I’m in the Wrong Business

Update: As Maury pointed out in the comments, Chavez has reconsidered:

Venezuelan-owned Citgo Petroleum, which had earlier indicated it might end a home heating oil assistance program for low-income Americans, yesterday said it had decided to continue the program.

Joseph P. Kennedy II, chairman of Citizens Energy, said yesterday that the renewal of the program was evidence of Venezuelan President Hugo Chávez’s “genuine concern for the most vulnerable, regardless of where they may live.”

Does that mean that he was no longer concerned for those people when he cancelled the program? With comments like that, Joe Kennedy’s $400,000 salary won’t be in jeopardy.

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You may have seen the recent announcement that Hugo Chavez is cutting off the free heating oil for low income residents in the Northeast:

Citgo Stops U.S. Oil Gifts in Sign Chávez Feels Pain

Citgo Petroleum Corp., the U.S. refiner owned by the Venezuelan government, will suspend charitable contributions of home heating oil to poor U.S. households — a sign that falling oil prices may hamstring Venezuelan President Hugo Chávez, whose administration has used an oil windfall to win voters’ loyalty at home and allies abroad.

In a surprise announcement, former U.S. Rep. Joseph P. Kennedy II said Venezuela would stop deliveries to his Boston-based nonprofit, Citizens’ Energy, which last winter received $100 million of fuel that was distributed throughout the Northeast. Mr. Kennedy said Citgo cited falling oil prices and the world economic crisis for forcing the company “to re-evaluate all of its social programs.” Neither Citgo nor the Venezuelan government had any comment.

That alone is an interesting story. Chavez has siphoned money away from the oil industry in order to pay for social programs, which has resulted in underinvestment that will eventually come back to haunt him. (See this story that I wrote last year highlighting the issues). To this point, high oil prices have been a blessing for him, but falling production and low oil prices are combining to put the squeeze on Chavez.

But that isn’t the point of this essay. In a discussion on this at The Oil Drum, someone linked to a bit of additional information:

Chavez, Joe Kennedy and Oil Math

It’s hard to avoid the commercials starring former Congressman Joseph Kennedy II explaining how friendly Venezuela and Hugo Chavez are to the American people. After all Chavez and Kennedy are bringing relief to the poor people of America who suffer under the evil tyranny of high fuel costs. However, reality has a tendency to get in the way of press events for Citgo and Citizens Energy Corporation such as the scenes of Joe Kennedy driving up to house in a Citgo truck to deliver 40% cheaper heating oil from his “not-for-profit energy company.” The last thing anyone involved in this program wants is for someone to look behind the curtain.

First, Citizens Energy Corporation is not the organization that is directly involved with the program. Rather, one has to first look to a holding company, which is a for-profit and wholly owned subsidiary of Citizens Energy’s called Citizens Enterprises Corporation: first, eighty-six percent of Mr. Kennedy’s over $400,000 annual salary comes from this organization.

It’s always been a pet peeve of mine when ‘charities’ pay outrageous salaries to their employees. If I send a charity a check, I really don’t want it paying for a vacation home in France. $400,000? Are you kidding me? Poor Joe may have to take a pay cut and join so many others who have been impacted by the economic turmoil.

I have always heard that if you want to get rich, you should start your own religion. But it looks starting your own charity can also offer up a path to riches. Now, if I can just come up with a catchy name…