NEW YORK (AP) — A former U.S. ambassador to Venezuela and an outspoken critic of public corruption in that country has sued three Venezuelan businessmen in New York, claiming they secured lucrative power plant construction contracts by paying kickbacks to government employees.
Otto Reich, who served as ambassador to the South American country from 1983 to 1986, also alleges in his suit filed in federal court in Manhattan Tuesday that executives at Derwick Associates — Leopoldo Alejandro Betancourt Lopez, Pedro Jose Trebbau Lopez and Francisco D'Agostino Casado — defamed him and caused his consulting business, Otto Reich Associates, to lose business.
"Defendants use Derwick Associates to secure inflated public contracts in Venezuela, paying public officials large payments in exchange for awarding them contracts, and unjustly enriching themselves in the process," the suit says.
Reich claims Betancourt, Trebbau and D'Agostino violated federal laws by securing numerous no-bid contracts to build power plants in Venezuela between 2009 and 2012 valued at about $1 billion, paying kickbacks to numerous public officials in Venezuela, including the president of the state oil company, Petroleos de Venezuela S.A. Reich claims the Derwick Associates officials also provided kickbacks to secure contracts with officials at the state-run company supplying power to the country's capital, Caracas, and the state-run company that controls energy production in the southeast region of Guayana.
Attorneys for Betancourt and Trebbau called the lawsuit meritless, adding that their clients do not conduct business in New York and have no commercial relationship with D'Agostino.
"Contrary to the spurious allegations in the complaint, Derwick is a well-established company with an extremely successful track record," attorneys Brian Kaplan and Hector Torres said in a statement. "We will take all necessary and appropriate measures to defend and protect our clients' rights and reputations."
Betancourt, Trebbau and Derwick Associates filed a $300 million defamation lawsuit in 2012 against Banco Venezolano in Florida, alleging the bank defamed the company on a website. The lawsuit was later settled, but Reich claims he lost a $20,000-month consulting contract with the bank after the men advised an intermediary to call a major Banco Venezolano shareholder to say, falsely, that Reich was working for Derwick as he was negotiating a consulting contract.
Reich lost another $20,000-month contract with a Venezuelan businessman after Trebbau and Betancourt falsely convinced him that Reich was working for Derwick, the lawsuit alleges.
Venezuela's president, Nicolas Maduro, has said entrenched corruption is one of the nation's biggest problems over the decades.
Opposition leaders charge that graft only got worse during the 14 years that the late President Hugo Chavez was in office, and accuse authorities of doing little combat it and even profiting themselves.