Warming Up the Bronx: Citgo Venezuela Heating & Social Development Program

Chavez in Bronx

It was the fall of 2005, and the cold months were beginning to roll in on the South Bronx, New York City’s poorest area. The dilapidated streets of the South Bronx, which has a history of being neglected by the city, might be the last place one would expect to receive a visit from a famous world leader. However this leader was different. On September 20^th, 2005, President Hugo Chavez of Venezuela, a champion of the poor and a vocal critic of the United States government, (having called George Bush “the devil”), came to the notorious urban neighborhood. Hosted by Congressman Jose Serrano, Chavez spoke to a round table of community groups at The Point, a community organization that promotes social and environmental justice[i]. On that day the Venezuelan president made a charged promise to the people of the South Bronx. Five years later—with the help of a people-friendly oil company, a progressive congressman, the generosity and political acumen of a foreign leader, and local grassroots participation—that promise has turned into a significant heating oil assistance and social-development program for low-income residents of the Bronx.  

Every winter thousands of poor Americans, including New Yorkers, die from a lack of heat. Many simply cannot afford the price of heating oil or gas. While the federal government administers some subsidy programs, by its own admission these programs reach only a small fraction of the people who need them. Heating assistance is one of the many vital services that are often not accessible to residents in the South Bronx. However, this bleak situation has begun to change: people in the South Bronx are warming up, and even Mayor Bloomberg and Washington are feeling the heat. 

This past January at Riverside Church, New York City celebrated the beginning of the fifth consecutive season of the Citgo-Venezuela Heating Oil Program, which has been providing tens of thousands of low-income families with low-cost heating oil throughout the city. The 2010 edition of the program was launched by the president of Citgo Petroleum Company, Alejandro Granado, the president of Citizens Programs Corporation, Joseph Kennedy II and the ambassador of the Bolivarian Republic of Venezuela to the US, Bernardo Alvarez. “Just as the government of President Hugo Chavez has made significant efforts in the fight against poverty and in promotion of social justice in Venezuela, we hope that this program can help needy communities and groups in the US to weather cold winters,” Ambassador Alvarez says. [ii]

Federal Heating Assistance Programs Inadequate 

“Poor folks have always had to struggle with cold—whether heating with wood, coal, oil, or other sources,” says Brian O’Connor, Communications Director of Citizens Energy Corporation, a non-profit that has helped provide affordable energy to the poor since 1980. “Fuel is expensive for those with few resources,” he notes in an interview.[iii]

 The U.S. faced its first modern national oil crisis in the 1970s, when the Organization of Petroleum Exporting Countries (OPEC) launched an oil embargo that drove crude oil prices from about $1 to $40 a barrel. A heating crisis followed and, as ever, the poor were the hardest hit. The crisis led to the creation of a federal fuel assistance program, the Low-Income Home Energy Assistance Program or LIHEAP. O’Connor contends that the program has never been adequately funded.

For example, LIHEAP’s own assessment –called its Home Energy Notebook—for Fiscal Year 2006, states that approximately 34.4 million households were income eligible for the LIHEAP program that year but that LIHEAP furnished winter heating and crisis benefits to only 5.7 million households, or about 17 percent of those eligible! The report acknowledges that “Federal funding of LIHEAP is primarily the limiting factor in LIHEAP program participation.” In FY2006, funding for the program totaled $3.1 billion; of that amount, states furnished about $2.1 billion in heating and winter crisis benefits with an average benefit of about $368 for the heating and crisis assistance recipients.[iv]

The size of the federal program has grown since then. LIHEAP’s 2009 appropriation was $4.5 billion, with $590 million in contingency funds. But the need for assistance has grown as well, with many suffering from prolonged unemployment due to the recession. The number of households applying for home heating assistance has risen by 15 percent to 8.8 million this past winter—reaching a record level for the third straight year, according to state energy officials cited in the New York Times.  Last year, there were 7.7 million recipients and in 2008 there were 5.7 million.[v]

