A Venezuelan state-owned oil company, heavily indebted to the Russian oil giant Rosneft, made a $500,000 donation to Donald Trump’s inauguration festivities, it has emerged.

Foreign donations are banned under US law, but the Venezuelan company, PdVSA, made the donation through a US affiliate, Citgo Petrol, soon after offering a nearly 50% stake in Citgo to Rosneft as collateral for a $1.5bn loan.

These transactions come at a time when PdVSA and the Venezuelan government of Nicolas Maduro is desperate for cash as oil revenues shrink and civil unrest grows. The influx of money from Rosneft is helping keep PdVSA and Maduro afloat.

If Venezuela defaults on the debt, Rosneft could stand to gain a controlling stake in Citgo, a prospect that has caused anxiety among both Republicans and Democrats in the US Congress. Under current circumstances, however, Rosneft could not take ownership of its shares in Citgo – which owns three refineries, as well as pipelines and oil terminals – because the Russian firm and its boss, Igor Sechin, are under US sanctions linked to Moscow’s military intervention in eastern Ukraine and the annexation of Crimea.

However, as Donald Trump prepared for his inauguration in January, having named the former oil executive Rex Tillerson as his secretary of state, Moscow had grounds for optimism that sanctions would be lifted. The new Trump White House is reported to have prepared executive orders relaxing Russian sanctions but was ultimately persuaded not to take action by congressional Republicans and European allies.

The half-million-dollar donation to the Trump inaugural committee came to light on Wednesday in a report by the Federal Election Commission. Neither PdVSA nor Citgo have commented on the gift.



It is not the only link between Rosneft and Trump. A dossier put together last year by a former British intelligence officer, Christopher Steele, containing allegations of collusion between the Trump campaign and Moscow over Russian intervention in the US presidential elections, mentions Rosneft as a central part of the supposed conspiracy. Steele claimed that Sechin, a close associate of Vladmir Putin, met one of Trump’s foreign policy advisers, Carter Page, and offered him brokerage in the sale of 19% of Rosneft shares.

Page has denied meeting Sechin, but his visit to Moscow in July is reported by the New York Times to have been a catalyst for the launch of a FBI investigation into Trump-Russia links. In December, Russia sold a 19.5% share in Rosneft for more than €10bn ($10.7bn). Some of it was bought by Qatar and Glencore, a Swiss-based oil trading company, but the new owners of most of the stake remain shrouded in mystery.