When the US removed Nicolás Maduro from power in Venezuela, the expectation was collapse. It has not come.
The removal of a long-serving head of state is almost always followed by economic chaos.
Following the removal of Saddam Hussein, Iraq’s oil production fell by 36%, and its economy shrank by almost a quarter.
But Venezuela, against considerable odds, has avoided that fate.
President Delcy Rodríguez has stabilized the home front while reopening the country’s oil industry to American capital at a rapid rate.
But that progress is now arguably under threat. The centre of that threat is Centerview Partners, and Matthieu Pigasse.
Pigasse is a French financier who has been angling to become a negotiator on Venezuela’s $170 billion debt restructuring – one of the most critical financial processes in global history, and critical for America’s energy security.
Venezuela defaulted on its national debt in 2017 after years of economic mismanagement drained the country’s oil revenues, leaving American companies and investors billions out of pocket.
Resolving this crisis, by restructuring the debt to allow Venezuela to repay what it owes as its oil industry recovers, is fundamentally in America’s economic interest. But that recovery can only happen if the debt restructuring has a credible path forward.
It’s a complex situation.
For a negotiation this difficult, and this vital for American energy and businesses, the people leading it, at least in the eyes of the Trump administration, must be guided by American priorities.
Pigasse is no friend to President Trump’s America First movement – in fact, he is fundamentally opposed to it. He is a long-term supporter of the French Socialist Party and has been criticized over claims that his media companies have shared antisemitic content.
His history in Venezuela makes his involvement in negotiations even more concerning. Pigasse served as an economic adviser to Hugo Chávez, whose socialist economic programme destroyed the country’s oil industry and created the very debt crisis that now requires a solution.
And yet, without any competitive selection process or request for proposals, Pigasse is now the man positioned to lead that restructuring.
The question, then, is how Pigasse ended up in a position of such influence. The answer is Mauricio Claver-Carone.
Claver-Carone is a Floridian lawyer who briefly served as President Trump’s special envoy to Latin America. He no longer holds that role, or any other government position. Claver-Carone now runs a private equity company, LARA Fund, with his partner Jessica Bedoya – who worked at both the CIA and the National Security Council. The fund invests heavily in Latin America.
Claver-Carone is operating at the very centre of US policy in Venezuela. The Washington Post recently described him as the ‘unofficial US viceroy of Venezuela’ and revealed that he has been relaying messages between Caracas and Washington.
What the Post did not explore is what Claver-Carone has chosen to do with this unofficial power.
It is Claver-Carone, without a mandate, who has put Pigasse forward for this role.
Pigasse’s approach to the debt crisis is also controversial. He is expected to push for a rapid resolution – a fast deal to give the impression that the process is moving forward.
But in a debt crisis of this size, speed is less important than ensuring investors get what they are owed. American companies like Morgan Stanley, Fidelity Management and ConocoPhillips stand to lose billions if the process is rushed.
A successful debt restructuring is not just good for Venezuela - it is good for American consumers. A Venezuela that is able to pump oil is one that helps keep fuel prices low for ordinary Americans.
That Claver-Carone has used his unofficial influence to place such a controversial operator like Pigasse at the heart of this process is a serious failure in oversight by administration officials.
President Trump, bogged down in Iran, may not yet have a clear picture of how far Claver-Carone’s influence has spread. He should be made aware.
America First, regardless of its merits, was a promise to put the interests of the American people at the front of the line. What is quietly taking shape in our Venezuela policy is arguably the opposite.
By Cyril Widdershoven for Oilprice.com
