BOGOTÁ, COLOMBIA – Rafael González Ulloa, a partner of multinational Riopaila, revealed the Colombian government knew about former Ambassador Carlos Urrutia’s involvement in the illegal purchase of small farmer lands and that the government itself obstructed investigation.
In an interview with Cecilia Orozco Tascón of Bogotá’s El Espectador newspaper published this weekend, González Olloa recounted his repeated attempts to get to the bottom of the sales that, once having come to his attention in January of 2011, immediately struck him as odd, and possibly illegal.
Rafael González Ulloa, Riopaila partner, says the governement knew. Photo: El Espectador/Juan B. Diaz.
González Olloa said that he became immediately suspicious when he discovered the project, internally named “Veracruz,” had large subprojects associated with it, yet had never been brought before shareholders for approval. He said for this reason and because the purchases exceeded the limits the law set for land accumulation in the region, he decided to investigate.
The land purchases were made by several companies, including Colombian sugar company Riopaila, US food giant Cargill Inc., and financial firm Grupo Aval, owned by Luis Carlos Sarimiento, a personal friend of President Juan Manuel Santos and owner of El Tiempo, the country’s largest newspaper.
The lands in question, 35 million hectares in the state of Vichada, were parcels assigned to small farmers as part of an agrarian reform, and classified as “Family Agricultural Parcels” (“Unidades Agrículas Familiares,” or UAF in Spanish). Under regulations of the Law 160, these lands may be sold individually between families, but not consolidated.
According to records that have now become public, Riopaila created 25 small shell companies, registered as SAS (“sociedades por acciones simplificadas” in Spanish), based in Spain and Luxumburg, that purchased the parcels from the farmers. The 25 companies then sold the lands to Riopaila, which consolidated the lands for large scale agricultural ventures.
The law firm , of which former Ambassador Urrutia was a partner, not only managed the sales, but created the aforementioned legal strategy to camouflage the questionable nature of the transactions.
Among the new information divulged by Riopaila partner González Ulloa is the revelation that the “owners” of the shell companies were all Riopaila employees and that Riopaila loaned the fake companies COP$37 million (more than $19 million US dollars) to purchase the protected lands – money that was never paid back.
González Ulloa said he attended a shareholder’s meeting in March of 2011 and stated for the record his concern with the legality of the land transactions. When he later requested the minutes from the meeting, he discovered that his comments had been deleted from the record. Ironically, in the same minutes, he saw the “Veracruz” project that involved the lands was noted as having been unanimously proved in the same meeting.
According to his right as a shareholder, he requested a copy of the contract with Urrutia’s law firm in regard to the matter, and a record of the firm’s presence in any Riopaila Board of Director’s meetings. He never received the requested information, and this prompted him to notify the Office of Fiscal Control (“Superintendencia Financiera”).
He decided to contest the record of the proceedings of the board meeting, the result of which is still in juridical process.
In May of 2011 he gave all of this information to “Incoder,” the government agency charged with supervision of land titles and transactions. However, the agency told him that the matter of whether the sales were legal or not did not fall under their jurisdiction.
What they did do though, was send the partner’s complaint to seven other government agencies (Superintendencia Financiera, Sociedades, Notariado y Registro, Procuraduría, Fiscalía, the Office of Anticorruption and the DIAN). In other words, by May 2011, the Colombian Government knew something was up.
In 2012 González Ulloa attended another shareholders meeting, again raised the issue of the illegally purchased lands, and again saw his remarks deleted from the record.
It was only when one of the original owners of the land complained that she hadn’t received the price promised that an investigation was launched. It was found that the money for her land had made its way into the bank account of one of the vice presidents of Riopaila. It was at this time that Riopaila finally recognized the purchase of the lands.
The sales continue under investigation. Former Ambassador Urrutia, who resigned in July, has insisted that the transactions administered by his law firm were perfectly legal.