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Goldman Under Fire for Buying Venezuela ‘Hunger Bonds’

Posted byBy Associated Press | Published on: CommentsComments (0)

Demonstrators get ready to confront security forces during anti-government protests in Caracas, Venezuela. (AP Photo/Fernando Llano)

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 almost two months of protests.

The Wall Street Journal reported Sunday that the bank has bought $2.8 billion in bonds from the state-run oil company PDVSA at a steeply discounted price.

Opposition leaders accused the bank of getting in bed with a deeply unpopular administration. Julio Borges, president of the opposition-led Congress, said Goldman Sachs is propping up a dictatorship and argued that the bond purchase violated the bank’s own code of conduct.

Venezuela’s opposition-controlled legislature voted later in the day to ask the U.S. Congress to investigate the sale.

In a statement, Goldman Sachs acknowledged it purchased the bonds but said they were bought in the secondary market and not directly from the Venezuelan government.

“We are invested in PDVSA bonds because, like many in the asset management industry, we believe the situation in the country must improve over time,” the statement said.

Goldman Sachs did not say in its statement how much it paid for the bonds. The Journal, citing unidentified sources, said the bank paid $865 million for the $2.8 billion in bonds, roughly 31 cents on the dollar.

About 20 people gathered outside the Goldman Sachs headquarters in Manhattan on Tuesday to protest the bank’s investment in PDVSA bonds.

“We express our moral outrage about the the rapacity of this transaction between Goldman Sachs and the Central Bank of Venezuela through obscure intermediaries. It has given oxygen to the Maduro regime. It has given support to repression and systematic violations of human rights,” said Eduardo Lugo, co-founder of SOS Venezuela New York. Protesters carried signs that read “Goldman Sachs supports Maduro’s dictatorship.”

At least 22 member countries of the Organization of American States are expected to meet Wednesday in Washington to discuss the crisis in Venezuela.

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