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The Citgo conspiracy: Opposition figures accuse Guaidó officials of ‘scam’ to liquidate Venezuela’s most prized international asset

Venezuela’s opposition has long accused the Bolivarian government of corruption and mismanagement. But with Citgo on the verge of liquidation, Guaidó’s officials are too incompetent — or too devious — to save it.

by Anya Parampil

Part 7 - Scavenging off Citgo’s corpse

When a court rules that one corporation like Crystallex can seize shares belonging to another like Citgo Holding in order to pay back debt, the shares are not directly transferred from company to company. Rather, the court decides what amount of the indebted company’s assets must be sold off in order to repay the claimant.

If the court allows Crystallex to move ahead with its right to seize Citgo, a decision which observers expect could come in early September, it will then initiate the process of liquidating $1.4 billion worth of the company’s assets.

Yet Crystallex is not the only vulture looking to scavenge the corpse of Citgo. The refinery currently faces several similar lawsuits, including the one from Owens-Illinois. The Crystallex precedent may help resolve these cases. 

[The Crystallex case] has a lot of implications because it completely opens the door to the whole list of companies that are suing PdVSA,” cautioned Rodríguez.

Lawmaker Oscar Roderos, a former judge, notes as many as 43 cases against Venezuela’s government could be impacted by the Crystallex decision.

On top of pending legal fights, a $913 million payment to Citgo’s US bondholders is due October 27. If Citgo defaults on the loan, creditors could then cash in on their whopping 50.1% stake in the company.

Taken together, these interests threaten to liquidate the majority of Citgo Holding’s assets, providing a boon to oil giants such as British Petroleum, Shell Gasoline, and ExxonMobil – the former employer of Vecchio.

If Citgo is liquidated, competing industry titans will have the chance to expand their share of the oil market through the purchase of Citgo’s assets in a firesale overseen by the court.

They’re auctioned,” Rodríguez explained, referring to Citgo’s assets.

As The Grayzone previously reported, Guaidó’s US representative Carlos Vecchio is a former functionary of the US oil industry. Vecchio spent the vast majority of his career working as a top lawyer for ExxonMobil, entering politics only after Chavez booted the company from Venezuela.

I was not aware of any of his relationships, and I was quite annoyed when I read [the Grayzone’s reporting],”  Rodríguez said. “Not that I criticize anybody for working for Exxon, but to me this sounds like the lawyers of Standard Oil Company of New Jersey, 100 years back, writing Venezuelan laws. For me it’s no fun, it’s unacceptable.

Vecchio’s intimate ties to the oil industry help remove the mystery behind his consistent covering for Hernández. Indeed, it is not hard to imagine a scenario in which Vecchio’s former employer, Exxon, could benefit from Citgo’s liquidation. 

Yet Vecchio, Hernández, and other Guaidó officials publicly maintain that protecting Citgo is paramount. In their effort to secure the company, they have relied on their most loyal ally, the Trump White House, and its weapon of choice: unilateral financial sanctions.

Within days of the Crystallex ruling, PdVSA’s Guaidó-appointed chair, Alejandro Grisanti, announced on Twitter that Venezuela’s opposition had requested an executive order from Trump “to protect the country’s assets on American soil”.

The following day, Trump announced that he was considering a full embargo of the country.

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