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U.S. slaps new sanctions on Venezuela, fugitive mayor defiant

Demonstrators block a street at a rally against Venezuela's President Nicolas Maduro's government in Caracas, Venezuela August 8, 2017. REUTERS/Marco Bello

By Hugh Bronstein and Matt Spetalnick

CARACAS/WASHINGTON (Reuters) – Washington imposed sanctions on eight Venezuelan officials on Wednesday for their role in creating an all-powerful legislative body loyal to President Nicolas Maduro, while a mayor-turned-fugitive called for more anti-government protests.

The new U.S. sanctions targeted politicians and security figures but stopped short of actions against Venezuela’s vital oil industry. Energy sector sanctions, which could cripple Venezuela’s already ailing economy, are still being considered, U.S. officials said.

The sanctions followed Friday’s installation of a legislative superbody known as the constituent assembly, made up entirely of allies of the ruling Socialist Party and armed with the power to re-write the constitution.

The assembly’s first action was to fire Venezuela’s chief prosecutor, who had accused Maduro of human rights abuses, confirming opposition fears that the assembly would purge the government of dissenting voices.

Maduro’s loyalist Supreme Court has, meanwhile, stepped up the prosecution of opposition politicians including Ramon Muchacho, mayor of the wealthy Chacao district of capital city Caracas.

Muchacho appeared in a video shot from a secret location after the court removed him from office and sentenced him to 15 months in prison on Tuesday for failing to halt anti-government protests in his district.

“To all Venezuelans, the message is to continue in this struggle,” said a bearded Muchacho, clad in a white T-shirt emblazoned with the Venezuelan flag and appearing before a plain white backdrop. The video was circulated on social media.

Chacao has been the epicenter of demonstrations against Maduro and Muchacho’s video could help breathe new life into the protest movement. The massive street protests seen before the election of the assembly have lost steam while anti-Maduro activists try to draw up a strategy for the future.

The Supreme Court said on Wednesday via Facebook that it had sentenced David Smolansky of the El Hatillo district of Caracas to 15 months in prison, fired him from his post and ordered his arrest. Smolansky, the fifth mayor to face such sanctions this year, was also accused of defying an order to prevent opposition protests from blocking streets.

FROZEN ASSETS

The sanctions unveiled Wednesday will freeze U.S. assets of the officials targeted, ban them from travel to the United States and prohibit Americans from doing business with them. Among those named was constituent assembly member Adan Chavez, brother of the late socialist leader Hugo Chavez.

“We absolutely reject this act of aggression by the North American empire, by the government of Washington, and we do not recognize any sanction against the people of Venezuela,” said Foreign Minister Jorge Arreaza in a televised broadcast.”

“Venezuela cannot be sanctioned by anything or anyone.”

Washington clamped sanctions on Maduro himself last week following actions against 13 Venezuelan figures last month.

Experts say individual sanctions have had little or no impact on Maduro’s policies and that broader oil-sector and financial sanctions may be the only way to make the Venezuelan government feel economic pain.

More than 125 people have died in violence since the opposition began a sustained wave of protests in April. Met by rubber bullets, water cannon and tear gas fired by the National Guard, the protesters say the crisis demands an early presidential election that they are sure Maduro would lose.

His popularity has been pounded lower by triple-digit inflation and acute food and medicine shortages which Maduro blames right-wing conspirators in league with the U.S. “empire”.

The opposition, which gained control of Venezuela’s congress in 2015 only to see its decisions nullified by the Supreme Court, boycotted the July 30 election of the legislative superbody known as the constituent assembly.

Maduro says the 545-member assembly will bring peace and prosperity to Venezuela. Laws passed by the new body will not need approval from Venezuela’s traditional congress, which met on Wednesday to discuss the region’s response to the new body.

In a joint declaration released on Tuesday, countries including Canada, Brazil, Argentina, Mexico, Chile and Colombia condemned the “breakdown of democratic order” in Venezuela and said they would not recognize any action taken by its “illegitimate” new constituent assembly.

(Additional reporting by Corina Pons, Eyanir Chinea, Diego Ore, Deisy Buitrago, and Girish Gupta; Editing by W Simon and Tom Brown)

Venezuela inflation quickens to 248.6 percent in year to July: opposition

CARACAS (Reuters) – Inflation in Venezuela’s crisis-hit economy quickened to 248.6 percent in the first seven months of the year, the opposition-led congress said on Wednesday in the absence of official data.

Economic hardship in Venezuela, where there are severe food shortages, is fueling unrest that has led to over 120 deaths in the last four months.

Various factors underlay the seven-month price rise, including a lack of U.S. dollars in the country, a sharp weakening of the bolivar currency, and political uncertainty, opposition lawmaker Angel Alvarado said.

He noted that monthly inflation was quickening, with the rise reaching 26 percent in July versus 21.4 percent in June.

President Nicolas Maduro’s government has not published official data for more than a year.

Government opponents say Maduro and his predecessor, Hugo Chavez, have wrecked a once-prosperous economy with 18 years of state-led socialist policies ranging from nationalizations to currency controls.

The government says it is victim of an “economic war” led by opposition-linked businessmen.

