Billions in losses due to corruption in the oil sector in Venezuela
From murky transactions to embezzlement, rigged audit procedures and mismanagement, corruption in Venezuela’s oil industry looks like a monster that has devoured billions of dollars over the past 20 years.
In this case, huge sums of money are involved; $17 billion was stolen from the coffers of the giant Venezuelan oil company, Petroleos de Venezuela (PDVSA), according to the non-governmental organization Transparencia Venezuela.
It appears that officials took advantage of US sanctions and the oil embargo to organize sales of crude oil on the black-market using cryptocurrency.
About sixty people were arrested, including Tariq El Aissami, a Venezuelan political figure considered close to President Nicolas Maduro, as well as to his predecessor Hugo Chavez (1999-2013).
This isn’t new… Rafael Ramirez, the former Minister of Oil (2002-2014), is also on the run in Italy and is accused of corruption during his term, while two former officials, Eulogio Del Pino and Nelson Martinez, were arrested.
Since 2017, at least 31 investigations have been opened that have led to more than 300 arrests; The loss amounted to tens of billions of dollars.
“Unfortunately, the Venezuelan national oil company was for a long time the mother of corruption because it was the only entity in the country that generated foreign currencies… generating large sums of dollars,” Transparencia director Mercedes de Freitas told AFP.
Along with South Sudan, Syria and Somalia, Venezuela ranks fourth in Transparency International’s corruption index.
Corruption is everywhere, from police and civil servants who regularly demand small sums to compensate for their meager salaries, to the opacity of authority, including in huge corporations where nepotism and rigged tenders are rife.
Inside the national oil company, employees say corruption is rampant at all levels, from the theft of televisions, computers and even light bulbs to private use of company machinery and embezzlement of funds.
A former employee, who requested to remain anonymous, recalls the waste during Ramirez’s administration, noting that the company rented sixty rooms in three different hotels for security reasons for the trips of its chairman, but he ultimately occupied only twenty rooms.
Talk about corruption within the company was stifled for years, and a large number of workers and trade unionists who dared to expose it were imprisoned.
The Venezuelan Transparency Organization said that at least $17 billion was embezzled between 2020 and March 2023.
De Freitas explained that this amount is three times what is needed to end the country’s chronic electricity problems.
She said that “this money has practically been lost and the chances of recovering it are very slim”.
President Maduro himself admitted that only “a portion of the stolen funds” had been recovered and that “the largest portion” was still missing.
The man, who will seek to win a third term in the presidential elections scheduled for July 28, proposed amending the constitution to increase the maximum prison sentence in major corruption cases from 30 years to life.
He said after the arrest of Tariq El Aissami, “We must be strict, whoever is involved”.
Oil Minister Pedro Telechia, Chairman of the Board of Directors of “PDVSA” since January 2023 and Minister of Oil, confirms that one of the pillars of his administration will be “cleansing” this industrial sector, which constitutes a real hotbed of corruption.
About 300 audits have been launched since the beginning of the year.
“We don’t ask for money” from potential suppliers and subcontractors, he said.
He added that from now on, any flaw that we may find in the audit process will be referred directly to the Public Prosecutor, but he admitted that there is still a long way to go.
Tarek El Aissami assumed the ministry in 2020 with the same mission, which was to restructure and purify the Venezuelan oil company after the accusations leveled against Rafael Ramirez; Four years later, he went to prison.
