The Foreclosure of a Country

SIR TERRYNCE

There is a glitch in the Venezuela story that most people are missing. The official line is that we captured a dictator to "restore democracy" and "stop drugs." But those reasons don't explain the timing. There is a $13 billion transaction happening right now that does. It’s called the Citgo Auction. 

Most people don’t realize that Venezuela’s "crown jewel"—the massive Citgo refinery network—is being sold off in a Delaware court this month. It’s a forced liquidation to pay creditors, but the auction had been frozen for years by political chaos. The capture of Maduro didn’t just change the regime. It cleared the title so the sale could close.

The winning bidder isn’t an oil major or a democracy activist. It’s Amber Energy, an affiliate of Elliott Management. That is Paul Singer’s fund, the most feared "vulture capitalist" in the world, famous for seizing sovereign ships to collect old debts. He isn’t betting on freedom. He’s closing a distressed asset deal.

 The timeline tells you everything you need to know. The sale to Elliott was approved by the court late last year, but it needed a "change in political circumstances" to finally clear regulatory hurdles. Maduro was the obstacle blocking the transfer. His capture on January 3rd wasn’t a police action. It was the final signature on the closing documents.

This reframes the entire operation. We aren't watching an episode of Law & Order; we are watching a foreclosure. The legal doctrine allowing the capture turns a President into a defendant, but the economic doctrine is simpler. It's a distressed asset restructuring with a military escort.

The playbook is the same one private equity uses for a failing mall, just scaled up to a sovereign nation. You depress the asset value with sanctions, buy the debt for pennies on the dollar, and use the courts to force a liquidation. Then you send in the troops to evict the tenant so you can collect at face value. It’s a leveraged buyout with an air force.

If you look at who is getting paid, the "democracy" frame falls apart completely. It isn't voters waiting in line; it's a queue of corporate creditors like Crystallex, ConocoPhillips, and Siemens, with Elliott Management at the front. Marco Rubio isn't representing a constituency here. He's processing a payout.

There is a simple way to prove the drug war angle is just wallpaper. Two weeks ago, the administration pardoned Rubio’s own brother-in-law for cocaine trafficking. You don't pardon traffickers while invading a country to stop trafficking. The drug story is decoration. The $13 billion asset transfer is the load-bearing wall.     That’s why the bonds rallied before the raid. The market wasn't guessing about justice; it had inside information about the closing date. Power is just physics with a spreadsheet, and the spreadsheet says the auction is finally closed.