Last Updated on June 10, 2026 by Chicago Policy Review Staff
The Trump administration’s undefined resolution to remain in control of Venezuela and its oil exports for the foreseeable future was, without a doubt, a shock to many, but this tactic is not entirely without historical precedent. In May 2003, the United Nations Security Council created the Development Fund for Iraq (DFI) after the United States invasion of Iraq. Revenues, especially from oil and gas, were to go into the fund to support humanitarian efforts and economic reconstruction in Iraq. However, instead of in Baghdad, the DFI began its lifespan at the Federal Reserve Bank of New York. Around a year later, the United States government returned control of the fund to the Iraqi government in Baghdad, but, even in the span of that year, a lack of transparency prevented proper oversight and management of the funds. Two key differences distinguish the DFI and the current situation in Venezuela, raising significant concerns about the potentially very easy misuse of Venezuelan oil funds by the United States government. The first is that there is notably even less oversight of the US government’s management of Venezuelan money than there was of the DFI account. The second is that, despite its heavy involvement with Venezuelan governance, however, the Trump administration does not officially recognize the current government of Venezuela.
Interim President Delcy Rodriguez is the head of what remains of Nicolás Maduro’s regime in Venezuela. Rodriguez was Maduro’s vice president when Maduro was still in power. However, during his first term, President Donald Trump recognized the National Assembly that the opposition to Maduro elected in 2015. On January 16, 2026, President Trump met with opposition leader María Corina Machado and received her Nobel Peace Prize. He signaled somewhat vaguely that he might create some involvement for her in the future of the Venezuelan government, but he also dismissed Machado with claims that she would not have the popular support to lead Venezuela. The success of the opposition party in the most recent election in Venezuela seems to undermine this evaluation.
The Trump administration’s unwillingness to recognize the Rodriguez government has created a complex situation with regards to US involvement in the Venezuelan oil industry. The abduction of Nicolás Maduro, the President of Venezuela, was, by US President Donald Trump’s own admission, directly related to oil and interest in establishing a presence in the Venezuelan oil industry. In fact, one of the few defined policies of the Trump administration’s involvement with Venezuela in the post-Maduro era is a plan for the US to indefinitely control the sale of Venezuelan oil on the open global market. The Trump administration confirmed its first sale of Venezuelan oil on January 14, 2026, valued at about $500 million.
Perhaps unsurprisingly, the money from this sale went directly to a bank account in Qatar rather than Venezuela or even the United States government, raising concerns about transparency. Since that initial $500 million sale, revenues from the sale of Venezuelan oil have gone to a US Treasury bank account. Energy Secretary Chris Wright claims that the money went back to Venezuela after the initial deposit in the Qatari bank account, but Democrats in Congress have voiced their suspicions about the legality of this. Senator Chuck Schumer (D-NY) and Senator Adam Schiff (D-CA) introduced legislation on February 12, 2026 that would demand an independent audit of the account in Qatar by the Government Accountability Office.
There are two reasons for its use of the Qatari bank account that the Trump administration has publicized. Secretary of State Marco Rubio argued that the account was to help reduce the risk of Venezuela’s creditors appropriating the assets and to create a loophole for working around the government recognition issue. Though the US government does not currently recognize the Rodriguez regime, Qatar recognizes the Maduro regime, of which Rodriguez is the functional continuation, apparently allowing for a short term solution to the recognition paradox.
On January 9, 2026, President Trump issued an executive order that requires that the revenues from the sale of Venezuelan oil by the US be stored in a US Treasury Department bank account and that declared these revenues to be the sovereign property of the government of Venezuela. However, this brings us to an important question: to which government of Venezuela does President Trump refer?
In 2019, during President Trump’s first term, the Trump administration officially recognized the opposition-dominated National Assembly that won the 2015 election in Venezuela, so, in theory, the money in the US Treasury Department account is under the control of that National Assembly. However, President Trump’s apparent dismissive attitude towards opposition leader Machado makes the situation less clearly defined. To muddy the waters even further, Rodriguez told NBC News that she believes that Maduro is still the legitimate president of Venezuela. As a result, Rodriguez must tread carefully to remain in power. She must maintain popular support in Venezuela with the anti-imperialist positions of Maduro while complying with the Trump administration’s demands to avoid the implied threat of meeting the same fate as Maduro.
