June 20, 2019

International Trade

Venezuela received a new shipment of humanitarian technical assistance

On Monday, June 17th, the second shipment of Humanitarian Technical Assistance arrived, with 24 tons of medicines and medical supplies, as part of the cooperation between the Maduro regime and the Federation of Red Cross and Red Crescent Societies. Maduro’s Health Minister, Carlos Alvarado, said that with this shipment increases to 48 tons received through the Federation, totaling 569 tons of medicines and medical surgical equipment. (AVN, http://www.avn.info.ve/node/474357)

 

Oil & Energy

CHEVRON could finally be forced to leave Venezuela

CHEVRON's nearly century-long relationship with Venezuela might not survive the Maduro regime's fight with the United States. Not only is Venezuela's infrastructure crumbling, but the national oil company has been sanctioned by the Trump administration. CHEVRON, the last major US oil company still operating in Venezuela, could be forced to leave unless US officials extend sanctions waivers scheduled to expire on July 27. A CHEVRON exit would follow on the heels of other major American companies that have retreated from the chaos in Venezuela in recent years. A loss of CHEVRON's expertise and resources would only make matters worse for Venezuela's oil industry, which is already on the brink of collapse under Nicolas Maduro. And it could trigger losses for CHEVRON in a major market it's spent decades sinking time, money and sweat into. CHEVRON currently has five onshore and offshore production projects in Venezuela with PDVSA, the national oil company. CHEVRON even established its Latin American headquarters in Caracas. In January, US President Donald Trump imposed tough sanctions on PDVSA in a bid to push out Maduro. Those sanctions prohibited American companies from doing business with PDVSA. However, the US Treasury Department granted six-month waivers to CHEVRON and five oil services companies: HALLIBURTON, SCHLUMBERGER, BAKER HUGHES and WEATHERFORD International. Those waivers, set to expire on July 27, allow the companies to conduct transactions and activities with PDVSA. If the waivers lapse and US sanctions remain in place, analysts said that CHEVRON would need to suspend its joint ventures with PDVSA. CHEVRON said that "future events" could cause the environment in Venezuela to become "more challenged," leading to "increased business disruption and volatility" in financial results. Today, CHEVRON owns a 39% stake in a joint venture with PDVSA that produced 16,000 barrels per day of oil in the Boscan Field, which is in the state of Zulia. CHEVRON also owns stakes in three other onshore production joint ventures, two of which operate in Venezuela's Orinoco Belt. If the sanctions waivers aren't renewed and CHEVRON Leaves, the hope is that the company would be able to resume its operations once relations between the United States and Venezuela improve. However, analysts warn that would be no easy task. Venezuela's energy infrastructure is falling apart -- and a pause in activity would only worsen it. (CNN: https://www.cnn.com/2019/06/19/business/chevron-venezuela-oil-sanctions/index.html)

 

Russia squeezing embattled Maduro for tax-free gas expansion

Russia’s state-controlled oil giant, ROSNEFT PJSC, is extracting concessions from crisis-ridden Venezuela to enter the offshore natural gas market on the cheap, a potential headache for the U.S. and Europe. An accord signed by both Russia and Venezuela earlier this month will give ROSNEFT tax breaks to produce and export gas from the Patao and Mejillones fields off Venezuela’s east coast. The document, which also includes a “fair market price” in the event of an expropriation, makes changes to a bilateral agreement reached in 2009, according to a filing by the Russian government. The deal underscores how Russia is both propping up and gaining from the Nicolas Maduro regime at a time when the U.S. is sanctioning Maduro and China has cut its support. Venezuelan gas could eventually offer Russia new entry points into both Asia and Europe. As a result of the changes signed by Russian President Vladimir Putin, ROSNEFT and its suppliers will be exempt from value added and import taxes to develop the two gas fields, which are near to where EXXON MOBIL Corp. is rushing to extract oil in neighboring Guyana. The agreement was filed online by the Russian legal information website, which publishes orders by the president and applied international treaties. ROSNEFT is also considering entering another natural gas block, known as Deltana 5, that’s much closer to a border that’s been hotly contested.  ROSNEFT would have two options to export the gas. It could build a liquefied natural gas plant in Venezuela, or it could pipe the gas to Trinidad where there are LNG trains with spare capacity. (Bloomberg: https://finance.yahoo.com/news/russia-squeezing-embattled-venezuela-tax-040001813.html)

 

U.S. seeks info from ad-hoc CITGO board named by Venezuela's Guaidó

An ad-hoc board of directors for U.S. oil refiner CITGO, named by Venezuelan interim president Juan Guaidó, said on Wednesday it has received a request for information from U.S. officials, who are probing its parent company PDVSA for alleged corruption. "Recently, the U.S. Department of Justice ... has also requested information from CITGO," the board said on its Twitter account. "CITGO has communicated to the Department of Justice its complete disposition to cooperate to clear up presumed irregular actions or corruption." The CITGO board added that it was conducting an internal investigation into "the company's actions in the recent past." (The New York Times: https://www.nytimes.com/reuters/2019/06/19/world/americas/19reuters-venezuela-politics-citgo.html)

 

No end in sight, families of CITGO executives jailed in Venezuela push for answers

It's been 570 days, say family members, who worry about the men's health and insist they're innocent as they worry their situation has been forgotten. Carlos Añez, 34, says he was upset when his stepfather, a Citgo executive, was called for a last-minute meeting in Venezuela the weekend before Thanksgiving 2017. Once in the conference room at the PDVSA headquarters in Caracas, armed and masked security agents arrested the men — five American citizens and one U.S. resident. Later that day, Maduro’s chief prosecutor, Tarek William Saab, announced at a news conference that the executives had been detained on charges stemming from a deal to refinance CITGO’s debt. Saab accused them of signing off on a deal to refinance the company's debt with terms unfavorable to Venezuela and offering CITGO as collateral. The alleged agreement was with the investment fund Apollo Global Management and Dubai-based Frontier, a firm that was working to source deals for Apollo. But a deal was never signed. About seven weeks after Apollo declined a deal, the executives were arrested. Maduro called them “corrupt thieving traitors” and said they should go to the worst prison. The detained include former Citgo President Jose Pereira and five former company vice presidents: Jorge Toledo, Tomeu Vadell, Gustavo Cardenas, Jose Luis Zambrano, and Alirio Zambrano. After more than a year-and-a-half in detention, the six Americans finally had a preliminary hearing. The judge ordered they stand for trial, after they declared their innocence. No date was set. Some of the families say they are concerned that CITGO and the State Department may not be doing enough to secure the release of the executives. A State Department spokesperson said it is gravely concerned about the welfare and safety of these and other U.S. prisoners in Venezuela and are closely monitoring the cases. (NBC: https://www.nbcnews.com/news/latino/no-relief-sight-families-citgo-executives-jailed-venezuela-seek-answers-n1018071)

