Javier Aguilar's Corruption Case: Insights into Oil Trading Bribery

Javier Aguilar's bribery scheme reveals the dark underbelly of the oil trading industry and its entrenched corruption.

### Unveiling Corruption: The Javier Aguilar Case and the Oil Trading Industry
* 🔍 Javier Aguilar, a trader at Vitol, was caught in a **massive bribery scandal** involving Ecuadorian officials, which was monitored by the FBI during a **lunch in Houston, Texas**.
* 💼 Vitol, the world’s largest independent oil trader, reported revenues of **$505 billion in 2022**, making them the **fifth largest company globally**, while Aguilar sought to **expand their business in Latin America**.
* 💰 The bribery scheme involved the Peré brothers directing funds to officials, with **$100 million flowing through their accounts**, and the largest recipient being Nilsen Arias, who received **significant bribes** as head of trading at Petroecuador.
* 📈 By 2019, the scheme had led to lavish purchases by the Peré brothers, including a **65ft yacht** and a **$165,000 Porsche**, but the FBI's investigation began to **unravel their operations**.
* 📞 The FBI's surveillance included recorded conversations that ultimately provided **critical evidence against Aguilar and the Peré brothers**, leading to **Aguilar's arrest in July 2020**.
* ⚖ Charged with breaching the **Foreign Corrupt Practices Act** and conspiracy to **launder money**, Aguilar was found guilty on all counts after a brief jury deliberation, facing **up to 40 years in prison**.
* 💸 In December 2020, Vitol agreed to pay **$164 million** for its role in bribing officials across multiple countries, highlighting the **pervasive corruption** in the commodity trading industry.
* 🌍 Despite these legal actions, the reporter questions whether **true change will occur** in an industry long plagued by **corruption**, especially in resource-rich countries like **Ecuador**.

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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Bloomberg Originals

Unprecedented Insight into Corruption in Commodity Trading

Javier Aguilar was caught on FBI surveillance discussing cash flow and bribes with Antonio and Enrique Peré in Houston.

The detailed recordings and videos provided a rare glimpse into the inner workings of modern-day corruption in the commodity trading industry.

Vitol, the world's largest independent oil trader, has made $28 billion in profit over the last two years and had revenues of $505 billion in 2022, making it the fifth largest company by revenue globally.

Bribery Scandal in the Commodity Trading Industry

Javier Aguilar was tasked by Vitol to expand their business in Latin America, leading to a team being assembled to bribe Ecuadorian officials.

The scheme, involving shell companies and multiple intermediaries, aimed to redistribute Vitol's money and stretched across the US, South America, the Caribbean, and the Middle East.

Ultimately, Petroecuador agreed to sell 17.

1 million barrels of fuel oil to Oman for $300 million, with Vitol supplying the money and reaping the profits.

The Peré brothers funneled $100 million through their bank accounts, paying out bribes to Ecuadorian officials, with Nilsen Arias receiving the largest share.

By 2019, the brothers were living lavishly, but the FBI's investigation led to their downfall.

The Peré brothers cooperated with the FBI, providing crucial evidence that ultimately led to the arrest and charges against Javier Aguilar.

Guilty Pleas and Consequences in Bribery Case

Several suspects, including Antonio and Enrique Peré, Nilsen Arias, and Lionel Hanst, have pleaded guilty in a bribery case, while Javier Aguilar pleaded not guilty.

The jury found Aguilar guilty on all counts, marking a significant jail term for corruption.

Vitol, a major oil trader, agreed to pay $164 million for bribing officials in multiple countries, leading other traders to end the use of third-party agents for business.

The Impact of Commodity Trading on Corruption

Traders in the commodity industry have generated profits totaling hundreds of millions, with a 2022 investigation estimating Petroecuador's oil deals cost the country $4.

Despite companies claiming to have improved compliance procedures, corruption in the industry remains a significant issue.

The US government's efforts to address corruption through legal action may have an impact, but changing the systemic corruption in natural resource production and sales will take time.