In 2018, Henri Falcón tried to save Venezuela. As governor of the populous western state of Lara, Falcón had drawn overwhelming electoral victories and admiring profiles in the Western press for his humble demeanor, military precision, and reputation for finishing infrastructure projects on time and under budget. (“Efficient Revolution” was one of his campaign slogans.) But as oil prices and U.S. economic sanctions plunged the country into a harrowing depression, his ambitions grew humbler. “The overriding priority of my administration will be to make sure that not one Venezuelan child goes to bed without having eaten,” he wrote in a somber New York Times op-ed announcing his presidential candidacy.
Just before the op-ed went to press, Falcón was called to a meeting at the U.S. embassy, at which officials expressed their displeasure with him. The hard-right political parties that had plotted the failed but violent 2002 coup attempt against Hugo Chávez reacted to Nicolás Maduro’s first election with bloody riots, rolling blackouts, and a strategy of manufactured chaos. But the disgruntled aristocrats, living outside Venezuela while drawing generous salaries from USAID-funded NGOs, had decided to boycott the election, and believed everyone else should, too.
Falcón was incredulous: Replacing Maduro with a competent technocrat like himself was the rational way to save the economically ravaged country from the fate of Somalia or Haiti. But he was told that the White House saw the elections as by definition illegitimate, because the Supreme Court had banned the “most popular politicians” in the country from running. Participating in them was tantamount to collaboration with the Maduro regime. Should Falcón choose to go ahead with his candidacy anyway, they said, he should not be surprised to find himself and his immediate family members on an Office of Foreign Assets Control blacklist, which would effectively lock him out of the global financial system, a cruel irony given that a pillar of his platform was establishing a strict currency peg to the dollar.
In short, the State Department was threatening to financially destroy him—for running against Maduro.
Falcón soon learned he wasn’t the only one who had been summoned to the embassy for such a “talk.” While most opposition politicians grudgingly acceded to the boycott, they did so out of fear more than solidarity. The “popular politicians” banned from running, like Leopoldo López, Henrique Capriles, and María Corina Machado, had been implicated in plotting violent riots, industrial sabotage efforts, and military coups, things normie Venezuelans opposed. The idea behind the boycott was that opposition needed to have solidarity, but Venezuela-based opposition politicians like himself knew all too well solidarity was a one-way street with the Miami right wing.
In his Times column, Falcón framed his decision in Washington consensus logic: “A comprehensive Brookings study of 171 cases of boycotting around the world found that 96 percent of the time, the movements promoting the boycotts did not see positive results,” he wrote. But not in a million years could he have imagined how uniquely catastrophic the results would be.
At the time, Falcón’s opposition coalition (MUD) had controlled the Venezuelan legislature after a shock landslide election in 2015. The elections were preceded by a two-year campaign of weapons-grade State Department–funded psychological warfare, outlined in an astonishing July 2013 memo titled “Plan Estratégico Venezolano” (Venezuelan Strategic Plan) drafted under USAID supervision by a consortium of Colombian think tanks and a major American restructuring firm. The reality on the streets of Caracas reflected the memo’s orders to opposition coalition members to “maintain and increase acts of sabotage that affect services to the population, particularly the electrical system”; “increase problems with shortages of basic food items”; and “create crisis situations in the streets that facilitate U.S. and NATO intervention, with the support of the Colombian government. Whenever possible, the violence should result in deaths or injuries … [emphasis added]”
The victory was a turning point for Ricardo Hausmann, a pre-Chávez government economist who was at the time playing the part of a moderate, nonideological empiricist, working on growth projects in countries as diverse as Kazakhstan, Paraguay, South Africa, and Peru, and running an outfit called the Growth Lab for the Kennedy School’s Center for Economic Development. But he was married to an anti-Chávez hard-liner named Ana Julia Jatar, who worked for a Venezuelan nonprofit founded by Machado, this year’s Nobel Peace Prize winner, currently making the rounds claiming that Maduro is harboring Hamas militants. In 2006, Jatar even published a book, Apartheid in the 21st Century, depicting Venezuela’s public relations campaigns as a neo-segregationist system of oppression. (Notably, her father had written a book, Disabling the Extreme Left, about his experience “eliminating leftist groups” in Venezuela as an official in the ruling Acción Democrática party during the 1960s, according to the journalist Anya Parampil’s indispensable 2023 book Corporate Coup: Venezuela and the End of U.S. Empire.) The election win led Hausmann to wonder, “Why can’t Venezuela be a day job?”
