US Spurns Blockbuster Venezuelan Prisoner Trade Offer
Discover more from SpyTalk
US Spurns Blockbuster Venezuelan Prisoner Trade Offer
Maduro offered a 9-for-1 deal to get back his sanctions-evading money man and suspected DEA double agent Alex Saab, now in US custody
Just before Christmas last year, Roger D. Carstens, the top U.S. envoy for hostage affairs, met quietly with Venezuelan President Nicolas Maduro in Caracas as part of U.S. efforts to bring home two Americans, whom the Biden administration says are being wrongfully detained there.
According to three sources familiar with the previously unreported Dec. 19 meeting, Maduro proposed a prisoner swap: the release of the two wrongfully detained Americans, along with six other jailed U.S. citizens, plus the added sweetener of turning over fugitive defense contractor, Leonard Glenn Francis, aka “Fat Leonard,” who pleaded guilty last year in federal court for his part in the U.S. Navy’s largest bribery scandal but managed to flee to Venezuela just before sentencing.
Maduro offered to release all nine, the sources said, in exchange for one person: Alex Saab, the Venezuelan leader’s top financial fixer, now awaiting trial in Miami on money-laundering charges.
It was a nonstarter, according to Biden administration officials.
“This wouldn’t constitute a real, let alone good faith offer, because it includes Saab, whom we had already made very clear is off limits,” a White House source familiar with Maduro’s proposal told SpyTalk.
Saab, 51, a Colombian businessman and Venezuelan citizen with extensive contacts around the world, is a national hero to Maduro for helping his authoritarian regime skirt tough U.S. sanctions. But to Washington, he’s a top-tier international criminal who laundered hundreds of millions of ill-gotten dollars through American banks. The erstwhile globe-trotting Saab is also wanted on money laundering charges in his native Colombia, and in Italy, where his 26-year old wife worked as a model. Until his extradition to the United States from Cape Verde in 2021, Saab, whose father is Lebanese, also acted as Hezbollah’s money man in Latin America, according to Gulf News, a UAE-based English language news site.
Those details alone would make any trade for Saab a blockbuster, in sports lingo. But he’s off the table—for now at least.
Spy Story
Complicating the issue is that Saab also worked as a spy for the U.S. Drug Enforcement Agency, providing intelligence about the inner workings of the Maduro regime, according to court papers. But some experts suspect Saab was a double agent who kept Maduro fully informed of his work for DEA. Some even suspect Saab’s reports to Maduro helped the Venezuelan leader foil a U.S.-backed coup attempt against him on April 30, 2019.
The official line on why Saab is not eligible to be part of any prisoner swap deal is because he hasn’t gone to trial yet on the money laundering charge. But in the antagonistic relationship between Washington and Maduro’s authoritarian government, experts say Saab has now become a valuable bargaining chip as the Biden administration tries to bring about the conditions necessary for free and fair elections in Venezuela.
“I suspect the U.S. isn’t going to give up Alex Saab for cheap,” said Geoff Ramsey, an expert on Venezuela at The Atlantic Council, a Washington think tank.
The Maduro regime describes Saab as a senior diplomat, a “special envoy” who used his global connections to negotiate important trade deals with Russia, China, Iran and Turkey for food, fuel, medicine, building materials, and other humanitarian goods that have helped Maduro circumvent tough U.S. sanctions. Those sanctions, imposed by the Trump administration, and which targeted Venezuela’s state-owned oil company, Petróleos de Venezuela, S.A., were designed to cut off the Maduro regime’s main source of cash and force him to relinquish power to the Venezuelan opposition, which claims Maduro’s 2018 election victory was fraudulent.
The Pulitzer Prize-winning Colombian journalist Gerardo Reyes, chief of the Univisión network’s investigative team and the author of a book about Saab, describes him as a “super minister” whom Maduro had trusted with more tasks than anyone else in his cabinet.
In 2019, the U.S. Treasury Department alleged Saab had bribed Maduro’s three stepsons to win a no-bid, overvalued contract to supply food from abroad for an Venezuelan government welfare program and then profited by providing only a fraction of the food.
“Alex Saab engaged with Maduro insiders to run a wide-scale corruption network they callously used to exploit Venezuela’s starving population,” then-Treasury Secretary Steven Mnuchin said at the time.
Separately, the U.S. Attorney’s Office for the Southern District of Florida charged Saab with laundering some $350 million that he allegedly accumulated corruptly by paying additional bribes to take advantage of Venezuela’s government-set exchange rate. Saab denies the charge. If convicted, he could face as many as 20 years behind bars.
In June 2020, Saab was on his way to Iran to negotiate supplies of gasoline for Venezuela when he was arrested on an Interpol warrant filed by the U.S. after his private jet landed in the Cape Verde islands for refueling. As a measure of his importance to the U.S., the Trump administration positioned a U.S. Navy cruiser off the Cape Verde coast just in case Venezuela or Iran tried to spirit him off the island.
