MIAMI — Venezuela’s state-run oil company was on the verge of financial ruin in 2017 when it decided it needed expert advice on how to improve its reputation and standing with American policymakers who could be instrumental to its survival.
For help, the company, Petróleos de Venezuela, S.A., or PDVSA, turned to a well-connected former Florida congressman, agreeing to pay his firm $50 million over three months for “strategic consulting services.”
The ex-congressman was David Rivera, a Cuban-American Republican from Miami who made a political career out of taking strident anti-communist stances — and was now being hired by President Nicolás Maduro of Venezuela’s socialist government.
As part of the previously undisclosed deal, a subsidiary of a PDVSA holding company in the U.S. says it shelled out $15 million to Mr. Rivera’s consulting firm. It received just two vague reports totaling five pages in return, according to a lawsuit for breach of contract filed on Wednesday in the United States District Court in Manhattan.
Mr. Rivera’s firm, Interamerican Consulting, “performed no meaningful services under the Agreement, and certainly did not perform the level of services that might be reasonably be expected for a fee of approximately $17 million per month,” the complaint filed by PDV USA, the American subsidiary, says, referencing the monthly total he charged for his services.
The company seeks to recover, with interest, the $15 million it ultimately paid to Interamerican over three $5 million installments between March and April of 2017, as well as compensatory damages.
That Mr. Rivera, a subject of past state and federal investigations into improper campaign dealings, has become embroiled in another eyebrow-raising controversy is one thing. That this one involves working for a left-wing Venezuelan government reviled in South Florida is quite another.
Asked about the contract on Wednesday, Mr. Rivera said in a text message to “ask the Citgo 6,” five American citizens and a U.S. legal resident who have been detained in a Venezuelan prison since November 2017.
He seemed to suggest that he was working with the Venezuelan opposition, but there was no way to immediately confirm that.
“They managed that entire effort, including all the money, in coordination with the Venezuelan opposition, including Leopoldo,” Mr. Rivera said, referring to Leopoldo López, an opposition leader who has taken refuge at the Spanish embassy in Caracas. The Trump administration was aware, Mr. Rivera added.
Back when Mr. Rivera’s firm entered into the consulting agreement with PDV, the subsidiary was still controlled through PDVSA by Mr. Maduro. But after the Trump administration imposed sanctions against the company last year, PDV and its other American assets, including Citgo, its oil-refining affiliate, fell under the control of Juan Guaidó, the opposition leader whom the U.S. recognizes as Venezuela’s rightful interim president.
The lawsuit claims that Mr. Rivera’s firm — which is based out of his townhouse and employs just him and his sister — was recruited by and taking instructions from PDVSA, not PDV. Had PDVSA engaged him directly, Mr. Rivera would likely have had to disclose his work under the Foreign Agents Registration Act.
Both companies agreed to assign Mr. Rivera’s contract to PDVSA, the lawsuit says, but Mr. Rivera objected — and demanded to be paid the remaining $35 million.
“Even though Interamerican did not provide services as required under the Agreement, and despite the involvement of the Maduro regime, and extreme disproportionality between the price of the contract and the services to be rendered,” the lawsuit says, “Rivera has repeatedly requested payment for the outstanding invoices.”