Arrest of Colombian businessman may spell trouble for Turkey, Venezuela

Alex Saab, a little-known Colombian businessman, was detained on the African island archipelago of Cape Verde on Friday after an Interpol “red notice” was issued against him. The 48-year-old was allegedly en route to Iran to negotiate some deals to exchange Venezuelan gold for Iranian gasoline.

Although Saab's detention captured international headlines over the weekend, it received scant attention in the Turkish media because the businessman's role in Turkish-Venezuelan relations is not sufficiently well known.

Saab was a key business ally for the administration of Nicolas Maduro, especially after the United States ratcheted up sanctions on Venezuela in January of 2919. Maduro reportedly relied on Saab, who has ran a network of shell companies around the globe, to help him make huge profits from the government-funded contracts.

The U.S. authorities last year sanctioned Saab, who they maintain is the chief money launder for Maduro, for his corruption network. He was also indicted by U.S. federal prosecutors on charges of money laundering. Saab allegedly bribed Venezuelan officials and funneled vast amounts of money to overseas accounts. 

Saab has also allegedly played a key role in building Venezuela’s economic relationship with Turkey through his shell companies located in Istanbul.

Although the scope and content of the trade between Venezuela and Turkey is still not well-documented, it is known that the two countries have established a so-called gold-for-food mechanism.

The U.S. Treasury has already released information on the opaque financial dealings between Ankara and Caracas.

According to the Treasury, Turkish companies have imported gold from Venezuela, deposited money in accounts in Turkish banks, which have then been transferred to an account of the Venezuelan Central Bank in Turkey.

Turkish President Recep Tayyip Erdoğan has thrown his vocal support behind Venezuelan strongman Maduro, and Venezuelan gold has been shipped to Turkey for refinement since 2018, with some $900 million’s worth of gold shipped that year.

In return, Turkey became a major supplier of consumer staples such as pasta, sunflower oil, wheat flour, red lentils, and powdered milk for Venezuela.

A severe economic downturn in Venezuela has meant that much of the population has struggled to afford basic food items.

Mulberry Proje Yatirim, established in Istanbul in 2017 by Saab’s partners, has allegedly become the intermediary in food imports by purchasing goods from Turkey on behalf of Venezuelan clients and selling them in Venezuela.

In July 2019, the U.S. Treasury imposed sanctions on Mulberry for its involvement in Saab’s sophisticated network that allegedly laundered millions of dollars in profits from overvalued contracts linked to Venezuela’s food subsidy program. Saab seems to be ultimately behind the joint ventures, which were established in 2018 between Venezuela and Turkey.

Several reports revealed that some senior Venezuelan officials and members of the military appear to have lined their pockets through Saab’s networks. Given the existence of Turkey's expanded pro-government network and state-sponsored patronage system, it might not be wrong to conclude that some high-level Turkish officials could be personally involved in Saab’s sophisticated network, just as in that of Reza Zarrab, a Turkish-Iranian gold trader arrested and charged in the United States in 2016 for involvement in a huge money-laundering scheme that violated U.S. sanctions on Iran.

Zarrab, who initially pleaded not guilty, flipped, became a U.S. government witness and admitted being involved in the multi-billion-dollar gold-for-oil scheme. His testimony implicated several former Turkish ministers.

Because the media has increasingly come under political control in Turkey, the corruption scandals have not received the coverage they deserved. Unfortunately, not one piece of news has been published in Turkey covering the Turkish leg of Saab’s sophisticated corruption scheme. 

Saab is believed to hold many secrets about allegedly siphoning off millions of dollars in government contracts and a wide-scale corruption network. Possible future indictments of Saab in the United States could reveal the unknown details of this complicated web and uncover the involvement of Turkish officials at the highest level.

The Venezuelan government recently hired Amsterdam and Partners LLP, a U.S. law firm that also represents Turkey, in a renewed effort to battle harsh economic sanctions imposed by Washington, the Associated Press reported in February.

Since 2015, Amsterdam has assisted Turkey in seeking the extradition of a U.S.-based Islamic cleric Fethullah Gülen, who Turkey accuses of masterminding a failed military coup on July 15, 2016.

The hiring of the legal firm is the latest sign that the Turkish and Venezuelan governments appear to be in cooperation beyond trade dealings.