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Friday, Jun 09, 2023

New claims against ex-Miami congressman hired by Venezuela

New claims against ex-Miami congressman hired by Venezuela

A former Miami congressman who signed a $50 million consulting contract with Venezuela’s socialist government not only did no apparent work, but also channeled a large chunk of the money to a yacht company on behalf of a fugitive billionaire, according to new allegations in a civil suit.
The accusations against former Congressman David Rivera come in a new filing Friday in New York federal court by opponents of Venezuelan President Nicolas Maduro who now control the U.S.-based affiliates of the South American nation’s state oil company.

Rivera’s Interamerican Consulting was sued in 2020 by PDV USA — a Delaware-based affiliate of Venezuelan-owned Citgo. It alleges Rivera performed no work for the $50 million contract he signed in 2017 for three months of “strategic consulting” meant to build bridges with key U.S. stakeholders.

The same contract has been the subject of an ongoing criminal investigation by federal prosecutors in Miami looking into, among other things, whether Rivera failed to register as a foreign lobbyist as required bv law.

Rivera has not been charged with any crime, but the new filings give a detailed look at his dealings with Venezuela’s state-run oil industry and how he allegedly spent the money he received.

Around the same time Rivera was hired, Maduro’s government had launched a charm offensive to curry favor with the Trump administration. It initially avoided outright criticism of the new U.S. leader and even donated $500,000 to his inaugural committee through Citgo.

The new court filing is based on evidence only recently uncovered by PDV USA’s attorneys, including 18,000 text and WhatsApp messages from Rivera’s phone and statements he made during a two-day deposition in July.

Rivera received only $15 million of the original amount, but the new filing says he spent part of that on unexplained payments to a convicted drug trafficker and to a company managing yachts on behalf of a Venezuelan TV magnate wanted for arrest by U.S. authorities.

“Mr. Rivera never provided any services to Citgo and, it appears, never intended to do so,” according to the filing by PDV USA. “Instead, the true purpose of the agreement was to cover up illicit transactions.”

Rivera did not reply to a request for comment, but he has maintained his innocence and has countersued PDV USA alleging breach of contract and unjust enrichment for its failure to pay $30 million he says he is still owed.

According to the filing, in one exchange of messages with Raul Gorrin — a Maduro insider who owns Venezuela’s largest private TV network — Rivera discussed trying to set up a meeting between Venezuela’s foreign minister and executives from the U.S. oil company Exxon.

The new filing cites a message in which Rivera and Gorrin texted one another that “the concert ticket is $15, not 20, as we said last night” — wording PDV USA’s lawyers call a “clear reference to a bribe.”

“At deposition, Mr. Rivera was unable to explain what this text message meant, and testified that he did not remember attending any concerts at that time,” PDV USA stated in its filing. It did not say who a bribe might have been meant for and the meeting never took place.

Rivera had asked the court to shield his communications with Gorrin, who the U.S. alleges was the mastermind of a conspiracy to siphon $1.2 billion from PDVSA — Venezuela’s state oil company. Gorrin is a lawyer, though not licensed to practice in the United States, and a judge in June ruled that Rivera’s communications with him did not meet the threshold for attorney-client privilege and must be handed over as part of what’s known as discovery.

Of the $15 million that Rivera received, about 75% was transferred to other individuals, according to the new filing. Around $3.75 million was transferred to a Miami company, Interglobal Yacht Management. Rivera claimed the money was an expense for services under the contract. PDV USA alleges instead it was used to pay for maintenance on one of Gorrin’s superyachts.

Similar amounts went to Esther Nuhfer, who is described as a longtime political associate of Rivera, as well as Hugo Perera, a Miami developer who pleaded guilty to tax fraud in a massive drug-smuggling case in the 1990s against the feared Cali Cartel.

Rivera testified that the payments were referral fees and for assistance he received as part of the consulting contract, according to PDV USA.’s account. But the new anti-Maduro management claims PDV USA never gave Rivera permission to outsource the work, as was expressly required by the consulting agreement.

To justify the large payments, PDV USA alleges Rivera created “phony contracts” backdated to March 20, 2017 — the day before the consulting agreement took effect.

Interglobal declined to sign the backdated contract, saying it had not performed that sort of subcontractor service.

“In short, PDV USA received nothing from Interamerican in exchange for making payments of $15 million,” the plaintiffs allege. “Most of that sum was transferred to third parties that are either indicted fugitives from justice or under criminal investigation in connection with those payments.”

The filing also alleges that other payments, deducted as expenses by Interamerican, were in reality moved between accounts controlled by Rivera. The new filings allege that Rivera’s own accountant testified in a deposition after meeting with criminal investigators from the Internal Revenue Service that he believed his client had committed tax fraud.

The consulting contract had all the hallmarks of a sham, according to PDV USA. Rivera’s Interamerican made just $9,500 in the year prior to signing the multimillion-dollar deal.

The lawsuit claims the company then controlled by Maduro loyalists hired Interamerican out of the blue, without due diligence, and that Rivera never met in person with anyone from Citgo or PDV USA while supposedly working on its behalf. Instead, he filed two “deficient and incoherent” progress reports of the seven he was required to submit.

“The written record is bereft of any evidence that Interamerican performed any of the contracted services,” PDV USA argues in the new filings. “There is not a single email, a single PowerPoint presentation, a single outline, a single memorandum, a single calendar entry, or anything else suggesting that Interamerican ever performed any of the services.”

Rivera, a Republican, served a single term in Congress, in 2011-2013, and during that time honored Venezuelan exiles fleeing socialist rule and cosponsored legislation seeking to withhold funding from the Organization of American States until it confronted then President Hugo Chávez for allegedly violating Venezuela’s constitution.

While serving as a state legislator, he shared a house in Tallahassee with now-Sen. Marco Rubio, who was the state House speaker at the time. Rivera has been embroiled in several election-related controversies since then, including orchestrating the stealth funding of an obscure Democratic candidate to take on his main rival in a South Florida congressional race. Last year, he was fined $456,000 for violating campaign finance laws in connection to that plot.
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