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Two Vile Names, One Sweetheart Deal: Goldman Bails Out Maduro

The Vampire Squid rescues an infamous autocrat

The Vampire Squid rescues an infamous autocrat.The Vampire Squid rescues an infamous autocrat.

Goldman Sachs reportedly bought $2.8 billion worth of bonds issued by Venezuelan national oil company PDVSA.

Richard Drew/AP

Who says two amoral and corrupt institutions with diametrically opposing ideologies can’t collaborate to sink even lower together?

Goldman Sachs, infamous investment bank and symbol of international predatory capitalism, has made a devil’s bargain with Nicolás Maduro, the infamous left-wing dictator of Venezuela who claims to despise companies just like Goldman. As Forbes writes:

“What happened is that the Venezuelan Treasury owned some bonds issued by PDVSA, the national oil company. They sold those bonds to Goldman Sachs at a serious discount to face value.”

Maduro’s authoritarian government has been rocked by protests this spring thanks to widespread economic and political devastation. (Maduro blames his country’s problems on an “economic war” waged by Washington.) The most shocking statistic is that 75 percent of Venezuelans are said to have lost at least 19 pounds from food shortages.

The Goldman deal was a win-win for the bank and the dictator. Goldman bought $2.8 billion worth of oil bonds for 32 cents on the dollar, according to the Times of London. Maduro’s regime, in return, immediately gets to stock its coffers with about $865 million.

Julio Borges, president of the National Assembly and a leading opposition figure, denounced Goldman for “aiding and abetting” the goblin of Bolivarian socialism:

“Goldman Sachs’ financial lifeline to the regime,” Borges wrote in a letter to Lloyd Blankfein, “will serve to strengthen the brutal repression unleashed against the hundreds of thousands of Venezuelans peacefully protesting for political change in the country.”

Borges added that he believed Goldman “decided to make a quick buck off the suffering of the Venezuelan people.”

In characteristic form, Goldman insisted it didn’t do anything untoward because it bought the bonds from an intermediary on the secondary market, and didn’t deal with Maduro’s government directly. (Goldman would only identify the intermediary as “European.”) Also, the bank insisted, it bought the bonds for a third of their value to help the Venezuelan people!

“We recognize that the situation is complex and evolving and that Venezuela is in crisis. We agree that life there has to get better, and we made the investment in part because we believe it will,” the firm said in an email statement.

More than 50 people have died in protests over the past two months, with many more injured and arrested.

Henrique Capriles, the opposition governor of the state of Miranda, told reporters that he and his team were beaten by security forces in a march this past weekend. He said he believed Goldman’s investment would “only make things worse,” as the Miami Herald put it.

“Why do they need this money?” Capriles wondered. “To buy bombs and war supplies that are running out? To finance a fraudulent electoral campaign?”

It’s a good thing Karl Marx is dead, because otherwise this metaphysical mind-loop of a news story would make his head explode. Is this a corruption of capitalism, a corruption of socialism, both, or neither? Maduro himself would probably say this transaction is a perfect example of the “savage capitalism” he says he despises.

Whatever it is, this tale of dogs and cats living together on the secondary bond market represents the ultimate in cynicism, and one likely to have dire consequences for a country already on the brink. 

In This Article: Goldman Sachs, wall street


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