Conservative groups to Trump: Don’t intervene in Citgo dispute
Several conservative groups are asking the Trump administration not to intercede on behalf of the Venezuelan opposition government to keep Citgo Petroleum from being seized by Venezuela’s creditors and auctioned.
Citgo, a Houston refiner, is the U.S. subsidiary of Venezuela’s state oil company and considered a valuable asset to help Venezuela rebuild from its crushing economic collapse if the opposition government of Juan Guaidó succeeds ousting President Nicolás Maduro. The United States and many of its allies recognize the Guaidó government.
A federal appeals court ruling this week said a defunct Canadian mining firm that was owed $1.4 billion by Venezuela may seize the shares of Citgo, triggering a chain of events that could auction Citgo off to the highest bidder, potentially other U.S. refiners such as Valero Energy of San Antonio or Marathon Petroleum of Findlay, Ohio.
Barring further appeals, executive action from the White House may be the best way to keep Citgo intact, analysts said.
A coalition of conservative groups is asking Trump not to get involved, given Venezuela’s track record under the leadership of Maduro and his predecessor and mentor, Hugo Chávez. Venezeula, which has the world’s largest proven oil reserves, was once among the world’s wealthiest nations, but has in recent years been wracked by political and economic crises and shortages of food, medicine and other basic necessities.
“Instead of taking executive action that could chill private investment in Venezuela, the Trump Administration should seek to help rebuild the country without violating property rights and the rule of law protected by the United States Constitution,” the groups wrote in a letter Wednesday.
Executive action would prevent the many companies owed money by Venezuela and its state oil company from recouping their unfair losses, they said. In many cases, the companies’ assets nationalized by the Venezuelan government.
“Instead, the administration should urge the interim Venezuela government to follow existing processes to restructure its debt and to
deal with its legitimate creditors within the framework set out by existing legal regimes and court processes,” they added.
The letter was signed by Grover Norquist’s Americans for Tax Reform, FreedomWorks, Heritage Action and other conservative groups.
After the Trump administration recognized his government earlier this year, Guaidó appointed a board of directors to oversee Citgo.
The Guaidó board ousted directors and executives loyal to Maduro. The Maduro board, however, has in a separate case asked a federal court to return Citgo to its control.
Citgo, a U.S. company with a more than 100-year
history, was acquired by the Venezuelan national oil company PDVSA about three decades ago and owns oil refineries in Corpus Christi, Lake Charles, La., and Illinois. It employs about 4,000 people in the United States, including about 800 in Houston.
The Canadian mining firm Crystallex International and other companies owed money by the Venezuelan government and PDVSA are eyeing Citgo as the best way to recoup their losses. Citgo is a profitable business that produces significant revenues, although U.S. sanctions prevent Citgo’s earnings from being repatriated to Venezuela.