BANESCO PRESIDENT CONCERNED OVER ALLEGED U.S.

C O N F I D E N T I A L CARACAS 001613

SIPDIS

HQ SOUTHCOM ALSO FOR POLAD
TREASURY FOR RJARPE
NSC FOR JSHRIER
COMMERCE FOR 4431/MAC/WH/MCAMERON

E.O. 12958: DECL: 11/20/2018
TAGS: EFIN VE
SUBJECT: BANESCO PRESIDENT CONCERNED OVER ALLEGED U.S.
INVESTIGATION

Classified By: Economic Counselor Darnall Steuart for reasons 1.4 (b)
and (d).


1. (U) This is an action request. Please see paragraph 5.


2. (C) Banesco President Juan Carlos Escotet visited the
Charge November 18 to express his concern about an alleged
investigation of Banesco by the USG. (Note: Banesco is by
most measures Venezuela's largest bank, holding 12 percent of
the overall assets of Venezuela's banking sector. End note.)
These allegations came to the attention of Raul Valdes, a
lawyer and chairman of the board of BBU Bank, a Florida-based
bank owned by Banesco. According to Escotet, Mario Montoto,
a Argentine citizen and legal client of Valdes with an
"interesting past" (a former Peronist guerilla in the 1960s
and a businessman for many years),told Valdes he received
information of the investigation from one of his (Montoto's)
contacts, a former USG official.


3. (C) While noting his bank did not discriminate based on
political affiliation (and therefore had Chavista and
opposition clients),Escotet assured the Charge appropriate
due diligence was conducted on all clients of Banesco and
BBU. As a result, Escotet continued, he was not worried that
Banesco had done anything wrong. He expressed concern,
however, that if allegations of an investigation became
public it could damage Banesco's reputation. He shared an
e-mail message "circulating around Caracas" as further
justification for this concern. This message, which purports
to provide a summary of testimony before the U.S. Congress,
names Banesco as facilitating corruption in the Chavez
government. Given these concerns, Escotet said Valdes was
planning to meet with the former USG official to discuss the
alleged investigation. Escotet welcomed any information the
Charge might be able to share on the issue.


4. (C) The Charge noted the way the information arrived to
Banesco was peculiar, particularly given that, should an
investigation be taking place, an individual with access to
that information through work in the USG would have
restrictions on sharing the information. The Charge agreed
with Escotet that the decision by U.S. authorities to license
BBU bank suggested the bank was clearly in good standing with
the USG at that time. The Charge told Escotet he would pass
Escotet's concern to Washington and would be back in touch if
he received any feedback he could share.


5. (C) Comment and action request: Given the indirect and
peculiar way Banesco learned of this alleged investigation,
we have no reason to believe the information is credible.
Nonetheless, we request the Department share with us any
information it can in this regard, particularly if there is
any reason we should not associate ourselves with Banesco.
End comment and action request.
CAULFIELD