Juan Guaido ally says U.S. sanctions on Maduro regime starting to bite

A leading member of Venezuela’s embattled opposition said that the U.S. and international sanctions imposed on the government of socialist President Nicolas Maduro are having a real impact, even if they have yet to drive the regime from power.

Carlos Paparoni is a member of Venezuela’s National Assembly and backer of opposition leader Juan Guaido, whose claim to be the country’s “interim president” is backed by the Trump administration and dozens of countries in the region and in Europe. Even as the Maduro government has dug in while facing a year of protest, Mr. Paparoni insisted on a visit to the U.S. last week that Washington’s oil and financial sanctions, along with travel restrictions for top regime officials, were taking a toll on the leadership.

“The design of Venezuelan sanctions [under President Trump] is different from those that had been applied before,” said Mr. Paparoni, the representative for the office of regional cooperation against money laundering and corruption under Mr. Guaido’s shadow government, in an interview with The Washington Times.

“As long as it continues to hit the financial structure that keeps Nicolas Maduro [in power], we believe that we can continue making progress,” he added.

Mr. Paparoni, acknowledges that the regime has used the ongoing sanctions as “an excuse” for the economic and humanitarian catastrophe facing Venezuela today. And ousting the government will not be a simple matter of winning elections.

“What we see today is that Venezuela, the structures in Venezuela, is not a political structure,” Mr. Paparoni said. “The government of Nicolas Maduro is more like the pyramid structures of organized crime.”

In an event hosted by the Atlantic Council on Friday, Mr. Paparoni said that international terrorist organizations, notably Hezbollah, are bringing illegal money into the country to underwrite the Maduro regime.

“There are deep ties with Venezuela and [terrorist] groups,” he said.

The funds that enter the country through Hezbollah come through commercial transactions as well as contracts with local services that ultimately are kicked back to the Maduro government.

“It’s not that irregular groups came to Venezuela, it is the issue that Maduro is harboring them and offering protection and financing,” he explained.

Dealt a financial lifeline by some of its few remaining allies, Venezuela now has run up massive debts to nations such as Russia and China, and creditors are already seeking payment.

Complicating the standoff between Mr. Maduro regime and Mr. Guaido, private creditors are seeking to seize control of a key gas refiner long run by Venezuela’s state-owned oil company, PDVSA. PDVSA four years ago issued a massive collateralized bond set to mature this year, one that could throw the future of Venezuela’s most prized asset into question.

Houston-based refiner and retailer Citgo, the eighth largest U.S. refiner, has been caught in a tug of war as the Maduro government claims it is their sole international asset with true value.

But for Mr. Guaido, the company and the revenue it generates — some $30 billion in 2018 — are critical to his hopes of underwriting a new, post-Maduro government.,

“Citgo is a key point for the future of Venezuela,” Mr. Paparoni said, adding there was growing fear Mr. Maduro and his aides were using proceeds from the bonds for illicit purposes.

With his regime on shaky ground, Mr. Maduro has begun loosening economic controls and allowing more free-market activity in Caracas, leading to a mini-boom in recent weeks in the capital’s wealthier neighborhoods. But shortages, unemployment and vast disparities of wealth remain the norm for the vast number of Venezuelans, and Mr. Paparoni said a Guaido government would push for major reforms.

“Commerce will be our priority,” he said. “Every investment that is made that will guarantee the development of the country, we will support.”

As for when the Maduro regime will be ousted, Mr. Paparoni says that the timing depends on how seriously the opposition and its allies abroad take the challenge of ousting a leader and regime that have clung to power and defied constitutional norms even as popular support collapses.

“If we keep seeing Maduro as a political structure,” Mr. Paparoni said, “it’s certainly going to take us a lot more time.”