Secret Biden deal allowed Chevron to pay Venezuela millions

The Biden administration secretly permitted Chevron Corp. to pay hundreds of millions of dollars to the Venezuelan government despite a license that explicitly prohibited such disbursements, according to people familiar with the matter.

The supplement to a November 2022 sanctions waiver allowed Chevron to remain in compliance with US law while paying the regime of President Nicolás Maduro taxes and oil royalties, said the people, who asked not to be identified discussing non-public information. The initial waiver from the Treasury Department’s Office of Foreign Assets Control granted Chevron permission to conduct limited operations in the Latin American nation.

The administration of President Donald Trump ended the arrangement and is requiring the Texas oil giant to wind down Venezuelan operations.

“Chevron conducts its business globally in compliance with all laws and regulations, including any sanctions frameworks provided for by the US government,” the company said in a statement.

The US Treasury Department, which oversees sanction waivers, declined to comment.

The sanctions waiver known as a general license allowed Chevron to pump and export Venezuelan crude but expressly forbade the company from paying taxes, royalties or dividends to the Venezuelan government or any state-controlled entities.

However, an undisclosed supplement to the waiver permitted Chevron to make certain payments essential to business operations, some of the people said.

Last year, Chevron filed documents with Venezuelan authorities showing about $300 million in accrued taxes in the nation, according to documents reviewed by Bloomberg News. At the time, US Representative Maria Elvira Salazar, a Florida Republican, condemned the arrangement and advocated withdrawing Chevron’s waiver.

Chevron is the only major US oil company still operating in Venezuela after a wave of nationalizations by Maduro’s predecessor, the late Hugo Chavez in the 2000s. Those seizures prompted some other operators to quit the nation and sue for compensation.

Chevron’s operations in Venezuela were effectively put on hold by sanctions during the first Trump administration. But that changed in 2022 when Biden officials struck a deal that encouraged Maduro to hold democratic elections in return for allowing Chevron to go back to work.

Expanding oil production helped stabilize Venezuela’s economy by bringing in much-needed dollars and reducing inflationary pressures. But Maduro backtracked on many of his democratic concessions, going as far as preventing his main adversary from running and declaring himself the winner without showing proof.

In the most autocratic moment of his regime yet, he also detained more than 2,500 people and forced opposition candidate Edmundo González to flee the nation.

The Biden administration “got played,” US Secretary of State Marco Rubio said during his Senate confirmation hearing. “Now they have these general licenses where companies like Chevron are actually providing billions of dollars of money into the regime’s coffers, and the regime kept none of the promises that they made.” The precise amounts paid by Chevron could not be independently verified.

“Revoking the Chevron license only serves to drive oil sales back toward China on the black market, allowing Venezuela to pocket every dollar,” said Juan Gonzalez, who led President Joe Biden’s administration’s policy toward Venezuela as senior director for the Western Hemisphere on the White House National Security Council. “It helps Maduro and prevents a US company from recouping what it is owed. So dumb.”

Chevron’s relationship with Venezuela has drawn intense scrutiny from Trump in recent weeks and earlier this month he laid down a 30-day deadline to wrap up its joint venture operations with state-owned PDVSA.

The administration is poised to extend that deadline for at least another 30 days, following lobbying by Chevron, people familiar with the matter said. One condition of the extension will be that any taxes and royalties go to helping pay for migrant deportations, rather than directly Maduro regime, one of the people said.