 

Canadian crude Gulf Coast exports rise as Venezuelan gap is filled

Heavy crudes have poured into the United States this spring, offsetting the loss of Venezuelan oil and producing a mini surplus, with Canadian heavy crude this month being exported from the U.S. Gulf Coast. U.S. refiners have lined up larger supplies from Canada, Iraq and Colombia since Washington in January began choking off the flow of dollars to Venezuela’s socialist government by barring transactions with PDVSA, Venezuela’s state oil company and once among the top three providers of heavy crude to U.S. refiners. The United States went from importing 561,000 barrels per day (bpd) of Venezuelan oil in January to zero barrels in May. This month, more than 130,000 bpd of heavy Canadian crude is scheduled to depart from Texas, four times the average exported in 2018, trade sources said. (Reuters, https://www.reuters.com/article/us-usa-crude-exports/canadian-crude-gulf-coast-exports-rise-as-venezuelan-gap-is-filled-trade-sources-idUSKCN1TJ2AC)

 

Economy & Finance

Is Maduro trafficking Nazi gold stolen from Holocaust victims?

The Simon Wiesenthal Center is looking into whether Venezuelan dictator Nicolás Maduro has been trafficking Nazi gold that includes ingots made from fillings taken from Jews murdered in the Holocaust. The Center said in a statement on Wednesday that it’s studying information exposed by the Wall Street Journal indicating that Maduro has managed to hold onto his regime through selling some 73.3 tons of gold valued at US$ 3 billion, to Middle East and Turkish companies between 2017 and February 2019. In March, it was reported that a further 7.4 tons of gold ingots, valued at US$ 300 million, were sent in two flights of a Russian aircraft from Caracas to Entebbe, for "refining" and sent on to a Middle Eastern country. “Despite the African Gold Refinery claims that the final destination was Dubai, via Turkey, if the final destination was a ‘Muslim country,’ possibly to Iran as end-user to fund terror, Maduro may be the agent of a historic irony: Gold stolen from Jews in the Shoah to finance another genocidal intent, this time against the Jewish State,” the Center stated. "We urge a full investigation into the activities of African Gold Refinery and its management’s reportedly nefarious role in the theft of the Venezuelan people’s property, the dubious origin of its gold transport and involvement in a possible Holocaust travesty,” it added. (The Jerusalem Post: https://www.jpost.com/Diaspora/Is-Veneeulas-Maduro-trafficking-Nazi-gold-stolen-from-Holocaust-victims-593042)

 

Midtown’s Tower Fifth gets pushback from Venezuelan leader

Real estate tycoon Harry Macklowe’s proposed Midtown Manhattan skyscraper, dubbed Tower Fifth, is now likely to get skinnier — thanks to US sanctions against the Venezuelan regime. After the Post reported Wednesday that Macklowe’s Tower Fifth skyscraper will be built partially in a space where the Venezuelan consulate now stands on East 51st Street, the Venezuelan Ambassador to the US tweeted out the story with some harsh words to Nicolas Maduro. “None of [Venezuela’s] assets are for sale in the US,” Ambassador Carlos Vecchio tweeted with a link to The Post story. “Maduro regime attempted to sell VZ consulate in NY, one of the usurper’s criminal acts that we stopped to protect assets of the nation,” said Vecchio, who was appointed by Juan Guaidó, who the US recognizes as the interim president of the country. (New York Post: https://nypost.com/2019/06/19/midtowns-tower-fifth-gets-pushback-from-venezuelan-leader/)

 

Politics and International Affairs

UN human rights chief Michelle Bachelet arrives in controversial Venezuela visit

UN human rights chief Michelle Bachelet arrived in Venezuela on Wednesday for a three-day visit where she is expected to hold separate talks with both Nicolas Maduro and interim president Juan Guaidó. She is also expected to speak to civil society leaders and "victims of human rights violence and abuses", the UN rights office said. Her visit, at the invitation of the government, comes in advance of a UN Human Rights Council three-week session.  Bachelet will deliver a statement at the end of her visit on June 21, and she is also expected to submit a report to the UN Human Rights Council in the next month. In recent months, the rights chief has been critical of Maduro's crackdown on opponents. In a report to the UN Human Rights Council in March, Bachelet said Venezuelan security forces, backed by pro-government armed groups, had quashed peaceful protests with excessive use of force, killings and torture. She has also criticized US sanctions against Maduro's government, cautioning that they are exacerbating the crisis and possibly hurting "people's basic rights and wellbeing". Some analysts believe her visit will reflect positively for Maduro. "With this visit the UN Commissioner, indirectly, recognizes the legitimacy of the government of Nicolas Maduro," said Luis Vicente from DATANALISIS, a think-tank in Venezuela. The fact that her three-day trip is even taking place is also seen as something of a minor triumph for rights activists. Bachelet’s predecessor, Zeid Ra’ad al-Hussein, was repeatedly denied access to the country for criticizing what he said was the government’s refusal to recognize a humanitarian crisis. In contrast, Maduro appears to be rolling out the red carpet for Bachelet, who survived jail and exile during Chile’s military dictatorship. On the eve of her arrival, the government freed 21 opposition activists considered political prisoners, including a substitute lawmaker and 18 people detained during recent anti-government protests. Previously, Maduro began allowing the Red Cross to deliver humanitarian aid. But several politicians close to Guaidó who have been arrested in recent weeks remain behind bars, including his chief of staff Roberto Marrero and National Assembly Vice President Edgar Zambrano.  In addition to meeting with Maduro, Bachelet will meet with socialist party boss Diosdado Cabello, as well as the Supreme Court head and attorney general. She also plans to see victims of human rights violations and their relatives, the U.N. agency said. Notably absent from a draft agenda are visits to detention centers such as the Helicoide prison, where many of the nearly 700 activists considered to be political prisoners by the opposition are being held. José Miguel Vivanco, Americas director for Human Rights Watch, urged Bachelet to insist on receiving access to a prison and the JM de los Rios Children’s Hospital in Caracas, which doctors describe as a waiting room for sick and dying children. He warned Bachelet’s visit will be a disappointment if she just meets with officials, opposition leaders and civil society representatives. “She can do that via Skype from Geneva,” he said. “She’s there to represent the victims. The litmus test is whether she can gain access to a prison of her choice, inspect conditions and meet in private with political prisoners. That’s the only thing that will give purpose to this trip.”  Supporters of Guaidó, however, have called for protests out of fear Bachelet will get a highly curated, unrealistic view of the crisis.  However, Geoff Ramsey, a Venezuela researcher at the human rights group Washington Office on Latin America (WOLA), said the visit would still be worthwhile, telling AP: "Any progress we see of releasing political prisoners or efforts to organize new elections I don't think are going to be providing oxygen to Maduro. This could be a galvanizing moment for the opposition at a time when they badly need it." (Al Jazeera: https://www.aljazeera.com/news/2019/06/rights-chief-bachelet-heads-venezuela-day-visit-190619061657764.html; Newsweek: https://www.newsweek.com/maduro-trump-venezuela-Guaidó-1444914; France 24: https://www.france24.com/en/20190620-venezuela-united-nations-bachelet-human-rights-chief-first-visit-crisis)

