent allegations by opposition politician and National Assembly representative Carlos Paparoni.

According to Paparoni, the excess money "is syphoned off into a corruption network."

SEE ALSO:  Venezuela News and Profiles

According to López's website, Postar Intertrade was founded in 2013, and imports housing construction material aimed at poor communities in partnership with US-based companies Home Depot and Graybar, among others.

The US Treasury Department officially named López and current Vice President Tareck El Aissami international drug traffickers earlier this month, describing López as a "key frontman" and money launderer for the vice president. Both López and El Aissami have denied the Unites States' allegations.

InSight Crime Analysis

If accurate, the accusations against López and his businesses are further proof of the vast profits that can be reaped by siphoning off state resources, in particular those involving subsidized food products. Indeed, these accusations -- and the recent sanctions -- come not long after an Associated Press report exposed how corrupt military officials were turning a hefty profit by selling overpriced goods to civilians on the black market.

SEE ALSO:  Coverage of Elites and Organized Crime

Venezuela's dire shortages of food and other basic products have made this form of contraband one of the country's most profitable criminal enterprises.

"Lately, food is a better business than drugs," a retired general told AP investigators.

And it is not only high demand and short supply that make this type of fraud attractive. Venezuela's policy of fixing the currency exchange for bolivars has kept the government-regulated price of dollars extremely low, while sky-rocketing inflation has pushed the unofficial exchange rate to extreme heights. As the government also has tight control over who is issued dollars at the official rate, importers are known to call in favors or line the pockets of state officials in order to secure deals. In the process, they inflate invoices to skim as many dollars as they can from state coffers.

Given López's close ties to a sitting vice president accused of criminal activity, he could probably tap into these corrupt networks with ease.

As Venezuela's economic crisis deepens, the socialist government is buttressing itself with those who would have most to lose with its demise -- the criminal elites who have tapped into state coffers -- further facilitating corruption schemes at the highest levels.

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