Goldman Sachs should be ashamed for throwing a lifeline to Venezuelan regime

(Photo: Ariana Cubillos AP)

If there were a gold medal for corporate social irresponsibility, it should be awarded to the Goldman Sachs investment bank for its decision to extend a $2.8 billion lifeline to Venezuelan President Nicolas Maduro’s repressive regime.

According to a May 28 report in The Wall Street Journal, Goldman Sachs Group Inc. bought $2.8 billion in bonds from Venezuela’s PDVSA state oil monopoly, the government’s main — and virtually only — source of income. The New York-based firm paid 31 cents on the dollar for the 2014 bonds, which means it effectively paid $865 million.

The bond purchase, carried out through an intermediary, in effect means that — if Venezuela doesn’t default — the bonds could yield an interest rate of 19 percent a year, plus capital gains.

While it is not unusual for big investment banks to buy bankrupt countries’ debts, the latest Goldman Sachs purchase raised more eyebrows than usual because it came as Venezuelan President Nicolas Maduro’s regime is facing massive street protests, which have left nearly 60 dead in recent weeks, and amid growing international pressures for the restoration of democracy in that country.

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