(Reporting by Corina Pons; Writing by Alexandra Ulmer)

Venezuela stands by election count despite fraud allegation

Venezuela's President Nicolas Maduro (2nd R) speaks during a meeting with members of the Constituent Assembly in Caracas, Venezuela August 2, 2017. The text in the back reads, "Heroic Venezuela". Miraflores Palace/Handout via REUTERS

By Hugh Bronstein and Cassandra Garrison

CARACAS/LONDON (Reuters) – Venezuela’s president rejected accusations on Wednesday that his government inflated turnout figures from its constituent assembly election, branding them part of an effort to stain what he called a clean and transparent vote.

The company that provides the country’s voting machines said that the government’s claim that 8.1 million votes were cast in Sunday’s poll overestimated the tally by least 1 million.

President Nicolas Maduro also criticized the accuracy of a story reported by Reuters that only 3.7 million people had voted by 5:30 p.m. on Sunday, according to internal electoral council documents, compared with the total 8.1 million ballots counted by authorities.

The documents, which break the data down into Venezuela’s 14,515 polling centers, show that 3,720,465 people had voted by 5.30 p.m. Voting ended at 7 p.m. and election experts said doubling the vote in the last hour and a half would be unlikely.

“We stand by our story,” Reuters global communications chief Abbe Serphos said in an email.

Maduro was defiant.

“This election cannot be stained by anyone, because it was a transparent vote, audited before, during and after the ballots were cast,” he told a televised gathering of supporters.

Electronic voting technology firm Smartmatic, which created the voting system that Venezuela has used since 2004, said the turnout figures had been tampered with.

“We know, without any doubt, that the turnout of the recent election for a National Constituent Assembly was manipulated,” said Smartmatic Chief Executive Antonio Mugica in a press briefing in London, without providing details of the company’s methodology.

“We estimate the difference between the actual participation and the one announced by authorities is at least 1 million votes,” he said.

The opposition, which boycotted the vote, has dismissed the official tally as fraudulent. A high turnout was seen as crucial for leftist Maduro to legitimize the election in the face of wide international criticism.

The assembly will have the power to dissolve the opposition-run congress and is expected to sack the country’s chief prosecutor, who has harshly criticized Maduro this year.

Maduro on Wednesday said the newly-minted superbody will also have the power to strip members of congress of their immunity from prosecution. On Tuesday security forces jailed two of Maduro’s leading critics in a fresh blow to the opposition.

Countries around the world have condemned the assembly as a bid to indefinitely extend Maduro’s rule. He is widely criticized for an economic crisis marked by triple-digit inflation and chronic shortages of food and medicine.

OIL WORKERS MARCH

Maduro says the assembly is necessary to give him the powers needed to bring peace to the country after more than four months of opposition protests punctuated by violent clashes between security forces and hooded demonstrators. More than 120 people have been killed since the unrest began in April.

Maduro said delegates of the 545-member assembly will have their first official session on Friday. The opposition called for a new round of protests on Thursday.

Congress has promised to continue holding sessions despite the election of the new assembly. Last month it also named alternate justices to the Supreme Court in defiance of the top court, which has heavily favored Maduro.

Authorities arrested three of those justices, and four others have taken refuge in the residence of the Chilean ambassador in Caracas.

The United States this week called Maduro a dictator, froze his U.S. assets, and barred Americans from doing business with him. Maduro, like his predecessor and mentor, the late Hugo Chavez, regularly laughs off criticism from Washington even though the United States is Venezuela’s top crude importer.

The European Union said it was mulling a “whole range of actions” on Venezuela. But Maduro continues to enjoy public backing from the Venezuela’s military, though soldiers are increasingly weary of the popular backlash against their role in quelling protests.

Oil workers, whom Maduro considers a bedrock of support, rallied in several energy producing regions of the country on Wednesday.

Chanting and carrying the red Socialist Party flag, they denounced sanctions on the leftist president.

“We are here to show our rejection of the intervention of the United States,” one demonstrator said during a televised rally, calling the sanctions “a political show with harmful economic consequences for the people of Venezuela.”

(Writing by Brian Ellsworth, additional reporting by Deisy Buitrago, Corina Pons and Girish Gupta in Caracas.; Editing by W Simon, Tom Brown and Michael Perry)

EU says mulling ‘range of actions’ on Venezuela but sanctions unlikely now

FILE PHOTO: Venezuela's President Nicolas Maduro talks to the media during a news conference at Miraflores Palace in Caracas, Venezuela, June 22, 2017. REUTERS/Marco Bello/File Photo

By Robert-Jan Bartunek and Gabriela Baczynska

BRUSSELS (Reuters) – The European Union is considering a “whole range of actions” in response to rising tensions in Venezuela, a spokeswoman said on Wednesday after the head of the bloc’s parliament called for targeted sanctions against President Nicolas Maduro.

Venezuela jailed two leading Maduro critics on Tuesday in a fresh blow to the opposition after deadly protests erupted around an election last Sunday, prompting the United States to impose sanctions on the leftist president.

