When the United States oversaw Iraq’s reconstruction after the 2003 invasion, it did so under a United Nations mandate, with an international advisory board, a special inspector general, and multiple layers of oversight monitoring Iraq’s oil revenues. Even then, at least $8.7 billion could not be properly accounted for.
Now, Venezuela’s oil revenues are being handled very differently.
Less than two weeks after President Donald Trump ousted Venezuelan leader Nicolás Maduro, the U.S. administration has already collected at least $500 million from Venezuelan oil sales. The funds are being held in a Qatari bank account, controlled by the U.S. government, with Secretary of State Marco Rubio granted sweeping authority over how the money is spent.
There is no independent auditor, no public reporting mechanism, no UN mandate—and no clear plan for when Venezuela might regain control of its own oil resources.
For former U.S. officials who managed Iraq’s reconstruction, the parallels are unsettling.
What Went Wrong in Iraq—Even With Oversight?
The Development Fund for Iraq was created under a UN Security Council resolution and subjected to extensive international scrutiny. It had an advisory board, external monitors, and even a special inspector general dedicated solely to oversight.
Yet corruption flourished.
“We had all kinds of people watching this stuff, but we still had a lot of corruption, a lot of bad decisions where the money should go,”
said James Jeffrey, U.S. ambassador to Iraq from 2010 to 2012. “The basic question is—if the U.S. government is actually marketing this oil, which it is—what is it going to do with the money?”
If billions went missing under strict supervision, critics ask, what happens when oversight is minimal or nonexistent?
Who Controls Venezuela’s Oil Money Now?
Following Maduro’s removal, Trump said Venezuelan crude exports would be sold to “benefit the people of Venezuela and the United States.” Energy Secretary Chris Wright later said oil sales would continue “indefinitely.”
An executive order authorizes Rubio to use the proceeds for “public, governmental, or diplomatic purposes” on Venezuela’s behalf. Former officials warn that this language is so broad it could justify nearly any expenditure, from humanitarian aid to geopolitical bargaining.
What remains unclear is whether funds will be distributed directly to Venezuelans, spent by U.S. agencies, transferred with conditions attached, or allocated entirely at Washington’s discretion.
“What does ‘for the benefit of the Venezuelan people’ mean if we’re controlling the money?”
asked Edward Fishman, former State and Treasury official.
“There’s all kinds of risk of corruption and misuse of these funds.”
Why Is the Fund So Opaque?
Unlike Iraq’s fund, which sat at the Federal Reserve Bank of New York, Venezuela’s oil revenues are being held in Qatar, outside the direct oversight of Congress and U.S. regulators.
The White House has declined to explain how Qatar was selected, how the funds will be audited, or how misuse will be prevented. The Treasury Department declined to comment, and the State Department did not respond to questions.
Administration officials instead emphasized the geopolitical benefits: lower U.S. energy prices, leverage against narcotrafficking, and pressure on regional criminal networks.
Critics argue this response sidesteps the central issue—who watches the money.
Can This Arrangement Avoid Corruption?
The risk is compounded by the people involved. Unlike Iraq, where the U.S. established the Coalition Provisional Authority to manage reconstruction on the ground, the Trump administration is now working with Delcy Rodríguez, Maduro’s former vice president—who was sanctioned by the U.S. in 2018 for alleged corruption and drug trafficking ties.
“If the regime puts in a request for the disbursement of a billion dollars, who’s going to track and audit that?”
asked Juan Zarate, a former senior Treasury official.
“This is a nefarious group still in power.”
Elliott Abrams, Trump’s former envoy to Venezuela, warned that giving money directly to the regime would be “the worst solution,” arguing funds should instead flow through trusted organizations like the World Food Program, Save the Children, or the Catholic Church.
Where Is the Exit Strategy?
In Iraq, the U.S. handed control of the oil fund back to Iraqi authorities after about a year. For Venezuela, there is no timeline, no electoral roadmap, and no defined transition plan.
Meanwhile, the administration has moved to shield oil revenues from Venezuela’s estimated $140 billion in creditor claims, including companies whose assets were nationalized. Experts say this protects Venezuela’s future—but also concentrates extraordinary power in U.S. hands.
“That was a very smart move,”
said Matt McManus, a former State Department official.
“You don’t want the first dollars going straight to oil companies.”
Still, shielding funds is not the same as governing them transparently.
What Happens If Something Goes Wrong?
Beyond corruption risks, there are security dangers. The U.S. has already seized tankers carrying Venezuelan oil, a strategy that could escalate.
“What happens if one of them escalates, and you get a U.S. service member killed or wounded?” Fishman asked. “That’s a risk. There’s a cost.”
Any scandal involving misused oil funds could also undermine Trump’s economic messaging ahead of midterm elections—hurting Venezuelans, damaging U.S. credibility, and complicating relations with allies.
Is Venezuela Repeating Iraq’s Mistakes—With Fewer Safeguards?
Iraq’s oil fund operated under the UN, international law, and congressional scrutiny—and still hemorrhaged money. Venezuela’s fund has none of those guardrails.
“This speaks to the opaque, non-transparent nature of everything that’s happened in Venezuela,”
said John Feeley, former U.S. ambassador to Panama.
The lesson from Iraq is not that oversight guarantees success—but that the absence of oversight almost guarantees failure.
The unanswered question now is simple, and dangerous:
If even the UN couldn’t fully track Iraq’s oil money, who—if anyone—is watching Venezuela’s?