U.S. calls for visits to jailed Citgo execs

CARACAS, Venezuela — U.S. diplomats on Friday demanded that Venezuela give them immediate access to jailed oil executives who hold American passports.

The State Department said in a statement that the U.S. Embassy in Caracas made the request to the government under international law.

It follows this week’s arrest of six high-ranking executives from Citgo, a Houston-based subsidiary of PDVSA, Venezuela’s state oil company.

Venezuela’s chief prosecutor Tarek William Saab has accused the executives of embezzlement stemming from a $4 billion deal to refinance bonds.

Five of the six Venezuelan executives have dual U.S. citizenship.

Oil-rich Venezuela has the world’s largest oil reserves, but low crude prices plunged the country into financial crisis.

The international scuffle could further strain relations between President Donald Trump’s administration and Venezuela as socialist President Nicolas Maduro tries to refinance billions in foreign debt amid U.S. sanctions.

Saab said earlier this week that the bond-financing deal provided “unconscionable and unfavorable” 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 percent payoff of the total.

Saab described the Citgo executives as facilitators of U.S. and international pressure on Venezuela’s oil sector, “putting at risk Citgo’s assets while obtaining personal benefits.”

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 U.S. govern-

ment.

“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.

Thus far, 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 United States. The company said that it is closely monitoring the situation.

The arrests come amid an ongoing investigation by U.S. prosecutors spanning multiple years into corruption at PDVSA. The U.S. Treasury

Department in 2015 accused a bank in Andorra of laundering some $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 U.S. federal officials in October arrested four high-ranking officials, including at least two aides to Venezuela’s ambassador to the United Nations.

The Trump administration imposed financial sanctions against Venezuela in August, prohibiting financial institutions from providing new money to the government or PDVSA. The sanctions also prohibit Citgo from sending

dividends back to Venezuela as well as ban trading in two bonds the government recently issued to circumvent its growing isolation from western financial markets.

Venezuela has struggled to crawl out of economic ruin amid triple-digit inflation, food and medical shortages and a decline in oil prices. Maduro recently announced his plan to renegotiate foreign debt that he said had become impossible to pay because of a U.S.-led financial “blockade” against the socialist nation, though he has offered few details to investors on how he plans to do that.

The Venezuelan government and PDVSA officially defaulted on billions of dollars’ worth of bonds earlier this month. The International Swaps and Derivatives Association, a group of banks and brokers that determine whether an entity like Venezuela has failed to make ontime payments on its debts, recently voted to say that Venezuela had defaulted. Two other rating agencies — Fitch and Standard & Poor’s — have also determined that Venezuela’s government is in default.

Information for this article was contributed by Jorge Rueda, Scott Smith and Steve Peoples of The Associated Press.