Derwick Associates

History and clients

Derwick's first project was the Engineering Procurement and Construction (EPC) of Picure Power Plant in Vargas State for 156 MW, awarded by the state-owned Electricidad de Caracas in 2009. It was followed by 11 more contracts from the Venezuelan government through PDVSA, CVG and Corpoelec during the 2009 - 2010 energy crisis in Venezuela. Four contracts were awarded by state-owned Electricidad de Caracas (since December 2011, part of Corpoelec), five by state-owned Petróleos de Venezuela SA (PDVSA, with the contract negotiated by Bariven, a division of PDVSA), and one by state-owned Venezuelan Guayana Corporation (CVG). The company's directors are: Edgard Romero Lazo, Iker Candina, Alejandro Betancourt López and Pedro Trebbau López.

Venezuelan EPC projects

Turbine Technology Center (TTC)

Derwick´s Turbine Technology Center (TTC) was started by Derwick in 2011 and conceived as a quick response to the technical assistance needs of the country.

In December 2013, Derwick Associates received the award "The Best Latin-American Initiative", given by Capital, Spanish financial magazine The award recognizes the TTC (Technological Center of Turbines) as an important initiative that has helped to improve Venezuela's power system.

Pacific Exploration & Production

In early 2015, Betancourt and investors through O'Hara Administration Co. purchased 20% of stake of Pacific Exploration & Production for $290 million as Pacific was struggling with the decline in oil prices. Betancourt fought off potential shareholders in a bid "to gain control of the company themselves", though when a deal with Mexico's ALFA fell through, Betancourt and his group lost 70% of their investment.

Independent investigations

In 2011, Venezuelan newspaper Ultimas Noticias's César Batiz published an investigative series alleging overbilling and odd transactions between BARIVEN and Derwick Associates. The articles alleged that the company had no experience building power plants when it was contracted to build them. A deputy to the National Assembly called for an investigation of how the Derwick contracts were awarded. In 2012, the Derwick articles in Ultimas Noticias won an award for investigative journalism. According to Reporters Without Borders and to the Institute of Press and Society, reporters received "threats, pressures, bribe offers" or were banned on Venezuela's internet. In 2012, César Batiz was offered a US$50,000 bribe to stop writing about the Venezuelan electricity industry.

According to claims by energy expert José Aguilar, the 40 contracts awarded to various companies, including Derwick, to address the Venezuelan energy crisis were overbilled by billions of dollars. Derwick director Edgard Romero Lazo claimed that allegations of overbilling and bribery were "part of a defamation campaign" against the company. The company claims that all contracts are available to the public through the National Contractors Registry (RNC).

Lawsuits

In 2013, Derwick was sued in the New York Federal Court by Washington businessman and ex-ambassador Otto Reich, who alleged that Derwick's executives defamed him and caused his consulting business to suffer financial losses, accusing Derwick of falsely stating that he consulted for them.

In a separate legal action, Thor Leonardo Halvorssen Mendoza, a human rights lawyer, alleged defamation and sued Derwick and its partners. Halvorssen also claimed they paid a $50,000,000 bribe to Diosdado Cabello, Speaker of the House of the Venezuelan National Assembly.

In response, Banesco and Derwick Associates claimed that the accusations in both lawsuits were false.

In May 2015, Judge J. Paul Oetken of the Southern District of New York dismissed Reich's case stating that since the Derwick executives were not permanent residents of New York, they could not be judged in a New York court. In June 2016, however, Reich filed to the appeals court to reinstate the lawsuit stating that Betancourt "owns a multimillion-dollar home" in New York, placing him under the jurisdiction.

United States Department of Justice investigations

In August 2014, it was reported in The Wall Street Journal that Derwick was under preliminary investigations by the United States Department of Justice and Manhattan prosecutors due to bribery allegations and possible banking infractions. ProEnergy Services, an energy company based in Missouri, was also said to be under investigation due to its relationship with Derwick. Manhattan prosecutors were specifically investigating Derwick and ProEnergy Services due to potential violations of New York banking laws. Federal prosecutors, however, are investigating the two companies for potential breaches of the Foreign Corrupt Practices Act, "which prohibits offering foreign government officials improper payments in exchange for a business advantage", with prosecutors suspicious of the potentially inflated prices used by Derwick and ProEnergy Services for the Venezuelan government that possibly showed raised prices to cover acts of bribery.

In March 2016, Derwick's activities were investigated by U.S. Attorney Preet Bharara in New York. Switzerland's Federal Office of Justice confirmed that 18 Swiss banks, following the measures of mutual assistance, agreed to turn over any existing bank records they would have involving representatives of the company, the first official statement acknowledging the investigation against Derwick by the United State Department of Justice. According to a Derwick spokesman, the investigation was suspended after the Justice Department reviewed its bank records, though the Department of Justice did not confirm this.