Chavez’s Citgo Is No Friend of America
Hugo Chavez has hijacked Citgo.
What was once a respected “American” corporation, which happened to be owned by and partnered with the National Oil Co. of Venezuela, PetrÃ³leos de Venezuela S.A. (PDVSA), is now the American directorate of Chavez’s anti-American revolution.
Formerly, following the takeover of Citgo by PDVSA in 1990, the top positions at Citgo were all unofficially reserved for American executives, so that Citgo could function in the American business landscape as a competent and independent enterprise, removed from the politics of Venezuela. This was a natural extension of the domestic policies of PDVSA, which despite being owned by the Venezuelan government since the nationalization of the Venezuelan oil industry in 1976, had functioned admirably and independently, according to relatively sound business principles. PDVSA was once one of the most respected companies in the petroleum industry.
All this began to change in 1999, when Hugo Chavez came to power as the self-declared leader of the “revolution” in Venezuela. Despite his dreams of conquering grandeur, however, there was no revolution. Chavez came to power through an election, and took office swearing to uphold the ideals and institutions of democratic Venezuela. This was quite a rehabilitation for the radical Col. Chavez who, in 1992, led a failed putsch against the elected government of Venezuela—a government he was sworn to protect as an officer in Venezuela’s military.
In the name of reconciliation, Chavez was pardoned after just two years in prison (despite his coup attempt having claimed 18 lives) and he immediately entered legitimate politics preying upon the economic fears of Venezuela’s poor—so successfully that he was soon elected to the office he had previously failed to seize. Stop me if you’ve heard a similar story before.
Once in office, Chavez set about reengineering Venezuela so that he could never be gotten out of office. The jewel of Venezuela’s economy and the heart of its anti-Chavez middle and upper classes was PDVSA, which Chavez had long railed against as an obstacle to his dream of a Castro-style national revolution. Chavez began, gingerly at first, to replace the upper management of PDVSA with his personal political hacks and cronies. In addition, military personnel believed loyal to Chavez were given security and management posts.
When this failed to silence and co-opt PDVSA fast enough, Chavez precipitated a crisis by appointing as head of PDVSA Gaston Parra, a Marxist college professor whose entire knowledge of the petroleum industry consisted of a belief that it was somehow evil. The reaction to this move was a strike by outraged PDVSA personnel, which shut down Venezuela’s petroleum-centered economy and set off a wave of pent-up distrust and hatred against Chavez. The strike was joined by millions outside PDVSA. Street protests coalesced and 700,000 Venezuelans marched through Caracas—the largest demonstration in the country’s history.
On April 11, 2002, Chavez’s volunteer revolutionary thugs opened fire on the crowd, killing 17. When he ordered the military to do likewise, they refused the order and Chavez was briefly removed from power. Following two days of internal struggle within the military, Chavez’s forces re-emerged in control, and a newly empowered Chavez began a swift and debilitating purge of PDVSA, forcing out 20,000 employees and replacing them with his “Bolivarian” henchmen. At the conclusion of the purge, PDVSA was crippled, corrupt, incompetent, and firmly in the control of President Hugo Chavez, revolutionary leader of the Bolivarian Republic of Venezuela.
The leader then turned his attention to PDVSA’s wholly owned indirect subsidiary in the United States, PDV America—parent company of Citgo Petroleum Corp. Chavez would more subtly repeat the pattern employed with such success against PDVSA: appoint a few corrupt and loyal incompetents to high positions and watch with glee as the honest and legitimate were driven past the breaking point and replaced.
As detailed in a New York Times article in 2005, among the first of the Chavez loyalists to be installed was Antonio J. Rivero, appointed to Citgo in 1999. Rivero, a graduate of Venezuela’s military academy and a participant in Chavez’s failed 1992 putsch, had no experience in the petroleum industry and seemed to have no duties at Citgo, other than reporting goings on among upper management “directly” to Hugo Chavez. “He was like the old Soviet commissar,” Robert Funk, former Citgo VP for Planning was quoted as saying in the Times article. “He was here to make sure we were doing things politically correct, and was passing back information to Venezuela.”
