Friday, 26 Apr 2024

U.S. Sanctions Venezuelan Elites for Alleged Food Corruption Scheme

MEDELLÍN, Colombia — United States officials have accused President Nicolás Maduro of Venezuela of a corruption scheme in which his officials, family members and business partners made off with large sums of money meant to feed the country’s starving population.

The allegations appeared Thursday in a new round of sanctions targeting three stepsons of Mr. Maduro and a Colombian business partner of theirs named Alex Saab, among others. American officials said that for years the men had used shell companies and no-bid contracts to siphon off government money, largely from Venezuela’s state-run food program, for their own profit.

“Alex Saab engaged with Maduro insiders to run a wide-scale corruption network they callously used to exploit Venezuela’s starving population,” United States Treasury Secretary Steven Mnuchin said in a statement.

He added: “They use food as a form of social control, to reward political supporters and punish opponents, all the while pocketing hundreds of millions of dollars through a number of fraudulent schemes.”

The economic collapse of Venezuela has left hunger widespread, leading to malnutrition among Venezuelan children and some families eating offal rather than meat. In 2016, Venezuela’s government set up the Local Committees for Supply and Production, known by its Spanish acronym CLAP, to distribute food boxes at subsidized prices.

The new system also allowed Mr. Maduro wide control over the food supply of the country at a time when millions of Venezuelans were hungry.

American officials say it allowed a number of elites to profit as well.

According to the sanctions, Mr. Saab, a businessman whom they identified as a Colombian national, began his illicit dealings with Mr. Maduro’s stepsons in 2011, after winning a contract to build government housing. The stepsons — Walter, Yosser and Yoswal Flores — opened doors for Mr. Saab and his business partner, Álvaro Enrique Pulido Vargas, to pay bribes to top government officials in return for even more lucrative contracts.

Mr. Saab then used his relationship with Mr. Maduro’s circle to import food, using companies registered in Hong Kong and Mexico to package supplies and launder money. Mr. Saab, however, brought in “only a fraction of the food” that he was contracted to import, while he “reaped substantial profits,” according to the Treasury Department.

Three American officials, speaking on the condition of anonymity, said the arrangement was not unusual for CLAP: The system had routinely shaved its expenses by buying lower-quality food or less food than budgeted. The money saved was funneled to loyalists of Mr. Maduro, the American officials said.

In addition to sanctioning Mr. Saab and Mr. Maduro’s stepsons, the U.S. sanctioned around 20 other individuals and companies they said were involved in the scheme.

A Trump administration official said the sanctions would not stop food or medicine from being sent to Venezuela to ease shortages during the crisis. A second official said that the United States Agency for International Development has so far provided $246 million in regional assistance to Venezuelans who have fled to Colombia and other neighboring countries.

Mr. Maduro, who is under sanctions and no longer recognized by the U.S. as president, did not comment Thursday. In the past, his government has denied wrongdoing, saying American accusations are part of an “economic war” to bring down his government.

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