The Blog

Oil for the Poor

Hugo Chávez and Joe Kennedy team up.

12:00 AM, Apr 19, 2007 • By JOSEPH LINDSLEY
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WHETHER YOU'RE A NEW ENGLANDER who is forced to wear two pairs of longjohns in the winter to keep warm or a Londoner who has trouble ponying up bus fare for the daily commute, worry no more: You can look to the leader of the Bolivarian revolution for succor.

For instance, Venezuelan president Hugo Chávez has been offering discounted heating oil through former congressman Joseph Patrick Kennedy's nonprofit Citizens Energy Commission. And in February Chavez orchestrated a deal with London mayor Ken Livingstone in which the prosperous British capital will provide teeming Caracas with planning consultation on matters ranging from traffic flow to recycling in return for discounted fuel. That fuel will enable half-price bus fares for 250,000 down-on-their luck workers. But why is a nation where 37 percent of the population lives below the poverty line helping the United States and the United Kingdom, where 12 and 17 percent of the people, respectively, live in poverty--and where the standards of living are much higher?

According to Fadi Kabboul, the minister counselor for petroleum affairs at the Venezuelan embassy in Washington, most of Chavez's oil charity generally extends to nations that "have similarities with us," that is, countries with "state-owned companies." These nations include Brazil, Spain, Russia, China, Argentina, Vietnam, Uruguay, and, Belarus. According to Chavez's own claim, the Bolivarian republic provides 200,000 barrels a day to its Latin American neighbors--more financial aid than the United States offers, he says. Why? "We're sick of being [America's] backyard where they toss their garbage. That's over." Chavez has touted this on this weekly radio show: "Venezuela, as modest as it is, is helping Latin America much more than the United States."

ENTER JOE KENNEDY. After Hurricane Katrina led to a spike in the cost of oil, Kennedy's Citizens Energy Corporation (from which the ex-congressman earns $400,000 a year) appealed to various energy firms for donations. Only one responded: Houston-based Citgo, which is owned by the Venezuelan state energy firm, Petroleos de Venezuela, SA.

Since Kennedy started CEC in 1979 to alleviate the cost of heating for needy New Englanders, Venezuela has been a major donor. But this time the Caracas charity has been controversial, given Chavez's public disdain for the U.S. government. Despite much criticism of Kennedy for accepting the offer, U.S. Energy secretary Sam Bodman endorsed the program last year: "I can't find my way clear to object to Venezuela being charitable," the secretary said. "I view it as a charitable contribution, and I wish more companies did it."

Kabboul says that Hurricane Katrina "was the awakening of Venezuela." The images of dispossessed New Orleanians--most of them African American--opened the eyes of Chávez to the poverty of many Americans. And, despite leading a nation suffering from severe poverty, Chávez made an offer of charity through Citgo. Olivia B. Goumbri, executive director of the Washington-based Venezuela Information Office, says that since the beginning of the program, over 400,000 families throughout America have been helped. It is supported in Philadelphia by Rep. Chaka Fattah, in Boston by Rep. William Delahunt, in Brooklyn by Rep. Jose Serrano, and in Harlem by Rep. Charlie Rangel. In Alaska, 150 villages have accepted aid totaling $5.2 million.

There have been some objectors. Four Alaskan villages, all members of the Aleutian Pribilof Islands Association, said no thanks in the name of American patriotism. While Florida's state toll road authority has an exclusive contract with Citgo through 2008, the state now advertises other nearby gas stations--and doesn't charge drivers to exit the turnpike to purchase non-Citgo fuel. Last September, 7-Eleven stopped selling Citgo gasoline, and there is a movement in Boston to topple the neon Citgo sign in Kenmore Square. (Since 2003, nearly all the top Citgo executives have resigned, due to concerns about the company's fiscal integrity arising from Chávez's interference. In 2004, when Citgo moved from Tulsa to Houston, the new Venezuelan executives, one of whom is closely allied with Chávez, installed a bullet proof chamber in the corporate headquarters.)

A January article in the Nation reported that "Venezuela has encouraged . . . citizen diplomacy by bringing beneficiaries of the heating-oil program to Caracas." About 60 recipients of the discounted oil journeyed to Venezuela in April 2006, though others declined the offer. At least one of the travelers made an appearance on Chávez's weekly radio show, during which, "he spent four hours explaining how Venezuelan oil reserves could be used to build stronger relationships with people in other nations," according to the Nation.