Mr. Rivero was seen as an intimidating figure at Citgo and one witness reported him having a gun in his office, causing Rivero to be bodily removed from the headquarters at one point. No gun was found by security. Immediately following Chavez’s removal from power in the 2002 Caracas massacre, company officials swiftly removed Rivero from Citgo. When Chavez returned to power two days later, Rivero likewise returned to Citgo, being elevated to the No. 2 spot in 2003.
A flood into the company of other Venezuelan cronies began, which did not stop when Rivero and fellow Chavez sycophant Luis Marin, the CEO, were eventually forced to resign for corruption. Indeed, by that point, the takeover was fairly complete, with all power controlled by the Chavistas through puppet committees and a “culture of intimidation.” When Jim McCarthy, the vice president for government and public relations, discovered that files on his computer regarding the Venezuelan embassy were being tampered with, his home was vandalized and he resigned. “I got the message,” he told the Times. Adding, “I was afraid for my family.”
McCarthy’s resignation was part of trend. Geoff Reid, assistant treasurer of Citgo, quit because it had “become tough to track” where the company’s cash was actually flowing and he was afraid of his personal liability. Chief Financial Officer Eddie Humphrey resigned for similar reasons.
Today, the American leadership is gone, replaced by Chavez agents who have moved the company, at a cost of $69 million, from Tulsa to an extravagant new headquarters in Houston—a headquarters perhaps unique in the industry, since it includes a bulletproof citadel near the offices of the top executives. Rivero described it merely as “a crisis room to protect top management.” Perhaps Rivero’s personal past has given him a too literal interpretation of what American corporate leaders mean when they refer to a “hostile takeover.”
Given Chavez’s declared aim of destroying America’s power in the world, it seems relevant to assess just how total is Chavez’s takeover of Citgo. To address this, and developments since the 2005 Times article, I contacted Gustavo Coronel, a founding member of the board of directors of PDVSA, a former temporary member of the Harvard faculty, and once an elected representative in the House of Deputies of the Venezuelan state of Carabobo. He now resides in the United States, where he writes prolifically about the Chavista captivity of his nation.
“Up to a few years ago, say 2002, Citgo had a mixed U.S.-Venezuelan board and top level managers were mostly U.S. citizens,” Coronel explained. “Now this is no longer the case. All (possibly with one or two exceptions) of [the] top managers of Citgo and all members of the board are Venezuelan and are there because they are unconditional supporters of Hugo Chavez,” he stated. As an example of the lack of real qualifications that the Chavista managers possess, Coronel added that Felix Rodriguez, who became president of Citgo following Luis Marin resignation over the 2005 corruption scandal, “speaks a Tarzan-like English”—yet he is somehow the head of a major “American” corporation.
“It is not a matter of political infiltration,” Coronel continued, “but a matter of total political control. This is an issue of the highest importance for U.S. national security.” He concluded, emphatically, “I repeat: all board members of Citgo are Chavez supporters.”
Professor Michael J. Economides, editor of Energy Tribune and one of the best known names in the international petroleum industry, concurred with Coronel’s assessment, commenting, “He has replaced all competent people throughout PDVSA. He is bad news for his country.” When I asked specifically if Chavez did the same at PDV America and Citgo, Economides responded simply, “Of course he did.”
And that would seem to be bad news for our country. Indeed, all one needs as proof of the total takeover of Citgo by a foreign dictator is its actions in recent years. While the economy of Venezuela is in shambles and oil prices are near record highs, Citgo has devoted a huge portion of its profits and resources not to improving the lives of Venezuelans, who are the effective “shareholders” of this government-owned business, but instead to propagandizing for Chavez and buying influence for him among the American public, media and, sadly, several willing members of Congress.
I refer here to Citgo’s Chavez-initiated program to provide subsidized home heating oil to States where the congressional delegation is friendly to Chavez. This program, which is named (in rather Tarzan-like English), “From the Venezuelan Hearts to the U.S. Hearths,” has several apparent political aims.
One is to buy good publicity for the class warrior Chavez by showing him to aid America’s poor when American oil companies have not. The fact that the money for his program is coming out of the pockets of Venezuelans (per capita GDP $6,100) in order to pad the pockets of whiney Americans (per capita GDP $41,800) is somehow left out of the Robin Hood themed press releases.