The need is almost certainly much greater than the number of applicants. LIHEAP’s report analyzes the many barriers that low-income people (and especially the vulnerable groups targeted by the program, which include low-income elderly and families with very young children) face when seeking assistance from federal aid programs. These barriers include lack of awareness of programs, lack of understanding of programs because of complex eligibility rules and confusion about those rules, and procedural barriers associated with application procedures and office procedures.[vi]

 These barriers to application, and the dollar limits on the program, carry especially alarming consequences for seniors. Many studies have shown that the elderly are particularly susceptible to hypothermia, because of their lower metabolic rates, special medications, relative lack of mobility, and other medical conditions. Higher rates of poverty among the elderly and increased health care expenses mean they are even less likely to be able to afford heating oil than the rest of the population – making aid programs even more important.[vii]

Joe Kennedy II, the founder and CEO of Citizens Energy Corporation, has long been known as a champion for the poor in providing heating assistance. Kennedy frequently writes op-ed pieces calling on the big oil companies and the U.S. government to help the most vulnerable Americans during the winter. He has also pushed vigorously for the expansion of the LIHEAP program. Kennedy wrote in a September 2005 Boston Globe column:

“To middle class households, higher energy prices mean less disposable    income. But for the poor, higher prices and eroding benefits mean cutting back on     necessities, huddling around the kitchen stove, using dangerous space heaters,        closing off rooms to cut fuel bills, and wearing coats indoors. Child nutrition in   poor neighborhoods dramatically declines during periods of cold weather and rising fuel bills.”[viii]

 After Hurricanes Rita and Katrina in 2005, when oil prices skyrocketed and millions of poor Americans faced a winter without heat, Citizens Energy Corporation and 12 U.S. senators made a plea to U.S. oil companies to share some of their windfall profits to provide affordable heating oil for the needy. “Oil companies were making huge profits while poor families, especially the elderly, were literally freezing to death in their homes,” O’Connor recalls.

Later, in 2008, Kennedy would write in the Boston Globe:  

“Worldwide oil supply and demand has remained relatively constant the past four years. What has changed is the perception that demand will soon outstrip   supply and the exacerbation of this by speculators allowing prices to skyrocket past $140 a barrel and Big Oil to fill its coffers. Given the chance to make a  balanced distribution of these “unearned” profits, Big Oil has chosen to reward   shareowners over their customers, who struggle to afford gas for daily commutes or heat to warm homes during winter. Every year Citizens Energy petitions Big Oil to provide a small slice of assistance to help keep the poor warm. Every year,   Big Oil says no.” [ix]

The only oil company to respond to the cry for help back in 2005, and every year since then, was Citgo Petroleum, a subsidiary of the Venezuelan state oil company (known as Petroleos de Venezuela S.A., or PDVSA, and pronounced peh-deh-VEH-sa.  The “S.A.” stands for “sociedad anonima” or incorporated).[x]

That response has led to a thriving partnership between Citgo and the South Bronx, as well as a much broader national program. Citizens Energy is currently working with Citgo to provide heating assistance to 200,000 low-income families in 23 states, more than 250 Indian tribes from Alaska to Maine, and to more than 200 homeless shelters.[xi]

Citgo Heating Oil program

In Massachusetts, Citizens Energy Corp and Citgo Petroleum had already provided thousands of low-income home-owners with heating assistance. Serrano was worried about how this assistance program would benefit the renters in the large apartment buildings of the Bronx, many of which have private landlords. They would have to ensure that the half-price heating oil would translate into direct monetary savings for the residents. “Poor residents of my district will benefit from this historic agreement with real savings and improvements in quality of life,” Serrano said.[xii] The congressman was right.

