Shadowy brokers walk off with billions in Venezuelan oil
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Loading... - Gracie Johnson
- 31 Mar 2023
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One startup lists as its address a small home in a working-class district in Venezuela's capital whose owner has never heard of the firm. Another is a Hong Kong-based shell company created in 2020. Yet another belongs to a Spanish commodities trader indicted in the U.S. for allegedly helping Russian oligarchs launder ill-gotten profits.
They are among the dozens of obscure middlemen and go-betweens at the center of a new crackdown in Venezuela on corruption in the state-run oil industry that has government insiders scurrying for cover. At the same time, regular Venezuelans are asking how more than $20 billion in proceeds from oil shipments seemingly vanished.
The purge began this month when authorities arrested 21 people, including business executives, senior officials and a lawmaker, as part of an investigation into missing payments for oil shipments. In a sign of the government’s desire to promote its anti-corruption crusade, state media this week were filled with images of the defendants dressed in orange jumpsuits walking into their initial judicial hearing.
Corruption has long plagued Venezuela — the OPEC nation was the fourth-most corrupt in the world in the latest rankings by Transparency International — but those in positions of power are rarely held accountable.
And when high profile arrests do take place, Venezuelans tend to view them as the result of a behind-the-scenes tug of war among rival heavyweights in the ruling socialist party, and not any impartial meting out of justice in a country where most institutions lack independence.
An entrenched culture of corruption and the inherently opaque nature of trading illegal crude oil take malfeasance to another level.
“These are two things that come together at the same time," said Francisco Monaldi, a Venezuelan economist who heads the Latin America energy program at Rice University’s Baker Institute for Public Policy. “It would be very difficult for even a much less corrupt state to implement all the necessary controls.”
While the fallout from the scandal continues, it already has felled one major power broker — Tareck El Aissami, the country's oil czar. He quit in the wake of the arrests, which included the detention of a close associate, Joselit Ramirez, who had been serving as Venezuela's cryptocurrency regulator. The U.S. already considered both of them fugitives from justice.
While Venezuelan authorities have not mentioned El Aissami as a target in the investigation, most of the shady transactions at state-run oil giant Petroleos de Venezuela SA occurred under his watch and while Asdrubal Chávez, a cousin of the late President Hugo Chávez, served as president of the company, known widely as PDVSA. Read More…