 

NSC denies Washington Post report that Trump is losing patience and interest on Venezuela

According to The Washington Post, President Donald Trump is losing interest in Venezuela after a bid to oust Nicolas Maduro by US backed opposition figures in April failed. An official told the Post that Trump had always thought of Venezuela as "low-hanging fruit" on which he "could get a win and tout it as a major foreign policy victory." "Five or six months later.... it's not coming together," the official said. Two senior White House officials told The Post that the president "chewed out the staff"  - national security adviser John Bolton and Latin America policy director Mauricio Claver-Carone - after the failure on April 30 to shift Maduro from power because they "got played" both by US-backed opposition leader Juan Guaidó, and Maduro regime figures - who claimed to have supported ousting Maduro. The time, the White House had been assured that key figures in the security forces and government were ready to switch their allegiance, The Washington Post reported. The issue has largely fallen off Trump's Twitter feed, with the president last mentioning Venezuela on June 4, when he claimed Russian forces had withdrawn from the country. However, the report was rejected by National Security Council spokesman Garrett Marquis who described the official's claims as, "patently false." "The United States never said that its effort in Venezuela would be limited to one round. The administration's maximum-pressure policy relies upon consistency and discipline to achieve the ultimate goal," another senior official told the paper. (Business Insider: https://www.businessinsider.com/trump-bored-of-venezuela-as-maduro-clings-to-power-report-2019-6; https://www.washingtonpost.com/; Newsweek: https://www.newsweek.com/maduro-trump-venezuela-Guaidó-1444914)

 

Pence thanks Latin America for generosity in supporting Venezuela’s freedom

Vice President Mike Pence renewed on Tuesday the “firm” commitment of the Donald Trump administration to Venezuela’s “legitimate” president, Juan Guaidó, and the Venezuelan people and thanked other Latin American countries for their “generosity” in helping defend the cause of freedom in Venezuela. The US government stands “with our neighbors ... We will continue to stand strong until freedom, democracy and the rule of law are restored” in Venezuela, Pence said on a visit to the US Navy hospital ship USNS Comfort at the Port of Miami, a vessel which on Wednesday will set sail on an 11-country tour of the Caribbean, Central and South America, the ship’s second visit to the region in the past six months. Pence said he was happy to visit Miami “for the departure of the USNS Comfort, bringing the compassion of the American people to those suffering here in our hemisphere and around the world.” (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2480035&CategoryId=10717)

 

Colombian armed groups recruiting desperate Venezuelans, army says

Venezuela’s crisis is spilling across the border into Colombia as Marxist rebels and right-wing paramilitaries recruit migrants to strengthen their ranks, according to five Colombian military commanders.  Violence still simmers in Colombia despite a 2016 peace deal with leftist FARC rebels, meant to end five decades of conflict. Dissident FARC fighters, the rebel National Liberation Army (ELN), right-wing paramilitaries and drug-trafficking gangs are battling each other and the military. Keen for recruits, these armed groups are targeting Venezuelans as they traverse the porous 2,219-km (1,380-mile) frontier at illegal border crossings, according to the military officials, human rights officials and migrants themselves. Five military commanders told Reuters that as many as 30% of insurgents in Colombia’s eastern border region are Venezuelans, willing to take up arms in return for food and pay. Nationwide, an estimated 10% of fighters are Venezuelan, the commanders said. Their estimates were based on information from informants, deserters, captured rebels and residents.  Reuters was not able independently to confirm the information provided by the commanders or speak directly to any Venezuelans who had been recruited by an armed group. Several Venezuelan migrants told Reuters they had been approached by armed groups for recruitment on entering Colombia. A FARC dissident, who asked not to be identified, told Reuters the group was also present on Venezuelan soil and was recruiting Venezuelans. Colombia’s right-wing paramilitary groups, which battled the ELN and FARC for decades, are also recruiting migrants, the military officials said. (Reuters: https://www.reuters.com/article/us-venezuela-politics-colombia-exclusive/exclusive-colombian-armed-groups-recruiting-desperate-venezuelans-army-says-idUSKCN1TL14E)

 

After loss at sea, Venezuelan archbishop calls for trafficking probe

A top Vatican official in Venezuela has called on authorities to investigate a rise in human trafficking after an apparent smuggling operation gone wrong left more than a dozen people missing. Archbishop Roberto Luckert in an open letter published on Facebook on Tuesday said the sinking of a boat carrying Venezuelan migrants to Trinidad and Tobago in April showed the dire consequences of trafficking. The letter urged authorities “to investigate, follow, prosecute and convict those responsible for the crimes of human trafficking.” It was signed by Luckert and another clergyman. Thirty-seven passengers were on board the boat which left Venezuela and sank on April 23. Rescuers found nine survivors and one body, and the other migrants remain unaccounted for. It was unclear whether the passengers left Venezuela voluntarily or were forced as part of a trafficking operation, as the Archbishop’s letter suggested. (Reuters: https://www.reuters.com/article/us-venezuela-trafficking-archbishop/after-loss-at-sea-venezuelan-archbishop-calls-for-trafficking-probe-idUSKCN1TK392)

 

OP-ED: Can negotiation actually break the stalemate in Venezuela? by Felix Seijas

