Venezuela’s Energy Minister Calls Nuevo Herald Charges of Corruption “Irresponsible”

Minister of Energy and Petroleum Rafael Ramirez during a press conference. Credit: VTV

Caracas, Venezuela, April 14, 2005—Venezuela’s Minister of Energy and Petroleum, Rafael Ramirez, responded to allegations of corruption in the state oil company PDVSA, today, during a press conference at the company’s Caracas offices.  The allegations, made by the Miami-based El Nuevo Herald in a two-part series published on Monday and Tuesday of this week, claim to provide proof of the payment of excessive commissions by PDVSA to third-parties facilitating large sales for the company.  Ramirez, who is also the President of PDVSA, categorically rejected the charges, characterizing the Herald as “irresponsible” and “gravely mistaken.”

Venezuela is the world’s 5th largest producer of petroleum, and one of the top four providers of oil to the US market, accounting for between 11-15% of US petroleum imports.

Last Friday, the Herald published an article claiming that high-level PDVSA employees were authorizing payment of multi-million dollar commissions to third parties for the sale of PDVSA products in the international market.  According to experts consulted by the Herald, the payment of these commissions could be a grave violation of Venezuelan law, including the 1999 Bolívarian Constitution and the 2002 Anticorruption Law.

Yesterday, Ramirez said that PDVSA’s legal team was studying the possibility of pursuing legal action against the Herald for defamation—a position that the Minister reaffirmed at a press conference today.

Venezuelan President Hugo Chávez announced that PDVSA “will sue a US newspaper because they are badmouthing our oil industry,” while speaking to a gathering of businessman at the Presidential palace earlier today.  Chávez attributed the article to what he referred to as an “attack” by this country “because PDVSA is no longer subordinated to the interests of Washington.”

Minister Ramirez’ answer was slightly more circumspect at this morning’s press conference.  “We’re reviewing our legal options with this newspaper,” Ramirez told reporters.  “We are not prepared to continue tolerating those who trash the management of our company.  This has damaged us internally and externally, there is a systematic campaign against Petroleos de Venezuela S. A. that is entirely groundless in the majority of cases,” Ramirez told reporters at a press conference in the company’s head office in Caracas.

“In this case the affirmations of El Nuevo Herald are completely outside reality,” Ramirez continued.  “Let me be clear: we do not have any responsibility whatsoever for what third parties do with their partners…in this publication, which is a serious publication, they have affirmed very happily, but very irresponsibly, that the PDVSA management is tied to the spending practices of private companies and third parties…this publication has also insinuated that we are tied to private contractors, to groups of individuals [middlemen].  This, we reject categorically.”

In part I of the Herald’s two-part series, somewhat melodramatically titled “Bleeding Venezuelan Oil Dry,” the Herald notes that “among the beneficiaries [of the commissions] there are also people who have been members of the opposition to President Chávez since 2003.”  A few paragraphs later, the article identifies Josué Moros Puentes as “one of the most active intermediaries.”  Moros is described as “a businessman who supported the recall referendum against President Chávez [last August], and who currently maintains political and economic connections in the South-Western state of Táchira.”  In one of the transactions described by the Herald, Moros received US$4 million per month for “consulting.”

Yet, in part II of the series, the Herald makes the opposite allegation, attempting to tie the perpetrators of the alleged fraud to pro-government parties and to President Chávez himself.  The Herald alleges that the intermediaries and PDVSA officials involved “maintain links with regional and national leaders of pro-government parties such as the MVR [5th Republic Movement] and Podemos [We Can].”

In part II the same Moros identified as a “businessman who supported the recall referendum against Chávez,” is now recast as a “businessman who was linked to opposition party Acción Democrática in San Cristóbal [in the state of Táchira] but who was developed important links with pro-government officials” there.

Other implicated parties such as Antonio Felipe Bueno Duque and Luis Humberto Fernández Sayago are linked to the government by the Herald simply for their apparent failure to be in opposition: “Neither of [Bueno Duque or Fernández Sayago] signed in support of the referendum against Chávez.”

Speaking at the press conference, Ramirez reiterated that PDVSA has long abandoned the practice of using intermediaries, except in a small number of specific cases.  “We have fought against the existence in the old PDVSA of groups of people, of powerful economic interests in the country, who lived off of [commissions from PDVSA],” said Ramirez, adding that PDVSA is constantly investigating to uncover irregularities in the company.

Citgo, a subsidiary of Pdvsa in the US, has recently been the focus of widespread allegations of corruption and mismanagement.  Former President Luis Marín was fired in early February, and last month a five-member team of Venezuelan deputies to the National Assembly (AN) visited with Citgo officials as part of a wider AN investigation into corruption at Citgo.  Approximately 14,000 independently owned gas stations use Citgo’s brand, and the company accounts for around 15% of the US’ refining output.