OPINION:
Washington’s removal of Venezuelan dictator Nicolas Maduro has created the first strategic opening in a generation, but that opportunity should not be mortgaged to Alejandro Betancourt, an oil baron known for business dealings with the communist Chavez regime.
Mr. Maduro’s removal has created a path for U.S. companies and acted as a deterrent for America’s enemies seeking to use the country as a South American operations center. Still, President Trump and Secretary of State Marco Rubio should be wary of aligning themselves with Mr. Betancourt.
Here is the backstory: The proposed arrangement announced by the White House covers 17 Venezuelan oil fields containing an estimated 65 billion barrels of reserves. The private vehicle is North American Blue Energy Partners, a Barbados company led by Mr. Betancourt.
Washington secured rights to a 35% interest through penny warrants from the Pentagon Office of Strategic Capital, preferential access to 20% of production at cost and first claim on the remainder.
U.S. officials describe rights lasting a century, while Mr. Maduro’s successor, Delcy Rodriguez, has described only 25-year licenses that may be renewed.
Nonetheless, the fields were awarded without any apparent competition, while important contracts and the legal rationale allowing a Pentagon lending office to collect dividends from a foreign oil venture remain outside public view.
As a result, the press has been left asking questions about the legality of these transactions.
To that end, a strategic oil agreement that cannot clearly state its duration, disclose its ownership or explain its legal authority is not finished work. It is an invitation to the next lawsuit, congressional investigation and successive Venezuelan governments aiming to terminate the deal.
Mr. Betancourt’s new venture, NABEP, is not Chevron or Exxon Mobil. NABEP’s roots trace in part to assets associated with Petrozamora, a joint venture between a PDVSA affiliate and Gazprombank Latin America Ventures, an entity linked to Russia’s Gazprombank and Mr. Betancourt’s company, Derwick Associates.
To be sure, Mr. Betancourt’s Derwick Associates has long been linked in investigative reporting to that Russian-backed arrangement. Some of the more sensational claims involving Russian security figures remain allegations, but allegations of that magnitude belong in a serious due diligence file.
If the administration intends to present this new agreement as a vehicle to drive Moscow and Beijing out of Venezuelan oil, it should demonstrate that Mr. Betancourt’s own history with Russian-linked commercial interests was carefully examined.
Mr. Betancourt has not been charged in the United States as Mr. Maduro has, and he denies any past wrongdoing. That distinction matters, but it does not end the inquiry.
Mr. Betancourt’s reputation is that he made his first fortune as a Venezuelan businessman who got rich from corrupt government contracts. He won Chavez-era power contracts during the country’s electrical crisis, and he has faced scrutiny and investigations in the U.S., Spain and Switzerland while other figures connected to related PDVSA cases pleaded guilty.
None of this amounts to a conviction, but it is a collective profile that any responsible Wall Street firm, bank, sovereign fund or intelligence service would consider high risk.
Still, Washington has now backed an arrangement placing the development of fields containing roughly one-fifth of Venezuela’s oil reserves under Mr. Betancourt’s company.
None of this should come as a surprise, however, as Mr. Betancourt spent years cultivating influential American connections.
In 2019, he retained Rudolph W. Giuliani and hosted him in Spain while a Justice Department matter hung over Mr. Betancourt. He later emerged as a channel to Ms. Rodriguez, with former NSC senior director Mauricio Claver-Carone acknowledging that U.S. officials had found Mr. Betancourt useful as an intermediary between Washington and Caracas.
Messrs. Trump and Rubio created the leverage. They imposed the blockade, produced the January shock, demanded the removal of hostile powers and restored American energy security to the center of Venezuela policy. The people operating beneath them converted that leverage into a deal built around Mr. Betancourt.
Reuters reported both the relationship and the concerns surrounding Mr. Claver-Carone’s influence over deals potentially worth billions of dollars.
Anti-communist opposition leader Maria Corina Machado has identified the central contradiction. She wants the U.S. as Venezuela’s partner, but insists the oil belongs to the Venezuelan people and must be managed under a lawful, transparent government. Ms. Machado’s objections go directly to transparency and legitimacy.
Reconstruction without legitimacy simply replaces one circle of privilege with another. A future elected government will examine these contracts with lawyers, creditors and voters in the room. Agreements supported by competitive awards, published terms, clean title and identifiable ownership may survive, but agreements built on access and ambiguity may not.
The answer is not abandoning Venezuela. Abandonment would hand Beijing, Moscow, Havana and Tehran the opportunity to rebuild what American power has just begun dismantling. The answer is to stop confusing one man’s access with an American strategy and do the deal right with transparency.
Publish the contracts. Reconcile the difference between 25 years and 100. Release the Pentagon’s legal opinion. Disclose every beneficial owner.
Identify the lawyers, lobbyists, consultants and informal envoys who presented Mr. Betancourt as indispensable, then require full disclosure of their fees, financial interests and any residual claim on the fields.
Tie continued access and offtake to measurable objectives: Release all political prisoners, dismantle the old security apparatus, remove hostile foreign penetration and hold a legitimate election instead of pretending Ms. Rodriguez is the result of regime change.
If NABEP can survive that scrutiny, the agreement will emerge stronger. If it cannot, Washington should learn that now, before more American power, money and credibility are stacked behind the same name.
Messrs. Trump and Rubio opened the door. Their intermediaries chose the doorman. A serious government keeps the door and changes the man.
• Rick de la Torre is a retired senior operations officer and former chief of station Caracas for the CIA. He is the founder and CEO of Tower Strategy, a Washington-based government affairs firm.
Please read our comment policy before commenting.