The 2018 presidential election came and went. Voter turnout was 45 percent, the lowest in recent memory. Although one of the most respected pollsters in the country had predicted a seven-point loss for the Chavistas just months earlier, Maduro won by 55 points, Falcón became Walter Mondale, and his chief adviser Francisco Rodríguez returned to New York, where he served as chief economist for a small investment bank that specialized in Latin American debt. The MUD opposition coalition began purging supporters of Falcón and other candidates who had broken the boycott, many of whom were also sanctioned by the United States for their supposed collusion with the Maduro regime. “Opposition politicians,” Rodríguez later wrote, had become “more adept at lobbying Washington than doing the hard work of mobilizing voters to oppose Maduro.”
Hausmann confided to an audience convened by the World Affairs Council of Greater Houston on November 1, 2018, what the real plan was for Venezuela. “The international community is now focused on the idea that … January 10 [2019] is the end of the presidential period of Nicolás Maduro.”
IAN BRODIE WAS A VANCOUVER PENNY STOCK PROMOTER who specialized in acquiring controlling stakes in obscure publicly traded companies, starting rumors of some major deal in the works, then dumping the stock after the inevitable share price run-up. At some point in the late 1980s, Brodie acquired control of Petroflame International, named himself CEO, and announced it had acquired mineral rights to the world’s largest untapped gold mine, near Venezuela’s border with Guyana. In fact, Petroflame had purchased something purporting to be the rights to mine gold from an unscrupulous miner who had in turn bought them from an unscrupulous lawyer who had expropriated them from a childless widow client who had proceeded to die without clearly willing the mine to anybody.
The stock went wild, only to fall back to Earth when the Vancouver mining giant Placer Dome announced it would be developing the same site in a joint venture with the Venezuelan government, and the Venezuela Supreme Court issued a judgment decreeing Petroflame’s ownership claim so dubious as to be unworthy of discovery—by which point, Brodie was long gone and Petroflame had changed its name to Crystallex.
Undeterred, Crystallex litigated its Hail Mary claim with Placer Dome and Venezuela for nearly two decades, while raining down extravagant compensation on far-flung executives with dubious résumés. In 1998, following a congressional investigation, bribery accusations, and a series of fascinating investigations in the National Post, Venezuela’s Supreme Court once again ordered Crystallex to cease and desist, with an influential congressman telling reporters: “This is the plain simple truth: Crystallex does not have the rights it is claiming and which it is telling investors it had.” But following Hugo Chávez’s election, the passage of new mining legislation, and a slide in gold prices, Crystallex won a contract to develop the mine in 2002. It embarked on a series of feasibility studies, photo ops, and new litigation battles culminating in a bond issuance to finance the project—at which point the Chávez government unilaterally called the whole thing off, citing the company’s long history of delays and violations of worker rights and environmental laws, but most importantly for legal purposes, the necessity to preserve state ownership of vital resources during periods of financial turmoil, such as the unprecedented credit crunch that paralyzed global financial markets in 2008.
A shrewder team of lawyers would doubtless have handled Crystallex differently. Team Chávez might have made the case that Crystallex, in all its chicanery and glacial progress, had forced the government’s hand, and coughed up a substantial enough settlement to avoid the inevitable litigation. But the timing could not have been worse: The oil prices that determined Venezuela’s solvency went into free fall during the fall of 2008, collapsing to $35 a barrel from $150 earlier that year.
Crystallex filed for Chapter 15 protection in Delaware, after negotiating a bankruptcy loan with a newly founded “special situations” hedge fund called Tenor Capital Management. In exchange for paying the requisite battalion of top-shelf lawyers and consultants, Tenor negotiated a majority stake in Crystallex’s claim against the Venezuelan government and began to assemble a legal team to argue its case before the International Centre for Settlement of Investment Disputes, a World Bank court based in Washington. Although Crystallex had only spent roughly $100 million developing the mine, Tenor sued Venezuela for $3.6 billion, and in 2016 a panel of three judges awarded Crystallex $1.2 billion, plus interest and fees.
That’s where Tenor got clever. Elliott Investment Management had rewritten the rules of international hedge fund assholery in 2012, when it convinced the Ghanaian government to seize an Argentine navy frigate that had docked in one of its ports—with more than 250 sailors aboard—to settle a decade-old dispute over defaulted bonds it had scooped up for pennies on the dollar. An international court ultimately deemed the seizure illegal, but four years later Argentina’s neoliberal president finally forked over $2.4 billion it didn’t have to settle the dispute.
Hoping a similar gambit would expedite Venezuela’s settlement, Tenor sued Citgo, the Texas refining giant Venezuela’s state-owned oil company had owned since 1991, quite famously to Americans in states where the company supplied free and subsidized heating oil to homeless shelters and low-income city dwellers during the Chávez years. It was a far bigger Hail Mary than the Argentine frigate, since Citgo wasn’t directly owned by the Venezuelan government, but by a holding company that was in turn owned by the Venezuelan state-owned oil company PDVSA, which like dozens of other state-owned oil companies from Malaysia to Qatar was legally distinct from the Venezuelan government in innumerable ways codified under American law.
