El Salvador’s Nayib Bukele Tainted by Money Laundering Allegations

SHARETweet about this on TwitterShare on FacebookShare on LinkedIn

El Salvador President Nayib Bukele is at the center of a complex web of financial transactions, which show he received millions of dollars from a subsidiary of Venezuela’s state-owned oil company, PdVSA.

An investigation by Revista Factum revealed that Bukele, who became president in June, received $1.9 million from Inversiones Valiosas S.A. (Inverval) in 2013 when he was mayor of the small town of Nuevo Cuscatlán, near the capital. Inverval is owned by Alba Petróleos, an El Salvador-based subsidiary of Petróleos de Venezuela S.A. (PdVSA), the Venezuelan state-owned oil firm that is under heavy sanctions by the US Treasury Department for being a vehicle for corruption.

The ties between Bukele and Alba Petróleos emerged in May 2019 after El Salvador’s Attorney General’s Office opened a money laundering inquiry into 23 companies, including Inverval.

Interval funneled the cash to Bukele — a rising star in the then-ruling party, the left-wing Farabundo Marti National Liberation Front (Frente Farabundo Martí para la Liberación Nacional — FMLN) — as campaign donations. Inverval also made donations to a company belonging to a family friend of Bukele and other close associates, who now serve in the president’s cabinet.

In total, Bukele and his associates received over $3 million from Inverval, according to Factum.

Part of these funds were then used by Bukele to invest in Starlight, a company also funded with Venezuelan capital. Starlight owns the TVX television station, which Bukele used to further his political career.

Interval money also financed luxury real estate developments in Nuevo Cuscatlán when Bukele was mayor. One Inverval executive said that he had given $500,000 to the mayor’s office, according to Factum. In turn, Interval had been exempted from paying taxes on the real estate projects.

SEE ALSO: El Salvador News and Profile

Both Inverval and Starlight were almost entirely financed with funds from Alba Petróleos, according to files from the Attorney General’s Office. Alba Petróleos was founded in 2006 by PdVSA as part of an international campaign of subsidies by which Venezuela’s former president, Hugo Chávez, maintained political alliances in Central America and the Caribbean.

In March 2019, Alba Petróleos and Albanisa, a PdVSA subsidiary in Nicaragua, were sanctioned by the US Treasury Department as part of its measures against PdVSA.

After Factum published its investigation, Bukele admitted having received $1.9 million from Inverval. The money, he claimed, had been for the sale of Starlight, which he said belonged to him. However, Bukele was never registered as an owner of Starlight, only acting as its guarantor, according to an investigation by El Faro.

In a press conference, Bukele said that the deal had happened before accusations emerged against Alba Petróleos and that he had dealt exclusively with Inverval.

“To be honest — which company didn’t receive money from Alba Petróleos … if you remember, at the time Alba Petróleos entered the Salvadoran market with billions of dollars and invested in other companies,” said the president.

Suspicions that Alba Petróleos was engaged in money laundering first emerged in 2010, according to a May filing by the Attorney General’s Office to explain its inquiry into the finances of the 23 companies.

InSight Crime Analysis

The ties between the president of El Salvador and Alba Petróleos have rung alarm bells about potential corruption in the country’s new government. With just four months in office, Bukele has remained extremely popular, with an approval rating of between 80 and 90 percent.

Since these revelations, a new investigation by El Faro has linked Bukele to money coming from associates of Herbert Saca, one of El Salvador’s most questionable political operators. Saca has in the past been linked to the Perrones local drug trafficking gang. He also allegedly participated in a corruption ring that bribed parliamentarians during the administration of former president Mauricio Funes between 2009 and 2014.

As these revelations surfaced, Bukele’s administration has sought to prevent journalists from Factum and El Faro from carrying out their work, including barring them from official press conferences.

SEE ALSO: Impunity In the Northern Triangle

As part of his anti-corruption agenda, Bukele announced in September his plan to create an international anti-corruption commission, similar to the United Nations-backed International Commission Against Impunity in Guatemala (Comisión Internacional Contra la Impunidad en Guatemala – CICIG). For the moment, this commission only exists on paper and it is unclear what independence it will have, according to Factum’s reporting.

For now, these suspicious financial dealings have dealt an early blow to Bukele and his vow to clean up corruption in El Salvador.

SHARETweet about this on TwitterShare on FacebookShare on LinkedIn