Venezuela Detains Former Oil Minister El Aissami Over PDVSA Corruption Case

Mexico City, Mexico, April 9, 2024 (venezuelanalysis.com) – Venezuelan Attorney General Tarek William Saab announced the arrest of former Oil Minister Tareck El Aissami as part of an ongoing corruption probe that billions pilfered from public coffers.

Simón Alejandro Zerpa, former Minister of Economy, and local businessman Samark José López were likewise detained on Tuesday morning.

All three were charged with misappropriation of public funds, influence trafficking and money laundering, with El Aissami additionally accused of treason.

The former minister abruptly resigned his post in March of last year after the National Anti-Corruption Police arrested several high-ranking figures, including Hugbel Roa, a lawmaker from the United Socialist Party of Venezuela (PSUV), and Joselit Ramírez, the head of the National Crypto Asset Superintendence (Sunacrip). 

Roa and Ramírez were considered close associates of El Aissami. Though the former oil minister avoided arrest himself at the time, there was widespread speculation over his direct involvement in the alleged corruption scheme. 

During his press conference from the headquarters of the Public Ministry in Caracas, Saab said that five people among the dozens arrested last year had agreed to cooperate with prosecutors but threats against them and their families complicated their ability to deliver testimony. Once the conditions to guarantee their safety were secured, the attorney general’s office was reportedly able to proceed with the arrest of El Aissami. 

According to Venezuela’s top prosecutor, one cooperating witness said the accused demanded cash payments in exchange for access to contracts with public Venezuelan companies. These payments were then subsequently laundered via various mechanisms. 

Saab said the delayed arrest also stemmed from the use of “digital financial technology to cover up the crime.”

The alleged corruption plot has been labeled PDVSA/Crypto by prosecutors, in reference to the accusation that US $3 billion worth of crude sales were diverted via cryptocurrency schemes orchestrated through Sunacrip. 

At the time, Reuters and the Associated Press claimed that state oil company PDVSA may have racked up more than $20 billion in unpaid bills, but Venezuelanalysis sources cast doubt on the figures and estimated losses between $5-10 billion.

The Venezuelan attorney general charged that El Aissami failed to comply with the regulations set out by state oil company Petroleos de Venezuela (PDVSA) and assigned oil shipments to the National Crypto Asset Superintendence without any administrative control or guarantees. 

Venezuela has turned to cryptocurrencies as a means of payment for crude cargoes as a result of US sanctions that bar state institutions from financial markets.

Saab further claimed that El Aissami was working in collaboration with people in the United States and that their aim was to further damage the Venezuelan economy through currency manipulation. He expressed concern that sources inside the US were already aware of El Aissami’s arrest before it had become public knowledge.

“With this structure they evaded all [Central Bank] financial regulations, bringing with it the instability of the national currency; fueling the increase in the black market exchange rate and causing damage to the Venezuelan state,” affirmed Saab. He pointed to private bank Bancamiga as a participant in the currency speculation scheme.

A former student leader in Mérida state, El Aissami rose through the ranks of the ruling Socialist Party (PSUV) in the mid-2000s. He served as interior minister and state governor before holding important posts as Economy Vice President and Oil Minister. 

Venezuelan President Nicolás Maduro tapped Pedro Tellechea to replace El Aissami and serve as both oil minister and PDVSA president. After taking over, Tellechea suspended most oil and fuel exports in order to renegotiate contracts after detecting a trail of payment defaults. 

Following the imposition of US sanctions on the country’s oil industry, Venezuela was forced to resort to smaller and unreliable intermediaries to place its crude in Asian markets by selling at big discounts. The unorthodox system has led to numerous payment delays as well as corruption schemes inside PDVSA.

Under Tellechea, PDVSA has seen seven straight months of production growth and the highest output since February 2019.

Edited by Ricardo Vaz in Caracas.