Iraq, 2003
During the period of United States control of the DFI, there were several layers of regulation to try to prevent misuse or misappropriation of the funds by the United States. The International Advisory and Monitoring Board (IAMB) was the auditing body for the fund, providing international oversight. The DFI even had a special inspector general. On the ground in Iraq, the Coalition Provisional Authority (CPA), the post-war and temporarily US-led government of Iraq, managed the reconstruction money from the DFI. However, even with these safeguards and the direct involvement of the Iraqi government, there was significant failure of oversight. Some of the money did go to Iraqi government ministries to fund projects, as the money’s use had been intended to be, but money went missing in transfers from New York to Baghdad, and the US-led CPA’s spending left little money for the Baghdad government to use after the final transfer of control of the DFI back to Iraq. The CPA had been responsible for managing over $23 billion, but it had spent over $19 billion before Iraq had control of the money again. The Special Inspector General of the DFI made special note of the lack of transparency by the CPA. The Defense Contract Audit Agency (DCAA) audit reports were heavily redacted, making it impossible for anybody to glean meaningful information from them. During the June 21, 2005 hearing about the misuse of DFI funds before the House Subcommittee on National Security, Emerging Threats, and International Relations, an entirely missing $8.8 billion that had been disbursed to the government ministries of Iraq was of particular interest.
Though there is some degree of precedent for the United States government taking temporary control over another country’s oil revenues in a time of emergency, the inability for several layers of oversight, backed by the power of and UN Security Council resolution, to prevent the disappearance of funds and the avoidance of proper scrutiny of transactions does not inspire confidence in an even less-regulated US-controlled Venezuelan oil fund.
Executive Orders in Comparison
With Executive Order 13303, former President George W. Bush created the DFI. In the executive order, he justifies it as a way to facilitate “the orderly reconstruction of Iraq, the restoration and maintenance of peace and security in the country, and the development of political, administrative, and economic institutions in Iraq.” In Executive Order 14373, President Trump establishes the Venezuelan oil revenue account, calling it the Foreign Government Deposit Funds. President Trump makes a much more sweeping argument than Bush did regarding the DFI about the significance of preventing any interference with the establishment of the Foreign Government Deposit Funds. He claims that it is necessary to “ensure economic and political stability in Venezuela. The failure of these critical efforts would jeopardize major foreign policy objectives of the United States, including: ending the dangerous influx of illegal immigrants and the flood of illicit narcotics, which has resulted in the death of countless thousands of American citizens; protecting American interests against malign actors such as Iran and Hezbollah; and bringing peace, prosperity, and stability to the Venezuelan people and to the Western Hemisphere more generally.” Though EO 13303 seems to argue that the establishment of the fund is explicitly for the good of the state of Iraq, EO 14373 more heavily emphasizes the foreign policy and domestic interests of the United States, including issues that are not necessarily directly related to the state of Venezuela. The Bush administration’s vision for the DFI, as dysfunctional as its execution was, appears to have been primarily that it would be a way to help Iraq rebuild after the war. EO 14373, however, briefly mentions the stability of Venezuela but focuses primarily on US interests.
A potentially more consequential difference between the two executive orders pertains to the issue of government recognition. In EO 13303, Bush explicitly defines the DFI to be “on the books of the Central Bank of Iraq, by the Administrator of the Coalition Provisional Authority responsible for the temporary governance of Iraq…” In contrast, President Trump only names the “Government of Venezuela” rather than specifying a specific government like Bush did. This leaves room for interpretation of the phrase “Government of Venezuela” if the Trump administration does not recognize the current Delcy government, creating uncertainty about the future of the Venezuelan funds, especially given the focus on US interests in EO 14373 rather than those of the state or people of Venezuela. The lack of oversight in the Venezuela case, in addition to the recognition issue potentially creating the opportunity for the Trump administration to delay proper disbursement of funds to Venezuela and Delcy’s strong incentives to not go against the wishes of President Trump, highlights the potential for similar, if not even more significant, dysfunctionality than in the Iraq case.