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