At PDVSA, the costs of corruption extend to bond swaps

While the instability in the worldwide price in crude oil is certainly a reason for some forbearance by the bond holders, The Man From FCPA also sees the insipid hand of corruption at play. The Venezuelan government has been alleged to have engaged in high level and significant amounts of corruption. PDVSA specifically is recognized as a corrupt entity. Anyone in the energy space has either heard the rumors or worse, experienced how the Venezuelan government used the entity as not only a cash machine but also an extra-curricular machine to create cash to fund bribery and corruption. It was so bad that Wall Street Journal had reported that it took the bribe of a Rolex watch to secure a meeting with mid-level PDVSA officials. More…