After making a bond purchase from the Venezuelan government, Wall Street investment bank Goldman Sachs has been accused of backing Venezuela's "dictatorial regime."
On May 28, The Wall Street Journal -- citing five people familiar with the transaction -- reported that Goldman Sachs had purchased $2.8 billion in bonds issued by state oil company PDVSA, according to Fortune. The bonds reportedly mature in 2022, or around $865 million. Three finance industry sources told Reuters on May 29 that the bonds were sold through an intermediary. One of the sources -- who was from Goldman Sachs -- said that the intermediaries were in Europe.
This deal comes in light of great unrest within Venezuela. According to The Guardian, the country is suffering the worst financial crisis in its history. The country is experiencing widespread shortages of food and health supplies, leaving many people starving. A full 25 percent of the country is unemployed, and inflation is reportedly above 400 percent.
In addition, protests have been taking place in the country in opposition to Venezuelan President Nicolas Maduro's administration, during which at least 55 individuals have been killed. On May 24, Maduro released plans to redraft the Venezuelan constitution and to delay regular elections until the end of the year, leading to even more protest in Caracas.
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On May 29, Julio Borges -- the president of Venezuela's opposition-run Congress -- wrote a letter to Goldman Sachs President Lloyd Blankfein expressing his discontent with Goldman Sachs' purchase.
"Goldman Sachs' financial lifeline to the regime will serve to strengthen the brutal repression unleashed against the hundreds of thousands of Venezuelans peacefully protesting for political change in the country," the letter said in part, according to Fortune.
"Given the unconstitutional nature of Nicolas Maduro's administration, its unwillingness to hold democratic elections and its systematic violation of human rights, I am dismayed that Goldman Sachs decided to enter this transaction," it continued.
In addition, the letter stated that the Venezuelan Congress will investigate the transaction and that Borges will recommend that the Venezuelan government not recognize or pay the bonds.
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On May 29, Goldman Sachs issued a statement regarding the purchase.
“We bought these bonds, which were issued in 2014, on the secondary market from a broker and did not interact with the Venezuelan government,” the statement said, according to The Guardian. "We recognize that the situation is complex and evolving and that Venezuela is in crisis. We agree that life there has to get better, and we made the investment in part because we believe it will."
The Guardian reports that while the bank did acknowledge the purchase, it did not comment on its details.