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Trump administration to tap into frozen Venezuelan government funds to revive efforts to oust Maduro

By KAREN DEYOUNG AND ANTHONY FAIOLA | The Washington Post | Published: August 20, 2020

The Trump administration is tapping into more than $300 million in frozen Venezuelan government funds in an effort to give new momentum to its elusive goal of ousting President Nicolás Maduro.

About $20 million will be used to send pandemic relief supplies to Venezuela via international health organizations, as fear of the novel coronavirus and the rigors of everyday survival diminish already-lagging enthusiasm for public activism against Maduro.

Within the next several weeks, 65,000 front-line health workers will begin receiving electronic payments of $100 per month — a sum many times their average pay.

The administration has refused to open the coffers freely to opposition leader Juan Guaidó, whom it recognizes as Venezuela’s legitimate president. But it has set the wheels in motion to provide two years of back pay to federal lawmakers whose salaries Maduro suspended in 2016.

The Trump administration also plans to close a sanctions loophole that has permitted other countries to ship fuel to Venezuela, which has helped Maduro at least partially keep the lights on as the economy has bottomed out.

But the latest attempts to tighten the screws on Maduro come as critics charge the administration’s 18-month “maximum pressure” campaign, centered on harsh sanctions, not only has failed to drive the autocrat from power, it has left him free to tighten his grip.

In recent months, the pro-Maduro Supreme Court has used a questionable legal maneuver to strip the heads of Venezuela’s three main opposition parties of their leadership titles and replaced them with more compliant politicians figures whose fealty allegedly was bought with bribes.

The original opposition leaders have agreed to boycott legislative elections Maduro has called for December, although it remains unclear how many lawmakers will join them. The elections will mark the end of the legal term in office of the current, opposition-controlled National Assembly that Guaidó leads, the position on which his claim as head of state was based.

Guaidó’s popularity in national polls has fallen to below 30%, its lowest level since he claimed the presidency after Maduro was reelected in a 2018 vote the U.S. and many other countries say was rigged. Initial public enthusiasm dimmed last year as an effort to force humanitarian aid over the border and to provoke a military uprising quickly fizzled, as did a plot to turn Maduro’s inner circle against him. After operatives close to Guaidó struck, and then canceled, a deal with a former U.S. Army Green Beret to kidnap Maduro, an apparently rogue mission the contractor launched in May ended in abject failure.

Now, as Guaidó struggles to maintain unity in a historically divided opposition, Maduro once again appears to have outmaneuvered him.

The Trump administration’s close hold on the frozen funds, held by the New York Federal Reserve Bank, has not helped. U.S. officials and courts have resisted opposition attempts to gain access to Citgo, the Venezuelan-owned U.S. energy company, and other Venezuelan government assets in the U.S. Profits from liquidated U.S. properties seized from Maduro cronies have gone into the Treasury Department’s forfeiture fund — hundreds of millions of dollars of which have been used to help pay for President Donald Trump’s border wall with Mexico.

“We’ve had no way to live up to Guaidó’s promise to pay [lawmakers] without access to those funds,” said one opposition operative who spoke on the condition of anonymity to discuss the sensitive topic. “It gets to the point where I really believe they want us to be successful, but something in their minds is sabotaging their objectives, which are also our objectives.”

Meanwhile, many Venezuelans have grown despondent, seeing the ever-increasing U.S. sanctions as worsening their lives without any hope of getting rid of Maduro.

“Sanctions sometimes work and sometimes they don’t,” said Ivan Freites, secretary of Venezuela’s United Federation of Petroleum Workers and a Maduro government critic. “In this case, the sanctions have not worked. Maduro is still in power, and every day, he grows stronger.”

But Russ Dallen, the head of Miami-based Caracas Capital Markets, said “the sanctions are working” in pushing oil production in Venezuela, home to the world’s largest estimated reserves, down to 1929 levels. “It’s not enough to survive,” he said.

The hope, Dallen said, is that Venezuela “has the reflex to rebound to … the way things used to be — a prosperous society with democratic tendencies.”

Charities and wealthier Venezuelans not connected to the government say the sweeping measures have made it hard for them to do business with the outside world.

Edison Arciniega said that when his Caracas-based charity, Ciudadania en Accion, sought to import solar panels to provide electricity for poor communities, foreign suppliers pulled out of the deal because they feared running afoul of U.S. law.

