One start­up lists as its ad­dress a small home in a work­ing-class dis­trict in Venezuela’s cap­i­tal whose own­er has nev­er heard of the firm. An­oth­er is a Hong Kong-based shell com­pa­ny cre­at­ed in 2020. Yet an­oth­er be­longs to a Span­ish com­modi­ties trad­er in­dict­ed in the U.S. for al­leged­ly help­ing Russ­ian oli­garchs laun­der ill-got­ten prof­its.

They are among the dozens of ob­scure mid­dle­men at the cen­ter of a new crack­down in Venezuela on cor­rup­tion in the state-run oil in­dus­try that has gov­ern­ment in­sid­ers scur­ry­ing for cov­er — and reg­u­lar Venezue­lans are ask­ing how more than $20 bil­lion in pro­ceeds from oil ship­ments seem­ing­ly van­ished.

The purge be­gan this month when au­thor­i­ties ar­rest­ed 21 busi­ness peo­ple and se­nior of­fi­cials as part of an in­ves­ti­ga­tion in­to miss­ing pay­ments for oil. To pro­mote the an­ti-cor­rup­tion cru­sade, state me­dia this week was filled with im­ages of the de­fen­dants dressed in or­ange jump­suits walk­ing in­to their ini­tial ju­di­cial hear­ing.

Cor­rup­tion has long plagued Venezuela — the OPEC na­tion was the fourth-most cor­rupt in the world in the lat­est rank­ings by Trans­paren­cy In­ter­na­tion­al — but those in po­si­tions of pow­er are rarely held ac­count­able.

And when high pro­file ar­rests do take place, Venezue­lans tend to view them as the re­sult of a be­hind-the-scenes tug of war among heavy­weights in the rul­ing so­cial­ist par­ty, and not any im­par­tial met­ing out of jus­tice in a coun­try where most in­sti­tu­tions lack in­de­pen­dence.

An en­trenched cul­ture of cor­rup­tion and the in­her­ent­ly opaque na­ture of trad­ing il­le­gal crude oil take malfea­sance to an­oth­er lev­el.

“It would be very dif­fi­cult for even a much less cor­rupt state to im­ple­ment all the nec­es­sary con­trols,” said Fran­cis­co Monal­di, a Venezue­lan who heads the Latin Amer­i­ca en­er­gy pro­gram at Rice Uni­ver­si­ty’s Bak­er In­sti­tute for Pub­lic Pol­i­cy.

While the fall­out from the scan­dal con­tin­ues, it al­ready has felled one ma­jor pow­er bro­ker: Tareck El Ais­sa­mi, the coun­try’s oil czar. He quit in the wake of the ar­rests, which in­clud­ed the de­ten­tion of a close as­so­ciate, Joselit Ramirez, who had been serv­ing as Venezuela’s cryp­tocur­ren­cy reg­u­la­tor.

While Venezue­lan au­thor­i­ties have not men­tioned El Ais­sa­mi as a tar­get in the in­ves­ti­ga­tion, most of the shady trans­ac­tions at state-run oil gi­ant Petroleos de Venezuela SA oc­curred un­der his watch.

In­ter­nal PDVSA doc­u­ments ob­tained by The As­so­ci­at­ed Press show the state oil com­pa­ny was owed $10.1 bil­lion as of Au­gust 2022 from 90 most­ly un­known trad­ing com­pa­nies that have emerged as ma­jor buy­ers of Venezue­lan crude since the U.S. im­posed eco­nom­ic sanc­tions in a cam­paign to oust Pres­i­dent Nicolás Maduro.

An ad­di­tion­al $13.3 bil­lion, cor­re­spond­ing to 241 ship­ments, is owed di­rect­ly to the na­tion­al gov­ern­ment as a re­sult of an Oc­to­ber ac­count­ing ma­neu­ver by PDVSA that re­as­signed re­spon­si­bil­i­ty for col­lect­ing the un­paid in­voic­es di­rect­ly to the Maduro ad­min­is­tra­tion in lieu of cash roy­al­ties. That is more than the coun­try’s en­tire for­eign cur­ren­cy re­serves.

All the oil car­goes were sold on con­sign­ment at a deep dis­count ow­ing to the sanc­tions, which have scared away more es­tab­lished traders.

PDVSA’s re­liance on in­ter­me­di­aries surged in 2020, when the Trump ad­min­is­tra­tion ex­pand­ed sanc­tions with the threat to lock out of the U.S. econ­o­my any in­di­vid­ual or com­pa­ny, re­gard­less of na­tion­al­i­ty or lo­ca­tion, that did busi­ness with Maduro’s gov­ern­ment.