The announcement of negotiations in Oslo between Nicolás Maduro’s government and the Venezuelan opposition took most of the country by surprise. Though the basis for the talks was built quietly over several months, their beginning marked a new phase in the country’s political conflict. Exploratory talks began just two weeks after the April 30 uprising, indicating that the opposition had already been testing the possibility of negotiations while pursuing its preferred path of a dramatic rupture within the government. With those talks underway, Guaidó now faces two fundamental problems. The first is that he must deal with currents within the opposition that do not want a negotiated exit for Maduro. Pressure from international actors, especially the Lima Group and the European Union, which have been consistent in calls for a peaceful resolution to the conflict, may help in this regard. A second, related problem is how to sell the benefits of dialogue to a skeptical public that remembers the fruitless attempts at negotiation with Maduro in Caracas in 2016 and the Dominican Republic in 2018. But despite the risks, the circumstances today are very different. Maduro is likely to still feel that he’s holding most of the cards, but time is not on his side as it once was. Thus, the possibility of success in Oslo, while perhaps slim, should not be discounted. The challenge lies in convincing those with the weapons that clinging to their trenches will cost them more in the long run than reaching an agreement and exiting the stage. To do this, it is essential to continue to increase pressure on Maduro, and Guaidó should concentrate his efforts on three goals: keeping the opposition coalition as unified as possible, keeping the public mobilized, and coordinating with international allies to continue to create effective mechanisms to pressure the regime. If any of these fails, the goals at Oslo may well be unattainable.  The Trump administration does not have a seat at the table in Oslo, but it is difficult to imagine that anything is happening without its full knowledge and consent. Diosdado Cabello is another player to keep an eye on. If Cabello were to get backing from Cuba, it could lead to consequential changes in the balance of power within chavismo. If talks are successful, the most likely outcome will be a call for new elections with safeguards to ensure a fair result. The two sides, for now, are far from such an agreement, and the odds of success at this point do not seem high. But for Venezuela, it is well worth the attempt.  - Seijas is a Venezuelan political analyst and statistician, Ph.D. He is the director of the Delphos poll. (Americas Quarterly: https://www.americasquarterly.org/content/can-negotiation-actually-break-stalemate-venezuela)

 

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.

June 13, 2019

International Trade

Miranda Governor announces Venezuela exported 10 tons of avocadoes and mangoes to Spain

Miranda State governor Hector Rodriguez has announced that Venezuela has exported 10 tons of avocadoes and mangoes to Spain, as a part of his state’s export drive. He made the announcement flanked by La Guaira Mayor José Alejandro Terán, and Hector Silva, President of the Miranda State Export Corporation. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/economia/venezuela-exporto-10-toneladas-de-aguacates-y-mango-a-espana/)

 

Oil & Energy

S&P withdraws ratings on Venezuela state oil company PDVSA

Standard and Poor’s withdrew its ratings On Venezuela's state oil company Petroleos de Venezuela S.A. after multiple events of default and the company repeatedly failed to submit its audited financials since 2017. “S&P Global Ratings withdrew its 'SD' issuer credit rating on Venezuela-based oil and gas company Petroleos de Venezuela S.A. (PDVSA). At the same time, we withdrew our 'D' issue-level rating on the company's debt.
The withdrawal of our ratings on PDVSA follows our repeated attempts to obtain timely information of satisfactory quality from the company in order to maintain our ratings in accordance with our criteria and policies. PDVSA has been unable to meet the coupon payments on its 2017, 2021, 2024, 2026, 2027, and 2037 notes since November 2017 (or we have been unable to obtain a confirmation that the bondholders had received the funds by that date). This constitutes an event of default under our methodology.” (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2479770&CategoryId=10717)

 

Venezuela’s massive blackout sparks boom in generator sales

As Venezuela's crisis deepens, the sale of electric generators is one of the few growth industries in the once-wealthy oil nation, whose residents struggle to get through each day as public services crumble. Millions of poor live at the mercy of Venezuela's unstable power grid, but middle- and upper-class residents able to scrape together enough dollars are buying backup generators to regain a normal life. Even this solution isn't foolproof. Gasoline shortages are creeping across the country, imperiling access to fuel for newly bought generators. A catastrophic power failure has led to a scramble for generators by residents and small businesses fearing another big outage could hit without warning, plunging their lives once again into chaos. Some have opted for small units costing a few hundred dollars that can pump out enough power to run a few appliances at a time, such as using the lights and water heater for a shower. A household living with all the amenities requires a large generator that can cost upward of US$ 1,000 — a small fortune in a country where the typical worker earns US$ 6.50 a month. The situation is especially dire in Maracaibo, once known as Venezuela's Saudi Arabia for being at the hub of the country's now-decaying oil industry. Power plants put out a fraction of their potential, and the lights have flickered on and off since late-2017, when a major transmission line burned up. The nationwide blackout in March took the lights out for eight days in Maracaibo and sparked massive looting that shuttered many businesses. Lines to fill up a car with gasoline stretch a mile and often require a two-day wait. (The Miami Herald: https://www.miamiherald.com/news/business/article231504798.html)

 

Shell stays course on Trinidad, Venezuela gas

Shell was asked by Trinidad and Tobago to study development options for an offshore natural gas field that straddles the maritime border with Venezuela, while it continues work on Venezuelan offshore gas, the European major told Argus. The cross-border Loran-Manatee field, estimated to hold about 10 trillion cf of gas, has long been seen by Trinidad as a key source of feedstock for its extensive gas-based industries, led by the 14.8mn t/yr Atlantic liquefaction complex. Trinidad's domestic gas production has been recovering since late 2017, but demand still outstrips supply, forcing costly curtailments. Loran-Manatee covers block 6 on Trinidad's side of the border, and block 2 on Venezuela's side. Shell acquired a 50% operating stake in Manatee, on Trinidad's side, from fellow major Chevron in June 2017. Chevron still holds the remaining 50%. Trinidad needs the gas to supply its industries, while Venezuela needs export revenue and has no infrastructure to monetize the gas on its own. Shell, like Chevron, has been careful to reiterate that its "activities relating to Venezuela are in strict adherence to all applicable laws, regulations, trade controls and sanctions." PDVSA has long neglected its abundant gas reserves in favor of oil, despite enormous suppressed demand from domestic refineries, power stations and petrochemical plants. Little is expected to change in the near term. Venezuela's oil-based economy is nearly paralyzed against the backdrop of a power struggle between the Maduro regime and the US-backed opposition. Under a transition government that National Assembly leader Juan Guaidó is campaigning to establish, legislative reforms would open the door for foreign oil companies to quickly tap dormant Venezuelan hydrocarbon deposits. (ARGUS: https://www.argusmedia.com/en/news/1920237-shell-stays-course-on-trinidad-venezuela-gas)

 

