Is Citgo Program for Poor, or for Chávez?

Joseph P. Kennedy II, chairman of Citizens Energy, launched a program with Citgo last fall to provide discounted heating oil.
Joseph P. Kennedy II, chairman of Citizens Energy, launched a program with Citgo last fall to provide discounted heating oil. (By Charles Krupa -- Associated Press)

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By Jeffrey H. Birnbaum and Steven Mufson
Washington Post Staff Writers
Saturday, February 24, 2007

Citgo, the Venezuela-owned oil company, is running television commercials across the United States promoting the discounted heating oil it provides to low-income people -- but some are wondering whether the ads are really promoting the South American country's leader.

The company said the ads, some of which feature former Massachusetts congressman Joseph P. Kennedy II, are designed to persuade families to sign up for the charitable program. Critics of Venezuela, however, see both political and economic motives -- primarily to enhance the image of the country's leftist leader, Hugo Chávez, and thereby improve the company's standing with U.S. consumers.

A new wave of ads shows Americans expressing gratitude for the program.

Citgo said it is giving a 40 percent discount on 100 million gallons of heating oil to up to 1.2 million Americans this winter. Last winter, U.S. households that used heating oil consumed an average of 585 gallons, according to Department of Energy figures.

Citgo spokesman Fernando Garay said the program was part of Citgo's "very strong tradition of giving back to the community." The current effort was particularly motivated, he said, by the recent spate of hurricanes and other weather-related disasters in the United States, which have boosted oil prices.

"It's a good thing to provide concessionary oil to the people in the United States," said Bernard Aronson, former assistant secretary of state for inter-American affairs. "But if the price of that is to rationalize the loss of political liberty for the people in Venezuela, that's not a fair price and it's a betrayal of the people of Venezuela."

An unusual aspect of the program is its widely seen commercials. Garay declined to say how much the company was spending on the ads, but said they are running in 16 markets around the nation where the heating oil is being distributed, including the Washington area. The ads started in mid-November and will continue until mid-March, he said.

Some observers, while praising the program's generosity, believe that more is involved than good deeds. Chávez, who recently won reelection and then said he intends to exert state control over strategic industries, has allied himself with such U.S. enemies as Iran and Cuba. He also has been outspoken in his opposition to the Bush administration's foreign policy.

"It's naive to think that there's not a political motive behind the ads by the Chávez government," said Michael E. Shifter, vice president for policy at the Inter-American Dialogue, a policy forum on Latin America and U.S. relations. "Chávez wants to be seen as the good guy and also to needle and embarrass the Bush administration that the richest country in the world can't take care of its own people."

Otto Reich, a former U.S. special envoy to the Western Hemisphere, said he believes the company hopes to benefit as well: "Citgo is probably concerned that the Chávez image will affect its image."

In a telephone interview in November, Kennedy, who heads Citizens Energy, a nonprofit group that helps poor people grapple with higher energy costs, said that in 27 years of providing heating oil assistance, he had never received a price break from an OPEC country or major oil company.

"I have tried and written every single member of OPEC and every single major oil company and asked for a little bit of a price break," Kennedy said. "Shouldn't we be encouraging people to be doing this sort of thing? Isn't this the sort of compassionate conservative movement we thought would be taking over the world at this point?"

Kennedy added that there was an element of good business sense about Venezuela's assistance.

"It's not only morally righteous, it's good business," he said, "when you're selling the world's largest market a gigantic percentage of your overall sales in crude oil, to take a little percentage and show that . . . you have concerns about how low-income people are going to keep up with the enormous price of keeping warm."


© 2007 The Washington Post Company

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