Citgo was to sell and deliver 8 million gallons of heating oil at a discount of 40 percent (an estimated $4 million in savings) to three Bronx non-profit housing corporations: Mount Hope Housing Corporation, Fordham-Bedford Housing Corporation, and VIP Community Services. The savings were to be given back to the tenants of the buildings through rent reduction vouchers and other benefits, such as social programs run by the housing cooperatives, along with “infrastructure and quality of life improvements” in the buildings.[xiii] Citgo’s initial pilot program in the winter of 2005-6 benefited 8,000 low-income residents, covering 2,800 apartments in 75 buildings in the South Bronx.[xiv] The residents, reportedly, saw major savings in their energy bills. Many tenants remember first watching the green Citgo truck pumping hundreds of gallons of heating oil into their building’s sidewalk. After receiving the discounted fuel, the landlords passed on the savings to their renters. This resulted in more than a $100 monthly rent reduction for many.[xv] However it was reported that only 1 million gallons of heating oil, rather than 8 million, were actually delivered in the pilot project.[xvi]

When asked about the program’s implementation process in a recent interview, O’Connor said:

“The Program implementation was relatively straightforward in New York. We contacted tenant-owned cooperatives, certified that they served low-income tenants, and contracted with heating oil dealers to deliver fuel to the buildings. Tenants receive rent rebates of roughly $200 each. Some politicians didn’t like the program but that didn’t have anything to do with implementation…the fact is, none of the people we helped had any complaints.”[xvii]

Since 2005 the program has continued to benefit tens of thousands of low-income Bronx residents, including some from other boroughs.[xviii] The following winter Citgo-Venezuela and Serrano expanded the program with the intent to provide 25 million gallons of low-cost heating oil for 200,000 New Yorkers.The expanded heating assistance program was run by Citizens Energy Corp. who had facilitated the Citgo program in Massachusetts. This year’s program would offer the low-cost fuel to individual homeowners and other cooperatives, in addition to the three housing groups from the previous year. In order to qualify, the new recipients would have to meet the same income eligibility requirements as the Federal Government’s LIHEAP.[xix] The expanded low-cost heating program would particularly benefit the many seniors throughout the city facing rising energy bills, who own their homes but live on a fixed income. Citgo, Citizens Energy and Congressman Serrano have ensured the continuation of this much needed assistance program for the last five winters.

Bolivarian Venezuela

“The Citgo fuel assistance program, despite filling a clear community need, became the target of a hostile media campaign. This attack, described in the next section, can only be understood by considering the connection between CITGO and Venezuela and the events that unfolded there.” Citgo is owned by Venezuela. For the past ten years, has had a democratically elected president, Hugo Chavez whose government has proclaimed a mission of social justice and redistribution of wealth to the poor. The Chavez government has been leading what he calls the “Bolivarian Revolution” named after the 19^th Century Latin American liberator, Simon Bolivar. Venezuela is an oil rich country. In the past the vast wealth has only benefited a small group of elites, while 80 percent of the population lived in poverty. Today, Chavez has redistributed this oil wealth to fight poverty by funding massive social programs known as misiones. Some of the Bolivarian government’s achievements include eradicating illiteracy, providing free healthcare to about 20 million poor Venezuelans, increasing access to higher education, as well as the expansion of indigenous rights, cultural rights and workers’ rights.[xx] (Many of the gains in healthy and literacy are not denied even by the opposition although some question whether they are sustainable) In keeping with his “Bolivarian vision,” President Chavez made this declaration of solidarity in 2005:

“We are all Americanos, and together we share the Bolivarian mission of giving hope and a better life to the poorest and most vulnerable—whether they live in Venezuela or Vermont. Our oil revenues are bringing literacy, health care and job training to millions of Venezuelans and it is our wish to extend this prosperity throughout the hemisphere. This program fulfills a promise I made to the people of the United States, and it is a gift warmly given to our American friends.”[xxi]

