This is Javier Aguilar, who’s trying to explain why there had been a holdup in the flow of cash for payoffs. He’s chatting with Antonio Peré and Enrique Peré, who were being used to pay bribes to officials in Ecuador. At this lunch in Houston, Texas, Aguilar didn’t realize every word was being monitored by the FBI. Really, we’ve never seen, in this level of detail, the facts laid out of a modern-day corruption case, like happened in the trial of Javier Aguilar. I’ve certainly never covered a story like this before. I have interviewed people where they’ve talked about paying bribes, where they’ve talked about corruption. But that’s not quite the same as listening to and watching video and recorded phone calls of the different co-conspirators discussing how they’re going to pay bribes, how the money should flow from one place to another. Aguilar at one point is saying he’s got two phones now.

He gives Antonio Peré his new phone number. Putting all of that together is really an unprecedented window into how this industry really works. Commodity traders were always this kind of slightly mysterious presence who everyone we spoke to felt like were the most important players in the market, and they were pretty secretive, pretty private. And that historically, they have done many things that are less than admirable. In the commodity trading world, in the oil trading world, Vitol is as famous as Goldman Sachs is in finance. They’re the world’s biggest independent oil trader. In the last two years alone, they’ve made something like $28 billion of profit. In 2022, Vitol’s revenues were $505 billion, which made them the world’s fifth largest company by revenue, behind only Amazon, Walmart, Saudi Aramco and the Chinese state grid. Javier Aguilar was a trader at Vitol. At the time when the video was recorded,

he was in his mid-forties. In the 2010s, Vitol had asked Aguilar to move to Houston to expand their business in Latin America. His goal in his work was to try and find new deals, find new sources of oil and oil products for Vitol to buy. That leads us to this moment, captured on a watch spy camera. It comes as authorities closed in on their main suspects in a massive international bribery scandal. The commodity trading industry is a world that has been known for backhanders and brown envelopes since the days of Marc Rich, the infamous godfather of the industry. In the mid-2010s, the premier playground for any oil trader looking for action in Latin America was Ecuador. After the country defaulted on its debt in 2008 and needed cash, commodity traders saw an opportunity. At Vitol, Javier Aguilar started to assemble a team to bribe Ecuadorian officials.

Brothers Antonio and Enrique Peré knew where to direct the bribes within the Ecuador government. Nilsen Arias, the head of international trading at state-owned Petroecuador, received bribes and finalized the contract. Lionel Hanst set up shell companies that would redistribute Vitol’s money to more than a dozen other intermediaries. Everyone would get a cut. The scheme stretched from the US to South America to the Caribbean and even to the Middle East. The negotiations were nominally between Petroecuador and the state-owned oil company of Oman. But in fact, behind the scenes, the strings were being pulled by Antonio Peré, by Javier Aguilar, by Nilsen Arias. Petroecuador agreed to sell 17.1 million barrels of fuel oil to Oman in exchange for an upfront payment of $300 million. But according to the testimony in court, it was Vitol that would supply the money and see the profits.

So something like $100 million flowed through the Peré brothers’ bank accounts. They paid it out in bribes to various different Ecuadorian officials. The one who got the biggest, the most bribes was Nilsen Arias, the head of trading at Petroecuador until 2017. But the Peré brothers themselves took a large amount of money, so they kept something like $50 million out of that $100 million. By 2019, the men were basking in their success. Antonio Peré had bought himself a 65ft yacht. Arias had splashed out on a $165,000 Porsche, but the FBI was closing in and soon the entire bribery scheme would come crashing down. In about August 2019, the FBI turned up at the door of the Peré’s office in Miami, and everything started to go wrong. In the Peré’s office, they found a huge trove of documents.

Enrique Peré had been keeping meticulous spreadsheets detailing all the money coming in, going out. And so the Peré brothers started cooperating, and that was really the beginning of the end for Vitol and for Javier Aguilar. The FBI started taping Antonio and Enrique Peré’s phone calls, including with Javier Aguilar, including with other people, building a case. So we’re back to that March 2020 lunch in Houston with Aguilar and the Peré brothers. It was one of the final pieces of evidence the FBI needed. So Javier Aguilar stepped off a plane in July 2020. He went through passport control. He was going through customs, and a man stepped out and said, I’m with the FBI. I’d like you to come with me. Ultimately, he was charged on three counts: breaching the Foreign Corrupt Practices Act, conspiracy to breach the Foreign Corrupt Practices Act, and conspiracy to launder money.

Other suspects, including Antonio and Enrique Peré, Nilsen Arias, and Lionel Hanst, have all pleaded guilty as part of this bribery case. Only Javier Aguilar pleaded not guilty. As the case entered trial, the secretive oil trading industry awaited the case’s verdict. And so here’s a moment from the cross-examination of Antonio Peré. The question: Are you familiar with the term lobbying? Yes, I am. What does that mean to you? It means advocating on behalf of a company or group for something that’s in the interest of that company or that group. That’s what lobbying is. At the time, maybe a little different. Question: What do you mean by that? Answer: Because in Ecuador, lobbying, especially in the 2000s, even up until now, is just perceived as a person that has the right contacts and that’s able to pay people in the government to get access to different businesses.

Question: Pay them what? Answer: Bribes. There it is in black and white. After only a few hours of deliberation, the jury in Javier Aguilar’s case found him guilty on all three counts. This is really the first time that we’re seeing somebody face a really significant jail term for corruption. More recently, Aguilar’s request to overturn his conviction was denied by a New York federal judge. He also pleaded guilty to a separate set of corruption charges in a second case. He now faces as long as 40 years in prison, though prosecutors have said they won’t seek more than 20. In December 2020, Vitol agreed to pay $164 million after admitting that it had bribed officials in Ecuador, Mexico, and Brazil over a period of 15 years. Other large oil traders say they’ve ended the use of third-party agents to win business. It’s hard to quantify exactly how much the government of Ecuador lost as a result,

but the profits generated by the traders add up to many hundreds of millions. An investigation by the Ecuadorian parliament in 2022 estimated that one set of Petroecuador oil deals had cost the country $4.8 billion. As a reporter, I’ve had this experience in past years, hearing companies say we’ve got great new compliance procedures and now we’re clean, and then seeing cases like this one. I think it’s a huge question whether things in the commodity trading industry will really change. For as long as oil and commodities are continuing to be produced and sold from countries where corruption is a fact of life, it would be naive to think that the US government, by launching a series of cases, even by putting a commodity trader in jail, which I do think will have a significant impact, will change corruption in the world of natural resources overnight.

The Global Oil Bribery Scheme Caught on Tape

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The Global Oil Bribery Scheme Caught on Tape

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