US targets Maduro food aid program for 'unbelievable fraud' in latest round of pressure

PHOTO: Yukpa indigenous children, some of them suffering from malnutrition, are fed with supplements provided by CARITAS organization, at Los Angeles del Tukuko mission, near Machiques, Zulia state, Venezuela, July 5, 2019. PlayYuri Cortez/AFP/Getty Images, FILE
WATCH News headlines today: Oct. 18, 2019

The U.S. is taking on Venezuelan President Nicolas Maduro's public food assistance program with new sanctions, alleging "unbelievable fraud," according to a senior Trump administration official.

The latest round of sanctions comes six months after Venezuela's opposition-controlled National Assembly moved to expel Maduro from power in a U.S.-backed vote. But despite consistently rising U.S. economic pressure, Maduro remains in control in the country, with strong military support.

The U.S. Treasury Department targeted 10 people Thursday, including Maduro's three stepsons and a Colombian "profiteer" Alex Saab, and 13 businesses owned by Saab or his partners for an alleged scheme of bribes and kickbacks that stole money from Maduro's food subsidy program called Local Committees for Supply and Production, also known by its Spanish acronym CLAP.

PHOTO: Kevin Gonzalez searches for food in the trash, on a sidewalk in Caracas, Venezuela, July 16, 2019. Rodrigo Abd/AP
Kevin Gonzalez searches for food in the trash, on a sidewalk in Caracas, Venezuela, July 16, 2019.

Saab and his partners allegedly sold food to CLAP at inflated prices and earned hundreds of millions of dollars -- even as Venezuela struggles with a humanitarian crisis that has left millions struggling for food, medicine, clean water and consistent electricity, according to the Trump administration.

Saab allegedly bribed Maduro's stepsons Walter, Yosser, and Yoswal Gavidia for CLAP contracts, buying food from his companies based in Hong Kong and Mexico and skimming funds off the top, per senior administration officials who briefed reporters on Thursday. Those profits were allegedly used to pay kickbacks and win more contracts. Saab is also accused of helping the Maduro government sell Venezuelan gold reserves overseas as it became increasingly cash-strapped.

The new sanctions freeze any U.S.-based assets held by members of the alleged food assistance scheme. That includes a luxury apartment in Miami and a Delaware-based company, according to senior administration officials, who declined to say beyond that how much their assets were worth.

PHOTO: Venezuelas President Nicolas Maduro speaks during a meeting with military high command members in Caracas, Venezuela, July 24, 2019. Miraflores Palace/Reuters
Venezuela's President Nicolas Maduro speaks during a meeting with military high command members in Caracas, Venezuela, July 24, 2019.

Rocked in recent years by economic mismanagement, corruption and a political crisis, Venezuela -- once one of the richest countries in the Western Hemisphere -- has seen its economy collapse with sky-high inflation. Taking power in 2013 after nearly 15 years of socialism under Hugo Chavez, Maduro has sought to consolidate power and crack down on political opposition, to which the Trump administration has responded with increasingly tough sanctions.

In January, the opposition-controlled Venezuela National Assembly voted to declare Maduro illegitimate and install its leader, Juan Guaido, as interim president -- a move immediately recognized by the U.S. and eventually over 50 other countries.

But with the military's leadership and fire power still behind him, along with allies like Russia and Cuba, Maduro has retained control in the face of sporadic flurries of protests, some of which have turned deadly. He has accused the U.S. of orchestrating a coup to take him out, and blocked any American or Western aid claiming it is part of some conspiracy.

The international community has managed to move in some 800 tons of aid anyway, according to the State Department, and the administration denies that sanctions have had a damaging effect on the Venezuelan people because they include exemptions for food and medicine.

PHOTO: Yukpa indigenous children, some of them suffering from malnutrition, are fed with supplements provided by CARITAS organization, at Los Angeles del Tukuko mission, near Machiques, Zulia state, Venezuela, July 5, 2019. Yuri Cortez/AFP/Getty Images, FILE
Yukpa indigenous children, some of them suffering from malnutrition, are fed with supplements provided by CARITAS organization, at Los Angeles del Tukuko mission, near Machiques, Zulia state, Venezuela, July 5, 2019.

"By trying to close this [scheme] off, we are not diminishing the amount of food available to Venezuelans. We are increasing it because what we're trying to do is to say the Venezuelan people who are paying for this should be getting 100% on the dollar's worth of food, instead of Alex Saab and his cronies stealing a very high proportion of it," said a senior Trump administration official.

As Maduro continues to hold on, the opposition's hopes of seizing power have turned to negotiations between the two sides, with some recent signs of progress.

But the U.S. has been reluctant to support that process, arguing Maduro cannot be trusted to talk and must vacate power immediately. On a tour of Latin America, Secretary of State Mike Pompeo said Saturday it was "incomprehensible" that a transition to democracy could happen with Maduro still in the country.

"Maduro will never govern that country again. It will not happen," he said the day prior, in Buenos Aires, Argentina.