Despite having been democratically elected numerous times (in transparent and internationally monitored elections), Chavez faces a well-organized and vocal opposition which claims he is centralizing power, persecuting opponents, and squandering the country’s wealth on programs like the one here in New York, instead of investing in his own country’s infrastructure. These viewpoints can be heard throughout the mainstream US media by right wing talk show hosts and politicians alike. Even the Citgo heating assistance program for the poor has not been exempt from this hostility. While many see this program as a warm gesture from “Venezuela’s hearts to American homes,” as reads the TV commercial for Citgo’s national heating-oil program, critics see it as Chavez playing “petro-politics.” They speak of “the perils of petrocracy,” the title of a 2007 New York Times article. They claim the charismatic president is only using his country’s resources to win political allies abroad and spread his “socialist revolution” to the United States. The media—corporate and grassroots—have followed this program closely, no doubt due to its political and international significance. Because of Chavez’s socialist rhetoric and because he is a vocal critic of US foreign policy, the corporate media has been engaged in a consistent campaign to demonize him and discredit his government. So, when he offered assistance to low-income Americans, the right-wing had a field day. In an editorial for the Washington Times, Douglas MacKinnon blasts what he calls the “Chavez-Citgo propaganda campaign” and the policymakers who have helped implement it:

“….like Bolshevik revolutionary Vladimir Lenin, Venezuelan strongman Chavez has found his “useful idiots” in the guise of Mr. Kennedy; actors Sean Penn and Danny Glover; Democratic Reps. William Delahunt of Massachusetts and Jose Serrano of New York; and the sycophant he has installed to run Citgo here in the United States. All sing his praises, all do his bidding, and all shame themselves with their self-serving actions…Those facilitating the Chavez-Citgo propaganda campaign…need to ask themselves a question: Would they be doing the same thing for the governments of Sadam Hussein, Pol Pot, Idi Amin, or even Adolf Hitler?”[xxii]

Declarations such as this one illustrate the aggressive campaign that much of the mainstream media has launched against Chavez, with his heating assistance program for poor New Yorkers being no exception.

For the same reasons that the mainstream media attacks Chavez, much grassroots and leftist media have idolized him and supported the Bolivarian Revolution. New York’s independent media, which speak for the city’s poor and marginalized population, have therefore portrayed this as a generous gesture of solidarity. They have used it as an opportunity to open people’s eyes to the social advances in Venezuela where the gifts are coming from, and to raise awareness of the successful efforts to combat poverty and exclusion in that country.[xxiii] As with many controversial issues, this program has initiated a small media war with much attention from both ends of the spectrum. 

Opposition/ Past Government intervention

This humanitarian program for the poor and elderly of the Bronx might come as a surprise to many New Yorkers whose only perception of Chavez from the mainstream media is that he is a dictator, a demagogue, and an agent of Fidel Castro. In the past the US government has blocked similar aid offers from foreign countries that are considered “enemies.” For instance, when the United States government provided a criminally-inadequate response to Hurricane Katrina in 2005, and while low-income African-Americans were dying on their roofs and in the Astrodome, Cuba offered to send 1,500 doctors for aid. George Bush turned the offer down. At the same time, Venezuela had also offered to send oil and resources directly after the hurricane, help that was turned down as well.[xxiv]

Some see the current Citgo-South Bronx program as an embarrassment to the Bloomberg Administration and to Washington. The fact that it takes a foreign, third world country (per capita GDP: $6,100) to take care of citizens in the richest city in the richest country on earth (per capita GDP: $41,800), is shameful, they argue.[xxv]

Some might say that this campaign of hostility against Chavez and Venezuela has  led the City of Chicago to refuse Citgo’s offer of low-cost diesel fuel for its public transit system—(CTA)—Chicago Transit Authority, as an alternative to raising fares for their residents to solve their budget crisis.[xxvi]

