Venezuelan oil czar resigns unexpectedly amid bribery investigations

CARACAS, Venezuela (AP) — The man responsible for running Venezuela’s oil industry — who pays for virtually everything in the troubled country, from subsidized food to ridiculously cheap gas — resigned amid investigations into alleged corruption among officials in various parts of the country . government.

Tarek El Aissami’s statement on Monday was shocking for many reasons. He was considered a loyal member of the ruling party and was considered a key figure in the government’s efforts to evade punitive international economic sanctions.

And he ran state oil company PDVSA in a Venezuelan business sector that many consider corrupt, a country where embezzlement, bribery, money laundering and other wrongdoing are a way of life.

“Obviously they’re giving it a touch of anti-corruption investigation,” said Ryan Berg, director of the US program at the Center for Strategic and International Studies, a Washington-based think tank.

“The rule of law is not advancing here,” Berg added. “This is really a chance for the regime to sideline someone who, for whatever reason, was a danger to it at the moment, and to continue acts of corruption after individuals have been ousted from the political scene.”

Hours after El Aissami announced his resignation on Twitter, President Nicolás Maduro called his government’s fight against corruption “bitter” and “painful.” He said he accepted the resignation “to facilitate all investigations that should lead to the establishment of the truth, punishment of those responsible and justice in all these cases.”

Venezuela’s National Anti-Corruption Police announced last week an investigation into unidentified government employees in the oil industry, the justice system and some local governments. Attorney General Tarek William Saab said in a radio interview on Monday that at least half a dozen officials, including people associated with PDVSA, have been arrested and he expects more to be detained.

The story goes on

Among those arrested is Joselit Ramirez, a cryptocurrency regulator who was indicted in the US along with El Aissas for money laundering in 2020.

Corruption has long been rampant in Venezuela, which sits on top of the world’s largest oil reserves. But officials are rarely held accountable, a major irritant for citizens, most of whom live on $1.90 a day, the international benchmark for extreme poverty.

“I assure you, especially at this moment, when the country is calling not only for justice, but also for the strengthening of institutions, we will use the full force of the law against these individuals,” Saab said.

Oil is the most important industry in Venezuela. A windfall of hundreds of billions of oil dollars thanks to record high world prices enabled the late President Hugo Chávez to launch numerous initiatives, including public food markets, new public housing, free medical clinics and educational programs.

But the subsequent fall in prices and government mismanagement, first under the Chávez government and then under the Maduro government, put an end to lavish spending. Thus began a complex crisis that pushed millions of people below the poverty line and forced more than 7 million Venezuelans to migrate.

The mismanagement of PDVSA, and more recently the economic sanctions imposed by the US, have led to a steady decline in production, from 3.5 million barrels a day when Chavez took office in 1999 to about 700,000 barrels a day last year.

David Smild, a professor at Tulane University who has done extensive research on Venezuela, said the Maduro government’s actions are more than just an attempt to clean up its image.

“Arresting important figures and accepting the resignation of one of the most powerful ministers in a $3 billion case will not improve your image,” he said. “This is probably because the missing money is actually having a major impact on a government with serious budgetary problems.”

The Biden administration recently eased some sanctions, even allowing oil giant Chevron to resume production for the first time in more than three years. The Maduro government is negotiating with its US-backed political opponents, primarily to secure the lifting of sanctions.

US Congressional scholars saw El Aissami as an obstacle to Maduro’s goals.

“If Al Aissami remains in office, it could complicate efforts to lift oil sanctions,” the Congressional Research Center said in a November report.

In 2017, the US government named El Aissami, a powerful ally of Maduro, as a drug lord in connection with his previous positions as interior minister and state governor. The Treasury Department said that “he has overseen or partially owned drug shipments of more than 1,000 kg from Venezuela on several occasions, including those with final destinations in Mexico and the United States.”

Under the Chávez government, El Aissami headed the Ministry of the Interior. He was appointed oil minister in April 2020.

“El Aissami was a key player in the Maduro government’s strategy to evade sanctions. We’re talking about someone who knows where all the bodies are buried, so it’s going to be important to keep track of where he ends up,” said Jeff Ramsey, a senior fellow at the Atlantic Council who specializes in Colombia and Venezuela. “If El Aissami gets involved, it could have serious repercussions for the entire power structure.”

In September, the Maduro government renewed wrongdoing charges against another former oil minister, Rafael Ramirez, alleging he was involved in a multi-billion dollar embezzlement operation in the early 2010s that used a dual currency exchange system. Ramirez, who ran the OPEC oil industry for a decade, denied the allegations.

In 2016, the Venezuelan National Assembly, then opposition-led, said $11 billion was missing from PDVSA between 2004 and 2014, when Ramirez was in charge of the company. In 2015, the US Treasury accused a bank in Andorra of laundering about $2 billion stolen from PDVSA.

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