Washington and the EU tend to coordinate their sanctions but the bloc has been divided over how to respond. Spain has been the most vocal in advocating sanctions, while others have so far mostly been cautious.

The European Parliament head, Antonio Tajani, joined the small choir calling to punish Maduro.

In a letter Tajani said that following the “unjustified arrests” of opposition leaders Antonio Ledezma and Leopoldo Lopez, he would like to consider “freezing assets and imposing travel ban to the EU to the members of the Venezuelan government including its President, Nicolas Maduro and its entourage”.

Since the bloc needs unanimity to introduce sanctions, diplomats in Brussels said that did not seem imminent.

Catherine Ray, a spokeswoman for the EU’s executive Commission in Brussels, told a news briefing:

“Consultations with member states are ongoing to ensure an appropriate and coordinated response by the EU. Obviously the whole range of actions is (being) discussed.”

Diplomats explained the bloc was working on joint declaration on Venezuela, where clashes last Sunday marred the election of a new political body with sweeping powers to strengthen the hand of the leftist government.

The EU has suggested it might not recognize the result of the voting.

The diplomats said the declaration would threaten Maduro with more “measures” it can take against what Tajani described as a country “falling into dictatorship”, but would not mention sanctions specifically.

On Monday, the United States government slapped sanctions on Maduro, freezing his assets subject to U.S. jurisdiction, and barring Americans from doing business with him.

(Editing by Pritha Sarkar)

Shunned from bond market, U.S. Virgin Islands faces cash crisis

Doctor Michelle Berkely (L) and Chief Financial Officer Tim Lessing of the Juan F. Luis Hospital and Medical Center, talk to Reuters in Christiansted, on the outskirts of St Croix, U.S. Virgin Islands June 29, 2017. Picture taken June 29, 2017. REUTERS/Alvin Baez

By Robin Respaut

ST. CROIX, V.I. (Reuters) – For a glimpse at the precarious financial health of this Caribbean island, visit its public hospital.

Pipes underneath the emergency room collapsed in May, causing waste water to back up through the drains. Now workers and visitors – even patients – use portable toilets set up on the sidewalk. The hospital doesn’t have the cash for new plumbing.

For years the U.S. Virgin Islands funded essential public services with help from Wall Street. Investors lined up to purchase its triple-tax-exempt bonds, a form of debt free from municipal, state and federal taxes.

Now the borrowing window has slammed shut. Trouble in neighboring Puerto Rico, which recently filed for a form of bankruptcy after a string of debt defaults, has investors worried that the U.S. Virgin Islands might be next.

With just over 100,000 inhabitants, the protectorate now owes north of $2 billion to bondholders and creditors. That’s the biggest per capita debt load of any U.S. territory or state – more than $19,000 for every man, woman and child scattered across the island chain of St. Croix, St. Thomas and St. John. The territory is on the hook for billions more in unfunded pension and healthcare obligations.

“We have a government that we can’t afford, and now all of it is converging,” said Holland Redfield, a former six-term U.S. Virgin Islands senator who hosts a radio talk show about politics in the territory. “We’re getting to the point where we may have a potential meltdown.”

Ratings agencies have downgraded the islands’ credit ratings deep into junk territory. With the U.S. Virgin Islands shut out of the credit markets after a failed January bond issue, officials are scrambling to stabilize its finances after years of taking on debt to plug yawning budget holes.

The government proposes to slash public spending by 10 percent. It recently hiked taxes on liquor, cigarettes, sugary drinks and vacation timeshares. And it has threatened to auction homes and businesses of property-tax deadbeats.

Governor Kenneth Mapp is quick to reassure bondholders that they get first crack at one of the territory’s largest funding sources: rum taxes. The money pays debt service before heading to government coffers, a protection called a lockbox.

The U.S. Virgin Islands has “never been late on a payment, much less defaulted on a bond or loan agreement,” Mapp said during his State of the Territory address in January.

But how these islands will recover from years of budget deficits and a severe liquidity crisis remains to be seen. The territory lost its single-largest private employer five years ago when a refinery shut down. Gross domestic product has declined by almost one-third since 2008. At times this year the government was operating with just two days’ cash on hand.

Locals live with pitted roads, crumbling schools, electricity outages and deteriorating medical care.

At the Juan F. Luis Hospital and Medical Center, plumbing troubles are just the beginning. Doctors have stopped performing some vital procedures, including implanting pacemakers and heart defibrillators, because the facility can’t pay suppliers for the devices, officials say.

“We have gone from bad to worse, and the patients are the ones who are suffering,” said Dr. Kendall Griffith, an interventional cardiologist who recently left the island to take a job in a Georgia hospital. “It’s forcing physicians to make hard decisions.”

FORGOTTEN ISLANDS

Before Puerto Rico imploded under $70 billion in debt and $50 billion of unfunded pension liabilities, few in Washington noticed troubles brewing in the other inhabited U.S. territories of American Samoa, Guam, the Northern Mariana Islands and the U.S. Virgin Islands.

Residents of these places are U.S. citizens, but they can’t vote in presidential elections and their Washington delegates are non-voting figureheads. Despite high poverty rates and joblessness, the territories receive just a fraction of the federal funding allocated to U.S. states for entitlements such as Medicare and Medicaid.

