Received by NSD/FARA Registration Unit 05/31/2021 5:37 PM
SAVE CITGO FROM MADURO’S FINANCIERS
The U.S. helped rescue CITGO Petroleum Corporation from Venezuelan dictator Nicolas Maduro in early 2019. Now, a group of Maduro’s creditors are attempting to seize CITGO. At risk are thousands of U.S. jobs, American energy security and the very prospects of freedom in Venezuela. The Trump Administration can stop Maduro’s creditors and save CITGO by closing a Treasury Department loophole known as GL 5.
Background
• In January 2019, the U.S. and more than 50 nations recognized Venezuelan National Assembly President Juan Guaido as the lawful interim president of Venezuela.
• To preserve U.S.-based CITGO Petroleum Corporation and protect it from the Maduro dictatorship, the Guaido government - with the strong support of the U.S. government - appointed a new board of directors to CITGO that is independent from Maduro.
• On October 27, the Maduro regime is expected to default on payments owed by state- owned oil company PDVSA. Maduro’s creditors are seeking control of CITGO as payment. This would be a major setback for Venezuelan freedom and U.S. interests.
Maduro’s financiers were warned not to extend credit
• In 2017, the Maduro regime - desperate to avoid collapse - sought new financing with CITGO pledged as collateral. The transaction was done without the required authorization of the Venezuelan National Assembly, raising questions about its validity.
• The National Assembly along with many other legal experts warned financial institutions of the legal and ethical reasons to NOT provide Maduro with this financing. Not a single U.S. law firm or financial institution participated. However, several foreign-based entities did, despite clear warnings. It was estimated at the time of the exchange that 25% of that debt was held by Maduro’s cronies and agencies controlled by Maduro.
• The result was to extend the Maduro regime’s grip on power - resulting in the continued suffering of the Venezuelan people, which continues to this day.
Maduro’s financiers don’t deserve a bailout
• Now these financiers who bailed out Maduro are seeking a bailout of their own via U.S. Treasury Department Office of Foreign Assets Control General License 5 (GL 5). GL 5 specifically provides Maduro’s financiers - and only them - permission to pursue Venezuelan assets in the event of a default on the PDVSA 2020 bonds. Their target is clear: CITGO.
• GL 5 was originally created to promote U.S. policy toward Venezuelan by allowing the sanctions regime to work without harming U.S. financial companies. Now, perversely, it
Received by NSD/FARA Registration Unit 05/31/2021 5:37 PM Received by NSD/FARA Registration Unit 05/31/2021 5:37 PM
is being exploited by Maduro’s very creditors in a way that would undermine U.S. policy toward Venezuela.
• GL 5 would create a special privilege for Maduro creditors - putting them at the front of the line and ahead of other U.S. creditors, including pension funds.
• The Trump Administration should suspend GL 5 - stop the bailout of Maduro creditors - and save CITGO. The creditors’ claims would remain intact to be resolved - when conditions allow and will not be prioritized over others.
CITGO matters for America’s national security and America’s economy
• With roots that go back more than 100 years to its founding in Oklahoma, CITGO is an iconic American company and the nation’s 5th largest independent refiner.
• CITGO supports thousands of American jobs in 31 states. Its Lake Charles, Louisiana facility alone is the nation’s 6th largest refining facility.
• If foreign interests gain control of CITGO its future could be in doubt, putting American jobs and American energy security at risk.
• CITGO is profitable, and the new board and management team have moved decisively to fix the extreme mismanagement of the company overseen by the prior, Maduro- appointed corporate leadership. Employee morale is high, and the company is on a path toward increasing success and recovering its past glory.
CITGO is a vital asset for Venezuelan freedom and democracy
• CITGO is the most important Venezuelan asset that is not controlled by Maduro. It is strategically important to the Guaido-led efforts to restore democracy and freedom to Venezuela.
• CITGO is uniquely capable of refining Venezuela’s high sulfur, extra-heavy crude oil and bring it to market.
• CITGO also will be instrumental in supplying Venezuela with refined petroleum products given the destruction of the country’s own refineries and the acute scarcity of gasoline and other petroleum products. The availability of diluents will be critical to support the fast ramp up of oil production in the country once there is a transition.
• CITGO is uniquely placed to provide technical expertise to help in the recovery of Venezuela’s refining system.
• CITGO’s improved financial prospects will allow it to declare dividends to the Venezuelan people. Losing Citgo will do great damage to Venezuela’s future economic recovery.
Received by NSD/FARA Registration Unit 05/31/2021 5:37 PM