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Elise Amendola/AP
Citizens Energy Corporation Chairman
and President Joseph P. Kennedy II

Venezuela Suspends Controversial US Oil Aid Program

January 06, 2009 02:01 PM
by Denis Cummings
Venezuela is suspending a fuel-assistance program that provided discounted heating oil to low-income families in the United States.

Venezuela Cuts Off Supply to Kennedy Nonprofit

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Citgo, the U.S.-based subsidiary of the Venezuelan government, has suspended a program that provided discount oil to Citizens Energy, a nonprofit run by former Mass. Rep. Joseph Kennedy, which distributed the oil to low-income families. In 2008, Citgo provided $100 million of free oil, which was distributed to 235,000 low-income households in 23 states.

The program has been highly controversial for the way in which it praises the generosity of Venezuelan President Hugo Chavez; Kennedy himself refers to “our friends in Venezuela” in a commercial for the program.

Though the program is considered a public relations success for Chavez and Venezuela, it has become a casualty of recent budget cuts by the Venezuelan government. “Due to falling oil prices and the world economic crisis,” the Citizens Energy Web site explained, “CITGO has been forced to re-evaluate all their social programs.”

The Venezuelan economy is largely reliant on the country’s oil industry, which was fully nationalized by the government in May 2007. Oil revenues accounted for approximately half of the 2008 federal budget and 94 percent of export revenue. In 2008, when oil prices reached a high of $147 a barrel, oil revenue contributed an extra $10.8 billion to social programs. However, writes The Washington Post, “Analysts say Venezuela needs oil prices of $60 to $90 a barrel to balance its budget” and prices are currently below $50 a barrel.

Furthermore, Chavez is trying to build domestic support so he can lift Venezuela’s term limits and run for re-election in 2012. “He is deciding to worry about his own domestic politics instead of ours,” said Julia Sweig of the Council on Foreign Relations to The Washington Post. “Now he’s shoring up all the domestic political support he can get and if that means rerouting $100 million from Americans to his own constituents, it makes a lot of sense.”

Opinion & Analysis: The program as propaganda

Kennedy, the son of late U.S. Attorney General and Mass. Sen. Robert F. Kennedy, has been heavily criticized for providing Venezuelan President Hugo Chavez a platform to build goodwill in the United States. For Chavez, an enemy of the United States who once called President George W. Bush “the devil,” the program has been a “public relations bonanza,” writes The Christian Science Monitor.

In 2005, after the program was announced, an editorial in The Wall Street Journal condemned Kennedy and Rep. William Delahunt, D-Mass., who helped create the program. “Mr. Delahunt’s lobbying for the dictator undermines any official U.S. pressure on Mr. Chávez to behave more humanely, which is precisely why Mr. Chávez is returning the favor by plying Mr. Delahunt with cheap oil,” it wrote.

The most notable example of criticism toward Kennedy is a 2007 letter sent to him by Rep. Connie Mack, R-Fla. “Hugo Chavez is providing your company ‘low cost heating oil’ not to help the American people, but rather to exploit his apologists in the name of public relations,” wrote Mack. “Sadly, you have chosen to actively participate in his charade, even as he continues to attack the United States, our leaders, and freedom-loving people everywhere.”

Kennedy has defended the program as “righteous” and pointed out that Venezuela is the fourth-largest supplier of oil to the United States. Additionally, he has frequently praised Chavez’s leadership in Venezuela, writing in a 2006 editorial in The Boston Globe, “The president is socializing his nation’s oil profits. Poverty has dropped by 25 percent. State-sponsored provision of basic needs like food and healthcare has expanded.”

On the Citizens Energy Web site, he requests that Americans write to Chavez and persuade him to restore the program: “We strongly encourage interested people to write to Venezuelan President Hugo Chavez to tell him the stories you have told me of the difference the generous donation of heating oil has made to so many of our fellow Americans.”
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