To bridge the gap, some have turned to the bond market. Bond issues typically fund infrastructure and capital projects. But in the case of Puerto Rico and the U.S. Virgin Islands, officials increasingly relied on borrowed money to fund government operations.

Debt loads for both territories have grown to staggering proportions, now surpassing 50 percent of their respective GDPs. That’s higher than anywhere in the nation and sharply above the state median of 2.2 percent, Moody’s Investors Service found.

(For a graphic on U.S. territory debt, see: http://tmsnrt.rs/2h8TGIo)

Bond buyers for years whistled past the territories’ shaky finances, comforted in the knowledge that these governments couldn’t seek bankruptcy protections available to many municipalities.

“There was an idea that because of the lockbox structure and the fact that the territories did not have a path to bankruptcy, they had to pay you,” said Curtis Erickson, San Francisco-based managing director of Preston Hollow Capital, a municipal specialty finance company.

That all changed in 2016 when Congress passed legislation known as PROMESA giving Puerto Rico its first access to debt restructuring. The move sparked a ferocious battle among creditors to see who would shoulder the largest losses.

Investors quickly surmised the U.S. Virgin Islands might pursue the same strategy. In December, S&P Global Ratings downgraded the territory by a stunning seven notches to B from BBB+, putting it well below investment grade.

The U.S. Virgin Islands is adamant that S&P and other ratings agencies overreacted. The territory has been unfairly “tainted by Puerto Rico’s pending bankruptcy,” and has no intention of pursuing debt restructuring, said Lonnie Soury, a government spokesman.

In addition to tax hikes and budget cuts, he said the current administration is looking to do more with its tourism and horse racing industries to boost development.

BIG DEBTS, FEW OPTIONS

In the meantime, the U.S. Virgin Islands is trapped in a circle of hock that’s making it tough to maneuver.

The government and its two public hospitals, for example, owe a combined $28 million to the territory’s water and power authority, known as WAPA. In turn, WAPA owes about $44 million to two former fuel vendors.

Then there’s the $3.4 billion of unfunded liabilities for public pensions and retiree healthcare. The pension fund is 19.6 percent funded and projected to run out of money by 2023.

Pensioners can wait months before their annuities start, because the government is behind on its contributions. St. Croix resident Stephen Cohen, 67, said it took almost a year after he retired as a high school biology teacher before he received his first check in 2016.

“A lot of people are financially stressed,” Cohen said. “They didn’t realize how bad things would get.”

Territory officials can’t say how they will close a projected $100 million budget shortfall for this fiscal year. That’s on top of an accumulated net deficit of $4.4 billion, according to government financial records.

Back at Juan F. Luis Hospital, officials hope to move the emergency room into the cardiac wing so repairs can begin on the collapsed pipes.

The government has pledged $3 million for the job, but Tim Lessing, the facility’s chief financial officer, wonders if he’ll see it.

“The territory is in a tough position,” Lessing said. “Nobody’s buying the paper.”

(Editing by Marla Dickerson)

Venezuela jails opposition leaders in new crackdown on opponents

By Corina Pons and Alexandra Ulmer

CARACAS (Reuters) – Venezuela jailed two leading critics of President Nicolas Maduro on Tuesday in a fresh blow to the opposition after the election of a new political body with sweeping powers to strengthen the hand of the leftist government.

The United States imposed sanctions on Maduro on Monday, calling him a “dictator” for Sunday’s election of a constituent assembly that the opposition boycotted and denounced as an affront to democracy.

In a statement announcing the jailing of opposition leader Leopoldo Lopez and veteran politician Antonio Ledezma, the pro-government Supreme Court said they were planning to flee the country and had violated terms of their house arrest by making political statements and speaking to media.

But government opponents called the abrupt removal of the men from their homes by security forces in nighttime raids a sign of Maduro’s determination to silence rivals. It was a view shared by U.S. President Donald Trump, who issued a statement condemning “the actions of the Maduro dictatorship.”

“Mr. Lopez and Mr. Ledezma are political prisoners being held illegally by the regime,” it said, calling “for the immediate and unconditional release of all political prisoners.”

About 120 people have been killed in more than four months of anti-government street protests, including at least 10 during Sunday’s vote.

Maduro says the constituent assembly was designed to restore peace to Venezuela. Lopez and Ledezma had called for protests against Sunday’s vote. In addition to rewriting the constitution, the legislative superbody will have the power to dissolve the opposition-led congress, eliminating any institutional check on Maduro’s powers.

Lopez had been held more than three years in a military jail until last month, when he was unexpectedly released in what was seen as a potential breakthrough in the country’s political standoff.

Attempts to get the opposition and the government to reach a negotiated deal subsequently floundered, however, and allies said Lopez, 46, may have been jailed again because he rejected government proposals.

“They have kidnapped Leopoldo Lopez because he simply would not break under the pressures and false promises of the regime,” said Freddy Guevara, a legislator in the Popular Will party led by Lopez.

