October 17, 2008
MIAMI -- The partner of a wealthy Venezuelan businessman on trial for his alleged involvement in a Latin American political cash scandal said Friday they were both deeply involved in rampant government corruption in their home country.
Carlos Kauffmann, 36, testified outside the presence of the jury that he and Franklin Duran made tens of millions of dollars beginning in 1998 through a system of bribes, kickbacks and payoffs with a web of top officials in two Venezuelan states, the country's national guard and its education and finance ministries.
"Everything is half and half," Kauffmann said. "Me and Franklin."
Duran, 41, is accused of conspiracy and acting as an illegal Venezuelan agent in the U.S. Prosecutors say he, Kauffmann and two other men came to Miami to cover up the Venezuelan source of a suitcase stuffed with $800,000 in cash intended for the campaign of Argentine President Cristina Fernandez.
Duran has claimed that he was set up by the FBI. Both Venezuelan President Hugo Chavez and Fernandez have denounced Duran's trial as politically motivated; the U.S. has denied the accusation.
Kauffmann has pleaded guilty to conspiracy in the case and is cooperating with prosecutors. He said he and Duran wanted to help Venezuela quell the political firestorm triggered by the suitcase's discovery to keep their profitable corrupt businesses going.
Their corruption, according to Kauffmann, included handling multimillion-dollar finance deals for the national guard, the education ministry and the states of Vargas and Cojedes, the sale of a Caracas building to the government for double its price in just a 15-day span and lucrative government construction contracts that still exist today.
Kauffmann said he and Duran got a percentage for their work and paid kickbacks to various officials, whom he identified by name and title for the first time.
"That's the way things work down there," Kauffmann said.
Later Friday, U.S. District Judge Joan Lenard ruled that jurors will be allowed to hear much of Kauffmann's testimony about Venezuelan corruption as well as a statement Duran allegedly made to the FBI after his 2007 arrest about how he amassed his wealth.
The FBI quoted Duran as telling agents that he "is able to succeed in Venezuela because he pays off politicians, government employees and high-ranking officials."
Duran attorney Ed Shohat had fought to keep the corruption testimony out of the trial, arguing it was not relevant to the U.S. charges.
"This will turn into a total character assassination of Franklin Duran," Shohat said, adding that Kauffmann's disclosures will trigger "a major scandal in Venezuela."
But prosecutor Thomas Mulvihill said it's clear evidence of the reason Duran and the others came to Miami to cover up the cash source at the request of Venezuela's intelligence service.
"They do a favor for the official, the official does a favor for them," Mulvihill said. "One hand washes the other."
Duran won a legal round Thursday when Lenard agreed to tell jurors before they begin deliberations that there is a legitimate defense of entrapment in the case. Shohat has claimed that Duran was set up by the FBI through use of a friend and associate, Guido Alejandro Antonini Wilson, who cooperated with U.S. investigators and secretly taped their conversations.
Antonini, a dual U.S.-Venezuelan citizen, was the man who actually carried the cash-laden suitcase into Argentina in August 2007.
Kauffmann is expected to take the stand again Tuesday to repeat his corruption claims before the jury. Jurors are scheduled to begin deliberations on Wednesday; Duran faces up to 15 years in prison if convicted.