But an economist and lawyer named José Ignacio Hernández argued otherwise. The Caracas professor had carved out a niche for himself as an expert in the nuances and loopholes of Venezuelan administrative law. In 2017, Hernández was recruited by none other than Ricardo Hausmann to be a fellow at the Growth Lab at Harvard’s Kennedy School. Together, they would preside over one of the most horrific periods of negative economic growth in world history.
IN A SWORN DECLARATION IN APRIL 2017, Hernández argued that PDVSA and any and all subsidiaries and offshoots were “alter egos” of the Venezuelan government itself. He cited the government connections of most PDVSA board members, the use of PDVSA’s surpluses to fund social spending programs, and the periodic purges of Citgo executives and workers who were disloyal to the government—though not the participation of said purged executives and workers in the 2002 coup that briefly replaced Chávez with the Chamber of Commerce president—to make his case. In another filing in November, he argued that the various ministries and institutions of the Venezuelan government did not have distinct “legal personalities” under the Venezuelan constitution, and should instead be seen as “subdivisions of Venezuela.”
Delaware federal judge Leonard Stark was persuaded: In an unusual 76-page opinion regurgitating many of Hernández’s arguments, he ordered the sale of Citgo to pay off Venezuela’s debt to Crystallex. Venezuela’s lawyers quickly appealed the ruling, wiring $500 million to Crystallex and another $950 million to PDVSA’s bondholders around the same time just to underline their seriousness. They had ample reason to believe they would ultimately prevail.
But then came the day Hausmann had teased his audience in Houston about: the January 10, 2019, meeting of the Organization of American States, at which the Permanent Council passed a resolution refusing to recognize Maduro as the legitimate president of Venezuela, on the premise that the 2018 election—which the opposition had boycotted and the OAS had declined multiple invitations to monitor—had been fraudulent. Earlier that week, a tall, youthful engineer named Juan Guaidó had been sworn in as the new leader of the National Assembly with a fiery speech about how he planned to rescue the country from Maduro. No one had heard of Guaidó; a former PDVSA engineer and opposition activist named Jorge Alejandro Rodríguez told the Prospect he was initially hopeful upon hearing the speech, then skeptical after his daughter asked how it could be that the new leader of the legislature had just 1,200 followers on Instagram.
But what Juan Guaidó lacked in social media friends he more than made up for in friends in high places. On January 23, 2019, when Guaidó proclaimed himself the “interim president” of an incredulous Venezuela, Secretary of State Mike Pompeo announced that the Trump administration would recognize Guaidó as the Bolivarian Republic’s genuine leader, and unveiled a suite of tough new sanctions on PDVSA, pitched as a bid to force Maduro to step down. The whole thing seemed like a joke, a throwback to the days when our foreign-policy establishment insisted a drug-trafficking warlord on an island of six million was the “real” leader of the world’s most populous country—though at least most Chinese knew who Chiang Kai-shek was when he fled to Taiwan in 1949 to preside over what the United Nations insisted on calling the “Republic of China.” Only the Miami Herald noted an unusual provision of the new arrangement, explained by then-Treasury Secretary Steve Mnuchin, who told the newspaper “that if Guaidó succeeds in forming a government, the money” from international sales of Venezuelan oil that he was freezing under the new sanctions regime “would go to him.” On Twitter, Guaidó promised this new arrangement would “prevent the looting from continuing.”
But Francisco Rodríguez began to feel a sinking sensation that the looting had just begun. As a self-taught expert on the nuances of “alter ego” law after years in the trenches of the Venezuelan bond market, he believed the country would ultimately prevail in its assertion that Venezuela, PDVSA, and Citgo were legally separate entities. But in mid-February, Guaidó named entirely new slates of board members to PDVSA, its U.S. holding company, and Citgo, a move Rodríguez knew would strengthen Crystallex’s case. That same week, the glass manufacturer Owens-Illinois, which had been awarded a half-billion-dollar arbitration judgment over two Coke bottle factories Chávez had expropriated in 2010, sued Citgo on the basis that it was an “alter ego” of the state. Owens-Illinois had expert witness assistance from none other than José Ignacio Hernández, whom Guaidó had just named the attorney general of the shadow government.
“I said to myself, this is a disaster,” Francisco Rodríguez remembers. “I called my friends in the opposition and said, ‘Look, you guys messed up, you shouldn’t have done this, my advice is you correct this as soon as possible because the country could lose billions of dollars because of this.’ And they said, ‘Thanks for letting us know, we knew nothing about this, we’re gonna do something about it.’ And then a few hours later they call me back and say, ‘We can’t do anything about it, this is coming from Guaidó, the whole legal strategy is being designed by Hernández and it’s a perfect legal strategy.’”