Venezuela argued against Saab’s extradition to the United States, saying he enjoyed diplomatic immunity as an official envoy of the government. But a Cape Verde court rejected the plea and extradited him to Miami in October 2021.
Though Saab has been in jail since then awaiting his day in court, no date has been set for his trial. His lawyers are currently appealing a federal judge’s rejection of Saab’s claim of diplomatic immunity.
Others who have looked into Saab’s alleged money laundering have not come to the same conclusion as U.S. prosecutors. After a three-year investigation, Swiss authorities ended their probe in 2021, citing insufficient evidence to support the claims.
Retaliation
Venezuela’s reaction to Saab’s extradition has only underscored his importance to the Maduro regime—and his corresponding value as a bargaining chip for the United States. Just hours after Saab was put on a plane to the United States, Venezuelan authorities jailed six American oil executives, who had been under house arrest in Caracas. That same evening, the Maduro government pulled out of Mexico City negotiations with the U.S.-backed Venezuelan opposition.
The Maduro regime also launched a global public relations campaign to rally support for Saab’s release. In Caracas, where Saab’s face appears on billboards and murals, the government continues to organize large demonstrations for him.
“Saab is a very well connected government middleman who helped the Maduro government evade sanctions,” says The Atlantic Council’s Ramsey. “Because of how essential he’s been to the government’s sanctions evasion strategy, they’re willing to go to the mat for him.”
Saab’s globe trotting ways are almost certainly at an end even if he is returned to Venezuela. But another Venezuela expert, who asked not to be named, said an additional reason the Maduro government wants Saab back is because of all the information he has regarding its shady financial dealings.
“He knows where all the bodies are buried,” this expert said.
Snitch
Saab already has spilled some of that information to U.S. authorities, according to court documents released last year in his money laundering case. They say Saab became an informant for the DEA in 2018 and provided information about the bribes he paid to Venezuelan officials to win government contracts. As part of his cooperation agreement, Saab also forfeited to the DEA $10 million in proceeds he admitted earning from corrupt state contracts, the court records revealed.
Prosecutors said his contract with the DEA ended shortly after he missed a May 30, 2019 deadline to surrender or face criminal charges. Two months later, he was indicted in a Miami federal court on money laundering charges. The indictment served as the basis for Interpol’s “red notice,” which led to his arrest in Cape Verde.
But some Venezuela watchers trace Saab’s failure to surrender to an April 4, 2019 meeting he held in Europe with his DEA handlers and U.S. Justice Department prosecutors. According to court papers, it was at that meeting that Saab first learned of his May 30 surrender deadline. Then, on April 30, 2019, Maduro, acting on intelligence supplied by an unidentified informant—possibly Saab—arrested a number of regime insiders who plotted to oust him in a U.S.-backed coup. The Atlantic Council’s Ramsey suspects Saab, determined to avoid jail time in the U.S., was Maduro’s informant.
“Something happened between April 4, when Saab met with the DEA and prosecutors, and May 30,” Ramsey said, “and I would bet that something was the failed coup attempt on April 30.”
“Saab was playing with fire,” Univisión’s Reyes told the AP’s Joshua Goodman last year. “He believed that he could work as a snitch for the prosecution and at the same time pretend he was being persecuted by Yankee imperialism without any consequences. But in the end he got burned.”
An Opening
Last November, the Maduro government and opposition officials resumed their talks in Caracas, with Saab’s Italian wife, Camila Fabbri, serving as a member of the Venezuelan delegation. The two sides agreed to establish a UN-managed humanitarian fund to provide food, medicine and education to help Venezuela’s impoverished population weather the nation’s protracted political and economic crisis. The Biden administration, concerned about high fuel prices, responded by loosening some oil sanctions on the Maduro regime, enabling energy giant Chevron to resume limited operations in Venezuela and send its crude back into the United States.
The money for the humanitarian fund was to come from Venezuela's frozen assets in international banks, which total more than $3 billion. But red tape and the reluctance of the United Nations to administer a fund for a sanctioned country like Venezuela have prevented their transfer until now.
As part of his prisoner swap proposal, Maduro wants the funds unfrozen. In return, according to people familiar with the offer, he also pledged to renew his commitment to free as many as 200 jailed opposition members, but only after the government receives and reviews the opposition’s list of those it wants released. (According to opposition sources, a list of 240 prisoners has been delivered to Maduro officials.) In addition, Maduro’s swap offer included a pledge to provide U.S. businesses with incentives to resume trade with Venezuela.
