Goldman under fire for buying Venezuela "hunger bonds"

"Tonight, millions of venezuelans will go to bed hungry and without the possibility of obtaining the medicines that they need, or exhausted and bloody following their legitimate peaceful protests for democracy and the right to vote, as victims of a brutal regime that Goldman Sachs chose to support", he continued.

US State Department Undersecretary for Political Affairs Thomas Shannon said the ultimate goal of the declaration was to "return to full respect for the rule of law, full respect for freedoms of political expression and participation" in Venezuela.

Goldman said its asset-management arm acquired the bonds "on the secondary market from a broker and did not interact with the Venezuelan government".

Once South America's richest country and awash in oil, Venezuela's government under Hugo Chavez and Nicholas Maduro took less than two decades to destroy the nation's democracy and economy. Opponents of President Nicolas Maduro want worldwide investors to avoid such purchases because they help to finance a "government accused of human-rights abuses", WSJ reports.

In New York, about two dozen protesters chanting "Shame on you Goldman Sachs" picketed outside of Goldman's headquarters in lower Manhattan on Tuesday afternoon.

Eduardo Lugo, a student at the City University of NY who helped organize the demonstration, called the deal immoral. “To the markets again: Buying hunger bonds, buying blood bonds is condemning and sentencing the people of Venezuela to starvation and to repression, ” he said in an interview.

In Venezuela, Maduro's critics have for two months staged street protests, which have left almost 60 people dead, to demand he hold early elections.


"We believe there is an worldwide role in the rebuilding of trust among the main political actors in Venezuela as well as the reduction of tensions", Shannon said. “We agree that life there has to get better. We made the investment in part because we believe it will.”.

The Wall Street Journal reported Sunday that the bank has bought US$2.8 billion in bonds from the state-run oil company PDVSA at a steeply discounted price. The government has the power to order the banks to turn over their securities to the central bank in exchange for bolivar-denominated notes, a currency considered all but worthless.

The investment bank stressed that it's not alone in investing in the country.

Fintech didn't respond to a request for comment. In an editorial on Friday, Harvard University economist Ricardo Hausmann - a former planning minister in Venezuela and long-time critic of the current government - called on JPMorgan Chase & Co.to remove Venezuela from its bond indexes so investors tracking the gauges aren't compelled to buy those notes.

At a news conference, Borges asked for "help" from European Union institutions so that "those who have violated human rights are also hit with sanctions". According the Bloomberg report, Botti was the one who originally described the Venezuelan bonds as "hunger bonds" in a tweet sent past year.

According to Reuters, Goldman Sachs acquired the bonds from New York-based investment firm Dinosaur Financial Group. They object to the Supreme Court's recent decision to suspend the powers of the National Assembly (controlled by the opposition), which they consider to be an undemocratic act that violates the Constitution.


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