Jorge Alejandro Rodríguez, who belonged to the moderate opposition that had rallied in vain around Falcón’s presidential bid, separately tried to sound the alarm with some legislators from Guaidó’s party. During a June 5 meeting, he “told the lawmakers: ‘I don’t give this [case] more than a couple of months … once you see the case and the things that Hernández did … you can see that it was of such a benefit to Crystallex, that for the judges it became a clear case.”
But his warnings fell on deaf ears. Hernández issued a memorandum, co-authored with Hausmann and some other Guaidó appointees, containing preliminary guidelines for a planned restructuring of Venezuelan debt. In a section headed “Equal Treatment,” the memo stated: “[N]o different treatment shall be accorded to eligible foreign currency-denominated claims as a result of their origin (for example, whether arising pursuant to a debt instrument, an unpaid invoice, an expropriation, etc.), the nature or domicile of the holder of the claim, and/or the identity of the public sector obligor (the Republic, PDVSA or another public sector entity, whether the claim has been reduced to a court judgment or otherwise.”
This was unambiguous “proof” that Citgo, PDVSA, and Venezuela were one and the same, as a long list of international creditors well understood. (It was also some Banana Republic shit: equal treatment of all claims related to entities connected to the Venezuelan government, no matter which entity had incurred the debt? The bonds had paid different interest rates, and now that they were in default, traded at different prices.) Most surreally, Citgo had not been so thoroughly cut off from Venezuela since the 1980s, as Team Guaidó had blocked PDVSA’s oil tankers from entering its ports and terminated the company’s email contact with its parent in “compliance” with Trump’s sanctions. Citgo was forced to spend hundreds of millions of dollars retrofitting its facilities to refine lighter oils than the Venezuelan heavy crude for which they had been designed, and Venezuela lost 1.34 million barrels per day in refining capacity overnight. After consulting with some Trump administration contacts, Jorge Rodríguez quickly tapped out the first of what would ultimately become a string of formal complaints piecing together Hernández’s scheme as he understood it, and submitted it to the Foreign Corrupt Practices Act enforcement desk of the Justice Department.
By that time, Trump had taken to calling Juan Guaidó “the Beto O’Rourke of Venezuela” behind closed doors, having generally bored of the quest to unseat Maduro, for whom he had developed a grudging respect. While variously depicted as a bus driver with delusions of grandeur and “Stalin of the Caribbean” by the Western media, Maduro is understood by everyone who knows him as a pragmatic negotiator, always on the lookout for a deal. In 2017, he summoned the elusive billionaire Harry Sargeant III, a former fighter pilot with a family asphalt business that had sourced crude oil in Venezuela since the 1980s, to rehabilitate three oil fields that had been destroyed by years of abandonment and vandalism, in a last-ditch effort to ward off famine. Sargeant, a longtime Mar-a-Lago member who had bundled donations for the Florida Republican Party for decades and plays golf with the president on a near-weekly basis, began in turn to nudge Trump and administration insiders, from Lev Parnas during the first Trump administration to Laura Loomer today, to make deals, not war. The Pentagon convened a collection of insiders and consensus-friendly regime change wonks like Douglas Farah to conduct a “war game” that projected the overthrow of Maduro would result in chaos and civil war.
“We were always fearful that he would want to exercise [the] option” of meeting Maduro face-to-face, a former Trump aide told The New York Times in 2020; the president had first floated the idea himself back in 2017 during a meeting widely depicted in the media as the time Trump suggested invading Venezuela. But the regime change lobby was simply too entrenched, as former NSC official Fernando Cutz semi-intentionally conceded in the process of explaining that the administration’s Venezuela policy had been designed to appeal to “swing voters in Florida”—not a swing state. “Maduro filled a hole that had been missing in the lives of a lot of these Florida reactionaries,” explains a money manager who has lobbied the administration on Venezuela policy. “They needed a villain, and he became their new Castro.”
If the momentum around Guaidó liberating Venezuela had stalled, it was picking up in Judge Leonard Stark’s Delaware courtroom. The inevitable August ruling that Venezuela and Citgo were one and the same had touched off a race to shake down the oil refiner for cash, and new creditors were coming out of the woodwork. A long-divested subsidiary of Northrop Grumman showed up to collect on a 20-year-old ship refurbishment contract Chávez had terminated in the late 1990s. ConocoPhillips sued to collect on an oil project it had discovered in 1999 but abandoned in 2007 after deciding it didn’t like the government’s terms. Koch Industries showed up demanding its equity interest in a fertilizer plant Chávez had nationalized in 2010, and whose bondholders made a 60 percent return on the deal. The arbitration claims against Citgo quickly ballooned to $24 billion, of which Judge Stark deemed about $21 billion to be legitimate, on top of a class of PDVSA bondholders whose bonds had been secured by Citgo shares, an agreement with Russia’s state-owned oil company that purported to be collateralized by the company’s equity, and a parade of former political prisoners who had begun lining up to sue Maduro in a long-shot effort to nab a piece of the action.
