On September 12, 2025, a report released by the State Department’s Office of Inspector General cast a spotlight on a curious and costly chapter in U.S. foreign policy: the continued maintenance of the shuttered American embassy and diplomatic properties in Caracas, Venezuela. Despite the diplomatic freeze with President Nicolás Maduro’s government since 2019, the U.S. has quietly sustained a sizable operation on Venezuelan soil, employing 150 local staff and spending more than $6.7 million annually on upkeep. The total annual budget for these operations, when factoring in all related expenses, reaches an eye-opening $10.5 million, according to the Associated Press.
The embassy compound itself is no small matter. Sprawling across 27 acres and encompassing five residences—once homes for American diplomats but now empty—the property sits as a silent witness to a diplomatic standoff that shows no clear sign of resolution. The State Department’s watchdog report did not mince words, criticizing U.S. officials for failing to conduct a required cost-benefit analysis to determine whether taxpayers should continue footing the bill for security, operations, and maintenance of these properties. As ABC reported, the core issue is whether this ongoing expense makes sense when the embassy is no longer operational and relations remain deeply strained.
Relations between the United States and Venezuela soured dramatically in March 2019 when the U.S. suspended embassy operations and evacuated all American diplomats from Caracas. This move was prompted by fears of a hostile takeover of the compound amid mounting tensions between Washington and the Maduro regime. Since then, the compound’s American flag has been lowered, and diplomatic ties have remained frozen. Yet, as the AP noted, a contingent of Venezuelans employed by the State Department stayed behind, quietly advancing U.S. interests in a country where such work carries real risk. The Maduro government has a record of jailing Americans and Venezuelans suspected of conspiring with “imperialists,” raising the stakes for those who remain on the ground.
While the U.S. presence in Caracas is now largely invisible, the embassy’s maintenance is not. The inspector general’s 28-page report, which focused on policy compliance, offered a rare glimpse into the sensitive and sometimes perilous work still taking place. It revealed that at least some of the 150 local employees appear to continue their duties from within the embassy compound itself. Notably, the report uncovered instances of unauthorized renovations to two embassy buildings—an issue that underscores the challenges of managing a remote and largely empty diplomatic outpost.
To ensure the compound’s protection, the U.S. reached an agreement with Switzerland to serve as the “protecting power” for the property. This arrangement mirrors steps taken in other countries where American embassies have closed, such as Syria in 2012. As a senior State Department official explained to the AP, it’s not uncommon for the U.S. to keep local staff or appoint a third country to safeguard abandoned government properties. Still, the scale and cost of the Caracas operation stand out—especially given the lack of diplomatic activity on-site.
In the absence of an American diplomatic footprint in Venezuela, the day-to-day management of U.S.-Venezuela relations has shifted to the Venezuela Affairs Unit, which operates remotely out of the U.S. embassy in neighboring Colombia. Originally staffed with just 10 U.S. diplomats as a temporary solution, the unit has since grown to 21 employees. However, the inspector general’s report found no evidence that the State Department conducted a review to justify this increase in staffing. Most of the unit’s diplomats work from a narrow, windowless space in Colombia dubbed the “submarine,” an apt metaphor for the hidden and constrained nature of their mission.
Until January, the Venezuela Affairs Unit was led by career diplomat Francisco Palmieri, who juggled the dual role of overseeing both one of the largest U.S. embassies in Colombia and the unique, remote mission to Venezuela. The report highlighted that this dual responsibility stretched resources thin, making it difficult for Palmieri to review sensitive diplomatic cables and participate in secret talks with Maduro officials. The watchdog noted that while the unit has taken some innovative steps—such as establishing a WhatsApp channel that now reaches 144,000 individuals monthly—there are still significant gaps in compliance with State Department policies, ranging from property management and staffing levels to proper use of the vehicle fleet and cloud-based software.
So why maintain such a costly and complex operation for an embassy that’s been closed for over six years? According to Geoff Ramsey, a senior analyst on Venezuela at the Atlantic Council, there’s a strategic logic to keeping a baseline presence. “It’s not a bad idea to have minimum baseline operations at the embassy,” Ramsey told the AP. “If relations ever get restored, it’s important that we have a team on the ground that’s ready to move the relationship forward. But if we’re spending millions of dollars just to maintain a few empty buildings with no end in sight, I think it’s fair to raise questions about the price tag.”
The inspector general’s report, which wrapped up its inspection in March 2025, issued seven recommendations to shore up compliance with State Department policies. These ranged from better management of diplomatic residences and regular review of staffing levels to ensuring that the vehicle fleet and cloud-based software are used properly by staff in Caracas. U.S. embassies are required to annually identify any excess properties not being fully utilized or that no longer make economic sense to maintain—a rule that, according to the report, appears not to have been rigorously followed in the case of Caracas.
The report also noted that, while the U.S. routinely keeps local staff or names a third country as a protecting power in similar situations, the scale of the operation in Venezuela is unusual. The American embassy in Caracas, once a symbol of robust bilateral engagement, now stands as a costly reminder of a diplomatic relationship gone cold. Yet, behind the scenes, U.S. interests are still being quietly advanced—albeit at a steep price and with little public transparency.
For now, the future of the U.S. embassy in Caracas remains uncertain. The State Department has not publicly responded to the inspector general’s recommendations, and it’s unclear whether changes will be made to the current arrangement. What is clear, however, is that the ongoing expense and the risks faced by local staff are drawing increasing scrutiny from both policymakers and the public. As the AP’s Matthew Lee observed, the story of the shuttered embassy is as much about the costs of diplomatic disengagement as it is about the challenges of maintaining a foothold in a country where relations have all but collapsed.
In the end, the question remains: how long will American taxpayers continue to support an empty embassy in Caracas, and what, if anything, will prompt a change? Until then, the compound’s empty halls and manicured grounds serve as a costly testament to a standoff with no clear end in sight.
