Venezuelan ministers were informed of deal 'Citgo Six' were jailed for, documents show
17/03/2021 11:00
By Luc Cohen
March 17 (Reuters) - Six executives of U.S. refiner Citgo
have been jailed in Caracas on graft charges since 2017, but
court documents seen by Reuters show that top Venezuelan
officials were made aware of the deal that the country's top
prosecutor accused the six executives of signing in secret.
The documents, which have not previously been reported, show
that during at least two board meetings of state oil company
Petroleos de Venezuela PDVSA.UL , which owns the U.S. refiner,
top Venezuelan officials - including three ministers - were
informed of the proposed deal for Citgo to borrow up to $4
billion.
The financing was never executed, and a Caracas court in
late 2020 sentenced the six executives to between eight and 13
years in prison. Washington has accused Venezuelan President
Nicolas Maduro of using the jailed executives as bargaining
chips to seek policy concessions from the United States.
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Maduro, who lost control of Citgo in 2019 to the Venezuelan
opposition in the wake of U.S. sanctions on PDVSA intended to
oust him, accuses the United States of seeking to foment a coup
to gain control of Venezuela's oil.
All six executives - Jose Pereira, Jose Luis Zambrano,
Alirio Jose Zambrano, Jorge Toledo, Tomeu Vadell and Gustavo
Cardenas - denied the charges. The group includes five
naturalized U.S. citizens and one permanent resident.
Prosecutors characterized the proposal for Frontier
Management Group Ltd and Apollo Global Management LLC to
refinance Citgo's debt as "unfavorable to the company."
On Nov. 21, 2017, a day after the men were arrested at a
meeting at PDVSA's Caracas headquarters, Venezuela's chief
prosecutor Tarek Saab told a news conference that they signed
the deal "without even communicating or coordinating with the
competent authorities."
However, meeting minutes entered into evidence and seen by
Reuters show that on June 14, 2017, PDVSA's board agreed to
negotiate with Apollo and Frontier, specifying that the board
must approve final terms. Records also show that at a May 18,
2017 meeting, the board also discussed Citgo's refinancing
plans.
PDVSA's board included then-Foreign Minister Delcy
Rodriguez, who was also PDVSA's vice president of international
affairs. Rodriguez is now Maduro's executive vice president.
Her name and those of Planning Minister Ricardo Menendez and
former Food Minister Rodolfo Marco Torres, who were also on
PDVSA's board, were included in the "c.c." line of both minutes.
Reuters was unable to determine if Rodriguez, Menendez and
Torres attended either one of those meetings.
"How could this all have been done behind the national
executive's back - without its approval, to use the
prosecution's words - if it is signed by or issued to the
citizen Delcy Rodriguez?" a defense attorney for Pereira,
Zambrano and Zambrano said in a Nov. 26, 2020 closing statement.
Another attorney for Pereira, Zambrano and Zambrano declined
further comment, as did a lawyer for Toledo and Cardenas.
An attorney for Vadell referred Reuters to comments he sent
to the judge at the close of the trial pointing to the absence
of Vadell's name from the PDVSA minutes as further proof his
client did not participate in the deal.
Neither Rodriguez, Torres, nor the planning ministry
responded to requests for comment.
Venezuela's chief prosecutor's office, the information
ministry, and PDVSA did not respond to Reuters' questions.
Citgo declined to comment.
Pereira, then Citgo's interim chief executive, acknowledged
involvement in the refinancing talks, but said he was acting at
the PDVSA board's instruction. The other five men said they were
not involved in the deal, and that corporate finance was not
among their job responsibilities.
The United States labels Maduro a dictator who rigged his
2018 re-election and uses the justice system to stifle dissent.
Maduro says Washington wants to control Venezuela's oil reserves
and aims to oust him in a coup.
The U.S. State Department has called the trial a "kangaroo
court." A State Department spokesperson, asked about the
documents showing Venezuelan officials knew of the negotiations,
called the detentions "unjust and unlawful".
"We will continue to work with our allies to seek the
release of the CITGO-6 and other unlawfully detained Americans
abroad," the spokesperson said.
A person close to Apollo said the company studied the deal
after being approached by Frontier, but decided not to
participate. Dubai-based Frontier shut in October 2019,
according to Dubai's public registry.
(Reporting by Luc Cohen in New York
Additional reporting by Matt Spetalnick in Washington; Editing
by David Gregorio)
((luc.cohen@thomsonreuters.com; +58 424 133 7696; Reuters
Messaging: Twitter: @cohenluc))