Commodities

Gas shortages, sky-high food prices plague Venezuelans amid economic crisis

Dozens of cars lined up alongside a gas station just after dawn on a highway in the Venezuelan city of Maracay, in the central state of Aragua. The drivers had been waiting for hours to buy gas, partaking in an all too common ritual in the hopes that when it was their turn, there would be enough gas left to fuel up. The wasted trips used up what little was left in his gas tank, and last Tuesday three men had to push his truck from the highway down a long hill to a pump, where he was finally able to fuel up. Venezuelans described lost days of work, anxiety at being unable to feed their families, and endless hours waiting in lines because of a gas shortage that's hitting the country with the world’s largest producible oil reserves. For Venezuelans who make it to a gas pump with fuel, filling a tank is basically free. Drivers tip gas station workers a small amount, but there is no real fixed price to fill your tank with the government keeping gas prices low but with the shortages it's a major problem. Hours-long lines for gas have become more and more common, especially in states within the interior of Venezuela, but the shortages have increasingly crept closer to Venezuela’s capital, hitting cities like Maracay. While Caracas has been largely spared the long lines thus far, Venezuelans in other states are in such desperate need of gas they'll sleep overnight outside gas stations. The gas shortages also meant disruptions to the once-reliable public transportation system in Caracas, lengthening commutes and exposing Venezuelans to more dangerous situations. They are also delaying food traveling from different states in the Venezuelan interior, leading to rising costs. Even when there is food available, the problem for many families is being unable to afford it with hyperinflation and low wages. Many Venezuelan families rely on government subsidized food-aid program, known in Spanish by its initials, CLAP. (NBC News: https://www.nbcnews.com/news/latino/gas-shortages-sky-high-food-prices-plague-venezuelans-amid-economic-n1016496)

 

Economy & Finance

Venezuela: hyperinflation leads to new banknotes for second time in a year

Venezuela is releasing new banknotes for the second time in less than a year, the central bank said on Wednesday, after hyperinflation eroded the effects of an August 2018 monetary overhaul meant to improve availability of cash. The Maduro regime last year cut five zeroes off the currency and prices. The move was supposed to ease shortages of cash that pushed most of the economy toward debit and credit card operations and put heavy strain on digital commerce platforms. Banknotes of 10,000, 20,000 and 50,000 bolivar denominations will begin circulating on Thursday to “make the payment system more efficient and facilitate commercial transactions”, the central bank said in statement. The largest of those bank notes, equivalent to about US$8, is more than the minimum wage of 40,000 bolivars a month. Following the 2018 overhaul, the highest denomination notes were 500 bolivars, which now would not be enough to buy a piece of candy. Inflation in May reached 815,000% after peaking earlier this year above 1.7m%, according to the opposition-run congress. (The Guardian: https://www.theguardian.com/world/2019/jun/12/venezuela-releases-new-bank-notes-bolivars-hyperinflation; Reuters, https://www.reuters.com/article/venezuela-economy/venezuela-adds-bigger-bank-notes-due-to-hyperinflation-idUSL2N23J167; Bloomberg, https://www.bloomberg.com/news/articles/2019-06-12/hyperinflation-forces-venezuela-to-roll-out-three-new-bills)

 

3M to take about US$ 160 million charge as it deconsolidates Venezuelan operations

3M Co said on Tuesday it would incur a pretax charge of about US$ 160 million, or 27 cents per share, in the second quarter, as the company suspended local operations in Venezuela. The maker of Post-it notes, and Scotch tape said in a regulatory filing that it deconsolidated its Venezuelan subsidiary as of May 31. (Reuters, https://www.reuters.com/article/us-3m-venezuela/3m-to-take-about-160-million-charge-as-it-deconsolidates-venezuelan-operations-idUSKCN1TC2AW)

 

Venezuela hit with default in Saint-Gobain's US$42 million award row

A Delaware court clerk entered a default against Venezuela and state-owned oil company Petróleos De Venezuela SA considering their silence in the French plastics company’s litigation aimed at registering and enforcing a 2017 arbitral award. (Law360: https://www.law360.com/articles/1168575/venezuela-hit-with-default-in-saint-gobain-s-42m-award-row)

 

Convicted Venezuelan official’s Palm Beach mansion goes for US$ 11 million in auction

For just US$ 11 million, a little piece of corrupt Venezuelan history was sold to the highest bidder last month, courtesy of the United States government. On May 30, a Palm Beach mansion forfeited by convicted money launderer and former national treasurer of Venezuela Alejandro Andrade was quietly auctioned off by Customs and Border Protection (CBP) agents. The 4,600 square-foot estate is a 5-bedroom, 4.5-bath beach getaway, complete with a spa and pool. Andrade bought the property, located at 1290 N. Ocean Blvd., for $8 million in 2013 and apparently let the place fall into disrepair. In 2016, neighbors complained that renovations of the home were disruptive and had been drawn out for too long. The home — the latest of Andrade's illegitimate riches to be auctioned off — is markedly more luxurious than the ex-treasurer's current digs in federal prison. In November, Andrade received a maximum ten-year sentence in a West Palm Beach federal court after pleading guilty to accepting a stunning $1 billion in bribes as part of an illicit foreign currency scheme. Andrade began his prison sentence in February. He is reportedly being kept in a low- to medium-security prison in Loretto, Pennsylvania, about 80 miles outside of Pittsburgh. (Miami New Times: https://www.miaminewtimes.com/news/government-auctions-off-palm-beach-mansion-owned-by-former-venezuelan-treasurer-alejandro-andrade-11195909)

 

Politics and International Affairs

Trump on disputed claim of Russian withdrawal from Venezuela: 'Ultimately I'm always right'

President Trump on Wednesday stood by his claim that Russia had withdrawn its forces from Venezuela despite the Kremlin's denials, asserting that he would be proven right in the end. Trump was asked during an Oval Office meeting with Polish President Andrzej Duda what he knows about Russia's involvement in Venezuela given the conflicting statements. "Well, let's just see who's right. You know what you're going to do? You're going to see in the end who's right," Trump said. "You just watch it, OK?" he added. "And we'll see who's right. Ultimately, I'm always right." Trump tweeted earlier this month that Russia had informed the U.S. that it had removed "most of their people from Venezuela." He offered no further information, and officials did not elaborate on Trump's announcement. The next day, a Kremlin spokesman told reporters that most of Russia's military specialists were still working in Venezuela. Trump on Wednesday described the situation in Venezuela as "in flux," and blamed the country's leaders for its descent into a worsening economic and humanitarian crisis. "It's a very sad thing," he said. "We're watching Venezuela very closely." (The Hill: https://thehill.com/homenews/administration/448247-trump-on-disputed-claim-of-russian-withdrawal-from-venezuela)

 

Secretary Pompeo urges world leaders to find solutions to Venezuela’s hunger crisis

Secretary of State Mike Pompeo implored world leaders to continue to stand against Venezuela’s Maduro’s regime amid the country’s ongoing economic and humanitarian crisis. At a World Food Prize event Monday, Pompeo highlighted the need for progress in agriculture to help hungry nations. He pointed to starvation in Venezuela as evidence. “More than 60% of the country goes to bed hungry each and every night, and many have resorted to rummaging through garbage bins to feed themselves and their children,” he explained. “Malnourishment is so widespread that Venezuelans refer to it as the Maduro diet.” Hunger in Venezuela is such problems that soup kitchens have rapidly cut down on food donations due to Maduro cutting off humanitarian aid. The Trump administration has sent aid to neighboring Colombia to get food to Venezuelans after aid being sent to Venezuela was blocked because Maduro claimed it was sent to embarrass his regime. Pompeo believes the U.S. government alone can’t solve the issue. “We all have an obligation to work each of these problems, it isn’t just a human tragedy when we see hunger,” he stated. “When it takes hold of a country, it can perpetuate a destructive cycle of crime and violence and instability.” (OAN: https://www.oann.com/secretary-pompeo-urges-world-leaders-to-find-solutions-to-venezuelas-hunger-crisis/)

