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Lobbying for Venezuela: PDVSA paid $180.000 to Venn Strategies LLC, $20.000 to Shearman & Sterling

By Aleksander Boyd

London 27.03.05 | On March 09 2004 the Secretary of the USA's Senate aknowledged receipt of a registration form (identification number 65191-722) that on behalf of VENN STRATEGIES LLC [1] was presented by Stephanie E. Silverman [2]. The client disclosed in the form was Petroleos de Venezuela and the specific lobbying issue had to do with a "comercial matter before the OPIC". The midyear report, received on August 03 2004, shows that $100.000 were paid for lobbying activities [3] and another $80.000 were disboursed according to the year end and termination filling, whose date of receipt was February 14 2005 [4].

As informed readers ought to know PDVSA had a legal battle with San Diego's Science Applications International Corporation (SAIC), that was taken by the latter to OPIC. In the website of the Embassy of Venezuela in Washington, former PDVSA president Ali Rodriguez is quoted as saying "We have every reason to believe that OPIC’s decision was based on prevailing politics in Washington, D.C., and the desire to satisfy a politically powerful U.S. company, rather than on the facts" [5]. Rodriguez provides his opinion based on a number of facts, reinforced in another article, also posted in the Embassy's website [6], by the perception of a legal expert by the name of Thomas B. Wilner, identified as "a partner with the prestigious law firm of Shearman & Sterling" (sic), who commented regarding the OPIC's decision in favour of SAIC "This is one of the strangest decisions that I have seen in more than 30 years of practicing law in Washington. There is no basis for this decision in either the facts or in the law. The OPIC decision has no merit whatsoever" (sic). Furthermore since Wilner was " surprised by the enormous political pressure that has been put on PDVSA and Venezuela from the highest levels of the U.S. Government for what is such a modest commercial dispute" (sic) [7] he undertook lobbying tasks in favour of PDVSA before the House of Representatives and the Department of Treasury with respect to what he considered a "false calim of expropiation" (sic). Evidence of this and of amounts paid -$20.000- can be seen in the Office of Public Records of the US Senate [8].

Regarding the matter John C. K. Daly reported on UPI Energy Watch on July 16 2004 the following:

Venezuelan government officials reacted sharply to a decision by the U.S. government agency Overseas Private Investment Corp., which ruled that the Venezuelan state oil company Petroleos de Venezuela Sociedad Anonima, had "expropriated" assets belonging to San Diego-based Science Applications International Corp. OPIC issued a ruling accepting SAIC's charge of PDVSA's "expropriation" of its assets and awarded SAIC an as yet undetermined amount of government compensation. Venezuela is the world's fifth-largest oil exporter and PDVSA provides about 14 percent of U.S. oil imports. In 1996, SAIC and PDVSA formed the joint venture Informatica, Negocios y Tecnologia S.A., called INTESA, to manage the oil company's outsourced information-technology operations. SAIC and PDVSA signed a five-year contract that could be renewed upon agreement by both parties. PDVSA President Ali Rodriguez Araque said that his company had decided not to renew the SAIC contract with SAIC after a Gartner Group audit. The case has strong political overtones. PDVSA and Venezuelan government experts have evidence that INTESA personnel participated in sabotage operations against PDVSA during the December 2002-February 2003 lock-out and strike organized by opponents of President Hugo Chavez to force his ouster after a coup d'etat failed in April 2002. The stealing of software and passwords and remote-control electronic disruption of production, refinery and storage operations caused PDVSA $14 billion dollars in losses and a historic 28 percent quarterly gross domestic product drop in Venezuela's economy at the beginning of 2003. PDVSA fired nearly 18,000 employees, mostly from managerial positions, for failing to show up for work. Venezuelan government officials believe SAIC was using INTESA for espionage purposes in Venezuela due to its strong ties to the Pentagon, the CIA and the NSA.

U.S. Newswire has this remark:

Commenting on the case, the Ambassador of the Bolivarian Republic to the United States, Bernardo Alvarez Herrera, indicated that "the allegation that the assets of INTESA were confiscated by PDVSA is totally inaccurate; such actions are expressly prohibited by the Venezuelan constitution.

One must wonder how does that statement pegges with the recent land confiscations of El Charcote and Hato Piñero...

On a different note it is worth noting that even though the relationship between VENN STRATEGIES LLC and PDVSA officially ended in 2004 the latter does not figure among the clients of VENN [9].

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