Venezuelans call for protest in New York after Goldman Sachs offers ‘lifeline’ to Maduro

Protesters take cover from the riot police water cannon during a march in Caracas, Venezuela, Monday, May 29, 2017.
Protesters take cover from the riot police water cannon during a march in Caracas, Venezuela, Monday, May 29, 2017. AP

Venezuelan activists are ratcheting up the pressure on Goldman Sachs amid reports that the investment bank bought billions of dollars worth of Venezuelan government bonds, handing the socialist administration a crucial financial lifeline amid spiraling protests.

In a flier making the rounds on social media, the New York chapter of SOS Venezuela is calling for demonstrations in front of Goldman’s New York headquarters Tuesday to protest what it calls the bank’s support of President Nicolás Maduro’s “dictatorship.”

Read More: Cracks in government as death toll in Venezuela mounts

The move comes after The Wall Street Journal reported over the weekend that Goldman had bought $2.8 billion worth of bonds issued by the state-run PDVSA oil company. Citing people familiar with the transaction, the newspaper said the company bought the bonds at 31 cents on the dollar, spending about $865 million.

In a scathing letter to Goldman CEO Lloyd Blankfein, Julio Borges, the president of Venezuela’s National Assembly, called the deal an “outrage” that provides a “lifeline to [an] authoritarian regime that is systematically violating the human rights of Venezuelans.”

“Moreover, the fire sale nature of this transaction is clear evidence the Maduro regime did not have Venezuela’s best interest in mind when conducting this operation,” Borges wrote. “The regime’s decision to conduct this transaction was made under duress driven by its desperate desire to gain resources needed to secure weapons and other instruments of repression in order to stay in power.”

He also said he would also discourage future governments from recognizing the debt.

In an email statement, Goldman Sachs Asset Management team said it bought the bonds, which were issued in 2014, on the secondary market from a broker and did not interact with the Venezuelan government.

“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 company said.

Read More: Venezuelan retirement sometimes means picking through garbage

The move comes as anti-government protests, which began April 1, have left more than 55 dead on both sides of the political divide.

The opposition is calling for new elections to overcome the deep social, economic and political crisis. Maduro accuses his opponents of trying to stage a coup and has said he will serve out his current term through January 2019. He’s also pushing for a “constituent assembly” to overhaul the 1999 constitution.

While Maduro and his socialist administration frequently denounce “savage capitalism” and Wall Street, the government is desperate for cash.

Henrique Capriles, the opposition governor of Miranda State, said he and his team were beaten by security forces as they marched on Monday. And he feared Goldman’s investment would only make things worse for protesters on the street.

“Why do they need this money?” Capriles asked. “To buy bombs and war supplies that are running out? To finance a fraudulent electoral campaign? Or to buy the food and medicine, which is what people need.”

The opposition is calling for additional protests Tuesday and Wednesday.

Follow Jim Wyss on Twitter @jimwyss