 

Moldova's parallel leader warns incumbent against new Venezuela

Moldova’s newly declared Prime Minister Maia Sandu said her decision to form a parallel government in the former Soviet Republic is perilous and urged the former ruling party still claiming power not to turn the country into a second Venezuela. Speaking in a phone interview from Chisinau, the 47-year-old former World Bank adviser insisted that her administration -- assuming it survives -- will be wholly pro-European even though it depends on the support of pro-Russia Socialist Party. (Bloomberg, https://www.bloomberg.com/news/articles/2019-06-11/moldova-s-parallel-leader-warns-incumbent-against-new-venezuela)

 

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.

June 06, 2019

Oil & Energy

Venezuela's oil exports drop 17% in May as sanctions kick in

Venezuelan PDVSA’s oil exports took another hit in May, following a deadline for customers to wind-down purchases in order to comply with U.S. sanctions, according to documents from the state-run company and Definitive Eikon data. The energy firm’s exports of crude and refined products fell 17% in May from the previous month to 874,500 barrels per day (bpd), mainly due to difficulty in selling off barrels of upgraded crude that used to be bought by U.S. refiners. Venezuela has drained oil inventories since late January, when Washington imposed sanctions on PDVSA, to offset declining crude output, according to analysts. That allowed the firm to maintain exports around 1 million bpd for the following three months despite the measures. But some customers ended purchases of Venezuelan oil in late April to comply with sanctions, leaving PDVSA with an accumulation of upgraded oil and further reducing its portfolio of regular buyers, according to the reports and data. (Reuters, https://www.reuters.com/article/us-venezuela-oil-exports/venezuelas-oil-exports-drop-17-in-may-as-sanctions-kick-in-data-idUSKCN1T521H)

 

Maduro’s PDVSA to open Moscow office this month

PDVSA plans to open an office in Moscow this month, Interfax cited the Maduro regime's oil minister as saying on Thursday during a trip to the Russian city of St. Petersburg. Caracas said earlier this year that it was moving its Lisbon-based office to Moscow in order to safeguard the country's assets. (The Moscow Times: https://www.themoscowtimes.com/2019/06/06/venezuelas-oil-company-office-to-open-in-moscow-this-month-a65901)

 

Commodities

Maduro claims that Venezuela has 1.2 billion Euros in mineral reserves

In a recent televised speech, Nicolas Maduro claimed that Venezuela has 1.2 billion Euros in mineral reserves, including gold, diamonds, nickel, bauxite, iron, and others. He added that Venezuela has been legally certified to have 2236 tons of gold, according to the regime’s news agency. More in Spanish: (AVN, http://www.avn.info.ve/node/472987)

 

Economy & Finance

Venezuela defaults on gold swap with Deutsche

Venezuela has failed to make interest payments on a gold swap agreement valued at US$ 750M with Deutsche Bank (NYSE:DB), leading the lender to take possession of the precious metal used as collateral. The loan that Deutsche Bank made in 2016 was backed by 20 tons of gold as collateral. The agreement was set to expire in 2021 but was settled early due to the missed interest payments. Meanwhile, Venezuela opposition leader Juan Guaido's parallel government has asked the bank to deposit US$ 120M into an account outside of Nicolas Maduro's control; that amount represents the difference in price from when the gold was acquired to its current level. Venezuela's gold holdings, one of Maduro's few sources of capital to keep his regime going and his military forces loyal, have been shrinking. In March Venezuela's Central Bank missed a March deadline to buy back gold from CITIGROUP For almost US$ 1.1B. And earlier, the Bank of England refused to give back US$ 1.2B worth of Venezuelan gold. (Bloomberg, https://www.bloomberg.com/news/articles/2019-06-04/venezuela-is-said-to-default-on-gold-swap-with-deutsche-bank)

 

90% drop in construction industry reported here

Mauricio Brin, head of Venezuela’s construction industry chamber, reports that construction here has dropped by 90% since 2019; and is currently totally paralyzed. He added that most public works have been paralyzed since 2010, “because the state has been unable to finance” them. More in Spanish: (El Universal, http://www.eluniversal.com/economia/42003/reportan-caida-de-mas-de-90-en-el-sector-construccion)

 

Politics and International Affairs

Leaked audio reveals Pompeo saying US has struggled to keep Maduro opposition united

In a closed-door meeting last week, Secretary of State Mike Pompeo said the U.S. has struggled to keep the opposition to Venezuelan President Nicolás Maduro united, according to The Washington Post. “Our conundrum, which is to keep the opposition united, has proven devilishly difficult,” Pompeo said in audio obtained by the Post. “The moment Maduro leaves, everybody’s going to raise their hands and [say], ‘Take me, I’m the next president of Venezuela.’ It would be forty-plus people who believe they’re the rightful heir to Maduro.” The secretary of State made the remarks last week during a meeting with Jewish leaders, according to the Post, at one-point declining to answer a sensitive question because “someone’s probably got a tape recorder on.” Pompeo added that while he believed Maduro would inevitably be ousted, he “couldn’t tell you the timing.” The secretary of State said the problems in uniting the opposition have been present since he became director of the CIA in 2017 and that internal squabbles among Maduro’s enemies were preventing a successful uprising. Maduro, Pompeo said in the recording, "is mostly surrounded by Cubans," adding, "He doesn’t trust Venezuelans a lick. I don’t blame him. He shouldn’t. They were all plotting against him. Sadly, they were all plotting for themselves." The sentiments Pompeo expresses in the recording are “a sober but accurate view,” Shannon O’Neil, a Venezuela expert at the Council on Foreign Relations, told the newspaper. “They remain divided over how to take on the Maduro regime — whether or not to enter into dialogue, whether or not to engage with the military, whether or not to run a presidential candidate or boycott elections,” she told the Post. “They don’t even retweet each other.” Pompeo blamed the disarray among the opposition for the failure of the April 30 coup attempt by a group of soldiers, which fizzled out within 24 hours. The Washington Post said Pompeo made the comments at a meeting last week in New York of which it had a recording, despite the official US support for interim president Juan Guaido. Diosdado Cabello, the US-sanctioned head of Maduro’s puppet “Constitutional Assembly” quickly called Pompeo “incompetent” for failure to unite the opposition and for “believing in their lies”; and invited him to visit Venezuela. (The Washington Post: https://www.washingtonpost.com/...pompeo...venezuelas.../85385a33-8eae-4ba5-a9ac-6; The Hill: https://thehill.com/policy/international/americas/447159-pompeo-reveals-in-leaked-audio-us-has-struggled-to-keep-maduro; RT: https://www.rt.com/news/461180-pompeo-opposition-unite-fail/; France24: https://www.france24.com/en/20190606-pompeo-warns-divided-venezuela-opposition-report; and more in Spanish: El Universal, http://www.eluniversal.com/politica/42042/cabello-ravell-debe-pagar-30-mil-millones-de-bolivares-para-la-construccion-de-escuelas-para-ninos)

