October 17, 2008
The convicted business partner of a wealthy Venezuelan will be allowed to testify at a Miami trial about millions of dollars in kickbacks allegedly paid to senior officials in the government of Venezuelan President Hugo Chávez, a federal judge ruled Friday.
Carlos Kauffmann gave a preview of that testimony on Friday when he summarized the money he and his partner, Franklin Durán, allegedly paid to senior officials in the Venezuelan National Guard, Finance Ministry, Education Ministry and two states.
U.S. District Judge Joan Lenard's ruling came after the unexpected testimony by Kauffmann, who took the witness stand without a jury present. He pleaded guilty to charges he failed to register as an agent with U.S. authorities when he flew to Miami to allegedly silence a business associate who had been stopped in Argentina with a suitcase containing almost $800,000 in cash.
Kauffmann's statements added an explosive dimension to the seven-week-old trial likely to reverberate from Miami to Caracas to Buenos Aires.
Though Kauffman's bribery allegations have emerged before in court records, his testimony is likely to draw more international scrutiny because of the dramatic fashion in which he will deliver it: in front of the 12-member federal jury in Miami.
Also, he is expected to name the senior officials who allegedly received tens of millions of dollars in bribes, though on Friday the judge limited the scope of Kauffman's testimony next Tuesday -- just before closing arguments Wednesday.
Kauffmann gave a preview of his testimony because Lenard wanted to hear whether his information should be allowed in as rebuttal to her decision to let Durán's attorney argue an ''entrapment'' defense in closing arguments.
''It's relevant to the crimes charged in this case and the defendant's readiness and willingness to commit those crimes,'' Lenard said.
Duran, 40, is charged in a plot of failing to register as an agent with U.S. authorities last year when he flew to Miami to silence a business associate who had been stopped with a suitcase filled with $800,000 in cash in Argentina.
The cash -- seized from Venezuelan businessman Guido Alejandro Antonio Wilson -- was intended as a campaign gift from the Chávez government to a political ally in Argentina, Cristina Fernández de Kirchner. She won last year's presidential election. The discovery of the suitcase by a customs agent, who later posed for Playboy in Argentina, sparked a hemispheric scandal.
Both Chávez and Fernández have denied allegations that the money was meant for her and have called the U.S. criminal case ``garbage.''
On Friday, Duran's business partner, Kauffmann, recounted how the two began working together a decade ago and became multimillionaires by paying kickbacks to top Venezuelan officials in exchange for lucrative contracts -- including collecting large fees for depositing government money in back accounts.
''We gave part of it to the people in government,'' Kauffmann testified before the federal judge.
In one deal, Kauffmann said he and Duran bought a building for $4.5 million in Caracas in 2002 so the Venezuelan Finance Ministry could purchase it for $9.5 million. The partners kicked back $4.5 million to four senior officials in that agency, Kauffmann testified.
In another deal, Kauffmann said he and his partner colluded again with the Finance Ministry officials on a $100 million bond sale, he testified. This time, they kicked back about $24 million to the agency officials.
The partners also paid off elected government officials in the states of Cojedes and Vargas, including a $250,000 campaign contribution, Kauffmann testified.
''It was to create a bond with them. . . to get more business with the government,'' he testified.
Assistant U.S. Attorney Thomas Mulvihill said it was relevant to allow Kauffmann to testify before the jury because these ''prior bad acts'' would show Duran's pre-disposition to lead the Venezuelan plot to silence Antonini about the source and destination of the suitcase full of cash.
Mulvihill said the jury should be allowed to hear his testimony because it shows that Duran was not ''entrapped'' by Antonini, who began cooperating with the FBI last year after he returned to his home in Key Biscayne following the seizure of the suitcase in Argentina.
In effect, the prosecutor argued that Duran's plot to silence Antonini was another kickback to the government of Venezuela, which would amply reward him with future government contracts if he was successful.
''He's not an innocent man entrapped by the United States,'' Mulvihill said.