Venezuelan ministers were informed of deal 'Citgo Six' were jailed for
Six executives of U.S. refiner Citgo have been jailed in Caracas on graft charges since 2017, but court documents seen by Reuters show that top Venezuelan officials were made aware of the deal that the country’s top prosecutor accused the six executives of signing in secret.
The documents, which have not previously been reported, show
that during at least two board meetings of state oil company Petroleos de
Venezuela, which owns the U.S. refiner, top Venezuelan officials - including
three ministers - were informed of the proposed deal for Citgo to borrow up to
$4 billion.
The financing was never executed, and a Caracas court in
late 2020 sentenced the six executives to between eight and 13 years in prison.
Washington has accused Venezuelan President Nicolas Maduro of using the jailed
executives as bargaining chips to seek policy concessions from the United
States.
Maduro, who lost control of Citgo in 2019 to the Venezuelan
opposition in the wake of U.S. sanctions on PDVSA intended to oust him, accuses
the United States of seeking to foment a coup to gain control of Venezuela’s
oil.
All six executives - Jose Pereira, Jose Luis Zambrano,
Alirio Jose Zambrano, Jorge Toledo, Tomeu Vadell and Gustavo Cardenas - denied
the charges. The group includes five naturalized U.S. citizens and one
permanent resident.
Prosecutors characterized the proposal for Frontier
Management Group Ltd and Apollo Global Management LLC to refinance Citgo’s debt
as “unfavorable to the company.” On Nov. 21, 2017, a day after the men were
arrested at a meeting at PDVSA’s Caracas headquarters, Venezuela’s chief
prosecutor Tarek Saab told a news conference that they signed the deal “without
even communicating or coordinating with the competent authorities.”
However, meeting minutes entered into evidence and seen by
Reuters show that on June 14, 2017, PDVSA’s board agreed to negotiate with
Apollo and Frontier, specifying that the board must approve final terms.
Records also show that at a May 18, 2017 meeting, the board also discussed
Citgo’s refinancing plans.
PDVSA’s board included then-Foreign Minister Delcy
Rodriguez, who was also PDVSA’s vice president of international affairs.
Rodriguez is now Maduro’s executive vice president.
Her name and those of Planning Minister Ricardo Menendez and
former Food Minister Rodolfo Marco Torres, who were also on PDVSA’s board, were
included in the “c.c.” line of both minutes. Reuters was unable to determine if
Rodriguez, Menendez and Torres attended either one of those meetings.
“How could this all have been done behind the national
executive’s back - without its approval, to use the prosecution’s words - if it
is signed by or issued to the citizen Delcy Rodriguez?” a defense attorney for
Pereira, Zambrano and Zambrano said in a Nov. 26, 2020 closing statement.
Another attorney for Pereira, Zambrano and Zambrano declined
further comment, as did a lawyer for Toledo and Cardenas.
An attorney for Vadell referred Reuters to comments he sent
to the judge at the close of the trial pointing to the absence of Vadell’s name
from the PDVSA minutes as further proof his client did not participate in the
deal.
Neither Rodriguez, Torres, nor the planning ministry
responded to requests for comment.
Venezuela’s chief prosecutor’s office, the information
ministry, and PDVSA did not respond to Reuters’ questions.
Citgo declined to comment.
Pereira, then Citgo’s interim chief executive, acknowledged
involvement in the refinancing talks, but said he was acting at the PDVSA
board’s instruction. The other five men said they were not involved in the
deal, and that corporate finance was not among their job responsibilities.
The United States labels Maduro a dictator who rigged his
2018 re-election and uses the justice system to stifle dissent. Maduro says
Washington wants to control Venezuela’s oil reserves and aims to oust him in a
coup.
The U.S. State Department has called the trial a “kangaroo
court.” A State Department spokesperson, asked about the documents showing
Venezuelan officials knew of the negotiations, called the detentions “unjust
and unlawful”.
“We will continue to work with our allies to seek the
release of the CITGO-6 and other unlawfully detained Americans abroad,” the
spokesperson said.
A person close to Apollo said the company studied the deal
after being approached by Frontier, but decided not to participate. Dubai-based
Frontier shut in October 2019, according to Dubai’s public registry.
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