 

Venezuelan troops trained rebels to fire rockets, Colombia says

Venezuelan soldiers loyal to embattled Nicolas Maduro have trained members of South America’s most dangerous guerrilla force to use heat-seeking anti-aircraft missiles, according to Colombian authorities. National Liberation Army fighters were instructed in how to use the Russian-manufactured IGLA surface-to-air missile system, according to General Luis Navarro, Colombia’s top-ranking soldier. The Marxist force known as the ELN has long used Venezuelan territory as a refuge and has a close ideological affinity with Maduro’s socialist government, which the U.S. is trying to topple. Colombia’s intelligence services don’t know whether the ELN actually has acquired its own missile launchers, nor do they know whether the training was organized by a faction within Venezuela’s military or sanctioned at the highest levels in Caracas. The ELN received training clandestinely rather than at Venezuelan army bases, Navarro said. “These are weapons used by the Venezuelan armed forces,” he said in an interview at a Bogota air base. “We have the clear evidence and the necessary intelligence to affirm that the ELN is considered as part of the defense of the revolution of the Maduro regime.” Now, the military intelligence report says, 45% of the ELN’s fighters - including its commanders - are hiding in Venezuela and receiving protection from Maduro. Venezuela’s Socialist regime has over the years acknowledged that the ELN enters the country but denies supporting the rebel group. “The ELN considers Venezuelan states bordering Colombia as their strategic rearguard,” said Navarro, adding that growth in the ELN and FARC ranks was “a risk and we have to contain them.” The ELN is present in 12, or roughly half, of Venezuela’s states, according to Insight Crime, a Washington-based research organization that monitors Latin America, a report recently underscored in Twitter by the US Southern Command. (Bloomberg: https://www.bloomberg.com/news/articles/2019-05-06/venezuelan-troops-trained-rebels-to-fire-rockets-colombia-says; SOUTHCOM: https://twitter.com/Southcom/status/1136314020162654209; Reuters: https://af.reuters.com/article/worldNews/idAFKCN1T62LM)

 

U.S. Bars Cruises to Cuba in Retaliation for Venezuelan Role

The U.S. State Department is barring cruise ships from going to Cuba as part of a crackdown on travel to the island, citing government repression and its role in the humanitarian crisis in Venezuela. “The United States will no longer permit visits to Cuba via passenger and recreational vessels, including cruise ships and yachts, and private and corporate aircraft,” the department said Tuesday. The action threatens to cut off a burgeoning tourist trade with Cuba that got underway during the Obama administration. Major cruises operators, including market leader Carnival Corp. and No. 2 Royal Caribbean Cruises Ltd., have regular itineraries delivering thousands of American tourists to Havana and other Cuban cities. The decision caught industry analysts and executives by surprise. Even as the threat of a Trump crackdown loomed, cruise lines had been adding sailings to the island, and Havana was making plans to triple the size of its cruise-ship terminal. (Bloomberg, https://www.bloomberg.com/news/articles/2019-06-04/u-s-to-bar-cruise-ships-from-cuba-in-retaliation-for-venezuela)

 

Brazilian President accepts credentials of Guaido’s envoy

President Jair Bolsonaro accepted on Tuesday the credentials of Maria Teresa Belandria, the envoy to Brazil of Venezuela’s National Assembly speaker, Juan Guaido, who is recognized by Brasilia as that country’s “legitimate and interim” head of state. Belandria arrived in Brazil in February, less than a month after Guaido took oath as Venezuela’s interim president following the National Assembly’s refusal to accept the legitimacy of Nicolas Maduro, who was sworn in for a new six-year term in January that the opposition and dozens of countries do not recognize following what they called “fraudulent” elections in May 2018. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2479470&CategoryId=10717; Reuters, https://www.reuters.com/article/us-venezuela-politics-brazil/brazils-bolsonaro-formally-recognizes-venezuelan-opposition-envoy-idUSKCN1T5312)

Venezuelan reporters push past police to enter Parliament

A group of reporters backed by several opposition lawmakers forced their way into Venezuela’s National Assembly after more than a month of being kept out by police. Led by the National Press Workers Union (SNTP), the reporters broke through the security cordon by pushing past some officers lined up in front of an entrance to the Federal Legislative Palace. On hand were several lawmakers who helped the journalists get into the building after a brief argument with the police. “Today, by a decision, and I have to say it, of the lawmakers of the National Assembly, we have finally been able to enter the building and do the work we are supposed to do,” said the president of the SNTP, Marco Ruiz. The legislators welcomed the press, while accusing the Maduro regime of seeking to censor the news. (Latin American Herald Tribune, http://wwwaht.com/article.asp?ArticleId=2479467&CategoryId=10717)

 

Putin says Russia and China want situation in Venezuela to stabilize, denies military support for Maduro

Russian President Vladimir Putin said on Wednesday after talks in Moscow with Chinese leader Xi Jinping that Moscow and Beijing wanted the situation in Venezuela to stabilize. Putin also said that Moscow has no plans to send troops to shore up Nicolás Maduro. Asked about US President Donald Trump's tweet earlier this week that Moscow had informed Washington it had pulled its personnel out of Venezuela, Putin said that Russian experts come and go to service Russian-made weapons bought by Caracas. "We aren't building any military bases there, we aren't sending troops there, we have never done that," Putin said. "But we have fulfilled our contract obligations in the sphere of military-technical cooperation, and we will keep doing that." He warned US military intervention in Venezuela would be a disaster. Even Washington's allies did not support such a course of action, Putin said. (Reuters: https://www.reuters.com/article/us-venezuela-politics-putin-xi/russia-and-china-want-situation-in-venezuela-to-stabilize-putin-idUSKCN1T61VC; TRT World: https://www.trtworld.com/americas/putin-says-no-plans-to-send-troops-venezuela-crisis-26278)

 

