Sun | Sep 23, 2018

Citgo chief arrested in anti-corruption dragnet

Published:Thursday | November 23, 2017 | 12:00 AM
In this August 23, 2017 file photo, Venezuela's Chief Prosecutor Tarek William Saab speaks during a news conference, in Caracas, Venezuela.

Venezuelan authorities detained the acting president of Citgo, the state-owned oil company's US subsidiary, and five other executives for their alleged involvement in a corruption scheme, officials said Tuesday. Jose Pereira and five Citgo vice- presidents have been detained on suspicion of embezzlement stemming from a US$4-billion agreement to refinance company bonds, Chief Prosecutor Tarek William Saab said.

Saab said the deal provided "unconscionable and unfavourable" terms for state oil giant PDVSA and offered Citgo itself as a guarantee on repayment without prior government approval. Mediators of the contract were purportedly eligible for a 1.5 per cent pay-off of the total.

Saab described the Citgo executives as facilitators of US and international pressure on Venezuela's oil sector, "putting at risk Citgo's assets while obtaining personal benefits".

President Nicol·s Maduro called the thefts blatant and he urged employees of the state-run oil company to stand with him in the fight against corruption and attacks from the United States government.

"While I'm working hard every day, there's a group of bandits stealing from the people," Maduro said in a televised address. "What's that called? Treason."

The detentions are part of an investigation by Venezuelan authorities into the country's oil sector, which has struggled in recent years amid mismanagement and declining production.

Saab's office has made nearly 60 arrests related to alleged corruption involving PDVSA, including many senior managers of the state-run firm and subsidiaries in Venezuela and the United States. Citgo runs three refineries in Illinois, Texas and Louisiana.

Officials at Houston-based Citgo distanced themselves from the arrests, saying in a statement that the firm operates independently and meets the standards and regulations set by the US. The company adds that it is closely monitoring the situation.

The arrests come amid an ongoing probe by US prosecutors spanning multiple years into corruption at state oil company PDVSA. The US Treasury Department in 2015 accused a bank in Andorra of laundering some US$2 billion stolen from the state oil company. Some 10 individuals have pleaded guilty for their role in the payment of bribes and kickbacks, and US federal officials in October arrested four high-ranking officials, including at least two aides to Venezuela's ambassador to the United Nations.