The pun­ish­ing ac­tion, com­bined with a pan­dem­ic-in­duced glob­al slump in de­mand for oil, led pro­duc­tion that sum­mer to plum­met to 350,000 bar­rels a day — 10% of what it pro­duced when Chávez took of­fice in 1999.

To sell what lit­tle is be­ing pro­duced, Maduro, with the help of al­lies Rus­sia and Iran — them­selves un­der U.S. sanc­tions — has had to re­ly on a com­plex net­work of in­ter­me­di­aries. Most are shell com­pa­nies, reg­is­tered in ju­ris­dic­tions known for se­cre­cy. The buy­ers de­ploy so-called ghost tankers that hide their lo­ca­tion and hand off their valu­able car­goes in the mid­dle of the ocean be­fore they reach their fi­nal des­ti­na­tion..

To avoid West­ern banks, Venezuela start­ed ac­cept­ing pay­ments in Russ­ian rubles, bartered goods or cryp­tocur­ren­cy.

But not every­one paid.

Among those on the delin­quent list is Walk­er In­ter­na­tion­al, which owes PDVSA about $77 mil­lion, ac­cord­ing to the doc­u­ments. The com­pa­ny is reg­is­tered in the Unit­ed Arab Emi­rates but lists as its Venezuela ad­dress a mod­est house at the foot of the moun­tain range that sep­a­rate Cara­cas from the Caribbean Sea.

The own­er of the home, An­dres Mu­zo, ex­pressed shock that his home could some­how be caught up in a case of in­ter­na­tion­al cor­rup­tion.

“I’m find­ing about this right now,” Mu­zo said af­ter see­ing his ad­dress in Dubai cor­po­rate records, which were first un­earthed by Venezue­lan news web­site Ar­man­do.in­fo. He shook his head and said he would in­quire with the peo­ple who rent his ad­ja­cent garage for an oil-change busi­ness.

“We don’t know any­thing,” Mu­zo said.

The bro­ker with the largest debt is M and Y Trad­ing Co, which was reg­is­tered in Hong Kong in 2020. It owes PDVSA more than $1.2 bil­lion, ac­cord­ing to the in­ter­nal doc­u­ments, which some­one knowl­edge­able about the trans­ac­tions shared with AP on the con­di­tion that they re­main anony­mous.

An­oth­er pre­ferred ven­dor was Unit­ed Petroleo Corp, which was reg­is­tered in Pana­ma in 2021 and owes more than $468 mil­lion. One of Unit­ed’s car­goes — a 600,000-bar­rel ship­ment last Sep­tem­ber — is at the cen­ter of a con­tro­ver­sy on the Dutch Caribbean is­land of Cu­ra­cao, where the Venezue­lan crude is be­ing stored at a fa­cil­i­ty tied to U.S. in­vestors in pos­si­ble de­fi­ance of sanc­tions.

Yet an­oth­er of PDVSA’s go-to part­ners was Tre­seus In­ter­na­tion­al. The com­modi­ties bro­ker­age, which did not re­spond to an email seek­ing com­ment, is run by Juan Fer­nan­do Ser­ra­no, a Spaniard in­dict­ed last year on mon­ey laun­der­ing charges in Man­hat­tan fed­er­al court for con­spir­ing to smug­gle oil on be­half of wealthy Rus­sians. That court al­so wants El Ais­sa­mi and Ramirez on charges of vi­o­lat­ing U.S. sanc­tions stem­ming from El Ais­sa­mi’s 2017 des­ig­na­tion by Wash­ing­ton as a “drug king­pin” for al­leged­ly help­ing car­tels smug­gle co­caine through Venezuela.

Au­thor­i­ties have yet to say how much mon­ey may be miss­ing. But Maduro has used some of his re­cent pub­lic ap­pear­ances to warn of­fi­cials against graft. Sup­port­ers even gath­ered for an an­ti-cor­rup­tion protest in Cara­cas.

Past crack­downs — like the ar­rest of a for­mer PDVSA pres­i­dent in 2017 — did lit­tle to clean up the oil in­dus­try, which is re­spon­si­ble for al­most all of the coun­try’s hard cur­ren­cy earn­ings. Many an­a­lysts sus­pect Maduro is look­ing to sta­bi­lize the econ­o­my be­fore next year’s pres­i­den­tial elec­tion.

“Cof­fers are bare and the coun­try is en­ter­ing an elec­tion year in which Maduro wants to con­vey a mes­sage that Venezuela is back on track,” said Ge­off Ram­sey, a se­nior fel­low at the At­lantic Coun­cil. “The more it be­comes clear that the econ­o­my re­mains in dire straits, the more Maduro will look for peo­ple to take the fall.”

CARA­CAS, Venezuela (AP)