Chavez has also used the program in an attempt to tap into racial politics in America as a source of support. Jesse Jackson and Danny Glover are leading trumpeters of the program, which is targeted especially at African-American and Hispanic neighborhoods and Indian reservations. Chavez draws heavy support in Venezuela from Indian and other minority groups, which he has declared historical victims under his benevolent protection. To further his dream of an anti-American world revolution, he seemingly hopes to exploit America’s race issues so as to philosophically co-opt a portion of the divided population.
Lastly, Chavez hopes (in my opinion) to directly influence congressional policy and interfere in American elections with the program, which was engineered in concert with Rep. Bill Delahunt (D.-Mass.) and is administered (in part) through Citizens Energy, a non-profit co-operative founded and run by former Massachusetts Rep. Joseph P. Kennedy II.
By doling out Chavez’s stolen oil at a 40% discount in liberal congressional districts and allowing the incumbent representatives to take credit for it, I believe Chavez seeks to alter the makeup of Congress and indebt Delahunt and other compromised congressmen to him. He has, essentially, turned pork-barrel politics into oil barrel politics and is buying votes for his sympathizers with a new brand of imported pork. SUV drivers are not the only ones with a costly addiction to foreign oil. Certain congressmen, having gotten the first hit for free, are now paying a price for the “free” oil with which they have bribed their constituencies.
The 15-page publicity brochure Citgo distributes to promote the program is illuminating, describing how, in a time “of catastrophic events within some of the poorest and most vulnerable communities in the United States … President Chavez offered help from Venezuela and Citgo.” It then goes on to quote the gratitude of Chavez’s charity recipients.
Rose King of Mattapan, Mass., who lives on a “limited income” (unlike Chavez, but like nearly every other human) states, “I didn’t really think about Citgo or Venezuela before, but I am so appreciative that they cared enough about people like me.”
While Carmen Garcia of the Bronx was included for this nugget regarding Chavez and her “community”: “It’s nice to see Latin American leaders extending themselves and taking care of their own. We’re not forgotten. We’re not ghosts in someone else’s eyes.” You know, the way she’s a pale brown ghost for President Bush and the gringos.
Terry Spence, speaker of Delaware’s House, groveled, “We’re grateful to Citgo and President Chavez for what they are doing to help.” And that’s the idea, Terry. Good boy.
The brochure ends with a touching tale of how select heating oil recipients and community leaders were transported, all expenses paid, to “personally thank President Hugo Chavez, Citgo’s parent company PDVSA and the Venezuelan people for their generosity.”
Having been granted an audience with Lord Chavez at the “Presidential Palace,” the group of supplicants “was delighted to hear directly from President Chavez that, as a response to the letter they had written to him asking for the program to continue, it was going to be expanded to help more U.S. families heat their homes during the next winter.”
The group of warm and well-trained terriers was then treated to a tour of working class neighborhoods, a Chavez-supported footwear factory, a health care clinic, and “dozens of cooperatives that provide work” to Chavez’s indigenous terriers.
Keep in mind that this was not a press release from Chavez’s propaganda ministry, but a public-relations pamphlet from the allegedly independent Citgo Petroleum Corp. The only thing missing was a photo-op in which the delegation could have been filmed aiming anti-aircraft cannons skyward at imperialist planes.
Today, Citgo is—quite simply—an unregistered agent of a foreign government, propagandizing for and subsidizing the Chavez regime in its neo-Marxist crusade against America’s alleged empire. Yet it is still treated as any other American business. The Citgo sign towers proudly over Kenmore Square in Boston and millions of Americans who were concerned to learn that Chavez seeks an alliance with Iran and North Korea, or who were incensed when Chavez called our President “the devil” at the United Nations last week, continue to mindlessly fill up at Citgo, giving Chavez not only profits from Venezuela’s oil (which is unavoidable) but profits from the retail sales of gasoline and diesel fuel (which is easily avoidable).
It has become clear that Chavez’s Citgo is no friend of America, what is less clear is just why America is still so friendly toward Citgo.