“The magnitude of what was lost here is almost inconceivable,” Francisco Rodríguez, the economist, told the Prospect. “I know everyone is mad at Scott Bessent because he gave $20 billion to Argentina to bail out his buddy. But for Venezuela, this is the equivalent of Bessent giving $20 trillion to Argentina.”
Called for questioning by opposition leaders in 2020, Hernández himself conceded that the Guaidó government had fucked up big-time, though he swore he’d had nothing to do with the shadow government’s handling of Citgo, for which he credited Guaidó’s appointed ambassador to the United States, Carlos Vecchio, a former Exxon executive whose central role led some to speculate that the oil giant had somehow masterminded the Citgo sell-off, though its former CEO Rex Tillerson took pains to distance himself from the regime change plot after Trump fired him as secretary of state.
“I hope that this meeting will be confidential because it is not good for our weaknesses to come to light,” Hernández said in response to a specific question he never got around to answering. “But I am going to tell you that I am surprised at how long these protective walls that it has built have lasted … If we add a possible political change in the United States, in Venezuela we can be six months at most from an even worse situation than it was in January 2019.”
OPERATION GIDEON IN THE SPRING OF 2020 was the Trump administration’s last-ditch attempt to oust Maduro. It began when a clique of Trump insiders, principally longtime personal bodyguard Keith Schiller, approached a Florida ex-Green Beret named Jordan Goudreau to organize a military coup. After meeting with a dizzying string of intermediaries in the professional Venezuelan exile community of South Florida along with Trump administration bigwigs (including Elliott Abrams and John Bolton), Goudreau secured a contract signed by Juan Guaidó himself, promising some $212.9 million to execute a coordinated defection of the top military brass alongside Cliver Alcalá, a Venezuelan general who had defected to Colombia in 2018.
But just a week before the operation was slated to launch, the DOJ indicted Alcalá on charges of conspiracy to commit narco-terrorism. The indictment contained no specifics other than a single mention of Alcalá’s supposed presence at a 2008 meeting of various alleged bosses in the alleged Cartel de los Soles, and one of the prosecutors working on it had informed his attorney two years earlier that the office had decided not to charge him for lack of evidence. Team Gideon should have taken the hint, but went ahead with the operation anyway, by which point the plot had reportedly been infiltrated by intelligence operatives on both poles of the ideological spectrum. The Biden administration indicted Goudreau on arms trafficking charges a few months before a documentary on him called Men of War premiered at the Toronto International Film Festival.
In a recent interview with Max Blumenthal, Goudreau accused the CIA and its menagerie of assets in the Venezuelan perma-exile community of sabotage, but many of the amateurish details of Operation Gideon suggested that the sabotage call was coming from inside the house. Goudreau’s explanation for why the intelligence community would pull the plug on its last hope of ousting Maduro before the 2020 elections, however, struck me as potentially … perceptive. “I just think … they were making a lot of money,” he told Blumenthal.
Without a doubt, many of “them” certainly were. The expatriate perma-opposition had long been flush with fellowships, stipends, and subcontracts supplied by USAID, which spent nearly $2.3 billion on democracy promotion and humanitarian assistance earmarked for Venezuela between 2017 and 2021; and corporate-funded think tanks like Hausmann’s Growth Lab, whose Venezuela research is endowed by a handful of Latin American oligarchs in the timber, banking, and petrochemical industries. But by mid-2019, Guaidó, who reportedly received $98 million from USAID to sustain his shadow government, was facing an apparent liquidity crisis; in June, the Panama Post reported that his ambassador to Colombia had bounced a $7,000 check written to help settle a $20,000 outstanding tab at a hotel where the shadow government, USAID, and the U.N. High Commissioner for Refugees were housing former Venezuelan military officials in advance of an anticipated coup. Even more lucratively, the Treasury Department’s increasing fondness for financial sanctions had spawned a $30 billion cottage industry of OFAC lobbyists and sanctions compliance specialists who charge retainers as high as a million dollars to help them navigate the Kafkaesque hell of excommunication from the global financial system—and whose livelihoods were threatened by the possibility of normalized relations.
