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PDVSA Citgo's $500K inaugural gift surfaces amid national security concern


As Venezuela starves, a U.S. subsidiary of a Venezuelan state-owned oil company Citgo Gave $500,000 to Trump Inauguration.- Latin American Herald Tribune

WASHINGTON
Petroleumworld 04 20 2017

A U.S. subsidiary of a Venezuelan state-owned oil company that has stirred national security concerns among U.S. senators contributed $500,000 to President Donald Trump's inaugural fund, federal disclosures show.

The contribution from Citgo Petroleum Corp. surfaced just nine days after a bipartisan group of senators expressed concern that “critical energy infrastructure” in the U.S. controlled by Citgo could wind up in the hands of Russian oil giant Rosneft PJSC .

Specifically, the senators, who included Florida Republican Marco Rubio and Texas Republican Ted Cruz, cited “a series of international transactions that could have significant national security implications for critical energy infrastructure in the United States,” according to a letter they sent to Treasury Secretary Steven Mnuchin on April 10. The letter asked Mnuchin to monitor the situation.

The White House referred questions to the inaugural committee, which didn't immediately respond to a request for comment. A spokesman for Citgo also didn't respond to a request for comment.

Petroleos de Venezuela SA , the Venezuelan state oil company that owns Citgo, used 49.9 percent of its Citgo shares as collateral for a loan from Rosneft last year, according to a Nov. 30 financing statement filed in Delaware. The size of the borrowing secured by the Citgo shares isn't clear. 

“It's completely normal for any company to do,” PDVSA President Eulogio Del Pino said of the arrangement on Venezuelan state television in December.

‘Could Default'

Nonetheless, the bipartisan senators' group, which also included Democrats Bob Menendez of New Jersey and Dick Durbin of Illinois, cited analysts' views that PDVSA “could default on its debt in the very near future.” While the company pledged less than half its Citgo shares to Rosneft, “It is our understanding that Rosneft acquired other PDVSA bonds on the open market that could bring their ownership potential to more than 50 percent,” the lawmakers wrote.

The senators asked Mnuchin, who chairs the Committee on Foreign Investment in the United States, to “proactively monitor the situation.” The interagency committee is authorized to investigate and block any transaction or investment that could present national security concerns.

Citgo's $500,000 contribution, which was received by the inaugural committee on Dec. 2, helped propel Trump's inaugural fundraising to $106.7 million, a record . It appears to be unusual for Citgo, which didn't contribute to inaugurations in 2005, 2009 or 2013.

The contribution was among the largest from fossil-fuel companies -- which in all donated almost $3.6 million to the inaugural fund, according to a tally prepared by Friends of the Earth, an environmental group.




Story by Bill Allison and John McCormick from Bloomberg.

bloomberg.com 04 19 2017

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