A U.S.-educated economist and former mayor in Caracas, Lopez is beloved by some in the opposition for his hard line anti-government stance and has become an international cause celebre.

The government sees him as an elitist coup-monger, and even some opposition sympathizers have criticized him for being hot-headed and authoritarian.

In a sign of heightening tensions, Chilean Foreign Minister Heraldo Munoz said Beatriz Ruiz and Jose Fernando Nunez, both recently appointed judges of an alternative Supreme Court by the opposition parliament, took refuge in Chile’s embassy in Caracas on Tuesday and may be granted political asylum.

The U.S. Congress, meanwhile, mulled possible additional measures aimed at influencing Maduro. Senator Ben Cardin, the senior Democrat on the Foreign Relations Committee, said Monday’s sanctions against the Venezuelan leader were not enough, and that punitive economic measures targeting the country’s vital oil sector may be in order.

The United States is Venezuela’s No. 1 crude importer. Actions targeting Venezuelan oil would likely heap more damage onto an economy already suffering from a deep recession, food shortages and the world’s highest inflation rate.

“Our objective needs to be to help the people of Venezuela through this extremely dangerous humanitarian crisis … and ultimately to get Venezuela back on a democratic path,” Cardin said.

AN ARREST FORETOLD

Lopez himself suspected he would be detained again, and had recorded a video alongside his wife Lilian Tintori in which he urged Venezuelans to keep fighting if he was put back behind bars.

“If you’re seeing this video it’s precisely because that’s what happened, they jailed me again, illegally and unjustly,” said Lopez, in the video shown on social media on Tuesday.

Blamed by many for rising poverty in Venezuela, Maduro has faced almost daily protests demanding freedom for jailed politicians, early elections to replace him and permitted entry of humanitarian aid such as food and medicines.

Lopez and Ledezma were both taken from their homes to Ramo Verde, a military jail in a slum area about an hour’s drive from the capital, according to lawyers and family.

Lopez was originally arrested for his role in leading street demonstrations against Maduro. Ledezma, a 62-year-old veteran politician, had been arrested on charges of plotting a coup.

Condemnation of Tuesday’s arrests also came from the United Nations human rights chief, the president of the European Parliament and other governments.

“We express our solidarity with Leopoldo Lopez, Antonio Ledezma and other political prisoners in Venezuela,” Mexico’s Foreign Minister Luis Videgaray said on Twitter.

(Additional reporting by Brian Ellsworth, Eyanir Chinea, Diego Ore, Hugh Bronstein, Fabian Cambero and Andreina Aponte in Caracas, Tom Miles in Geneva, Sarah White in Madrid, Patricia Zengerle and Yeganeh Torbati in Washington D.C., Mitra Taj in Lima, Adriana Barrera in Mexico City and Robert-Jan Bartunek in Brussels; Writing by Alexandra Ulmer and Brian Ellsworth; Editing by W Simon and Tom Brown)

Venezuela security agents seize opposition leaders from homes: family

By Corina Pons

CARACAS (Reuters) – Venezuelan security officials seized two opposition leaders from their homes in overnight raids, their families said on Tuesday, after they urged protests against a new legislative superbody widely denounced as anti-democratic.

Leopoldo Lopez and Antonio Ledezma were both under house arrest, the former for his role in leading street protests against President Nicolas Maduro in 2014 and the latter on charges of plotting a coup.

“12:27 in the morning: the moment when the dictatorship kidnaps Leopoldo at my house,” Lopez’s wife Lilian Tintori wrote on Twitter.

She posted a link to a video that appeared to show Lopez being led into a vehicle emblazoned with the word Sebin, Venezuela’s intelligence agency.

The Information Ministry did not immediately respond to an email seeking comment.

Lopez and Ledezma are both former mayors in Caracas, and high-profile critics of Maduro.

They had called on Venezuelans to join protests over Sunday’s election of the constituent assembly, which supersedes an opposition-controlled congress that a pro-Maduro Supreme Court had already stripped of its powers.

At least 10 people were killed in unrest during the vote, which was boycotted by the opposition and criticized around the world as an assault on democratic freedoms.

“They have kidnapped @leopoldolopez because he simply would not break under the pressures and false promises of the regime,” wrote Freddy Guevara, a legislator from Lopez’s Popular Will party.

Vanessa Ledezma said she held Maduro responsible for what happened to her father.

“The Sebin just took him,” she wrote on Twitter, posting a video of intelligence agents taking Ledezma, who was dressed in pyjamas.

He was granted house arrest in 2015 after being imprisoned on charges of leading a coup against Maduro.

Lopez was granted house arrest in July following three years in prison for his role in anti-government street protests in 2014. His release was considered a major breakthrough in the country’s political standoff.

Lopez’s lawyer, Juan Gutierrez, wrote on Twitter that “there is no legal justification to revoke the house arrest measure.”

(Writing by Brian Ellsworth; editing by John Stonestreet)

Phone calls, dismissal threats: Venezuela pressures state workers to vote

Venezuela's President Nicolas Maduro waves during a pro-government rally with workers of state-run oil company PDVSA, in Barcelona, Venezuela July 8, 2017. Miraflores Palace/Handout via REUTERS

By Alexandra Ulmer

CARACAS (Reuters) – State workers in Venezuela are receiving frequent phone calls, pressure from bosses and threats of dismissal to ensure they vote in favor of President Nicolas Maduro’s controversial new congress on Sunday.

