RFK son is oil broken up over Chavez death
Perhaps no American will mourn Hugo Chavez more than Joe Kennedy.
For years, the eldest son of the late Robert F. Kennedy has relied on the Venezuelan strongman to prop up his charity with tens of millions of dollars in donated oil.
The steady flow of heating oil allowed the former congressman from Massachusetts to portray himself — and Chavez — as heroes to the poor even as Kennedy and his wife pull down more than $1 million in salary and benefits from a web of for-profit and nonprofit energy concerns.
In cloying TV ads, Kennedy said “only [Venezuelan oil giant] Citgo, the people of Venezuela and Hugo Chavez responded” to his request for heating-oil donations.
Now that Chavez is dead, it is unclear whether the well will run dry. Venezuela is in economic turmoil, and elections will be held in a month for a new leader.
“I think Venezuela is teetering on the verge of bankruptcy, and Chavez, for his own populist reasons, gave away the store in Venezuela by giving free oil to Cuba, discounted oil to other Latin American countries and free oil to Joe Kennedy,” said John Hofmeister, head of the watchdog group Citizens for Affordable Energy and former president of Shell Oil. “The question of whether they can continue to do that and run the country, I think is really up in the air.”
A spokesman for Kennedy’s Citizens Energy Corp. nonprofit would not comment on the future of the oil supply.
Kennedy, 60, founded Citizens Energy Energy Corp. in 1979 to provide low-cost home heating oil. In the early years, the nonprofit bought crude oil from Venezuela at a special price and sold it off at market rate, using the proceeds to bring heating oil to Massachusetts. Running the charity gave Kennedy his activist credentials. He ran for Congress in 1988 and served in the House until 1999.
During that time, his younger brother, Michael Kennedy, ran Citizens Energy and garnered criticism for a pay package as high as $313,000, including money he got from related for-profit ventures. Michael Kennedy died in a 1997 ski accident.
After Joe Kennedy left Congress, he returned to run Citizens Energy. That job paid him $86,311 in 2010. But the bulk of his income comes from his for-profit companies — Citizens Enterprises Corp. and Citizens Investments Ltd. — which together paid him $807,390 in salary and benefits. Kennedy’s wife, Elizabeth, raked in $346,764 from the nonprofit, where she is marketing director, and from the for-profit companies.
Kennedy says he turned to Chavez after American fuel companies refused to donate oil to his program. But the Venezuelan donations were actually brokered by members of Congress. Former Rep. Bill Delahunt from Massachusetts, who served on the Foreign Affairs Committee, built up a relationship with Chavez and broached the idea of the oil donations as Congress was cutting back on home-heating-oil assistance, said Mark Forest, Delahunt’s former chief-of-staff.
Queens Rep. Gregory Meeks — a Democrat dogged by corruption allegations who attended Chavez’s funeral Friday — also claims credit. During a trip to Caracas, he and Delahunt introduced Kennedy to the dictator, according to a published report.
Forest said Citizens Energy would serve as the distribution network for the donated oil from Citgo, a subsidiary of the Venezuelan national oil company.
The oil started to flow in 2005 via two related nonprofits. Citizens Programs Corp., a charitable foundation, takes in the heating oil — $59 million worth in the fiscal year ending June 30, 2011. It immediately sells the supply to an undisclosed “prearranged buyer,” according to its tax returns. The proceeds are used to buy 100 gallons of heating oil for 200,000 needy households in 25 states and Washington, DC.
The distribution is done through Citizens Energy, which receives a $5 million management fee from Citizens Programs.
Citizens Programs uses some of its oil riches — $4 million in fiscal year 2011 — to pay for its ubiquitous advertising program. Running a call center and the “Joe-4-Oil” hot line costs $1.3 million.
A spokesman for the groups refused to answer questions about the operation.
Kennedy also funnels cash to his family’s own causes, including the Robert F. Kennedy Center in DC.
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