Chavez, Joe Kennedy and Oil Math

It’s hard to avoid the commercials starring former Congressman Joseph Kennedy II explaining how friendly Venezuela and Hugo Chavez are to the American people. After all Chavez and Kennedy are bringing relief to the poor people of America who suffer under the evil tyranny of high fuel costs. However, reality has a tendency to get in the way of press events for Citgo and Citizens Energy Corporation such as the scenes of Joe Kennedy driving up to house in a Citgo truck to deliver 40% cheaper heating oil from his “not-for-profit energy company.” The last thing anyone involved in this program wants is for someone to look behind the curtain.

First, Citizens Energy Corporation is not the organization that is directly involved with the program. Rather, one has to first look to a holding company, which is a for-profit and wholly owned subsidiary of Citizens Energy’s called Citizens Enterprises Corporation: first, eighty-six percent of Mr. Kennedy’s over $400,000 annual salary comes from this organization. Second, among the nine companies that it manages is Citizens Program Corporation, which directly handles the Citgo heating oil program. This company went from having almost no assets in 2004 to recording the purchase and later sale of over two million dollars worth of oil in 2005. Then in the first half of 2006 they managed to buy over ten million dollars in oil which they sold for over sixteen million dollars.

However there’s a problem with the math in these deals. According to Citgo 40 million gallons of oil went to help 181,000 households last year, however Citizens Energy claims it was 170,000 households. Now if you take the average cost of home heating oil (which was $2.43 per gallon), and the amount of $6,463,078 that Citizens Programs Corporation claimed to have spent on this program, the greatest number of gallons they could have been provided was 2,657,702. This is significantly less than the forty million gallons Citgo claims to have provided. If this amount was supplied to the 170,000 families that Kennedy claims to have helped, it would mean that each of those homes would have received only 15.6 gallons (or 14.6 gallons if Citgo is to be believed).

Interestingly, the numbers provided by Citgo offer a breakdown by State on the number households aided and total gallons involved. The disparities by State offer a view into what this program really seeks to accomplish. In New York where the program was limited to Bronx and Harlem are the districts represented by Congressmen Charles Rangel and Jose Serrano, the latter being arguably Chavez’s biggest ally in the US Congress, the average household received 454 gallons of oil from Citgo. In Massachusetts — the Kennedy stronghold – was where Representative Bill Delahunt, who is Chairman of the Subcommittee on International Organizations, Human Rights, and Oversight of the House Foreign Relations Committee welcomed the delivery of on average 240 gallons of oil per household. That’s also the most oil delivered to a single state. Finally, there is Rhode Island where Senator Kennedy’s son Patrick Kennedy represents the first Congressional district and whose average household participating in this program happened to have received over 366 gallons. That’s well above what Vermont, despite having harsher winters, got: at an average of 166 gallons per participating home.

There are a number of fundamental questions that need to be answered about this program. Among them are:

Why is a not-for-profit entity engaged in a commercial enterprise?

Where and how did the additional thirty-seven million gallons of heating oil, representing more than ninety-million dollars based on the average price, come from that Citgo claims to have distributed, when their point of distribution claims to have only been involved in a six million dollar program?

But this program is not about the buying, or selling of oil, or math or home heating. It’s about the subtle influence of the American system. After all the this programs purpose is the same as every other discounted oil program run by Chavez throughout this hemisphere and now in Europe. It is about aiding political allies as a means of influencing policy. This alone is bad enough. However, when one adds in that this is being done by a foreign nation that is openly hostile towards the United States and which is also a close ally of two state sponsors of terrorism (Cuba and Iran) it should raise alarm bells.

It is time the Kennedy family and their allies provide answers to the American people about what they and their partner Chavez are really up to, and end the platitudes about how Chavez is just a misunderstood teddy bear who cares for Americans.