The authoritarian socialist’s administration has begun a broad purge at state-owned Petroleos de Venezuela, arresting more than 50 officials at the oil giant and its joint ventures since August, supposedly to fight corruption.
No one is questioning that there is corruption in PDVSA. Per Reuters:
The political opposition says PDVSA is rife with corruption, and a congressional investigation [I believe this is Venezuela's congress, not the US] concluded that at least $11 billion went “missing” between 2004 and 2014 . . .
The arrests rid Citgo of much of its top brass and have instilled fear throughout Venezuela’s oil industry, snarling up decision making, sources close to PDVSA have told Reuters.
One question is how does this impact PDVSA's business with so many oil executives under arrest? I'm sure there are hundreds of oil executives at PDVSA; however, arresting 50 has to have an impact. The knowledge base of those 50 must be significant. (The Vox article that I link to below has the figure at 65.) And as the Reuters quote states, this is causing fear in Venezuela's oil industry. If I were an oil executive, I'd be panicking and thinking of a way to leave the country. If I were an executive at Citgo and based in the US, I'd refuse to travel to Venezuela.
Now, of course, arresting corrupt oil executives is the right thing to do. But this brings up another question: If this corruption is a well known fact, why is Maduro making arrests now when Venezuela's oil industry is in such a mess and has seen production declines?
One obvious conclusion is that Maduro wants to show (show is key word here as will be seen further down) that he's taking on corruption. I think Vox has a great write-up highlighting some other reasons:
First: Maduro is also attempting to clear the powerful oil company of potential rivals.
A potential political rival that the article discusses is former (per the article, he was recently fired) Venezuelan U.N. ambassador Rafael Ramirez. PDVSA executives have close ties to him.
The article also states that the new head of PDVSA is Major General Manuel Quevedo, which brings up:
Second: “The military is Maduro's security blanket and he is making sure they have a stake in the continuation of his presidency,” [David Smilde, a scholar of Venezuela at Tulane University] explains. [Claudio Rodriguez, an analyst for Caracas Chronicles] says that the military would likely expect to be able to inherit the tradition of corruption at PDVSA and funnel money into their own coffers.
I think the idea about why Maduro is turning to the military is the most interesting of the two points. Maduro is worried about being over-thrown. By "showing" that he's against corruption, he can also gain favor with the military by putting one of their own at the head of the company. Yet, Claudio Rodriguez states via the Vox article that the military will no doubt assume they can continue the "tradition of corruption."
So is this really a move by Maduro to eliminate corruption? One can conclude that all that is happening is that those who benefit from corruption are simply shifting from prior oil executives to current military generals.
I believe this is similar to what is going on in Iraq and how the Iranian military helped the Iraqi's squelch the Kurdish attempt for independence. From a blog post about the situation:
Discussions are happening between Iraq and Iran oil ministries; however, the article states that the Quds need to sign off on it.
In Iraq, there are discussions about oil from Kirkuk going through Iran. My speculation is that the Iranian military (Quds) will gain financially from this deal.
Iran and Venezuela: military leaders attempting to profit from oil. I'm guessing sometime in the future there will be payback. Either these military leaders will be jailed/executed or hiding away in some friendly foreign country.
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