U.S. Said to Ready Sanctions Against Top Venezuelans

(Bloomberg) —
Venezuela’s President Nicolas Maduro (L) speaks with Venezuela’s Defense Minister Vladimir Padrino Lopez. (Miraflores Palace/Handout via Reuters)

The U.S. is poised to impose sanctions on Venezuela’s defense minister and several other top officials for human-rights violations, according to people with knowledge of the plan, who added that the action was one of several under consideration by the Trump administration against President Nicolas Maduro’s government.

The U.S. Treasury could announce the sanctions, which would freeze the officials out of the U.S. financial system, as soon as Tuesday, the people said. Among those named would be Defense Minister Vladimir Padrino Lopez, 54, and Diosdado Cabello, 54, a longtime ally of late President Hugo Chavez and power broker within the ruling Socialist party, they said. The officials couldn’t immediately be reached for comment.

The move against top officials — potentially the third round of sanctions against Venezuelans under the Trump administration -— is one offshoot of a broader U.S. probe into allegations of Venezuelan corruption that began several years ago and has resulted in some criminal charges. Other Venezuela-related measures are also in the works, the people said, adding that U.S. officials have given briefings on the potential actions in recent weeks to lawmakers including Sen. Marco Rubio of Florida.

The administration laid the groundwork this week for new penalties on Venezuela’s government. On Sunday, millions of Venezuelans, struggling with an economic collapse many blame on years of official corruption, protested the Maduro government’s plan to rewrite the country’s constitution to maintain its hold on power.

On Monday evening the White House, said it would bring “strong and swift economic actions” if Maduro’s government went ahead with its constitution plan.

But there is tension inside the White House about which measures to adopt, and whether to wait to see how Venezuela’s constitutional issue plays out, some of these people said. Among the measures creating divisions is whether to impose some sort of ban on crude imports from Venezuela, the third-largest supplier of U.S. crude, according to people familiar with the discussions.

Members of the National Security Council view limits on Venezuelan crude imports as a potent weapon, said Joe McMonigle, a senior energy policy analyst at HedgeEye Research and former chief of staff at the Energy Department. A person familiar with the administration confirmed that account, saying that others in the administration have argued that cutting off a major source of foreign trade would harm already-suffering Venezuelans while also potentially raising U.S. gas prices.

White House spokeswoman Natalie Strom declined to comment. Spokesmen for the U.S. Treasury didn’t respond to requests for comment.

Trump entered the White House as the government was already well into a probe of alleged Venezuelan corruption. At the center of the broad probe — conducted by the U.S. Justice Department, Immigration and Customs Enforcement, Department of Homeland Security and other agencies — are allegations of bribery and money laundering related to the country’s state-owned oil company, Petroleos de Venezuela, or PDVSA. Last year, Roberto Rincon-Fernandez, a Venezuelan national living in Houston, pleaded guilty in a Houston court for taking part in a $1 billion bribery scheme to secure contracts with PDVSA for companies affiliated with him.

Senators briefed in recent weeks on Venezuela-related measures include Rubio as well as Bob Corker of Tennessee, according to two people familiar with the discussions. The officials presented a dossier, more than 200 pages in length, that included allegations of white-collar crimes related to PDVSA, three of the people said.

Spokesmen for Rubio and Corker didn’t respond to requests for comment.

Rubio, in July 14 comments on Twitter, said that Cabello was feeling “nervous” in reaction to the fact that “evidence of his crimes is growing by the days” while “the walls are closing in.”

The Treasury Department’s Office of Foreign Assets Control, which administers and enforces sanctions, in February blocked the country’s vice president, Tareck El Aissami, from the U.S. financial system, branding him a drug kingpin. In May, Treasury expanded the sanctions list to include eight members of the country’s Supreme Court of Justice that it accused of undercutting the country’s democratically elected legislature.

Treasury put the individuals on its Specially Designated Nationals list, reserved for individuals and companies accused of acting on behalf of countries sanctioned by the U.S. based on foreign policy or national security goals, or for crimes such as drugs and weapons trafficking or terror financing.

The cost of corruption has become apparent as Venezuela’s economy crumbles and average people face shortages of affordable food and medicine. The former finance minister, Jorge Giordani, has said that as much as $300 billion was embezzled from Venezuela in the last decade through high-level corruption.

Anti-government protests over the past four months have left almost 100 dead and amid increased fears the country is heading closer toward Cuba-style authoritarianism. Over the weekend, Venezuelans defied expectations and threats of violence, with more than 7 million Venezuelans turning out to vote in an unofficial referendum to reject plans to rework the constitution and to call for fresh elections.

Luis Almagro, Secretary General of the Organization of American States, is due to testify on July 19 to the Senate’s Committee of External Relations in a session called “The Collapse of the Rule of Law in Venezuela: What the United States and the International Community Can Do to Restore Democracy.”

To Read The Full Story

Are you already a subscriber?
Click to log in!