The unpopular leftist Maduro is pushing ahead with the election to create a powerful new legislature despite four months of deadly anti-government protests in the oil-rich South American nation, which is reeling from food shortages, runaway inflation and violent crime.

Maduro says the 545-seat Constituent Assembly, which will have the power to dissolve all other state institutions, will overcome the “armed insurrection” to bring peace to Venezuela. His opponents say it is a puppet institution designed to cement a dictatorship.

With surveys showing that almost 70 percent of Venezuelans oppose the assembly, the government wants to avoid embarrassingly low turnout in a ballot being boycotted by the opposition.

Pressure on state employees is higher than ever, according to interviews with two dozen workers at institutions ranging from state oil company Petroleos de Venezuela SA (PDVSA) to the Caracas subway, as well as text messages, internal statements, and videos seen by Reuters.

“Any manager, superintendent, and supervisor who tries to block the Constituent Assembly, who does not vote, or whose staff does not vote, must leave his job on Monday,” a PDVSA vice-president, Nelson Ferrer, said during a meeting with workers this week, according to a summary circulated within the company and seen by Reuters.

In a video of a political rally at PDVSA, an unidentified company representative wearing the red shirt often worn by members of Maduro’s Socialist Party shouted into a microphone that employees who do not vote will be fired.

“We’re not joking around here,” he says.

Workers recount a laundry list of pressures: text messages every 30 minutes, phone calls, mandatory political rallies during work, requests that each worker enlist 10 others to vote, or orders to report back to a “situation room” after voting.

While it remains difficult to estimate how many of Venezuela’s 2.8 million state workers will vote, most interviewees said a significant majority probably will, either out of allegiance or out of fear.

Some Venezuelans also said Socialist Party operatives had threatened to stop distributing subsidized food bags to those who did not vote.

“I’ve seen a stream of people crying because they don’t know what to do. There’s so much fear,” said one PDVSA employee, who asked to remain anonymous to avoid reprisals.

Venezuela’s Information Ministry did not respond to a request for comment. PDVSA did not respond to a request for comment about Ferrer’s alleged remarks or wider pressures.

TO VOTE OR NOT TO VOTE?

After a brief coup against him and an oil strike over a decade ago, Venezuela’s late President Hugo Chavez increasingly staffed state institutions with his supporters.

Cheering government employees became fixtures at marches to defend the leftist firebrand’s “21st century Socialism”. PDVSA’s headquarters are still decorated with portraits of Chavez, who died of cancer in 2013.

Critics say unqualified political appointees have sunk the OPEC nation’s oil industry and spurred a brain drain.

Under Chavez’s less charismatic successor Maduro, the bolivar currency has plummeted and dragged down salaries to a few dozen U.S. dollars a month, fomenting discontent among the rank-and-file.

But, with the country of 30 million people submerged in a fourth straight year of recession, many employees stick to their posts because of health insurance, subsidized food or lack of other jobs.

Some employees said they would vote on Sunday to avoid the fate of those fired after a government lawmaker published a list of Venezuelans who signed a petition demanding a recall referendum against Chavez.

“My mother is ill, my wife is pregnant, and if I lose my job I’ll be even worse off than I am now. I need to go vote,” said a worker at Venezuelan steelmaker Sidor.

Other workers have decided to ignore phone calls and lay low on Sunday. Some are gambling that their bosses will be lenient, while others say they have compromising information about corruption or misdeeds that could protect them from dismissals.

A handful say they are willing to risk their jobs to oppose Maduro.

“We’re tired of working and working and still not being able to save. We can’t change cars or fix up our little house, let alone take a vacation,” said the director of a public school, once comfortably in the middle class.

“We’re ready to assume the consequences of not voting.”

(Additional reporting by Mircely Guanipa in Punto Fijo, Maria Ramirez in Puerto Ordaz, Anggy Polanco in San Crsitobal, and Deisy Buitrago and Andrew Cawthorne in Caracas; Writing by Alexandra Ulmer; Editing by James Dalgleish)

U.S. orders Venezuela embassy families out, crisis deepens

Demonstrators run away at a rally against Venezuelan President Nicolas Maduro's government in Caracas. REUTERS/Carlos Garcia Rawlins

By Alexandra Ulmer and Fabian Cambero

CARACAS (Reuters) – The U.S. government ordered family members of employees at its embassy in Venezuela to leave on Thursday as a political crisis deepened ahead of a controversial vote critics contend will end democracy in the oil-rich country.

Violence continued to rage on the street, with another seven people killed during the latest opposition-led strike against President Nicolas Maduro’s planned election for a powerful new Constituent Assembly on Sunday.

Adding to Venezuela’s growing international isolation, Colombian airline Avianca suddenly stopped operations in the country on Thursday due to “operational and security limitations”.

Maduro’s critics were planning to pile more pressure on the unpopular leftist leader by holding roadblocks across the nation dubbed “The Takeover of Venezuela” on Friday.

