EuropeI always A pillar of Venezuela’s authoritarian regime for decades. According to Juan Pablo Pérez Alfonzo, the country’s oil minister in the 1960s and one of the founders of OPEC, fuel is not “black gold” but “the devil’s excrement”. A corruption probe announced March 17 by President Nicolás Maduro’s authoritarian government suggests there may still be some truth to that.
The investigation has so far led to the resignation of Oil Minister Tareck El Aissami, who has not been named in the investigation. Nearly two dozen people were arrested, including politicians and cryptocurrency regulators. State prosecutors are looking for 11 other people.The episode offers a rare window into the chaos and corruption at the top of Venezuela’s oil company SA (PDVSA), Mr Maduro, following in the footsteps of his late predecessor Hugo Chávez, has driven the national oil giant to near ruin.
According to company documents seen by Reuters, more than $3 billion came from PDVSA Since 2020, it is likely that there will be no recovery. There is another $18 billion in losses from potential bad debt or fraud. Overall, 84% of the value of the shipments it has invoiced over the past three years remain unpaid. Some recipients claimed they did pay, but the amount never showed up in company coffers. State media showed images of private jets and commercial buildings allegedly purchased with ill-gotten funds.
The losses are severe for the weakened company.They emerged in part as the company became more reckless in its evasion of U.S. sanctions against PDVSA 2019, after Mr Maduro rigged the 2018 election.
since then, PDVSA It has been selling oil at deep discounts through an intricate web of intermediaries, mainly to independent refiners in China. Middlemen bypass U.S. sanctions by sometimes deploying so-called ghost ships, which turn off tracking devices or change names at sea.Some companies that trade oil are formed weeks before they process trades PDVSA. Some may be fraudulent and never intended to pay for the goods they received.
Rumors of missing billions of dollars and suspicious dealings have been swirling in the capital Caracas for months. “Entire tankers were exchanged for bitcoin,” one businessman claimed last year. Cash-strapped governments are looking to settle their bills with crude oil as part of a barter payment system, he said. “We’re all oil traders now,” he said.
But it wasn’t until March that the government confirmed that it had made the first arrests, and said nothing publicly about the brewing scandal. One theory for the delay is that Mr Maduro believes he needs an explanation for the deteriorating economy. The central bank has struggled to prop up the local currency, the bolivar, amid a shortage of dollars. It has fallen sharply since October, losing two-thirds of its value against the dollar. That undercuts Mr Maduro’s claims that he has pulled the country out of the economic disaster of the past decade. Rising inflation is also a concern for him ahead of a presidential election scheduled for 2024.
accused of malfeasance PDVSA Because these questions are politically useful. Some have speculated that Mr Maduro’s investigation was partly to send a message to his internal opponents. But punishing those responsible is also a delicate matter in the regime’s world of nepotism. January, Asdrúbal Chávez, then head of the PDVSA, was dismissed. He was the cousin of the late dictator. That might explain why there was no public mention of it after he was fired.
Francisco Monardi of Rice University in Houston, Texas, wonders if Mr Maduro is particularly strategic. Instead, the investigation suggests something simpler and more deplorable: that the country’s oil industry is “a gigantic corrupt machine in which very little money ends up benefiting the Venezuelan people.” ■