Press. voanews.com
The head of Venezuela’s opposition-led congress on Monday blasted
U.S.-based bank Goldman Sachs for a financial transaction that he said would
prop up his country’s unpopular socialist government while exacerbating
difficulties for ordinary Venezuelans.
National Assembly President Julio Borges denounced the bank for
"trying to make a quick buck off the suffering of the Venezuelan
people," he said in an open letter to the bank’s leader, criticizing last
week’s deeply discounted purchase of $2.8 billion in Venezuelan bonds.
Borges said in the letter that he would recommend "to any future
democratic government of Venezuela not to recognize or pay on these
bonds."
As The Wall Street Journal first reported Sunday, Goldman Sachs Group
Inc. last Thursday closed a deal in which it agreed to pay Venezuela’s Central
Bank $865 million for the bonds issued by state-owned oil company Petroleos de
Venezuela SA (Pdvsa) in 2014. That’s a rate of 31 cents on the dollar. A
London-based intermediary, Dinosaur Group, handled the transaction, The Journal
noted in a follow-up story.
In seeking money to satisfy creditors such as Russia and China, the
Venezuelan government was considering "all options," The Journal
quoted the country’s oil minister as saying last week.
Borges said the assembly would begin a probe into the deal. Venezuela’s
opposition leaders repeatedly have asked foreign governments and investors not
to do business with the Maduro administration, which it has accused of human
rights abuses.
Anti-government protesters clash with riot police, encountering water
cannon spray, during a march toward the Ombudsman's Office in Caracas,
Venezuela, May 29, 2017.
Anti-government protesters clash with riot police, encountering water
cannon spray, during a march toward the Ombudsman's Office in Caracas,
Venezuela, May 29, 2017.
Venezuela has been wracked by nearly two months of street
demonstrations, sparked by the jailing of Maduro’s political rivals, delayed
elections and widespread shortages of food, medicine and other basics. At least
60 people have died in the protests.
Goldman Sachs defended its actions in a statement it emailed to Voice of
America:
"We bought these bonds, which were issued in 2014, on the secondary
market from a broker and did not interact with the Venezuelan government. …
Many investors make similar investments daily through mutual funds, index funds
and ETFs which also hold Pdvsa bonds. We recognize that the situation is
complex and evolving and that Venezuela is in crisis. We agree that life there
has to get better, and we made the investment in part because we believe it
will."
Keeping score
Borges warned that any future Venezuelan government "would not
forget where Goldman Sachs stood when it had to choose between supporting the
Maduro dictatorship and democracy for our country," The Wall Street
Journal quoted the lawmaker as saying.
Venezuelan economist Ángel García Banchs, a Central University of
Venezuela professor and Econometrica think tank director, said the bank
"is making a financial bet [that] the government is going to fall. This
bet, I think, is correct” – and will pay off for the institution and its
investors, he predicted.
But García questioned the ethics of the deal, calling it "a very
serious mistake." Similarly, José Méndez, a Venezuelan petroleum engineer who studied at
the George Washington University in Washington, described the investment as
"criminal behavior."
"Really, these are criminal operations against the republic,"
Méndez said. "How is it possible that Goldman Sachs is [paying] 31 cents
for every dollar that must be extracted from the bloodstream of the Venezuelan
nation? That cannot be." VOA Spanish Service correspondent Alvaro Algarra
contributed to this report from Caracas, Venezuela.