The White House on Friday announced a new round of sanctions against Venezuela that explicitly exempt the U.S. arm of the country’s state-owned oil company. That company, Citgo, donated six-figure sums to Trump’s inauguration and recently hired former Trump officials to lobby for that exemption.
The purpose of the new sanctions announced by the administration is to target arms of the Venezuelan government that have supported or facilitated President Nicolas Maduro’s ongoing crackdown on domestic political opposition. The carve out for Citgo was included in the White House statement released on Friday.
“To mitigate harm to the American and Venezuelan people, the Treasury Department is issuing general licenses that allow for transactions that would otherwise be prohibited by the Executive Order,” the White House wrote in a statement on the sanctions. “These include provisions allowing for…transactions only involving Citgo,” and no other sanctioned entity.
Citgo is the U.S. arm of Petróleos de Venezuela, S.A., the country’s state-owned oil company. Since 2014, Citgo, a Delaware corporation, has fought to insulate its operations from measures aimed at punishing the Maduro regime’s efforts to consolidate political power.
Under the administration of President Donald Trump, those efforts entailed beefing up its D.C. influence operation with lobbyists with deep ties to the president’s political operation. In April, it hired Avenue Strategies, the firm co-founded by former Trump campaign manager Corey Lewandowski and campaign adviser Barry Bennett.
Since then, Citgo has paid Avenue Strategies $160,000 to lobby the White House, the Treasury Department, the Justice Department, and the Energy Department on the “potential impact of U.S. energy and foreign policy restrictions on CITGO Petroleum Corporation’s operations and valuation of assets,” according to disclosure filings.
Citgo sought favor with the Trump administration even before the president took office. It pitched in $500,000 to fund the president’s inaugural ceremony, according to Federal Election Commission records— a break from previous inaugurations, which the company had not bothered to finance.
The exemption Citgo received from the Trump administration in this latest round of sanctions won’t just benefit PDVSA, it will also benefit a Russian company that has been fighting U.S. sanctions on a wholly separate front. Months before the Trump inauguration PDVSA mortgaged 49.9% of Citgo to state-owned Russian energy giant Rosneft as collateral for a $1.5 billion loan to the Venezuelan parent company. Rosneft paid another $1 billion this month for crude oil from the cash-strapped PDVSA, which is the Russian firm’s largest non-Russian supplier.
The U.S. sanctioned Rosneft and its chief executive, Putin ally Igor Sechin, in 2014 in retaliation for the Russian invasion of Ukraine and annexation of Crimea. Top Russian officials have made no secret of their desire to relax those sanctions as well.
Though Citgo has tailored its political operation to the Trump administration, it has long focused its lobbying on efforts to ensure that sanctions and other punitive measures aimed at the Venezuelan government leave its U.S. operations intact.
The company has spent millions of dollars on its US lobbying operation since early 2014, when Sens. Marco Rubio (R-FL) and Bob Menendez (D-NJ) introduced sanctions legislation that targeted PDVSA, among other state entities. By the following year, it had five lobbying firms on retainer. Employees of all five had donated to Menendez, who inserted language into his legislation that spared Citgo from some of the measures aimed at its Venezuelan parent.
In Avenue Strategies, Citgo found lobbyists with the president’s ear. In addition to Bennett, Cummins, and Lewandowski, who left the firm in May, Avenue employs Ed Brookover, a senior adviser to Trump’s 2016 campaign.
The White House did not respond to questions about the sanctions’ Citgo exemption.