(Adds official confirmation, details on Bariven case)
By Alexandra Ulmer
CARACAS, Nov 2 (Reuters) - Venezuela has arrested the president of state oil company PDVSA’s procurement subsidiary Bariven, the chief prosecutor said on Thursday, as a graft probe widens into the oil corruption that has long dogged the OPEC country.
Bariven has been in the spotlight since U.S. authorities arrested two prominent Venezuelan oil businessmen in 2015 on charges of violating the U.S. Foreign Corrupt Practices Act (FCPA). Both Roberto Rincon and Abraham Shiera have pleaded guilty to bribing PDVSA officials to win juicy contracts with Bariven, in what insiders say was a massive bribery scheme including kickbacks and overpricing.
Socialist-run Venezuela originally slammed the investigations as sabotage by Washington, its ideological foe.
But in a turnaround, PDVSA said last year it was actually a victim of fraud and Bariven has asked a U.S. court to order the businessmen to compensate it for $600 million in losses, a position prosecutor Tarek Saab is now pushing.
“That money needs to be repatriated to the country. For us this will be a point of honor,” Saab, a former Socialist Party governor, said at a news conference.
He stressed that Rincon had robbed the nation, but that he was now a “protected witness” in the United States and would soon walk free.
Saab also said Venezuela would request the extradition of Nervis Villalobos, a former vice minister, arrested in Spain last week after the U.S. District Court in the Southern District of Texas, which is hearing Rincon’s case, issued an international detention order.
PDVSA did not respond to a request for comment.
A Reuters analysis last year suggested that Venezuela’s legal strategy to portray itself as a victim was unlikely to lead to compensation.
Under the FCPA, money collected from fines and penalties goes to the U.S. Treasury and appeals for compensation are rare. Allegations of endemic corruption at PDVSA are likely to weigh, experts believe, and the company is more likely to be considered a co-conspirator.
What prosecutor Saab has called a “crusade” against corruption has now left 32 oil officials behind bars, including five top-level executives, in the last two months.
Francisco Jimenez, the head of procurement arm Bariven, was detained on Tuesday afternoon at PDVSA’s Caracas headquarters, according to an internal PDVSA message seen by Reuters. Two other Bariven executives were also arrested, Saab said.
President Nicolas Maduro’s government and PDVSA, which is formally known as Petroleos de Venezuela SA, have repeatedly vowed to take steps to combat corruption.
Opposition leaders say PDVSA has been crippled by malfeasance under 18 years of socialist rule. They say sporadic arrests are the result of infighting among rival government factions.
Sources close to PDVSA say the arrests owe more to turf wars for control of the company, which is the financial motor of Venezuela’s ailing economy, than a wholesale effort to clean up graft. (Reporting by Alexandra Ulmer; Editing by Jeffrey Benkoe)