A godfather of that industry happened to be a former Venezuelan embassy worker named Martin Rodil, who is currently wanted in Spain on charges of running a global extortion ring in cahoots with an Israeli special forces veteran and bot farmer accused of meddling in 33 elections. But in Washington, where he has been based for most of his career, Rodil is a classic policy entrepreneur: “consulting” rich Venezuelans hoping to “relocate” abroad by coughing up intel on the “illicit” financial activities of Venezuelan government linked companies, then “consulting” those same companies’ business partners on how to avoid running afoul of the punishing economic sanctions the Treasury Department imposes on countries it doesn’t like. Spanish law enforcement claims Rodil exploited the effective criminalization of Venezuelan commerce to extort no less than 20 million euros out of rich Venezuelans in recent years. Getting rid of Maduro and the sanctions regime that accompanied him would have shut down that gravy train.
For the Guaidó shadow government, the Maduro sanctions regime gave the opposition unfettered access not just to Citgo’s bank accounts, but a vast array of Venezuelan government assets, all without any practical means of sending those funds back to Venezuela. Those assets included bank accounts at the New York Federal Reserve containing some $400 million, according to former National Security Council official Juan Sebastian Gonzalez, who directed Venezuela policy during the Biden administration. That figure included a $342 million transfer from Citigroup Venezuela had posted as collateral for a swap agreement that was canceled when the country lost access to credit markets. According to an internal document Francisco Rodríguez posted on X, that number has since dwindled to just over $30 million; no wonder they had second thoughts about Goudreau’s $213 million.
Citgo’s billions of dollars in annual cash flow have bankrolled not only $4,750-per-month stipends for Guaidó’s handpicked board members, but money for a veritable army of lobbyists, publicists, social media influencers, and unspecified South Florida–based LLCs. In 2024, following the Biden Treasury’s decision not to block its forced sale to pay off creditors, Citgo retained the Daschle Group at a retainer of $100,000 a month to convince legislators like Debbie Wasserman Schultz to issue strongly worded statements condemning the usurpation of Venezuela’s oil refineries to pay off international vulture funds; around the same time, it employed Rodil’s former business partner José Cárdenas, to draft press releases on Citgo’s purported success under Guaidó’s leadership and brainstorm with ideological comrades like Elliott Abrams over how to convince the Biden administration to bail the oil company out.
And for years now, Citgo or some alter ego has been paying a long list of propagandists, lawyers, influencers, and obscure “civil society organizations,” nearly all based in South Florida, to promote a narrative of its impending sale that casts Maduro as its arsonist and Rodríguez, the whistleblower, as his mendacious collaborator. “They’re all the same: Maduro, Guaidó, Chavista, opposition. They are all just … thieves,” Jorge Rodríguez told the Prospect from his home in Switzerland. He has attempted on numerous occasions to sue Guaidó’s appointed ad hoc PDVSA board chairman, and a long list of his collaborators, for defamation and racketeering, alleging that critics of their grift fear for their lives, but the complaints are largely redacted and have so far been dismissed; he can’t afford to hire an attorney, so he writes his own complaints. “Experience and academic evidence show the extent into which criminal activities by well connected officers have found fertile ground in countries returning to democracy, leaving behind a tyranny, or without real control within a nation’s territory,” he noted in one brief. “The cases of former communist countries provide clear evidence on this.”
Roen Kraft, a shadowy natural resources financier who helped bankroll Operation Gideon as what Goudreau described as a “way to monetize the aftermath of a Maduro-free Venezuela,” reached the same conclusion, according to an account written by an FBI agent who interviewed him for its investigation into Goudreau. “He said that if the Venezuelans see something they will steal it,” he told the agent, leaving unacknowledged his own agenda for Venezuela’s untapped mineral wealth. “This is what he observed from the culture there.”
Others have observed that a similar culture inside the Delaware courtrooms and Zoom calls hosting the sale process helmed by Judge Stark and his appointed “special master” Bob Pincus, responsible for sifting through the granular details to determine the fate of Venezuela’s long-lost refineries, seems designed to add maximal insult to injury. Pincus’s team alone has thus far run up more than $100 million in fees overseeing a maddeningly opaque process that seems destined to gift Citgo to the notorious vulture fund (and former Rodil client) Elliott Investment Management, despite a bid of just $5.86 billion—“so low it shocks the conscience of the court,” Venezuela’s attorneys opined in one filing—more than $1.5 billion lower than a competing offer from the Vancouver mining firm Gold Reserve Ltd. at a valuation Venezuela’s experts estimate at between $32 billion and $40 billion.
But a creditor involved in the case says the bigger problem with Elliott’s offer is what it plans to do with Citgo: merge its refineries with those held by Philips 66, a smaller energy firm in which it owns about 20 million shares, whose board it partially controls following a proxy battle earlier this year. Merging the refining capacity would create the country’s third-biggest oil refiner after Valero and Marathon, but it would almost certainly come at the expense of both Venezuela and Citgo’s own competitive advantage, because Citgo’s refineries were built specifically to process Venezuelan heavy crude, and the company buys that at a substantial discount to light crude. “By not reintegrating into the Venezuela pipeline Citgo is leaving two billion dollars a year gross profit on the table, and at the same time condemning Venezuela to spend another five, ten years or more trying to resurrect its oil production,” the creditor says.
