In compliance with the principles of transparency, accountability and responsibility in the exercise of public functions, the Office of the Special Prosecutor of the Republic, through communication PER-P-274 of June 30th, submitted to the consideration of the Board of Directors of the National Assembly the administrative report that summarizes the activities carried out since June 25th, 2020, date of the assumption of functions of the current head of this organism of the Interim Government, until June 25th of this year. Among the activities of defense and representation of the rights and interests of the Republic, of State companies, and of the other decentralized entities of the Public Administration abroad, documented in said report, the following stand out:
1. The tasks related to the control of the main lawsuits and arbitrations initiated against the Venezuelan State abroad have been maintained with a very small group of legal professionals; which implies direct intervention in the setting and review of legal strategies, as well as in the review of briefs, demands, motions, answers, replies, evidence (discovery), resources and other procedural actions, providing suggestions, questions, correcting, correcting , or giving approval to the actions of the different law firms.
2. Even in the face of the disadvantageous situation derived from the illegal and unconstitutional actions of the Maduro-Chavista dictatorship, as a consequence of the actions of the Attorney General’s Office, undeniable achievements have been obtained in the emblematic gold trials in London and in the protection of Citgo, as well as decisions that have allowed to achieve large reductions in debts and amounts demanded.
3. In the United Kingdom, where there is litigation directly against the dictatorship for the control of the gold deposited in that country for an approximate value of two billion dollars (US $2,000,000,000.00), a favorable first instance decision was reached in 2020, and its review before the Supreme Court of Justice, where even the British Government has intervened to establish its position in this regard. The holding of the oral hearing prior to the final decision is scheduled for this current July, so a decision is expected this year.
4. Regarding Citgo: despite the fact that since 2018 a judicial (executive) embargo of shares owned by PDVSA was decreed against the company PDVHolding (owner of Citgo), under the theory that PDVSA was used by Maduro’s regime as alter ego of the Republic (Crystallex case) up to now, with the protection of the United States Government and judicial actions in multiple instances, it has been possible to prevent the process of selling the shares. Currently, despite having been ordered to “advance” some steps for that sale, an important appeal is being processed on the merits of the matter, which could ultimately annul the aforementioned embargo. Regarding the same argument of the alter ego, which intends to execute other obligations of the Republic regarding PDVSA’s assets, two important judicial decisions have recently been obtained, according to which said theory must be proven on a case-by-case basis and taking into account the current circumstances, which implies the possibility that said argument will be rejected given the circumstances of the new government that must not be confused with the administration and commercial operations of PDVSA when under Maduro’s control. This would prevent further attacks on Citgo for obligations of the Republic in the future.
5. In the same vein, it is recalled that Maduro pawned Citgo shares to guarantee the so-called PDVSA 2020 Bonds, whose issuance was categorically rejected by the legitimate National Assembly in 2016 and expressly declared invalid in 2019, therefore a lawsuit was enjoined in New York to declare the nullity of said bonds and the guarantee. Again, with the protection of the United States Government, and through the actions exercised, the execution of the pledge and the automatic loss of the aforementioned actions have been prevented. The process is currently on appeal on the New York Court of Appeals. In parallel, Citgo’s protection, granted by the OFAC, will most likely be extended for another six (6) months after July 21st, 2021.
6. In addition to these emblematic processes, trials and arbitrations have been attended for claims that exceed forty billion dollars (40,000,000,000.00 US $), and decisions have been reached that have effectively reduced claims and penalties, that is, the Venezuelan State will no longer have to pay large sums of money by virtue of having achieved, in specific cases, a reduction in the capital owed, interest reduction, elimination or reduction of professional attorneys’ fees, and elimination or reduction of costs and procedural costs. These decreases exceed twenty billion dollars (20,000,000,000.00 US $).
7. It has been specified, with detailed records and reports, the account status of debts and financial obligations derived from professional fees with law firms caused from the very beginning of the Interim Government and those payments have begun to be honored in an orderly fashion. In this context, due to negotiations carried out by the Special Prosecutor’s Office with the law firms that represent us in trials and arbitrations, discounts were obtained in the professional fees owed of more than two (2) million dollars. In addition, an expenditure budget was prepared, on a case-by-case basis, until December 2021, to attend the trials and arbitrations currently underway, whose approval is pending by the National Assembly.
8. In the largest trial (arbitration) currently facing the Republic, two important decisions have been obtained that have rejected more than 70% of the claim, and a procedure for nullity is currently being verified before ICSID of the award rendered in favor of Conoco Phillips in the Petrozuata case (US $ 8,523,000,000.00 + interest). The final decision could come in the second half of 2022.
9. The attitude of creditors, mostly bondholders, who have initiated aggressive actions to enforce judgments not against PDVSA, but against assets of other entities such as bank accounts, has been detected – and the corresponding organization of the defense abroad of the Republic and the BCV is being prepared.
10. Preliminary hearings have been attended in trials initiated against the Republic before the Supreme Court of Justice in exile, in which must be highlighted the functional incompetence of the Special Prosecutor’s Office to act in those trials as they are internal processes. It has been requested the suspension of these processes so that the respective claims are processed once the usurpation has ceased and the transitional justice mechanisms have been installed.
11. An intense activity of legal advice and legal support has been carried out for the Presidency in Charge, the Center of Government, the Ad-hoc Boards of State companies and the National Assembly, which has included the drafting, opinion or revision of draft laws and regulations, contracts and other legal opinions.
12. An internal control system has been designed with precise protocols for the analysis of the rationality of the invoices presented by the law firms that have been representing the Venezuelan State abroad in trials and arbitrations for the protection and recovery of public assets. This is being used to process the invoices before the Expense Administration Commission for payment.
13. The hiring of law firms is being implemented under the modality of payment of fees for results to intervene in criminal proceedings against Venezuelan citizens under trial in the United States courts for crimes of corruption, money laundering and organized crime, in order to procure compensations in favor of the Venezuelan people, victims of such crimes against the public patrimony.