Goldman Sachs’s purchase of Venezuela’s “hunger bonds” come under fire

Goldman Sachs bought PDVSA’s oil bonds for pennies.

As per a senior White House official, the Trump administration is concerned about any action by U.S. companies that provides a financial lifeline to Venezuela’s government.

The U.S. government stance may have come about after the Goldman Sachs Group came under fire for purchasing oil bonds from a Venezuelan company for $2.8 billion at a deep discount.

Goldman Sachs’ bond purchase have drawn the ire of Venezuela’s political opponents, including U.S. lawmakers, who have labelled the purchase as “hunger bonds”.

The Venezuela’s government run by President Nicolas Maduro has been accused of creating food shortages which has affected millions of Venezuelans.

Last week, New York-based Goldman Sachs had stated it had never transacted directly with Venezuelan authorities for purchasing PDVSA’s oil bonds for pennies.

“We’re concerned by anything that provides a lifeline for the status quo,” said an U.S. official who spoke on the condition of anonymity. “I would prefer them not to.”

As per another U.S. administration official who also spoke on the condition of anonymity, U.S. companies making investments in Venezuela should “think morally about what they’re doing.”

Both officials stated they did not know whether the Trump administration had spoken about the matter directly with Goldman Sachs.

Goldman Sachs did not respond to a request for comment.

On Monday, Julio Borges, head of Venezuela’s opposition-led Congress, has accused Goldman Sachs of “aiding and abetting the country’s dictatorial regime.”

In a letter to Lloyd Blankfein, Goldman Sachs’ President, Borges said Venezuela’s Congress would open an investigation into the matter and he would recommend “…any future democratic government of Venezuela not to recognize or pay these bonds.”

Incidentally, the Trump administration, has several former Goldman Sachs executives in its senior roles.

On Friday, Eliot Engel, the senior Democrat on the House of Representatives Foreign Affairs Committee, had urged President Donald Trump to condemn Goldman Sachs’ bond purchase.

As per Engel, the bond purchase has allowed Maduro and his associates to “regularly abuse the human rights of Venezuelan citizens while at the same time blocking their access to much-needed food and medicine.”


Categories: Creativity, Economy & Finance, Entrepreneurship, Geopolitics, HR & Organization, Strategy

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