“Even now, there are shortages of disinfectant, soap and chlorine that could allow us to do more to fight the pandemic,” Arciniega said. “But suppliers have had difficulty importing them, and when we ask why, they mention the sanctions.”

The millions of Venezuelans who have fled the country are trying the patience of their hosts in neighboring nations. Hundreds of thousands are also in the U.S., where the administration has refused to grant them protected status and more than 100,000 asylum applications are languishing.

Trump repeatedly has said that “all options are on the table” for dealing with Maduro, a coded reference to possible use of force. But more than a year and a half after the U.S. recognized Guaidó as interim president and imposed sanctions on oil, the lifeblood of the national economy, he’s shown no inclination to use it.

At other times, Trump has contradicted his own administration’s policy, expressing a willingness to talk with Maduro and dismissing Guaidó as a weakling.

“He seems to be losing a certain power,” Trump said of the opposition leader in response to a reporter’s question at a Miami event this summer. “We want someone who has the support of the people.”

Leadership challenges to Guaidó have become increasingly public. Two weeks ago, Henrique Capriles, a two-time presidential candidate who commands substantial support within the opposition, hinted that he is close to breaking with the U.S.-backed leader.

“Never has the opposition been in a situation of such inertia and fantasy,” Capriles said in a video posted on social media. “Are you going to keep lying to the people? Are we going to keep ruling over the internet? Let’s be serious.”

Critics fault Trump for not following oil sanctions with a second, fatal punch, such as a deal with Russia and China to end their support for Maduro.

“I appreciate the obvious commitment of the Trump administration to help Venezuela regain its freedom and democracy,” Pedro Burelli, a fervent anti-Maduro activist and former member of the board of directors of Venezuela’s state oil company, PDVSA, said last week.

“But I have ample reason to fear that the policy is rudderless, has no port in sight and lacks anything resembling a schedule,” he said.

In recent months, Maduro, 57, aformer union leader, has shored up his power base by increasing repression at home and bolstering relationships with Iran and Turkey.

Last week, the U.S. seized Venezuela-destined fuel — reportedly purchased with gold from Venezuelan mines — aboard four ships traveling from Iran in violation of sanctions against that country.

Although the Trump administration says that Venezuela would have more fuel of its own if Maduro were not sending cut-rate shipfuls to Cuba in exchange for security and intelligence support, the bottom line for most Venezuelans is likely to be less electricity.

There is ample bipartisan support in Congress for getting rid of Maduro, although only a handful believe Trump would — or should — use the U.S. military to drive him out. But there is widespread feeling that what the administration has done has either been unwise or not enough.

“Venezuelan policy in the last year and a half has been an unmitigated disaster,” said Sen. Chris Murphy, D-Conn., one of the administration’s harshest critics, at a hearing earlier this month.

The administration could be doing more, said Sen. Robert Menendez, D-N.J., such as cracking down more forcefully on oil shipments to Cuba and imposing more measures against Russia and China, Maduro’s backers.

Even Republicans have struggled to be optimistic. Mulling the possibility of putting more pressure on Russia, China and Cuba, committee chairman James Risch, R-Idaho, questioned whether those countries “are going to listen to us.”

The administration has its own frustrations. At the hearing, Elliott Abrams, the administration’s special envoy to Venezuela, said the administration believes that Maduro is now “watching and waiting” for U.S. election in November to see if its prospects might improve if Democratic nominee Joe Biden wins.

In policy speeches and articles, Biden has pledged to reverse Trump’s restrictive refugee and asylum policies. Campaign advisers and policy papers indicate he would immediately authorize protective status to those who have fled to the U.S., removing any fear of deportation.

Advisers say Biden would continue U.S. sanctions against Venezuela and press existing indictments against corrupt Venezuelan officials, including Maduro, but would emphasize diplomacy in bringing more allies to the cause.

“The big difference with Biden is that he is somebody who has international credibility,” said Juan Gonzalez, a former policy adviser to then-vice president Biden at the White House.

At the same time, Biden would use U.S. support as leverage to press for unity within the Venezuelan opposition, his advisers say. Recognition of Guaidó or whomever the opposition was united behind would continue, but it would be up to Venezuelans, not the U.S., to decide Maduro’s future.

Trump’s rhetoric on Venezuelan regime change, Gonzalez said, “is a false promise to drive electoral support in South Florida. The Trump administration talks tough, but when you look at what they’ve done, it’s actually very little.”

Faiola reported from Miami. The Washington Post’s Ana Vanessa Herrero and Mariana Zuñiga in Caracas contributed to this report.

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