Trump's handling of Venezuela's oil money threatens a constitutional crisis
by Kim Wehle, opinion contributor - 09/30/26 9:30 AM E
AP Photo/Mariam Zuhaib
Treasury Secretary Scott Bessent, testifying on Sept. 15.
Buried inside President Trump's takeover of Venezuela's oil revenue is a ticking constitutional time-bomb.
For months, congressional Democrats have been asking questions about Trump's financial system for controlling Venezuelan assets. But despite repeated hearings, Treasury Secretary Scott Bessent will not give Congress a basic accounting of the billions in Venezuelan oil money and other assets that the Trump administration has been collecting and managing through a series of elusive bank accounts. Nor is there clear constitutional or congressional authority for any of this.
The arrangement began after Trump ordered the U.S. military to capture former Venezuelan president Nicolas Maduro and his wife, Cilia Flores, from their bedchamber, bringing them to the U.S. to await trial on alleged criminal violations. Maduro's vice president, Delcy Rodriguez, was installed as interim Venezuelan president and later recognized by the U.S. government.
After announcing in January that Venezuela would turn over up to 50 million barrels of oil to the U.S., Trump stated that the oil "will be controlled by me … to ensure it is used to benefit the people of Venezuela and the United States!"
The White House formalized the arrangement on January in an executive order stating that the funds remain Venezuelan sovereign property while directing the Treasury Department to hold them in a "custodial and governmental capacity" and to follow the disbursement instructions of Secretary of State Marco Rubio.
The website of Treasury's Office of Foreign Assets Control's now instructs parties making payments to Venezuela to deposit the money instead into something called the "Foreign Government Deposit Funds" account. Before receiving payment instructions, a depositor must provide the State Department with information about the parties, the underlying contract, invoices, the amount, the currency, the payment date and the specific license authorizing the transaction. Treasury can apparently reject a deposit if those requirements are not satisfied.
In January, Rubio told the Senate Foreign Relations Committee that approximately $500 million in proceeds had been deposited into a bank account in Qatar that was allegedly owned by Venezuela but controlled by the U.S. He added that $300 million had been transferred to the Venezuelan government to meet public-sector payroll, while another $200 million remained in a short-term account. Rubio also said that Treasury had a written agreement with Venezuela for reviewing its budget requests.
Then, in June, Rubio stated that the Venezuelan revenue was instead being held in a Treasury-blocked Citibank account, with KPMG engaged to audit expenditures. To date, the account number, its balance, the banking agreement, the list of authorized signatories, and a transaction-by-transaction ledger have not been disclosed to Congress or the public.
Alongside Sen. Chris Van Hollen (D-Md.), Rep. Sean Casten (D-Ill.) has asked Bessent at two congressional hearings and through multiple letters for the administration's legal authority for the operation, the written agreement with Venezuela, and rudimentary information about the accounts and the disposition of the money.
When Casten asked at a Sept. 15 House Financial Services hearing which U.S. bank was holding the funds, Bessent demurred. After Casten reminded him that Rubio had already named Citibank, Bessent agreed that Citibank was involved, but would not confirm the amount being held. As to whether the accounts involved only oil proceeds, Bessent stated: "It is many Venezuelan assets." Astonishingly, he could not confirm that the money was not flowing to U.S. persons.
The executive order's legal justification for this operation rests largely on the International Emergency Economic Powers Act, which gives presidents authority to regulate, block and control transactions involving foreign property during a declared national emergency. But Article I of the Constitution gives Congress the power of the purse, and nothing in the act or any other federal law authorizes such a colossal power grab.
The executive order doesn't just freeze Venezuelan property, after all. It also purports to create a comprehensive system for the collection of Venezuelan oil proceeds and other Venezuelan assets, and to give Rubio the power to decide what to do with the "custodial" accounts it creates for holding them.
In short, the government is collecting and controlling another country's sovereign assets while the Treasury secretary continues to deny Congress an accounting of the location the money, the identity of the account holder, the nature and amount of the payments being made or the identities of the people or entities receiving them. Trump is treating it all as a discretionary executive fund.
Of course, Venezuela's interim government has a powerful economic incentive to cooperate. It needs access to its oil revenue and other assets to pay government workers and keep functioning. Meanwhile, Trump continues to conduct lethal strikes on Venezuelan fisherman in violation of international law.
The problem here isn't Venezuela. It is Trump.
Kimberly Wehle is currently a thematic group coordinator and fellow at the Netherlands Institute for Advanced Study in the Humanities and Social Sciences and author of "How to Read the Constitution - and Why," as well as "What You Need to Know About Voting - and Why" and "How to Think Like a Lawyer - and Why."
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