“We’re going to keep fighting, we’re not leaving the streets,” said opposition lawmaker Jorge Millan.

The government banned protests from Friday to Tuesday, raising the likelihood of more violence in volatile Venezuela. Many people have been stocking up food and staying home.

As well as ordering relatives to leave, the U.S. State Department on Thursday also authorized the voluntary departure of any U.S. government employee at its compound-like hilltop embassy in Caracas.

President Donald Trump has warned his administration could impose economic sanctions on Venezuela if Maduro goes ahead with the vote to create the legislative superbody.

The Constituent Assembly would have power to rewrite the constitution and shut down the existing opposition-led legislature, which the opposition maintains would cement dictatorship in Venezuela.

Over 100 people have died in anti-government unrest convulsing Venezuela since April, when the opposition launched protests demanding conventional elections to end nearly two decades of socialist rule.

(For graphics on Venezuela’s economic crisis and anti-government protests see: http://tmsnrt.rs/2pPJdRb and http://tmsnrt.rs/2ujuylf)

ANTI-MADURO STRIKE

Many streets remained barricaded and deserted on Thursday during the second day of a nationwide work stoppage.

Plenty of rural areas and working-class urban neighborhoods were bustling, however, and the strike appeared less massively supported than a one-day shutdown last week.

With Venezuela already brimming with shuttered stores and factories, amid a blistering four-year recession, the effectiveness of any strike can be hard to gauge. Many Venezuelans live hand-to-mouth and say they must keep working.

In Barinas, home state of former Venezuelan leader Hugo Chavez, only about a third of businesses were closed according to a Reuters witness, as opposed to the opposition’s formal estimate of 90 percent participation nationally.

“I am opposed to the government and I agree we must do everything we can to get out of this mess, but I depend on my work. If I don’t work, my family does not eat,” said Ramon Alvarez, a 45-year-old barber at his shop in Barinas.

There has been widespread international condemnation of Maduro’s Constituent Assembly plan. The United States on Wednesday announced sanctions against 13 current and former officials for corruption, undermining democracy, and participating in repression.

Government officials and candidates for the Constituent Assembly wrapped up campaigning on Thursday with a rally in Caracas with Maduro.

The former bus driver and union leader reiterated that the assembly was the only way to bring peace to Venezuela, blasted threats of further sanctions from “emperor Donald Trump,” and hit back at accusations that he is morphing into a tyrant.

“The usual suspects came out to say Maduro had become crazy,” he told cheering red-shirted supporters in Caracas.

“Of course, I was crazy! Crazy with passion, crazy with a desire for peace.”

Amid rumors of 11th-hour attempts to foster negotiations, Maduro reiterated an invitation to dialogue with the opposition, although such talks have flopped in the past.

DEATHS, ARRESTS

The state prosecutor’s office said four people died on Thursday amid the unrest: A 49-year-old man in Carabobo state, a 23 year-old in Lara state, a 29 year-old in Anzoategui state and a 16-year old in the middle class Caracas area of El Paraiso.

A 23-year-old man and a 30-year-old man were also killed in western Merida state and a 16-year-old boy was killed in the poor Caracas neighborhood of Petare during clashes on Wednesday.

This week’s death toll topped last week’s one-day strike, when five people were killed.

Over 190 people were arrested during the stoppage on Wednesday and nearly 50 on Thursday, said local rights group Penal Forum. Since April, authorities have rounded up nearly 4,800 people, of whom 1,325 remain behind bars, the group said.

Wuilly Arteaga, a violinist who has become one of the best-known faces of the protests, was among those detained by the National Guard, Penal Forum added.

(Additional reporting by Deisy Buitrago, Brian Ellsworth, Alexandra Ulmer, Anggy Polanco, Andrew Cawthorne, Diego Ore, Corina Pons, and Girish Gupta in Caracas, Mircely Guanipa in Punto Fijo, Francisco Aguilar in Barinas, Maria Ramirez in Bolivar, Eric Beech in Washington D.C., and Julia Symmes Cobb in Bogota; Writing by Alexandra Ulmer and Andrew Cawthorne; Editing by Toni Reinhold, Andrew Cawthorne and Michael Perry)

U.S. sanctions Venezuelan officials, one killed in anti-Maduro strike

Demonstrators use a tire on fire to block a street at a rally during a strike called to protest against Venezuelan President Nicolas Maduro's government in Caracas, Venezuela July 26, 2017. REUTERS/Andres Martinez Casares

By Matt Spetalnick and Alexandra Ulmer

WASHINGTON/CARACAS, Venezuela (Reuters) – The Trump administration imposed sanctions on 13 senior Venezuelan officials as the country’s opposition launched a two-day strike on Wednesday, heaping pressure on unpopular President Nicolas Maduro to scrap plans for a controversial new congress.

With clashes breaking out in some areas, a 30-year-old man was killed during a protest in the mountainous state of Merida, authorities said.

Venezuela’s long-time ideological foe the United States opted to sanction the country’s army and police chiefs, the national director of elections, and a vice president of the state oil company Petróleos de Venezuela S.A. (PDVSA) for alleged corruption and rights abuses.

