Venezuela oil executives ‘captured as pawns in US-Venezuela standoff’

Image copyright EPA Image caption Precedent-setting legal action against Venezuela has also been launched in the United States

Four years after their arrest, oil executives kept as pawns in a US-Venezuela standoff have survived another legal challenge, says Dr Kevin Barrett

Those accused of being the chief executives of the now-defunct US-owned company PDVSA remain jailed, despite US authorities having abandoned a case filed against them in 2016.

Their ongoing incarceration raises questions about the rule of law in Venezuela, and whether the country has broken international law.

A judge in Caracas has rejected a petition by lawyers for the oil executives, including Dora Bakalis and Nelson Martinez.

Luxury cars

The pair, along with Diego Salazar and Francis Alvarez, were arrested in December 2015 while they were on a private jet en route to Germany.

The case hinged on the country’s so-called “blacklisting” of PDVSA, the country’s main oil company, so that anyone involved in oil and refining could not travel to the US without permission.

Three months later, the US Justice Department launched a criminal case charging them with buying millions of dollars of oil with PDVSA money.

That set the course for the oil executives’ incarceration, as they continued to face charges of corruption related to a scheme that the US alleged had resulted in US taxpayers losing as much as $8bn (£6.2bn).

In May last year, the judge in the case signed a document that declared the case “closed”.

After that, all the public mention of the case disappeared.

How did the whole case come to be dropped?

On Wednesday, Fadhil Ahmad, lawyer for the four executives, lodged a new petition to free them. He presented a letter from attorney David Hickton, US Attorney for the Western District of Pennsylvania, indicating that the Justice Department would no longer pursue charges against the executives and also agreeing with Mr Ahmad’s request that their bail conditions be eased.

Mr Ahmad said he took heart from that development, but still believed the executives “would soon be vindicated and released”.

In a statement, the Justice Department said that the “timing of the filing of this petition was unrelated to the ultimate disposition of this case”.

US law requires that after almost two years, the Justice Department must review whether to move forward with the charges against the PDVSA executives, which had been scheduled to go to trial in October.

It is not known when, or if, that decision will be made.

The release of the executives would come at a sensitive time for relations between the two countries.

US officials have levied several rounds of sanctions against Venezuela, as well as its allies Cuba and Russia, accusing them of harbouring foreign officials who were involved in Russian interference in the 2016 US election and other political issues.

The US says the measures aim to put an end to “high-level corruption”.

Following the announcement of the investigation in December 2015, Venezuelan officials made no secret of their anger with the US, and in particular the executives.

US allies were also unimpressed, expressing concern at the actions of their governments which had allegedly come too late to halt the alleged corruption.

Investigation into alleged corruption

Mr Salazar and Mr Salazar were found with in a luxury car provided by PDVSA, which was purchased with oil money, when they were arrested.

And last year, a report by Swiss private investigator Kroll identified the reason for their alleged arrests: their suspected role in an operation to buy fraudulent US-made trucks and connections to a network of shell companies.

Those arrested were then described by US officials as key players in a scheme to give oil-related companies in the US tens of millions of dollars in kickbacks.

Amid a struggle for control of PDVSA, the suspects were accused of giving $20m (£15m) in bribes to win lucrative contracts.

That includes sending a Mercedes-Benz and other luxury cars to their homes – something they said was a gift from PDVSA.

But the allegations were not exclusive to the executives, who were also alleged to have had four Honduran prostitutes sent to their homes.

Disputes over what really happened within the company continue to rage.

In late January, Mr Salazar’s brother, Konstantin, was summoned to testify before a US congressional committee investigating allegations of corruption.

Media reports said Konstantin Salazar answered questions about the prostitution incident, but failed to answer others.

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