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Citgo Pulls DC Strings, Blocks Sanctions on Chavistas

By: María Gabriela Díaz - Aug 11, 2014, 9:17 am

EspañolVenezuela’s human rights violators can rest easy, once again. Last week the US Senate found itself in deadlock over the Venezuela Defense of Human Rights and Civil Society Act of 2014, which targets the Chavista regime’s top officials and military brass linked to the violent crackdown on opposition protests.

Even though the bill may be a means to punish Nicolás Maduro’s regime, Senate Energy and Natural Resources Chairman Mary Landrieu (D-LA) hasn’t seen it that way. In fact, Landrieu has placed a hold on the legislation, and prevented a vote in the Senate.

Why would a senator from Louisiana block a bill that would punish Venezuelan high-level officials accused of human rights violations? The answer to this question would be oil, reports US publication Politico.

Citgo refinery at Lake Charles, Louisiana employs more than 1,100 people.
Citgo refinery at Lake Charles, Louisiana employs more than 1,100 people. (Citgo)

According to a series of emails leaked by Politico, Citgo — the US subsidiary of Venezuela’s national oil company, Petróleos de Venezuela (PDVSA) — has shared grave concerns with Landrieu. Company executives argue that if the bill were approved, it would affect the company’s capacity to import crude oil to its refinery in Lake Charles, Louisiana, and would force the company to dismiss hundreds of employees.

In another email, Landrieu staffer and legislative director, Elizabeth Craddock, wrote to Democratic colleagues on the Foreign Relations Committee:

“We have a refinery in Louisiana that takes Venezuelan crude. The fear is that this bill will prohibit future shipments of that crude, thereby essentially shutting in the refinery and as a result, there will be a large loss of jobs at the refinery. If this is indeed the case, or can potentially happen, my boss is unwilling to support this bill.”

However, members of the Foreign Relations Committee assured Craddock that the bill would not harm Citgo’s operations in the United States.

“[There is] no need for Senator Landrieu to be concerned about any implications for refineries in Louisiana. The scope of [the bill] is very narrow. It focuses on individuals that have committed human rights abuses against protesters in the past 6 months, [have] unlawfully jailed protesters, or supported either of those first two provisions,” the email stated.

Nonetheless, Citgo has still been concerned that “the interpretation of the legislation by the executive branch and Congress could change over time.” The company says it is afraid the US law would regard the company as a “person,” and that its link with Venezuelan state-owned oil company PDVSA might drag it into the regime’s human rights abuses accusations.

Senator Mary Landrieu (D-LA) blocked the bill due to Citgo's concerns.
Senator Mary Landrieu (D-LA) blocked the bill due to Citgo’s concerns. (Flickr)

According to Matthew Lehner, Landrieu’s communications director, the Louisiana senator asked for “a second layer of protection” for the oil company in the sanctions bill. Given the committee’s negative response to this request, Landrieu blocked the piece of legislation right before the Senate adjourned for August recess.

The bill has been pending in the legislature for six months now. In February, Senators Marco Rubio (R-FL) and Bob Menendez (D-NJ) sponsored Senate Bill 2142. In May, the Senate’s Foreign Relations Committee approved this piece of legislation, and a few days later, the House approved a similar one. That was House Resolution 4587, sponsored by Representative Lleana Ros-Lehtinen (R-FL).

In the meantime, Citgo hired two DC-based lobbying firms, Squire Patton Boggs and Cornerstone Government Affairs, according to Politico‘s report. Squire Patton Boggs has been one of the biggest donors to Senator Landrieu, contributing more than US$75,000 to the Louisiana Democrat over the years.

What Difference Does It Make?

Luis Fleischman, a senior adviser to the Menges Hemispheric Security Project of the Center for Security Policy, spoke exclusively with the PanAm Post about what the passage of or hold on this bill could bring for both the United States and Venezuela.

He describes it as a first step for the US Congress and the Obama administration to raise awareness that the Venezuelan regime is both a threat to its population and to regional security, including that of the United States. If approved, Fleischman believes “these sanctions will force Congress to monitor the human rights situation in Venezuela.”

However, Fleischman, author of Latin America in the Post-Chavez Era: The Security Threat to the United States, views with “much concern and anxiety” the fact that a company like Citgo can exercise such pressure on a US Senator.

“PDVSA is a mechanism in the hands of the Venezuelan government to launder money, including drug money, and Citgo belongs to PDVSA.”

He points to the recently released Venezuelan General Hugo Carvajal as one example. Carvajal served for many years as chief of military intelligence, Fleischman explains, and was allegedly in charge of collecting drug shipments from the Colombian FARC guerrilla.

“[Carvajal] controlled the entire distribution of drugs to the United States and Europe. He was also in charge of laundering drug money through PDVSA.”

In fact, just a week before Landrieu put this sanctions bill on hold, Carvajal was arrested in Aruba at the request of the United States for his involvement in drug trafficking. Carvajal is among many high-ranking Chavista officials included on the infamous Clinton List, held by the US Treasury Department. However, the United States failed to extradite him, when Aruba decided to release him. The following day, Caravajal was welcomed home by President Nicolás Maduro as a hero.

But how dangerous can Citgo’s influence be for the United States? Fleischman contends that because Citgo belongs to the Venezuelan government, it is intertwined with drug trafficking. The regime also “has established alliances with US enemies such as Iran, Hezbollah, the [FARC]. Citgo is lobbying on behalf of the Venezuelan government, and that is a major threat to us.”

Beyond the financial support for Landrieu, Fleischman notes that Citgo has spent up to US$200 million per year in 17 targeted House districts, subsidizing oil in winter, “probably with the intention of protecting Venezuela in Congress.”

The senior adviser fears the consequences if this bill is left on ice: “If Citgo succeeds in holding this bill, this means that any hostile country to the United States that possesses the means can corrupt Washington. This is a very serious issue.… an issue of national security. Senator Landrieu cannot allow herself to be lobbied on behalf of an unfriendly and dangerous country. It makes a mockery of the United States.”

María Gabriela Díaz María Gabriela Díaz

María Gabriela Díaz reported from Caracas, Venezuela, and led the PanAm Post internship program. She has a Bachelor of Arts in political science with a focus in international affairs.