Court Case in Miami Casts Light on Corruption in Venezuela

In Venezuela, the state media have largely ignored the case and the government has scoffed at the revelations, which officials have cast as part of a Bush administration plot to smear Chávez.

Bernardo Álvarez, who until last month was the Venezuelan ambassador to Washington, criticized prosecutors' reliance on Antonini to build a case against Durán. "It's shocking that a man who committed a crime in Argentina becomes a protected witness in Miami to make all kinds of accusations against the Venezuelan government," Álvarez said in an interview.

In Argentina, Fernández de Kirchner has dismissed the case as "garbage." But the trial has generated front-page news there for months.

Transcripts of the taped conversations reveal intricate details of the collaboration between Venezuelan businessmen and government officials during Venezuela's recent oil boom as they pilfered public funds through no-bid contracts, kickbacks and secret commissions.

"It's basically a bunch of guys in their late 30s, all of whom saw an opportunity when Chávez went into power," said Kenneth Rijock, financial crime consultant for World-Check, a London-based firm that provides risk analysis for banks and other institutions. "They've been riding his coattails since, benefiting from sweetheart deals, kickbacks and other corrupt practices."

In one case, Kauffmann said he and Durán bought a $4 million building in Caracas and sold it to the Finance Ministry 15 days later for $9.5 million. About $5 million of that went to top officials in the Finance Ministry, Kauffmann said, including then-Minister Tobias Nóbrega. Venezuelan officials charged Nóbrega this year in connection with that case and others.

Kauffmann said he and Durán limited their earnings in that swindle as a way of ingratiating themselves with Nóbrega and his associates, "to create a bond with them . . . to do more business."

Kauffmann described another scheme in which a $100 million bond sale netted $25 million for Finance Ministry officials and how he and his associates managed bribes by companies to the National Guard.

Maiónica testified that as the scandal spiraled out of control, Chávez assigned the Venezuelan intelligence chief, Gen. Henry Rangel Silva, to launch an operation to silence Antonini.

Those who participated in the alleged coverup expected to be paid handsomely for their work. Maiónica said he would earn $400,000. Kauffmann said the Venezuelan ambassador in Bolivia offered to pay him from a $100 million fund set up to aid President Evo Morales's government.

"We were going to receive big payment for this, big contracts and big favors," Kauffmann said.

For the Bush administration, the revelations at the trial have provided a glimpse of the Venezuelan government's reliance on business associates to channel money and avoid detection, a senior administration official in Washington said. The United States has long warned that Venezuela was becoming a hotbed of corruption and drug trafficking involving armed forces officers.

"They're expected to move money when Chávez wants," said the official, who spoke on the condition of anonymity because of the delicate nature of U.S.-Venezuelan relations. "They're moving around money to launder it and to meet off-budget expenses, whether in Bolivia or wherever."

Special correspondent Brian Byrnes in Buenos Aires contributed to this report.