Lavrov confirms Russia’s contacts with Venezuelan opposition

Russian Foreign Minister Sergey Lavrov said in a recent interview that Moscow hasn't ended contact with Venezuela's opposition. "As for your question about working with the opposition, we are not quitting this work. As I said, in Venezuela we responded several times to requests for contact. These contacts took place", Lavrov said in an interview with RBC. "During these conversations, we reaffirmed our position in favor of a national dialogue, expressed disagreement with the fact that in response to the call by the 'Montevideo Mechanism' to start such a dialogue, when President [Nicolas] Maduro agreed, [opposition leader Juan] Guaido haughtily refused", he said. (Sputnik International: https://sputniknews.com/russia/201906061075669431-russia-venezuela-oslo-talks/)

 

Xi says China will play 'constructive role' on Venezuela

China will work with the international community to play a constructive role with Venezuela and help the country to get back on a normal development path as soon as possible, Chinese President Xi Jinping told Russian media. Xi told TASS news agency and Rossiyskaya Gazeta newspaper that China opposes foreign interference, unilateral sanctions, the use of force, or threats of the use of force, when it came to Venezuela. (Reuters, https://www.reuters.com/article/us-venezuela-politics-china/xi-says-china-will-play-constructive-role-on-venezuela-idUSKCN1T606W)

 

Venezuela, now a top source of U.S. asylum claims, poses a challenge for Trump

Nearly 3.9 million people have fled Venezuela, with millions more expected to follow this year, according to William Spindler, spokesman for the United Nations refugee agency. As a result, Venezuela has overtaken China to become the No. 1 country of origin for those claiming asylum in the U.S. upon arrival or shortly after, with nearly 30,000 Venezuelans applying for asylum with U.S. Citizenship and Immigration Services in 2018. Nearly one-third of claims filed with the agency come from Venezuelans, the most of any country by far, according to the latest data. That has created a dilemma for the Trump administration in which its foreign policy, which considers Maduro’s government an oppressive dictatorship, is colliding with its immigration policy, which has sought aggressively to hold down the number of people admitted to the country through asylum. President Trump has railed against asylum applicants, saying that many are engaging in a “hoax” and a “big, fat con job.” Many Central American asylum seekers, who are Trump’s primary target, fall into a different category than the Venezuelans. But because of the foreign policy focus on Venezuela, the asylum seekers from that country pose a more direct challenge to the administration’s anti-immigration agenda. Only about 2% of those granted asylum in the U.S. are Venezuelan, according to a Homeland Security report in March. While approval rates appear to be increasing, about 50% of Venezuelan asylum claims are denied, on average. Those denied asylum are at risk of deportation back to their home country. The administration has resisted a bipartisan push — including from Florida Republican Sen. Marco Rubio, an avowed hawk on Venezuela — to grant Venezuelans the right to stay in the U.S. under so-called temporary protected status. That program, designed to deal with people fleeing natural disasters or civil unrest, offers recipients protection from removal and the right to work legally in the U.S. But administration officials have sought to dismantle the program as part of their wider efforts to reduce immigration. In fact, the Trump administration has stepped up deportations of Venezuelans. U.S. Immigration and Customs Enforcement deported 336 Venezuelans last year, far fewer than the tens of thousands of Central Americans being removed each year, but a 35% increase over the year prior. Sen. Richard J. Durbin (D-Ill.), who has pushed for granting temporary status to Venezuelans, said Trump’s policy is counterproductive. “Blocking Venezuelan refugees from seeking safe haven and forcing them to return home at this very dangerous time plays right into Maduro’s hands,” Durbin said. (Los Angeles Times: https://www.latimes.com/politics/la-na-pol-trump-venezuela-asylum-immigration-20190605-story.html)

 

Maduro court forces publication to pay US$ 4.7 million to alleged socialist drug lord

Venezuela’s Supreme Court, run by loyalists to socialist dictator Nicolás Maduro, ordered the online news outlet La Patilla to pay senior chavista official, television show host, and alleged cartel chief Diosdado Cabello US$ 4.7 million for aggregating a 2015 article in which Hugo Chávez’s former security chief accused Cabello of drug trafficking.  La Patilla is a Venezuelan online publication that posts anti-socialist material, usually curating news from other sources rather than publishing original reports, as well as entertainment and lifestyle news. The story that Cabello sued over was an original report in the Spanish newspaper ABC revealing that the former security chief, Leamsy Salazar, had left Venezuela and was under DEA protector, willing to testify to Cabello being the head of the Cartel de los Soles (“cartel of the suns”). The Cartel de los Soles is thus named because it is made up of members of the Venezuelan military, who wear sun medallions on their uniforms. It is an intercontinental cocaine trafficking operation, according to American law enforcement. Cabello responded to the report with a lawsuit rampage targeting La Patilla, two other Venezuelan outlets, ABC, and the Wall Street Journal. A U.S. court threw the case against the Wall Street Journal out in 2018 because, the judge ruled, Cabello did not provide any evidence that disproved “that he is, in fact, under investigation for his potential involvement in drug trafficking and money laundering activities.” Responding to the ruling, La Patilla owner Alberto Ravell called it “judicial terrorism.” Cabello is one of several senior Maduro officials under severe U.S. sanctions. The U.S. Treasury accused him in a 2018 statement announcement sanctions on him of being “directly involved in narcotics trafficking activities.” A June 2018 report revealed that the Treasury had confiscated US$ 800 million in assets that Cabello had hidden in the United States. (Breitbart: https://www.breitbart.com/the-media/2019/06/05/venezuela-court-forces-publication-to-pay-4-7-million-to-alleged-socialist-drug-lord/)

 

How Maduro 'spent thousands of state funds on Cuban rituals'

Nicolas Maduro allegedly spent thousands of state funds on religious rituals in Cuba, according to a former intelligence official. Hugo Carvajal, former director of the country’s military intelligence, lashed out at Maduro in an open letter. Responding to a claim from the Venezuelan ruler that he was dismissed for gross misconduct, Carvajal made several explosive claims about Maduro’s religious beliefs and financial conduct. He wrote: "The people should also know that your religious sacrifice rituals in Cuba were paid by your minister of finance, who on at least one occasion sent a briefcase with US$ 500,000 in cash to Havana in a PDVSA plane." Maduro was accused of performing Santeria rituals in Cuba while leaving ordinary citizens with desperate shortages back in Venezuela. Carvajal continued: “How dare you call yourself Christian when you follow any belief you come across? “You are a devout Santero, follower of Sai Baba and who knows what other religion. I suppose that you must by some means justify all the atrocities you have committed against the Venezuelan people.” Maduro was raised as a Roman Catholic and claims to maintain his Christian beliefs – but some fear his relationship with Cuba is religious as well as political. The Santero faith combines Roman Catholicism and Yoruba beliefs. (Express: https://www.express.co.uk/news/world/1136689/venezuela-crisis-maduro-cash-cuba-ritual-santeria-spt)

 

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.