The jailed Americans included in the offer, these sources say, are Los Angeles lawyer Eyvin Hernandez and Dallas computer programmer Jerrel Kenemore, both of whom the U.S. claims have been wrongfully detained; former Green Berets Airan Berry and Luke Denman, both serving 20-year sentences for their part in the failed 2019 plot to overthrow the Maduro government, plus four others—Abraham Coakley III, Hamid Ortiz Dahud, Jason George Saad and Joseph Ryan—all of whom face charges of criminal association and conspiracy connected to their alleged illegal entry into Venezuela—crimes punishable with up to 16 years in jail.
The ninth prisoner is “Fat Leonard” Francis, the Malaysian national who is the central figure in one of the largest corruption scandals in U.S. military history.
In 2015, Francis was convicted of bribing dozens of uniformed officers of the U.S. Navy’s Pacific-based Seventh Fleet for more than a decade, showering them with a half million dollars in cash, as well as prostitutes, luxury hotel accommodations, cigars, and gourmet meals, all in exchange for classified information on fleet movements that helped him win lucrative U.S. Navy service contracts for his Singapore-based ship servicing company, Glenn Defense Marine Asia Ltd.
Under those contracts, U.S. aircraft carriers, submarines and other warships were routed to Pacific ports where Francis’ company controlled re-supply services and where he overcharged the Navy by at least $35 million for fuel, food, water, and other services, the prosecution charged.
Under house arrest in San Diego while awaiting sentencing last year, Francis shed his ankle bracelet monitor, fled over the border to Mexico, and made his way to Venezuela, where he was detained. Because the United States and Venezuela have not had diplomatic relations since 2019, the Biden administration has been unable to win Francis’ extradition.
Full Stop
Meanwhile, the Biden administration refuses to discuss Maduro’s prisoner swap offer.
“We continue to press for the immediate and unconditional release of all wrongfully detained U.S. nationals in Venezuela at every opportunity and will continue to do so,” said a State Department spokesperson, who asked not to be named. “Beyond that we are not going to discuss the specifics of our efforts to secure the release of wrongfully detained U.S. nationals.”
The provenance of the offer itself is shrouded in mystery. In April, one source told SpyTalk that he’d heard about Maduro’s offer to Carstens from a senior Venezuelan official who was present at the Dec. 19 meeting. But the offer was delivered only verbally, said the source, who demanded anonymity in exchange for discussing the subject. At first, U.S. officials dismissed the existence of any “meeting” or “offer.” It wasn’t on paper, so in practical terms, it didn’t exist.
But in May, two independent sources in Caracas familiar with the matter—one a European diplomat involved in the Mexico City talks, the other a well-informed academic—confirmed both the Dec. 19 meeting between Maduro and Carstens and the presentation of the prisoner swap proposal. A third independent source in Washington familiar with the matter also confirmed the meeting and the offer. All declined to be identified to discuss sensitive diplomatic issues.
Carstens is no stranger to prisoner swaps with Maduro. Though the Venezuelan leader had severed diplomatic ties with the United States in 2019 over Washington’s recognition of opposition leader Juan Guaido as the winner of Venezuela’s 2018 elections, Carstens brought home two Americans in March 2022 and the six American oil executives last October in exchange for two nephews of Maduro’s wife, who were in jail in the United States on drug charges. Soon afterward, Carstens acknowledged the United States has “an ongoing conversation” with the Maduro government.
But an administration official, who spoke on condition of anonymity, said U.S. officials already had rejected an earlier Venezuelan demand for Saab’s release when it arose in negotiations for the March and October 2022 prisoner swaps. Both times, the official said, the administration made it clear that Saab’s freedom was not up for negotiation. Another person familiar with U.S.-Venezuelan contacts said that Washington’s message was re-emphasized during a meeting last month between American and Venezuelan officials that took place in an unidentified third country.
Sometimes, however, a non-negotiable deal can suddenly become negotiable. Last year, for example, Justice Department officials strenuously opposed trading Viktor Bout, the notorious Russian arms dealer serving a 25-year prison sentence in the United States, for WNBA star Brittney Griner, who had been sentenced to nine years in Russia on a minor drug offense, arguing it would undercut the U.S. justice system. But President Biden overruled the Justice Department to allow the swap to go forward just before last Christmas.
So situations change. Rumors of a possible prisoner swap continue to swirl around Caracas, according to Luz Mely Reyes, a Venezuelan journalist who heads the digital news site Efecto Cocuyo. Local hopes for Saab’s release as part of a deal were stoked very recently, when Yvan Gil, the Venezuelan Foreign MInister, told an interviewer that a “humanitarian exchange” was one of the ways Saab could be returned to Venezuela.
“Sooner rather than later, Alex Saab will return to his country, Venezuela. . .either by humanitarian exchange, or by a legal victory, or by U.S. recognition of international law” regarding Saab’s purported diplomatic status, Gil told the television program Venezuela Noticias on May 26.
Perhaps. Right now, however, it looks more like later rather than sooner.###
Venezuelan journalist Luz Mely Reyes and author John Dinges provided additional reporting for this story.