Goldman Sachs caught up in anti-Maduro protests

CARACAS, Venezuela (AP) — Venezuela opposition leaders are decrying Goldman Sachs Group Inc.'s purchase of bonds from the socialist government of President Nicolas Maduro, who has been targeted by nearly two months of protests.

Two months of protests against President Nicolas Maduro's socialist government have convulsed the South American OPEC nation, with around 60 people killed in the unrest.

Julio Borges, the president of Venezuela's opposition-run Congress, said that Goldman is "aiding and abetting the country's dictatorial regime", which is now engaged in a violent crackdown on anti-government protesters across the country, Reuters reported.

Goldman Sachs confirmed the purchase, but denied any interaction with or connection to the Venezuelan Government of President Nicolas Maduro, having purchased the bonds on a "secondary market from a broker", Reuters reported. "I also intend to recommend to any future democratic government of Venezuela not to recognize or pay on these bonds", Borges wrote. Goldman reportedly paid $865 million, or 31 cents on the dollar, for Pdvsa bonds worth $2.8 billion when they mature in 2022.

What might seem like a wise investment could become more complicated for Goldman Sachs and other investors, after National Assembly president Julio Borges threatened on Monday to withhold payment on the bonds.

Although Goldman didn't buy directly from the government, experts say the immediate increase in Venezuela's reserves indicates Goldman's money went straight to Maduro's coffers.

"We express our moral outrage about the the rapacity of this transaction between Goldman Sachs and the Central Bank of Venezuela through obscure intermediaries". After all, no one would buy Venezuelan debt if they didn't (a) aim to sell it again quickly or (b) hope for a nice resolution.

On Thursday of last week, the worldwide reserves for Venezuela rose $749 million to reach over $10.86 billion but that is down over 50% from three years ago. "We agree that life there has to get better, and we made the investment in part because we believe it will", the Wall Street bank affirmed. The opposition - burned by talks that went nowhere in the past - has said it will continue to protest until the government calls general elections and releases political prisoners.

About 30 protesters gathered Tuesday in front of the company's NY headquarters on West Street in lower Manhattan chanting “No more hunger bonds, Goldman Sachs” and “Goldman Sachs, shame on you.”.

Venezuela's food shortage has been so bad, the average citizen has lost 19 pounds in the past year. "We can't allow their personal interests to take over and ignore the violations of human rights in Venezuela".

For its part, Goldman insists that its investment in the state-owned oil company of a government that's plunged its people into political turmoil and economic devastation is extremely ethical.

  • Salvatore Jensen