00:00Thank you. I appreciate it. And I'll be brief in my opening statement so we can leave more time for questions.
00:05I've submitted a written statement, but I'm not going to use it. I'm just going to talk to you guys for a few minutes.
00:10All right, here we go.
00:15Suspend. You know the drill. Off to jail.
00:17That's a war crime.
00:18That's a one-year ban.
00:20Anyone from the committee, anyone who is a persistent violator will be...
00:25...banned for three years. So I don't know whether the guy falls in that category. It looks like it.
00:29I hope...
00:30After three years, he'll find a more productive means of employment.
00:32Secretary Rubio, we have two hearings a year.
00:35A week, you know. You seem to have a more robust following than most of our...
00:40...witnesses that come before us. But anyway...
00:43There'll be a couple more...
00:45So I just thank you for stopping the clock. But I appreciate it.
00:50So, and I know there's a lot of other topics you're going to ask me about, so we can talk about those, including the one...
00:55...ones that Senator Shaheen just outlined. But let me just talk about Venezuela.
01:00...in particular. Please.
01:01I think we can talk if you want. I'm sure your questions will be about what happened.
01:05...before and led up to in the operation. I want to focus my comments this morning on what happens now and moving forward.
01:10Because you're going to ask about going back. And let me just say this. What is...
01:15...is our goal going in. We had in our hemisphere a regime...
01:20...operated by an indicted narco-trafficker that became a base of operation for virtually every...
01:25...competitor, adversary, and enemy in the world. It was, for Iran, their primary spot of operation...
01:30...in the western hemisphere was Venezuela. For Russia, their primary base of operation...
01:35...in the western hemisphere along Cuba and Nicaragua was Venezuela. In the case of...
01:40...China. China was receiving oil at a huge $20 a barrel discount.
01:45And they weren't even paying money for it. It was being used to pay down debt that they were owed. This is...
01:50...the oil of the people of Venezuela and it was being given to the Chinese as barter at a 20%...
01:55...at a $20 discount per barrel in some cases. And so you had basically three of our primary...
02:00...opponents in the world operating from our hemisphere from that...
02:05...in the United States. It was also a place where you had a narco-trafficking regime that openly...
02:08...cooperated with the...
02:10...the FARC and the ELN and other drug trafficking organizations using their national territory.
02:15It was an enormous strategic risk for the United States. Not halfway around the world...
02:20...not in another continent, but in the hemisphere in which we all live. And it was having dramatic...
02:25...impacts on us, but also on Colombia and on the Caribbean Basin and all sorts of other places.
02:30It was an untenable situation and it had to be addressed. And it was addressed. And now...
02:35...the question becomes what happens moving forward. As I've described to you in previous settings...
02:39...in an individual...
02:40...conversations...
02:41...we had three objectives here. The final...
02:43...I'll work it backwards because...
02:45...the end state here is we want a...
02:47...we want to reach a phase of transition where we are...
02:50...we are left with a friendly, stable, prosperous Venezuela. And democratic.
02:55...in which all elements of society are represented in free and fair elections. By the way, you can have elections.
03:00You can have elections all day. But if the opposition has no access to the media...
03:04...if...
03:05...the opposition candidates are routinely dismissed and unable to be on the...
03:10...ballot because the government...
03:12...those aren't free and fair elections. That's the end state that we want...
03:15...free, fair, prosperous and friendly Venezuela. We're not going to get there in three weeks.
03:20It's going to take some time. And so objective number one was stability. In the aftermath of the...
03:25...moval of Maduro, the concern was what happens in Venezuela? Is there civil war? Do the different...
03:29...factions start...
03:30...going at each other? Are a million people crossing the border into Colombia? All of that has been avoided.
03:35And one of the primary ways that it has been avoided is the ability to establish direct, honest...
03:40...respectful, but very direct and honest conversations with...
03:45...the people who today control the elements of that nation. Meaning the law enforcement, the government...
03:50...of the apparatus, etc. And one of the tools that's available to us is the fact that we have sanctions on oil.
03:55There is oil that is sanctioned that cannot move from Venezuela because of our quarantine.