The fact that the Elliott entity that submitted is helmed by two recently departed Exxon board members has fueled speculation that the bid is partially motivated by the desire to hobble Exxon’s biggest domestic competitor Chevron, which operates what is left of Venezuela’s oil extraction in a joint venture with PDVSA. Meanwhile the Gold Reserve bidders have expressed their intention to reintegrate the company into Venezuela’s oil production pipeline as soon as possible, an agenda more favorable to Chevron and to Venezuela’s horrific hunger crisis. “Reintegrating is also so much better for the trade imbalance and American industry, because Venezuela has enormous demand for oil refining agents that it would otherwise source from Iran and China,” the creditor adds. “But that’s a public policy argument, not a legal argument, so it’s not even really admissible.”
Instead, Venezuela and Gold Reserve have argued that Elliott’s bid should be thrown out because the lawyers who advised Pincus to anoint the hedge fund the winning bidder were already working for Elliott on other deals and scheming to win more business for their firms Weil, Gotshal and Evercore, and until September, shamelessly lying about all of it, according to a motion filed by Venezuela’s lawyers. The motion notes that Weil disclosed just one monthlong September 2024 Elliott engagement to bidders and creditors when in reality its “ongoing commercial relationship” with the hedge fund had yielded more than $5 million in fees on over a dozen cases since 2023. As a result, Weil attorneys allowed Elliott to blow bid deadlines, view data that was inaccessible to its competitors, and sidestep various other formalities because, as one senior Weil attorney remarked to another in an email about the Citgo bid, “I hate for them to not want to work with us.” Gold Reserve recently sued another creditor, Rusoro Mining, for pretending to join its bid only to turn around and conspire with Eliott to sabotage Gold Reserve.
So far, none of these conflicts have convinced Stark the process is irrevocably corrupted, but some observers are still holding out hope that they might convince him to re-evaluate the bids, and others are fairly certain the U.S. will intervene to halt the sale altogether if and when Maduro is overthrown.
“The only good thing, potentially, is that everyone is incentivized for this to drag out another two years so they can rack up more hours,” a shareholder in one creditor told the Prospect. “When I started to get involved, everyone told me, watch out, the Maduro government is notoriously corrupt. But…the corruption of the American corporate lawyers working in Delaware courts has been pretty impressive, too.”
NOW THE TRUMP ADMINISTRATION IS back on regime change in Venezuela, with Secretary of State Marco Rubio again playing the chief agitator role he shared in 2018 with fellow Senate Foreign Relations Committee (and new jailed) hard-liner Bob Menendez. Many of the same ideologues (Mauricio Claver-Carone, Rodil, and his collaborator and Tren de Aragua “expert” former CIA agent Gary Berntsen) who helped “mastermind” the 2019 coup still call the shots on Proyecto 2025.
Then as now, Trump is wavering on invasion, seemingly more interested in having the country’s hard-right elites oust Maduro themselves. But that’s an even taller order this time around, with Colombia’s current left-wing government far less hospitable than in 2019 to allowing Green Berets to temporarily annex their border provinces, and Trump’s approval rating throughout Latin America roughly on par with his approval rating in Chicago and L.A. “It will be hard to talk down María Corina [Machado], because she really wants it now,” says the money manager. “But like so many in the opposition, she’s gotten carried away, promised too many things to too many people, and if the government collapses it’ll just be anarchy … they already robbed, pawned, and gambled away the country’s biggest functioning asset.”
Rodríguez, the economist, would ultimately publish a great and depressing book, The Collapse of Venezuela: Scorched Earth Politics and Economic Decline: 2012–2020, placing the Citgo dumpster fire in the broader context of the normalization of economic sabotage as a political weapon. Neoliberal economists like to blame the Chavistas for Venezuela’s economic crisis by nationalizing industries, rewarding loyalty over expertise, and choosing to maintain state control over the means of production. But as Rodríguez points out, the data demonstrates unequivocally that it was only after the death of Chávez himself—and with it, the end of the expropriation sprees that had so enraged the Davos crowd—that the organized opposition began the multipronged campaigns of financial and industrial terrorism that pulled Venezuela into an economic black hole with virtually no equivalent in the modern era, dragging its own reputation among Venezuelans into the abyss along with it.
