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Citgo detainees betrayed Venezuela: prosecutor

22 Nov 2017, 8.35 pm GMT

Citgo detainees betrayed Venezuela: prosecutor

Caracas, 22 November (Argus) — Six senior Citgo executives arrested in Caracas yesterday for alleged corruption were actually detained for committing treason against Venezuela, acting attorney general Tarek Saab said today.

Acting Citgo chief executive Jose Pereira and five other company executives detained at the headquarters of Citgo's Venezuelan state-owned parent company PdV were "cooperating" with the US against Venezuela, Saab told state-owned VTV television.

He said Pereira gave Wikileaks confidential PdV debt-related documents, including unspecified signed contracts.

Pereira is also charged with chairing unauthorized $4bn loan negotiations with two foreign hedge funds and a Swiss-based intermediary with at least two Venezuelan stakeholders, Saab added.

The five executives arrested with Pereira yesterday by the Venezuelan national intelligence service (Sebin) include Citgo refining operations vice president Tomeu Vadell; vice president and Corpus Christi refinery general manager Alirio Zambrano; supply and marketing vice president Jorge Toledo; strategic shareholder relations, government and public affairs vice president Gustavo Cardenas; and vice president of shared services Jose Luis Zambrano.

Four of the six detained Citgo executives are naturalized US citizens, a Sebin official familiar with the case told Argus. The Sebin official declined to name the US citizens.

The US State Department said it expected Caracas to provide notification of arrests of US citizens and to allow US diplomats to meet them.

But if Citgo officials are dual US-Venezuelan citizens and entered Venezuela on their local passports, they would not have rights to US consular services.

Citgo said yesterday that it was "looking into the current investigation related to Citgo officials by the Venezuelan Prosecutor's Office to better understand the situation" and would use "the full strength of our resources to bring prompt resolution to this matter." The company said it had "procedures in place to ensure ongoing operations and the continuous supply of product to our customers." The Houston-based company has not said who has taken over from Pereira.

The detained Citgo executives or attorneys representing them could not be located.

The executives were ordered to visit Caracas allegedly to meet with PdV's senior management to discuss issues including Venezuelan crude deliveries to Citgo and ongoing negotiations with Aruba's government over restarting a mothballed refinery there, the Sebin official said.

"The meeting they were called to attend in Caracas in fact was a ruse to bring them back to Venezuela to be arrested," the Sebin official said. "But not everyone ordered to travel to Caracas from Houston made the trip."

The attorney general's office declined to comment on the Sebin official's claim that the executives were tricked into traveling to Caracas so they could be jailed. But the office confirmed that the executives will be jailed indefinitely in Venezuela's general penitentiary at San Juan de Los Morros in Guarico state while prosecutors pursue court convictions for corruption.

Citgo owns three US oil refineries with a total of 749,000 b/d of nameplate processing capacity. Citgo is considered PdV's most valuable asset at a time when the Venezuelan firm is in default on bond payments and facing an accelerating decline in upstream production capacity and exports.

In recent years, PdV has used its more creditworthy US subsidiary to raise cash and collateralize loans and a bond swap.

Despite Citgo's efforts to maintain an arm's length relationship with its financially troubled parent, the US firm has faced increased operational pressure since the US imposed financial sanctions on PdV in August.


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