To the excitement of the opposition, there was a short scare in 2009 that, due to the economic crisis and plummeting price of oil, the Citgo Heating Oil program would not continue that winter. Critics of the program immediately jumped on this opportunity to attack: “It looks like the cost of bringing Fidel Castro’s brand of rich-vs-poor politics to America just got to be too expensive for Venezuela’s bellicose president, but it’s hardly a surprise that he’s pulling out of our economy now that he’s crashed his own,” said Larry Neale, deputy GOP staff director of the House and Energy Committee.[xxvii] However, skeptics were proved wrong, when Citizens Energy and Venezuela’s Citgo did continue the program after all, providing approximately 50,000 families and 39 homeless shelters in New York City with heating assistance for the 2008-09 winter.[xxviii]

This assistance goes far beyond New York City and Massachusetts—with the help of Citizens Energy Corp, Citgo has expanded their low-cost heating oil program throughout the country to include 25 states, 245 homeless shelters and 250 Native American tribes.[xxix]

Petro-Bronx

Because of the increase in participation from South Bronx residents and community activists and because the implementation and outcomes of this project were so successful, the partners decided to increase their commitment to the social development agenda in the poorest part of the city. Whether seen as honest concern for grassroots empowerment or socialist propaganda, Citgo-Venezuela aid has gone beyond oil—to the heart of the community, some might say.

In 2007, Citgo began providing $4 million worth of grants to community organizations and non-profits throughout the South Bronx.[xxx]Grassroots participation is a key component of the partnership. South Bronx community residents formed Petro-Bronx, a diverse coalition of community organizations that evaluate and recommend how the Citgo money is allocated.

“We insist that our leadership is heard and respected. Petro-Bronx brings a balance of decision-making. It is a coalition which is diverse in race and religious beliefs,” says Jaime Rivera, a Petro-Bronx member and program coordinator of For A Better Bronx (FABB), which runs community programs around environmental and food justice.[xxxi]  The numerous organizations receiving grants focus on issues of social justice, environmental justice, anti-poverty, community health, women and youth empowerment and more. The thirteen groups receiving the funds include: Mount Hope Housing, South Bronx Food Cooperative, Green Worker Cooperatives, Servicio de Educacion Basica, Youth Ministries for Peace and Justice, Rocking the Boat, The Point, Mothers on the Move and Sistas on the Rise, to name a few.[xxxii]

“These organizations provide the community with access to justice through engagement, culture, education, environment, and more. Before Citgo, who controlled access to the money—the Democratic machine—an oligarchy of families…By bringing in Citgo it begins to provide an alternative. This is providing many grassroots CBO’s and nonprofits with support who otherwise would be out of funding,” says Samuel Sanchez, the coordinator of FABB’s food justice program which is being funded by a Citgo grant.[xxxiii]  

The Point Community Development Center, more commonly known as “The Point,” is a non-profit committed to the social and economic development of the Hunt’s Point neighborhood of the South Bronx. They facilitate programs of youth empowerment, environmental justice and arts and cultural programs. In fact they hosted Chavez for his visit in 2005. Citgo asked for community groups to apply for environmental grants and the Point responded. Now Citgo is providing a three year grant for their ACTION program (Activists Coming to Inform Our Neighborhood) which trains teens to be social and environmental activists in their community. The three-year initiative will focus on the ecological restoration of the North Brother Island in the Bronx River, by training inner-city youth in environmental leadership. Teens are being taught skills such as the use of rowboats and binoculars to identify bird species and protect the environment.[xxxiv] 

Adam Liebowitz, the program director, welcomed the Citgo grant money. However, he says that when the local paper, The Hunts Point Express asked him about the funding, they twisted his words in order to stir up controversy—that because they were a nonprofit they would take money from anybody (maybe implying they would even take funds from a “foreign dictator”).[xxxv] However Liebowitz reiterates that they do not take money from anyone; for example, while they gladly accepted the grant from Citgo, they will not take money from the New York Organic Fertilizing Company, a major polluter of their community which they are trying to shut down.