The hard-right opposition and its American backers cheered on deadly attacks on vital Venezuelan infrastructure, like the unprecedented failure at the massive Guri Dam hydroelectric power plant that caused a collective 200 hours of electrical blackouts in nearly every household in Venezuela in March 2019 alone. The Maduro regime never prosecuted anyone over the attacks, but Guaidó’s failed coup plotter Goudreau recently told The Grayzone that an intelligence consultancy had “been doing infrastructure attacks or helping to facilitate infrastructure attacks for a decade or so” in the country. He provided the publication with a pitch deck obtained in discovery, which was produced for then-Vice President Mike Pence by a group called “Virtual Democracy.” It outlined a detailed 29-page regime change proposal consisting of sabotage plans including “contamination with hepatitis (A, B and C), influenza, measles and piglet to the social clubs where the top officials of the narco-regime meet” and “forced stoppage of public and private transport in all forms” that would culminate in the replacement of the Bolivaran constitution with a “simple federalist constitutional text that prohibits communism and socialism,” with training to commence on a North Carolina training camp operated by Constellis, formerly known as Blackwater.
That plan never got off the ground, perhaps because it required the Treasury Department to grant the plotters “a Swift clearance passport from the US government to transfer accounts of the US government an approximate amount of US $14,500,000,000 in assets expropriated from the narco-regime and make it available to Virtual Democracy.”
It’s perhaps little wonder that a community of expats that concocts such plots would almost universally cheer on the draconian economic sanctions that directly caused the vast majority of Venezuela’s suffering during Trump’s first term. The suffering was presaged during the Obama years by a campaign of agitation for the government to simultaneously default on, and the global financial community to boycott buying, its so-called “Hunger Bonds,” on the “theory” that every penny the government paid in interest to foreign creditors was a penny not being used to feed a starving child.
The campaign was logically ridiculous, since feeding its citizens required Venezuela to access international credit markets to sell oil and buy flour, and defaulting on its obligations would make that more expensive and difficult. But never mind reality: Starting in 2016, the “Hunger Bonds” crowd staged astroturf shaming operations to taunt institutions that purchased them or even included them in emerging market indexes. More recently, during the October IMF meetings someone hired a billboard truck to drive around a hotel that was hosting a cocktail party for the hedge fund Greylock Capital Management. “GREYLOCK CAPITAL FEAST: Enablers of Maduro’s Tyrannical Dictatorship,” one side blared. “Greylock: Where Ethics Default. Your activities enable the narco-terrorist regime. HAVE YOU NO SHAME?”
Guaidó is out of the picture, living in exile in Miami since 2023, but in 2024 the opposition once again got its chance. Machado was barred from running for president, and after one false start found an unknown surrogate, the grandfatherly Edmundo González. In one of the first truly organic political trends to sweep Venezuela in many years, a grassroots campaign emerged to get voters and poll workers to audit the results by submitting the results from their polling station, and González won in a landslide. Rodríguez was not surprised, as the population is truly desperate for change: 1 in 3 Venezuelan children have such severe chronic malnutrition that they cannot grow to their full height. But Maduro did not budge, blaming foreign hackers, inevitably dispatched by the CIA, for disabling the counting machines. González fled to Spain the week after the election after signing an agreement to not dispute the results.
Machado did not push the issue before U.S. elections; Trump had been so good to Miami anti-communists during his first term, after all. But perhaps Machado and her minions had finally realized the permanent opposition was their real comfort zone. The month she won the Nobel Peace Prize, a poll of 1,200 Venezuelans revealed that 91 percent of respondents disapproved of her. As parodic and insane as it was to bestow such an award upon a woman who has asked numerous U.S. presidents and also Benjamin Netanyahu to invade her country, it’s impossible to visualize Machado, whose family was one of the biggest slaveholders in Venezuela during the 19th century, being feted as some kind of human rights champion if she had to actually govern.
“The question is, if the hard-right opposition takes power, what happens to the half of the country that still identifies as Chavista?” asks a bond investor. “That is the thing that truly terrifies me. Because I think you will see really scary human rights abuses.”
In his book, the economist Rodríguez proposes an algorithm for explaining how the ostensibly rational actions of competing political elites could lead to a death spiral bigger than three Great Depressions combined. “A party may decide that it prefers the rewards that it is able to reap from conflict to those that emerge even from winning an election,” he writes.
It’s an obvious enough observation, and we see it in our own politics every day, like when the Republicans nominated Bob Dole so they could continue to cynically dine out on the never-ending moral turpitude of the Clinton presidency, or the Democrats refused to renounce the ritual slaughter in Gaza because they would hate for ethno-supremacist billionaires to not want to work with them, or when either side chooses to run a sure loser because he’s good at raising money while ratfucking an obvious winner because she’s a little too good at raising money. They’re all doing a variation on this same trade-off, and pawning your democracy in the process.