CITGO: The document that controvert the Prosecutor of Venezuela, Tarek William Saab

A controversial act of the PDVSA board of directors has just put the current Venezuelan prosecutor, Tarek William Saab, against the wall. The document shows that the board of directors of Venezuelan state oil company Pdvsa has been approved to renegotiate the debt of the subsidiary Citgo using the same company as collateral. The act denies the prosecutor Saab and proves that the six executives of Citgo detained never acted behind the back of PDVSA in promoting these negotiations. The publication of the document raises new questions: Did Saab know the content of this communication? If he knew, why did he lie deliberately? Will he take steps to correct the mess?

By Maibort Petit @maiborpetit

The unpublished record of a meeting of the Board of Directors of Pdvsa, which took place in mid-June, is embarrassing the designated Venezuelan prosecutor Tarek William Saab. The document shows that the Venezuelan attorney general is one of the highest figures of “revolutionary” justice in the government of Nicolás Maduro. He could lie deliberately and deployed a concept of “selective justice” and politically motivated.

Last November, prosecutor Saab announced the arrest of six directors of Citgo Petroleum, the Pdvsa subsidiary in the United States, accusing them of having signed a contract to refinance the debt of this subsidiary without the approval of the high government.

The contract signed by the executives — presumably on the back of PDVSA, according to Saab — was signed with Apollo Global Management LLC, based in New York, and Frontier Management Group Ltd, based in Dubai, to refinance a program of debt acquired in 2014 and 2015. According to public statements of the Venezuelan prosecutor, the contract was signed under “unfavorable conditions” for PDVSA, and without permission from the government of Nicolás Maduro.

“The subsidiary itself (Citgo) was offered as a guarantee, compromising the Republic’s assets,” Saab declared, accusing the directors of having committed “own fraud”, and of having incurred in a “public official’s contract with a contractor, legitimating of capital and association to commit a crime “.

“This is corruption of the worst kind,” Saab said.

However, new evidence to which this journalist had access shows that the negotiations were not only approved by Pdvsa’s board of directors, but also backed by high-ranking officials such as the president of the National Constituent Assembly Delcy Rodríguez and others who were members of the National Assembly. Delcy Rodriguez was also the directive of the Venezuelan oil conglomerate when the negotiations were approved.

According to the minutes corresponding to the N-2017–17 meeting, held on June 14, 2017, the board of directors of Pdvsa learned first-hand the alternative proposal for debt restructuring of CITGO-CITGO Holding. It was presented by the firms Apollo Global Management and Frontier Management Group. According to this act, in this meeting all the members of the board of directors were notified and an agreement was authorized, after review by the Legal Consultancy of PDVSA, for the purpose of beginning negotiations of the private alternative proposal for the restructuring of the CITGO-CITGO Holding debt.

The board of directors at that time was made up of the following people:

Eulogio Del Pino (president); Maribel Parra (VP-Executive); Delcy Eloina Rodríguez (Vice President); Mariany Gómez (VP); César Triana (V.P); Nelson Ferrer (VP); Yurbis Gómez (External Director; Wils Rangel (External Director); Ricardo Menéndez (External Director); Rodolfo Marcos Torres (External Director); José Pereira (International President of Citgo); Vicky Zárate (Legal Consultant of PDVSA).

The minutes read that once the negotiations are concluded, the final terms must be presented to the PDVSA board of directors for approval. The minutes are signed by Humberto Perniciaro, executive of the corporation.

The evidence shows that the directive of the state company knew the terms of the restructuring. This case led to a criminal accusation by the public prosecutor who was appointed by the National Constituent Assembly, Tarek William Saab. He accused six Citgo executives, including the president of Citgo, José Ángel Pereira and the vice presidents of the subsidiary: Tomeu Vadell, Alirio Zambrano, Jorge Toledo, Gustavo Cárdenas and José Luis Zambrano.

Saab declared in a press conference held at the Public Prosecutor’s Office in Caracas on November 21, 2017, that Citgo’s top management, “using its investiture, signed an international agreement with two financial companies,” to ‘apply for loans’ under unfavorable conditions for PDVSA “. According to the prosecutor, in the aforementioned contract, the subsidiary itself (Citgo) was offered as collateral, committing the assets of the Republic, without the approval of the board of directors of Pdvsa.

Saab said then that the agreement allowed financing for an amount of up to $ 4,000 million “without having the approval of the National Executive.” However, as shown in the minutes of the 2017–17 meeting, the full board of PDVSA met the project and requested its approval.

“If the oil executives detained by Saab committed crimes of embezzlement and money laundering by signing a refinancing agreement for Citgo’s debt, then the Prosecutor should imprison the entire PDVSA board that gave its full approval to such agreement,” said the Venezuelan criminal lawyer Claudio Díaz.

The regulations state that it is up to PDVSA as the shareholder of CITGO to report to the Ministry and the Executive. CITGO was obliged to request approval from PDVSA.