U.S. President Donald Trump spared Venezuela for now from broader sanctions against its vital oil industry, but such actions were still under consideration.

U.S. officials said the individual sanctions aimed to show Maduro that Washington would make good on a threat of “strong and swift economic actions” if he goes ahead with a vote on Sunday that critics have said would cement dictatorship in the OPEC country.

The leftist leader was also feeling the heat at home, where protesters backing the 48-hour national strike blocked roads with makeshift barricades and many stores remained shut for the day.

“It’s the only way to show we are not with Maduro. They are few, but they have the weapons and the money,” said decorator Cletsi Xavier, 45, helping block the entrance to a freeway in upscale east Caracas with rope and iron metal sheets.

The opposition estimated that some 92 percent of businesses and workers adhered to the strike, although it offered no evidence for the figure. Overall, fewer people appeared to be heeding the shutdown than the millions who participated in a 24-hour strike last week when five people died in clashes.

State enterprises, including PDVSA [PDVSA.UL], stayed open and some working-class neighborhoods buzzed with activity. But hooded youths clashed with soldiers firing tear gas in various places including Caracas.

In western Merida state, Rafael Vergara was shot dead when troops and armed civilians confronted protesters, local opposition lawmaker Lawrence Castro told Reuters.

Local rights group Penal Forum said 50 people had been arrested and opposition lawmakers said at least 4 protesters had been shot.

A demonstrator wears a Venezuelan flag during a strike called to protest against Venezuelan President Nicolas Maduro’s government in Caracas, Venezuela July 26, 2017. REUTERS/Marco Bello

‘IMPERIALIST SANCTIONS’

Maduro has vowed to push ahead with Sunday’s vote for a Constituent Assembly, which will have power to rewrite the constitution and override the current opposition-led legislature.

The successor to late socialist leader Hugo Chavez says it will bring peace to Venezuela after four months of anti-government protests in which more than 100 people have been killed.

One of the U.S. officials warned the sanctions were just an initial round and the administration was readying tougher measures. The most serious option is financial sanctions that would halt dollar payments for the country’s oil or a total ban on oil imports to the United States, a top cash-paying client.

But policy makers continue to weigh the potential risks of such sanctions, which include inflicting further suffering on Venezuelans and raising U.S. domestic gasoline prices.

Even some of Maduro’s opponents have cautioned that he could rally his supporters under a nationalist banner if the United States goes too far on sanctions as Venezuelans endure a brutal economic crisis with shortages of food and medicine.

At a campaign-style rally for Sunday’s vote, broadcast on state TV late on Wednesday, a defiant Maduro presented some of those sanctioned with replicas of a sword belonging to Latin American independence hero Simon Bolivar.

“Congratulations for these imperialist sanctions,” he said, before handing out the symbolic swords. “What makes the imperialists of the United States think they are the world government?”

Among those sanctioned were national elections director Tibisay Lucena, PDVSA finance vice president Simon Zerpa, former PDVSA executive Erik Malpica, and prominent former minister Iris Varela.

Varela tweeted a picture of herself grinning and extending a middle finger toward the camera with a message that read: “This is my response to the gringos, like Chavez told them, ‘Go to hell, you piece of shit Yankees.'”

Elections boss Lucena is scorned by opposition activists, who have said that she has delayed regional elections and blocked a recall referendum against Maduro at the behest of an autocratic government. The opposition has also long accused PDVSA of being a nest of corruption.

A demonstrator gestures while clashing with riot security force at a rally during a strike called to protest against Venezuelan President Nicolas Maduro’s government in Caracas, Venezuela July 26, 2017. REUTERS/Carlos Garcia Rawlins

‘BAD ACTORS’

The U.S. officials, who spoke to Reuters on condition of anonymity, said the individuals targeted for sanctions were accused of supporting Maduro’s crackdown, harming democratic institutions or victimizing Venezuelans through corruption, and that additional “bad actors” could be sanctioned later.

Punitive measures include freezing U.S. assets, banning travel to the United States and prohibiting Americans from doing business with them.

Sanctions were imposed on the chief judge and seven other members of Venezuela’s pro-Maduro Supreme Court in May in response to their decision to annul the opposition-led Congress earlier this year.

That followed similar U.S. sanctions in February against Venezuela’s influential Vice President Tareck El Aissami for alleged links to drug trafficking.

Assets in the United States and elsewhere tied to El Aissami and an alleged associate and frozen by U.S. order now total hundreds of millions of dollars, far more than was expected, one of the U.S. officials told Reuters.

(Additional reporting by Andrew Cawthorne, Corina Pons, Andreina Aponte, Anggy Polanco, Girish Gupta, and Fabian Cambero in Caracas, Francisco Aguilar in Barinas, Maria Ramirez in Puerto Ordaz, Mircely Guanipa in Punto Fijo, Isaac Urrutia in Maracaibo, Patricia Zengerle in Washington; Writing by Alexandra Ulmer and Matt Spetalnick; Editing by Andrew Cawthorne, Tom Brown, Toni Reinhold)

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