Goldman Sachs Under Fire For Venezuelan Bond Purchase

Venezuela's opposition party is refining a new weapon against the government of embattled President Nicolas Maduro: threatening that the country's lenders may not get their money back after Maduro is removed from power.

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. Venezuela's Latin American neighbors, its energy overseers as a member of the Organization of Petroleum Exporting Countries and the United States all benefiting from Venezuela's crippled oil production with a glut of global oil.

"As hard as it may try, Goldman Sachs ... can not put lipstick on this pig of a deal for Venezuelans", Borges said.

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Last week, Goldman Sachs purchased about $2.8 billion worth of Venezuelan bonds.

Goldman Sachs paid $865 million to purchase $2.8 billion in bonds that mature in 2022.

MEPs denounced the continuing unconstitutional violation of the democratic order in Venezuela and the lack of separation of powers and independence of the branches of government. Julio Borges, the leader of Venezuela's National Assembly, threatened that a later government may refuse to pay them.

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 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.

However, in an emailed statement Monday, Goldman Sachs rebuffed the criticism, insisting that the political and economic situation in Venezuela will "improve over time".

Goldman replied it had bought the bonds not from the government, but on the secondary market from a broker. Beke said her mother, Rebecca, lost her battle with cancer previous year.

But going back to the original question, what sort of obligation does Goldman Sachs or any other investment capital outfit have to be "socially responsible" in their worldwide dealings?

In his stead, he sent Tom Shannon, the US undersecretary of state for political affairs, who urged Venezuela to stay in the group and defended its right to try to resolve the crisis.

The State Department official said that Venezuela has historically been "very influential" in the region, which allowed it to control the debate at the OAS. Protestors gathered outside the investment bank's NY headquarters on Tuesday in reaction to the transaction.

The bonds, held by Venezuela's central bank, weren't released to the public after lack of investor interest in bonds of this struggling country.

Videgaray has been sharply criticized by Maduro's government but has nonetheless pledged to use all diplomatic channels to help reach a peaceful political solution to the bloody crisis in Venezuela.

  • Zachary Reyes