04:00And so what we did is we entered into an arrangement with them. And the arrangement is this...
04:03...on the oil that is sanctioned...
04:05...in quarantine. We will allow you to move it to market. We will allow you to move it to market at...
04:10...market prices, not at the discount China was getting. In return, the funds from that will...
04:15...be deposited into an account that we will have oversight over. And you will...
04:20...spend that money for the benefit of the Venezuelan people. Why was that important? Venezuela was...
04:25...running out of storage capacity. Okay? They were producing oil, they were drilling...
04:28...and they had nowhere to put it. They...
04:30...and they were facing a fiscal crunch. They needed money in the immediacy to fund the police office.
04:35So the sanitation workers, the daily operations of government. And so we've been able to create a short-term...
04:40...mechanism. This is not going to be the permanent mechanism. But this is a short-term mechanism in which the needs and the values...
04:45...the Venezuelan people can be met through a process that we've created...
04:48...where they will submit every month...
04:50...the budget of this is what we need funded. We will provide for them at the front end what that money cannot be used for.
04:55And they've been very cooperative in this regard. In fact, they have pledged to use a substantial amount of those funds...
05:00...to purchase medicine and equipment directly from the United States.
05:05In fact, one of the things they need is dilutin or dilutin, depending on how you want to pronounce it.
05:10And that basically is the light crude that you need to mix with their heavy crude in order for the oil to be...
05:15...able to be mixed and moved. They used to get 100% of that from Russia.
05:20We are now getting 100% of that from the United States.
05:23So we're using...
05:25We're using that short-term mechanism both to stabilize the country, but also to make sure that the oil proceeds...
05:30...that are currently being generated through the licenses will now begin to issue on the sanctioned oil.
05:35It goes to the benefit of the Venezuelan people, not to fund the system that existed in the past.
05:40The second is a period of recovery, and that is the phase in which you want to see a normalized...
05:45...oil industry. Again, this is... Look, we've got plenty of oil. There's plenty of oil all over the world.
05:50Canada produces heavy crude, so it's not like Venezuela's oil is unique in that regard, despite the fact they have the largest...
05:55...unknown reserves in the world. It's not irreplaceable. But we understand that that is the lifeline.
06:00Their natural resources are going to allow Venezuela to be stable and prosperous moving forward.
06:04And so we are...
06:05We've created the... What we hope to do is transition to a mechanism that allows that to be sold in a normal...
06:10...oil industry, not one dominated by cronies, not one dominated by graft and corruption.
06:15To that end, the authorities there deserve some credit. They have passed the new hydrocarb...
06:20...of the carbon law that basically eradicates many of the Chavez era restrictions on private...
06:25...investment in the oil industry. It probably doesn't go far enough to attract sufficient investment.
06:30But it's a big step from where they were three weeks ago. So that's a major change. We can address...
06:35...some of the other components, but I'll run out of time. But one of parts of the transition phase...
06:40...the recovery phase is beginning to create space for different voices inside of...
06:45...and as well in politics to have an ability to speak out. Part of that is the release of political prisoners.
06:50By some estimates up to 2,000. They are releasing them. They are releasing them probably slower than I would like...
06:55...but they are releasing them. And in fact you're starting to see some of the people being released...
06:59...beginning to speak out.
07:00...and participate in political life in the country. We have a long ways to go. Look, we can talk in more detail...
07:05...about all of these things. Suffice it to say, I'm not here to claim to you this is going to be easy or simple.
07:09I am saying...
07:10...that in three and a half, almost four weeks, we are much further along on this project than we thought...
07:15...we would be given the complexities of it going into it. And I recognize that it won't be easy. I mean look at the end...
07:20...and today we are dealing with people over there that have spent most of their lives living in a gangster paradise. So...
07:25...it's not going to be like from one day to the next we are going to have this thing turn around overnight. But I think...
07:30...we're making good and decent progress. It is the best plant and we are certainly better off today in Venezuela.
07:35...than we were four weeks ago. And I think and hope and expect that we will be better off...
07:40...in three months, in six months, in nine months than we would have been had Maduro still been there. So thank you.
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