Petroleumworld`s
Opinion Forum:
viewpoints on issues in energy & international
politics.
Saturday's
Lagniappe
Hugo
Chavez has hijacked Citgo
Chavez's Citgo Is No Friend of America
By Mac Johnson
Posted Sep 26, 2006
What
was once a respected “American” corporation, which
happened to be owned by and partnered with the National Oil
Co. of Venezuela, Petróleos 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.
Mac
Johnson
is a writer and medical researcher in Cambridge, MA. and a regular
contributor to Human Events. His column generally appears on
Tuesdays. Archives and additional material can be found at www.macjohnson.com.
Human Events was first published in 1944 - more than a decade
before any other conservative weekly.
Petroleumworld
not necessarily share these views.
