Patricia Hurtado, Bloomberg News

NEW YORK
EnergiesNet.com 01 05 2023

The first defendant to face trial in a sweeping crackdown on bribery in the commodities-trading industry “orchestrated a money-laundering scheme right here in the US,” prosecutors told a jury in their opening argument against a former Vitol Group manager.

Javier Aguilar is accused of bribing Ecuadorian and Mexican government officials to win more than $500 million in business for Vitol, the world’s largest independent oil-trading firm, from state-owned Petroecuador and Petroleos Mexicanos. US prosecutors allege that he made $870,000 in payments to the officials to get the business. 

This is the first major trial of a commodity trader in more than a decade. While the industry has a had a reputation for backhanders and brown envelopes since the days of Marc Rich, few individual commodity traders have been convicted of corruption and even fewer have stood trial. A slew of anti-corruption investigations in the US, the UK, Brazil and Switzerland has yielded at least half a dozen guilty pleas, but Aguilar is the first to stand trial.

The trial promises to turn up new details about what US prosecutors have described as widespread corruption in the oil sector in Ecuador that involved at least six commodity trading houses as well as several state-owned companies in the Middle East and Asia.

Aguilar, who was based in Houston, is charged with three counts of conspiring to violate US laws against bribery and money laundering and could face at least a decade in prison if convicted.

‘Access, Influence or Greed’

“Whether for access, influence or greed, it’s a federal crime to bribe foreign officials for business,” prosecutor Clayton Solomon told the jurors in Brooklyn, New York, on Friday.

Aguilar and alleged co-conspirators used aliases such as Perez Marcos 007 to send emails to intermediaries to pay the bribes and used code words like zapatos, or shoes, to refer to the illegal payments, Solomon told the panel. He said some of the bribes were even made in the parking lot of a Houston-based Pemex business. Aguilar was secretly recorded discussing the scheme, he said.

Solomon told the jurors they would hear from former senior Petroecuador manager Nilsen Arias and consultants Antonio and Enrique Pere. They have pleaded guilty in the fraud and will testify for the government against Aguilar in hopes of leniency at their sentencing.

Aguilar’s lawyer, William Price, told the jury in his own opening that his client was framed by his former Vitol superior, Marc Ducrest, who pinned the blame for the fraud on an innocent Aguilar. 

Ducrest, who hasn’t been charged with wrongdoing, couldn’t immediately be reached for comment.

Aguilar a Scapegoat

“They decided to point the finger at Mr. Aguilar and say he was responsible for it,” Price told the jury. “But Mr. Aguilar had nothing to do with it.” 

Price argued it’s a common practice to hire consultants in Latin America and said Aguilar believed they were legitimately facilitating contracts. 

“Mr. Pere and his brother had a self-contained criminal enterprise,” Price said. “They basically bribed government officials so they could get results, so they could get the business.”

Prosecutors allege that Aguilar wired money to domestic and offshore bank accounts through a network of shell companies controlled by the co-conspirators. The payments, many of them processed through US-based banks, helped Vitol retain business related to Petroecuador and Mexico’s state oil giant, Pemex, according to the US. Aguilar also faces federal charges in Texas related to Pemex.

Aguilar was indicted in 2020. His trial was delayed by the pandemic, which shut down US courts.

As part of a deferred-prosecution agreement with the US, Vitol admitted that between 2005 and 2014 it and co-conspirators paid more than $8 million in bribes to four officials of Brazilian energy company Petrobras to get confidential pricing information. Separately, it said it tried to manipulate benchmarks for fuel oil prices, according to the agreement.

Vitol’s Americas division has also been a focus of the Brazilian “Carwash” corruption and money-laundering investigation that toppled some of that country’s leading business executives and political leaders. A former Petrobras oil trader who went by the code name Phil Collins told a Brazilian judge in 2019 that he received bribes from the trading house to favor the firm in contracts from 2003 to 2005.

The case is US v. Aguilar, 20-cr-390, US District Court, Eastern District of New York (Brooklyn). 

–With assistance from Archie Hunter, Jack Farchy and Stephan Kueffner.

bloomberg.com 01 05 2024