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Welcome to Miami, Venezuelan kleptocrats

The week in corruption, 10 July 2020

Transparency Int'l

Earlier this week, U.S.federal agents seized 81 luxury cars worth US$3.2 million in the south of Florida.

The cars were bound for Venezuela – Latin America’s resource-rich but impoverished country, where 85 per cent of the population can barely afford daily sustenance, let alone a US$62,000 Jaguar.

Agents believe that Venezuelan billionaire Raúl Gorrín and his associates were planning to smuggle the cars to Venezuela for use by the country’s kleptocrats and well-connected individuals – quite possibly some of those featured on El Feis, a new social-media style website from the Organized Crime and Corruption Reporting Project.

But that isn’t all: Gorrín was sanctioned by the U.S. government for “significant corruption” back in 2019, and banned from conducting business in the U.S.

So how could he continue to have dealings in the U.S.?

Gorrín is alleged to have used local shell companies and proxies to do business in the U.S., and he’s hardly the only one.

In recent years, the U.S. Attorney’s Office in Miami and its partners have brought dozens of such charges against regime officials, resulting in seizures amounting to US$450 million. Many of them had used anonymous companies to launder dirty money through Florida banks and Miami real estate.

Cases like this expose a paradox at the heart of the U.S. approach to fighting global kleptocracy.

While often taking the lead on international anti-corruption investigations and enforcement, the U.S. continues to be the financial secrecy jurisdiction of choice for many of the world’s corrupt politicians.

A major reason for this is that the U.S. does not make companies disclose their “beneficial owners” – those who really control and benefit from the companies.

Last week, the U.S. Senate missed a historic opportunity to make meaningful progress in this regard.

The bipartisan bill, which would have helped end the abuse of anonymous companies and, with it, U.S. complicity in transnational corruption, has been further delayed.

Until these crucial and long overdue updates to its lax anti-money laundering regulatory environment are secured, the U.S. will continue to allow the world’s known kleptocrats to fly under the radar of the very departments that have sanctioned them, to the detriment of the people they steal from.

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