Oops: Parliament Finds $11B Missing from Venezuela’s State-Run Oil Corp

In this Feb. 18, 2015 photo, storage tanks stand in a PDVSA state-run oil company crude oil complex near El Tigre, a town located within Venezuela's Hugo Chavez oil belt, formally known as the Orinoco Belt. U.S. petroleum exports to Venezuela, much of it fuel additives to dilute the country’s …
AP Photo/Fernando Llano

Anti-socialist legislators in Venezuela have released a report finding that the nation’s state-run oil corporation, Petróleos de Venezuela (PDVSA), is missing $11 billion unaccounted for in the past decade.

The missing funds appear to have come into the corporation during the tenure of former PDVSA head Rafael Ramírez, who is now Venezuela’s ambassador to the United Nations. Such a prodigious sum missing from Venezuelan government coffers calls into question socialists’ repeated claims that the government of Venezuela has failed to halt an economic depression that has left thousands in the nation starving because of falling global oil prices.

The result of Venezuela’s government running out of money has been a crisis in which most middle-class Venezuelans must ration their food, wait in hours-long supermarket lines in the hopes of scrounging up some rationed corn flour or rice, or attempt to flee into Colombia to find a fully-stocked market. Those who protest this state of affairs are subject to beatings, torture, and arbitrary arrest.

During Ramírez’s tenure, the Spanish newspaper ABC notes, PDVSA represented 90 percent of the nation’s income. Venezuela is home to the world’s largest oil reserves.

Reuters reports that Venezuela’s National Assembly announced the report this week. Legislator Freddy Guevara asserts that this unaccounted-for money was handed out in a bribery scheme similar to that in place for years at Petrobras, neighboring Brazil’s state-run oil corporation.

The amount of money stolen from PDVSA is “more than the budget of five Central American countries,” Guevara asserted. The money came out of the corporation between 2004 and 2014, while Ramírez was still running it and late dictator Hugo Chávez was in power. The text of the report asserts that “the representatives of PDVSA had FULL KNOWLEDGE of the existence of administrative irregularities.”

The report has been published just as PDVSA has warned that it may not have enough money to adhere to its debt commitments. According to CNBC, PDVSA is expected to pay “$1.8 billion this month and $3 billion next month in debt interest and bond maturities,” and may not have enough cash on hand to do so.

“If PDVSA cannot meet its debt obligations today that is because they stole the money,” Guevara asserted. “We’re talking about $11 billion they cannot justify.”

Ramírez has dismissed the report as “irresponsible lies.”

Such allegations of misconduct regarding state-owned oil assets may trigger an even larger revolt against the socialist government. In Brazil, where the Petrobras kickback scheme took place under the auspices of socialist Workers’ Party president Lula da Silva and his Minister of Energy, Dilma Rousseff, millions took to the streets to demand Rousseff, now da Silva’s successor, be impeached. Da Silva himself was detained, and Rousseff’s protection of him prompted even larger protests. Rousseff was eventually impeached, but the corruption was so sprawling that it affected her enemies, too.

Eduardo Cunha, the former Speaker of the Brazilian House of Representatives known as the architect of her impeachment, was detained and sentenced to a lengthy prison term earlier this week for also taking bribes from Petrobras.

Venezuela’s government is far less democratic than Brazil’s, leaving the possibility of such an impeachment highly improbable. The opposition’s attempts to force a constitutional recall vote failed this week, as Maduro shut down the recall operation with no explanation and banned those organizing the recall petitions from leaving the country.


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