While also happily accepting a three-year $70,000 grant from Citgo, Adam Green, Director of Rocking the Boat, had a somewhat more mixed response. Green said that their Board of Directors, some of whom have ties to other large US corporations were somewhat unsettled by all the controversy around Venezuela. In a recent interview he said:

“There was some not so clear communication from Citgo about the nature of the funding and about the ties to Venezuela. How it then became a big love affair with Venezuela. We don’t have a problem with the Venezuela connection, but only with the political energy around that. Citgo’s first outreach didn’t show the political complexity of that. But we feel no sense of imposition…as long as they don’t tell us what to do.”[xxxvi]

To publicize their grant assistance program, Citgo published a colorful brochure with photographs that describes the thirteen Bronx organizations that receive their grants. On the cover is a large photo of the Venezuelan Ambassador, the Citgo CEO, and Congressman Serrano, while the back page has an animated map of the Americas with a trail of stars connecting Venezuela and the United States. It reads “Venezuela and the Bronx—Building a bridge of solidarity for the people.” Below a picture of both the Venezuelan and American flag it says: “The Spirit of solidarity of the Venezuelan people together with the entrepreneurial spirit of the Bronx is helping build a better future for Bronx residents”.[xxxvii] Such dramatic statements and publications have only fueled the fires of the program’s opponents. “Keep in mind that this was not a press release from Chavez’s propaganda ministry, but a public relations pamphlet from the independent Citgo Petroleum Corporation. The only thing missing was a photo-op with the delegation aiming anti-aircraft cannons skyward at imperialist planes,” writes Mac Johnson in an Energy Tribune article.[xxxviii]

However, to many of the Bronx groups’ members this is a true mission of solidarity. “When people complain about it, we say that Citgo is from the US—even though we know it’s deeper than that. It’s from the people of Venezuela. It’s not about Chavez. The people of Venezuela are supporting us here—from one community to another,” says Wanda Salaman, the executive Director of Mothers on the Move, a community justice organization from the South Bronx. MOM was started by a group of mothers sixteen years ago who were concerned about educational justice for their children.[xxxix] Today they have expanded their work to include issues of environmental and economic justice as well. The Citgo grant is paying for their new “Community Vision program, which will enable them to create a sustainable community development plan for the South Bronx based on social and environmental justice and equity. Salaman continues, “Bush never came out here and said he wants to help us…or Obama…So if another president wants to work and dialogue with our community they’re more than welcome.”

Sanchez, who has been a community organizer in the Bronx for decades, also sees a deeper connection between Bolivarian Venezuela and the local struggle in his community:     

“Some of the groups didn’t understand the full vision. Here in the Bronx we need to create a new consciousness…The process of justice we are talking about is ‘Participatory democracy’….If you don’t have adequate funding you can’t develop your staff, your product, your cooperatives. If you look at South Bronx actually, it is a 3^rd world country. It’s the poorest district in the whole United States. Now you have an invader from outside, ALBA, ooo scary, Chavez, ooo scary, which actually poses a real genuine threat to the political, economic interests of gentrification. We have an alternative to challenge the displacement and devastation of hundreds upon hundreds of thousands of people…We have created a higher awareness and consciousness of what it is to be self-determined.”[xl]

The heating crisis in the South Bronx has exposed one of the historic problems of American society—the ongoing neglect of our nation’s poor. The need for expanding heating assistance is clear, yet, in the face of this crisis and suffering, there has been no indication that Congress is going to significantly increase LIHEAP funding, nor is there reason to believe that the cost of heating oil is going to go down anytime soon. However this crisis has also exposed an alternative path. One would hope that the much needed help provided by Citizens Energy and Venezuela’s Citgo to the people of New York and other parts of our country would begin to arouse the conscious of the American public, leading lower-income Americans to demand more from our government, and also fostering a deeper international respect and understanding between our two nations. It will be interesting to see whether the Citgo-Bronx partnership will continue to expand or not, depending on the balance between support and political resistance.