To hear President Donald Trump say it, he’ll have a sort of slush fund of billions of dollars from Venezuelan oil that he can dole out as he sees fit.
To hear President Donald Trump say it, he’ll have a sort of slush fund of billions of dollars from Venezuelan oil that he can dole out as he sees fit.
In a Tuesdaysocial media post, Trump announced that interim leaders in Venezuela would turn over 30 million to 50 million barrels of oil, which the US would sell at a market rates instead of the discount rate at which Venezuela has been allowed to sell its oil.
“…And that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States!” Trump added.
On Wednesday, Trump said in afollow-up postthat Venezuela, which is still led by Maduro allies, would only buy American-made products with proceeds from its oil, which would be a real reversal after years of American sanctions against companies selling to Venezuela.
CNN reported Wednesday that the administration is scrambling to formulatea makeshift strategy for Venezuela’s oilthat doesn’t destabilize the country. In comments to The New York Times, Trump said the US could be effectively running the country and its oil market for years.
But rather than use the Treasury Department to facilitate the sale of Venezuelan crude, the Trump administration could, according to CNN’s report, “utilize a collection of international oil traders and offshore bank accounts to sell the oil and manage the resulting cash.”
Presidents aren’t usually supposed to have slush funds —Article 1 of the Constitutiongives Congress the power to raise and spend funds on behalf of taxpayers.
But the fungible use of money — taxpayer and otherwise — has been one of the main goals of Trump 2.0. He claims to be using revenue from tariffs for a wide variety of different things it could not conceivably cover.
► Rather than have taxpayers rebuild the East Wing after hedemolished it for a ballroom, he has instead sought patrons from the private sector, raising serious questions about conflict and favor.
► He has made good on a campaign promise to impound funds earmarked by Congress forforeign aid, a test of the law so far allowed by compliant lawmakers and conservatives on the Supreme Court.
► The US government is also taking a stake in public companies in an unprecedented way on Trump’s watch.
In terms of Venezuela’s oil, it’s important to remember, as details emerge, that much of what comes out of Trump’s mouth is drastically oversimplified.
Asked whether Trump had the authority to seize and sell oil, House Speaker Mike Johnson — whose Congress should theoretically have a say in how the money is spent by the government — said lawmakers are still reviewing things and noted that the fact the oil is sanctioned gives the administration more leeway to seize it.
“There are a lot of ideas,” Johnsontold reporterson Capitol Hill Wednesday. “There’s some brainstorming being done out loud by all sorts of people, many of whom are not even authorized to have these conversations.”
But Johnson said he’s confident there are “steady hands” at the wheel.
Secretary of State Marco Rubio was a bit more clear after a briefing for senators on Wednesday when he explained that controlling the sale of its oil is how the US will control Venezuela.
The interim leaders will essentially be getting a better deal by selling the oil at market rates than at the cut rates they were subjected to under long-standing US sanctions. And selling the oil will also end the effective total embargo — Rubio called it a quarantine — that will otherwise starve their government.
“Understand they are not generating any revenue from their oil right now,” Rubio said. “This is tremendous leverage. We are exercising it in a positive way.”
The money, according to Rubio would be handled “in a way that benefits the Venezuelan people, not corruption, not the regime.”
The Trump administrationhas told Venezuelais must also cut ties with Iran, Russia, China and Cuba.
In public,Rubio saidVenezuela’s oil would be opened up to the market “in a way that’s fair.”
That rhetoric is at odds with that of Trump, who projects that the oil will be used to benefit the US.
White House press secretary Karoline Leavittgave even more detailthan Rubio at a briefing, telling reporters the oil was already being marketed “in the global marketplace for the benefit of the United States.”
Proceeds, she said, “will first settle in US-controlled accounts at globally recognized banks to guarantee the legitimacy and integrity of the ultimate distribution of proceeds, and those funds will be disbursed for the benefit of the American people and the Venezuelan people, at the discretion of the United States government.”
The argument for essentially putting the money in escrow in foreign accounts is to make clear that it is ultimately Venezuela’s money.
Energy Secretary Chris Wright, who will be at the forefront of US efforts on Venezuela’s oil, has saidon CNBCthat the benefit to the US would be to “reduce the risks to the American people of the giant criminal activity coming out of (Venezuela).”
Suffice it to say that Trump believes he will be controlling the cash. Rubio said the processing of all of this oil — bringing it to US ports, finding buyers for it — won’t cost taxpayers anything.
The idea that all this Caribbean adventurism won’t cost money is also important to the Trump administration.
Rubio argued the entire Venezuelan operation — the snatch-and-grab of Maduro by the US Army’s Delta Force and the Caribbean blockade by the US Navy — isn’t a drain on taxpayer dollars.
“These ships, if they weren’t in the Caribbean, they’d be somewhere else conducting activity,” Rubio said. “That’s what the Navy does.”
It is oil companies, not taxpayers, that will be relied upon to eventually scale up Venezuela’s oil production, Trump told NBC News. But they will be “reimbursed by us or through revenue.”
Thay may not be a direct taxpayer subsidy, but it is certainly an expectation that the deal will be worth the oil companies’ while.
Lawmakers have already used spending to bring the administration in line. Attaching conditions to Defense Secretary Pete Hegseth’stravel budgetin December is how lawmakers pressured the Pentagon to share with them unedited video of a controversial “double-tap” strike on an alleged boat strike.
If nothing else, this is the latest example of the Trump administration blending private enterprise with government action in a new way for Americans.
He wants to create a sovereign wealth fund like those utilized by Saudi Arabia and, to some extent, Norway, to take stakes in companies.
The US has already taken stakes instruggling tech giant Inteland other companies, giving the government new sway over otherwise public companies.
Trump wants the US to get 15% ofAI giant Nvidia’s profitsin the sale of advanced chips to China, sales he greenlit despite national security concerns.
Each of these novel ways Trump is using the presidency raises the same question. Can he do that? But without pushback on Capitol Hill, the answer for all of them is the same: He did.