Treasury Department Sanctions Venezuelan Officials Who Stole Billions

On January 8, the Trump administration sanctioned a network of corrupt Venezuelan businessmen and senior officials for their role in a multi-billion dollar bribery and embezzlement scheme, just days ahead of the inauguration of Venezuelan strongman Nicholas Maduro as president. That the Treasury Department targeted senior Venezuelan officials ahead of Maduro’s inauguration is unsurprising; what is novel is Treasury’s newfound willingness to compel a sanctioned person to relinquish their ownership and control of a large business by offering to lift sanctions on that company if new non-sanctioned parties assume ownership and control.

Globovision is now subject to sanctions because any company that is owned by a single person or multiple persons subject to sanctions – meaning they have an ownership stake of 50 percent or more – is automatically sanctioned. This is commonly referred to as a “derivative designation.” What was novel in this case – going beyond similar actions such as the efforts to force Russian SDN Oleg Deripaska to give up ownership and control of EN+ and Rusal – is that Treasury did not just issue the designation, but clearly spelled out what actions Globovision would have to take to get sanctions lifted.

In May 2013, Globovision was sold to a consortium of businessmen – including Gorrin and Gustavo Perdomo, who was also designated along with Gorrin – with close ties to the Maduro government. Up until that point, it was Venezuela’s last major television station still critical of the government. The prior ownership group claimed that mounting government fines and political harassment compelled them to sell. The use of sanctions to wrest this station from Venezuelan government control could restore some of the network’s independence.

Gorrin was well known to U.S. authorities before his designation, as the Justice Department indicted him this past August on corruption and money laundering charges. Gorrin’s main partner in this scheme, former Venezuelan Treasurer Alejandro Andrade, pleaded guilty in U.S. court to money laundering charges and reportedly admitted receiving $1 billion in bribes from Gorrin.

The administration was very clear both in the designation of Globovision, as well as in the general license that accompanied it, that in order to have sanctions lifted against the television station, a change in ownership of Globovision must occur within the year. By forcing divestment of this asset, Treasury would be able to remove a high-value asset from Maduro’s effective control, provided Gorrin’s successor is not another Maduro ally.

A similar approach was most recently applied to the Panamanian newspapers La Estrella de Panama and El Siglo, who were owned by designated narcotics traffickers. Their ownership was eventually transferred to a non-designated entity.

The increasing use of derivative designations as a tool to separate sanctions targets from their business with substantial international exposure is a tool that the administration should continue to refine and utilize given the ever-expanding use of sanctions as an instrument of foreign policy. Whether Globovision ultimately meets the conditions that the administration has laid out will be an important test as to whether the administration can effectively wield this tool to separate Maduro’s cronies from their business interests.

Matthew Zweig is a senior fellow at the Foundation for Defense of Democracies, where he also contributes to FDD’s Center on Economic and Financial Power. Follow FDD on Twitter @FDD and @FDD_CEFP. FDD is a Washington-based, nonpartisan research institute focusing on national security and foreign policy.