KPMG Report Shows $12 Billion in Venezuela Oil Funds Flow Through US Account

The New York Times, which reviewed the confidential document, says the vast majority of the money was sent back to Venezuela soon after it arrived. About $11.7 billion was used to support the bolívar through foreign-currency auctions at Venezuelan commercial banks, and about $130 million went to pay the Venezuelan government’s foreign bills, mostly debts to other governments and international organizations.

A Treasury-Run Custody Account

KPMG compiled the report for the U.S. government. It describes the “Venezuela Custody Account,” which the Treasury Department set up after U.S. forces captured Nicolás Maduro on Jan. 3. The account was first held in Qatar and was moved to Citibank in New York in late January.

The firm says it assisted the State Department in administering the account, including by tracking transactions and applying financial integrity measures. It does not describe itself as an auditor, and the report is not the formal audit of Venezuelan oil finances that State Department officials had promised earlier this year.

“The U.S. government established custodial control over Venezuelan natural resources revenue deposits” this year, the report says. Each transaction had to be signed off by officials from the State Department and the Treasury.

Venezuela’s central bank requested funds from the account, the Times reports, and U.S. officials released money after checking that the requests met integrity criteria. The speed of those disbursements, the newspaper says, lends some credence to U.S. officials’ claim that they act as custodians. The same report, however, shows that Washington has retained the final say over when the money is released and who receives it.

That arrangement fits a pattern already described by U.S. officials, including Energy Secretary Chris Wright, who has said Washington holds significant leverage over Venezuelan oil revenues.

What Went Back, and What Remains

The account had a balance of about $170 million on Sept. 30, the report’s cutoff date, and earned about $12 million in interest over the period.

Crude sales accounted for the vast majority of deposits. Smaller sums came from minerals and fertilizer, including about $100 million deposited by Trafigura for the purchase of Venezuelan gold. Trafigura and Vitol, which acquired exclusive rights to sell Venezuelan oil after the U.S. operation, together accounted for 61% of the money deposited by the end of September.

The $11.7 billion returned for currency support is in line with an estimate from the Venezuelan consultancy Síntesis Financiera, which said the government spent $12.3 billion on foreign-currency auctions in the same nine months.

Limits of the Accounting

The report does not identify the ultimate beneficiaries of those auctions, and it is not clear whether the returned funds remained in Venezuela. The Times has previously reported that a large share of the dollars ends up with a small group of Venezuelan agribusinesses and consumer corporations, while many smaller companies struggle to obtain hard currency.

The $12.26 billion figure also does not capture all of Venezuela’s export revenues. Two of the country’s largest crude exporters, Chevron and a local producer, NABEP, use different financial arrangements to sell at least some of the oil they pump, the Times reports. Last month, NABEP began sending oil to the United States under a deal through which it will give the U.S. government 35% of its shares and 20% of its production at below-market rates.

The findings land as Washington has separately pursued majority control over a vast share of Venezuelan oil reserves. The Treasury, the State Department, KPMG and Venezuela’s government did not immediately respond to requests for comment, the Times said.