Telefónica paid bribes to Venezuelan government members

On Saturday, news broke that Telefónica’s Venezuelan subsidiary Telefónica Venezolana had reached a settlement with the US Justice Department. Pay a fine of $85.26 million (about 80 million euros)The reason for this was to close the investigation into a bribery scheme against members of the Venezuelan government.

In a statement sent by the US Department of Justice itself, Principal Deputy Attorney General Nicole M. Argentieri, head of the Criminal Division, explained that “Telefónica Venezolana bribed Venezuelan government officials to participate in a government auction, through The Venezuelan bolivar was exchanged for the US dollar. Company hid illegal payments by purchasing equipment at inflated prices To two suppliers who had paid bribes on behalf of the company.

Argentieri said that “Telefónica Venezolana decided to support a corrupt regime to overcome the difficulties of running a legal business In Venezuela.” And he assured that the fine imposed “is another example of the Justice Department’s commitment to fighting corruption and holding companies accountable for their criminal conduct.”

The statement was published on the same day Telefónica Venezolana signed a deferred processing agreement (DPA) For violating the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA). The acknowledged events occurred in 2014, when Telefónica was President César Alierta, José María Álvarez-Palete (current Chairman) was CEO and Ángel Villa (current CEO) served as Director of Corporate Finance.

As reported this Monday confidentialCiting sources close to the case, the operator had been aware of the magnitude of the cleared file for months, and during negotiations with the US Justice Department, it agreed to a number of conditions to avoid a lawsuit “including “There could have been bad consequences,” is one of them. Dismissal of “those most responsible for bribery”Among whom was Pedro Cortez, who was CEO of the Venezuelan subsidiary at the time of the commission payments to members of Nicolás Maduro’s government.

On your personal LinkedIn profile, Cortez says he was acting president and CEO of Telefónica Venezolana between 2012 and 2017.At which time he began holding the same position in the company’s Peruvian subsidiary (Telefónica del Peru). He remained in that position until July 2023, when he was appointed Strategy Director of Hispam, the unit of the business group that brings together businesses in Argentina, Chile, Colombia, Ecuador, Peru, Mexico, Uruguay and Venezuela.

Cortez’s relationship with Telefónica ends in July 2024And from then on the executive acts as an “independent professional”. This newspaper has contacted the operator to ask whether his departure was motivated by this case, but he has declined to comment.

in and out investigation

According to court documents obtained by the US Justice Department, in 2014 Telefónica Venezolana participated in a currency auction sponsored by the Venezuelan government, which allowed it to exchange its Venezuelan bolivars for US dollars. To ensure its success in the auction, the company recruited two suppliers to make corrupt payments.

for approximately $28.9 million to an intermediary, knowing that some of those funds would be paid as “commissions” to Venezuelan government officials.

To conceal the bribe payments, Telefónica Venezolana covered the costs of the bribes by purchasing equipment at inflated prices from two suppliers. As a result of their “corrupt payments” to Telefónica Venezolana They were given permission to exchange and later received over $110 million through a currency auction.which he used to purchase equipment from two suppliers he recruited to participate in the scheme. These funds represent more than 65% of the funds offered by the Venezuelan government in the 2014 currency auction.

Damien Williams, U.S. Attorney for the Southern District of Venezuela, said, “Telefónica Venezolana, a subsidiary and agent of a U.S. issuer, agreed to line the pockets of corrupt Venezuelan officials to gain access to U.S. currency and maintain its position in the Venezuelan telecommunications market. Hui.” New York. “The middlemen then paid the bribes through correspondent bank accounts in the United States. This office will not tolerate.” The use and abuse of the US financial system to enrich corrupt foreign officials And those who maintain their position in the market by pleasing them,” he said.

The Justice Department reached this resolution with Telefónica Venezolana based on “several factors”, including the nature and seriousness of the crime. as explained, The operator received a minor fine because he cooperated with the investigation.For example, making employees outside the United States voluntarily available for interviews or collecting, analyzing, and organizing evidence and information with document translation.

However, US judges confirm that The company was unwilling to cooperate in the early stages of operation,

Something that has worked against them, including the fact that in 2019 the company’s Brazilian subsidiary Telefónica Brasil already received approval from the Securities and Exchange Commission (SEC) to purchase Brazilian tickets for the 2014 Soccer World Cup and the 2013 Confederations Cup. Had found it. officers.

As yet, Telefónica Venezolana has implemented a series of “timely corrective measures”. Such as disciplining or firing some of the employees involved and strengthening its anti-corruption compliance program. And both the subsidiary and its corporate parent, Telefónica, have agreed to continue to cooperate with the Criminal Division’s Fraud Section and the United States Attorney’s Office for the Southern District of New York in any ongoing or future criminal investigations occurring during Validity. Have agreed to. DPA.