Skip to content

Sen. Cruz: To Undermine the Maduro Regime in Venezuela, Disrupt the Region's Illicit Gold Mining Networks

WASHINGTON, D.C. - U.S. Sen. Ted Cruz (R-Texas), this week participated in the Foreign Relations Subcommittee on Western Hemisphere, Transnational Crime, Civilian Security, Democracy, Human Rights, and Global Women's Issues Hearing titled "Illicit Mining: Threats to U.S. National Security and International Human Rights." There, Sen. Cruz expressed his concerns regarding the illicit mining and trafficking of natural resources, such as gold and uranium that can be used to bankroll terrorist organizations and rogue regimes.

During Sen. Cruz's line of questioning, Carrie Filipetti, the Deputy Assistant Secretary for Cuba and Venezuela in the Bureau of Western Hemisphere Affairs, confirmed that illicit gold mining in Venezuela is being used to sustain the Maduro regime. When asked if disrupting the region's illegal mining networks, such as those run by the ELN and the FARC, would undermine the stability of the Maduro regime, DAS Filipetti responded "the answer is a categorical yes" and cited the billion-dollar Turkey-Venezuela gold trade as an example of why U.S. engagement is necessary.

Sen. Cruz has led efforts in the Senate to combat illicit gold transactions, introducing legislation, S. 533, which would empower the United States to take action against countries, industries, or financial institutions complicit in moving gold for Venezuela or Iran.

Watch Sen. Cruz's direct line of questioning here. Full transcript is below.

Sen. Cruz: "Thank you Mr. Chairman. Good morning. Welcome to each of the witnesses, thank you for your testimony. I've long worried that we're not paying nearly enough attention to the use of gold as a monetary instrument of illicit finance, and so today's hearing is valuable in that regard. I appreciate Chairman Rubio convening this hearing.

"Earlier this year, I introduced a bill that would add trade in illicit precious metals as a class of transaction to be considered when making a Section 311 primary money laundering concern designation. This bill would allow the Treasury Department leverage when determining whether a country or bank shall be designated a jurisdiction of primary money laundering concern - a label which has an obvious chilling effect. I continue urge the administration to consider this and similar measures, which would help address both the mining and trade of illicit materials.

"On that issue, I'd like you to talk a little bit about how illicit metals are being used by the Maduro regime and other anti-American regimes in South America. Specifically, the porous border between Venezuela and Colombia facilitates the smuggling of illegal gold with ties to guerrilla groups like the ELN and the FARC. How widespread is this challenge? And how can we support Colombia in monitoring and halting smuggling across its borders?"

DAS Filipetti: "Senator, thank you. I can speak very briefly to the Venezuela angle of it. In terms of how prevalent it is, you know, unfortunately because we do not have a relationship with the Maduro regime it can be difficult for us to gain exact numbers. We do know that approximately ninety-one percent of all of the mining in Venezuela is illicit. Which is partially why our gold sanctions are so significant. It enables us to target the entire industry because either it is illicitly mined, or it is in some way trying to be used by the Maduro regime in order to support itself by stealing from the natural resources of the Venezuelan people. We know that the ELN and the FARC are present. We also know that there are number of decentralized gangs, "Colectivos," as you are aware, that are operating there. And it's really a vicious cycle because it is, the presence of these ungoverned spaces means that terrorist and criminal groups come in, they are the ones who have control over the weapons. They're often in indigenous communities. It's notable that the three highest mining instances are in Bolivar, Amazonas, and Zulia, which are of course also the most heavily and densely populated with indigenous communities within all of Venezuela. So, their land is being stolen from them. They are being trafficked. Both being trafficked into the sex trade as well as forced into labor.

"So, it's a key problem, and it affects Colombia as well because as you noted, these are porous borders, the transit routes are often controlled by the ELN and the FARC and other gangs. And so, the health impacts and the poisoning of the water and so on does not stop at Venezuela's borders. Colombia had recently indicated that most of its, I think it was ninety-five percent, of all of the new malaria cases in foreign born individuals who are in Colombia, came from Venezuela. So we're seeing everything start to trickle out of Venezuela. I think it's critical that we focus both on regional approaches, which my colleagues can discuss in the surrounding countries where we have partnerships, but also some of the ideas that we posited on how to address the problem inside Venezuela, even with a government that's not willing to cooperate with us."

Sen. Cruz: "Let me follow up. How does the Maduro regime benefit from illegal mining carried out by groups like ELN and the FARC? And will disrupting the region's illegal mining networks undermine the stability of the Maduro regime? If so, how can we rally the region behind this goal?"

DAS Filipetti: "The answer to if disrupting it will help destabilize Maduro, I think the answer is a categorical yes. It's partially why we have implemented the gold sanctions. He's going to keep looking at other sources of potential cash the more our sanctions take effect--particularly on the petroleum sector. And so, we have seen him turn even more towards gold. We've seen him make announcements in both 2018 and this year indicating that this ‘Arco Minero' is a central piece of his strategic development. And of course, there are billions and billions of dollars worth of revenue that can be generated from the gold reserves inside Venezuela.

"In terms of what we can do again, we have very strong allies on the borders of Venezuela who have been working very closely with my colleagues in INL and elsewhere in order to combat illicit mining. We have seen reports, though of course it's hard to determine the origin of some of the gold, so what comes out as Colombian gold may have actually been Venezuelan in origin.

"A few things that we can look at in the near term. So, as I've pointed out, we have had some cooperation from our allies as we've come forward and indicated to them the sanctions risk of engaging with the Maduro regime. So we have seen a significant decrease. I think Turkey is an example of this. Between January and September of 2018, we saw Turkey purchase over nine hundred million dollars worth of Venezuelan gold. That's more than the total trade between the two countries in the previous five years combined. We engage with them very directly. Our embassy engaged with them very directly, and we're not seeing that kind of engagement with the Venezuelan gold industry to that extent. And so that is something that we continue to engage with our partners on.

"Another thing for us to potentially look at is mercury. Mercury is one of the key causes of the ecological devastation, which also affects the health of the indigenous communities that are present. If we can potentially consider ways to prevent or disrupt the amount of mercury that's going into Venezuela and being used by these small mining individuals, that I think, could potentially prevent the production of that gold from ever making it out of Venezuela in the first place. So that's an area for us to look into as well."

Sen. Cruz: "Alright, let's shift for a minute from gold to uranium. In Latin America there are two converging developments on uranium. First, legal mining has been on the rise of uranium across Latin America, and illicit mining will undoubtedly increase alongside it. Second, as we have known for a decade now, Iran and Hezbollah are both engaged in efforts to mine strategic minerals for missile and nuclear programs across the region. A report recently published by Los Alamos National Laboratory about Hezbollah specifically called attention to the quote, ‘global pandemic,' of missing nuclear material and equipment. A couple questions.

"What is your assessment of the risk Hezbollah, or affiliated extremist organizations, are trying to, and can acquire illicit precious metals for their ballistic missiles and nuclear programs, especially illicitly mined and traded uranium?"

DAS Filipetti: "I could speak briefly to the Venezuela angle of this. So we certainly know that there is an Iranian presence. The extent to which the Iranians are directly involved in mining, inside Venezuela at least, is still a little unclear to us. So we know that that there's Iranians, we just don't know the extent to which their operational in the mining industry. There are some deposits of thorium and uranium, inside Venezuela, so it's something that we watch incredibly closely. And the minute we have further details we're happy to provide those to you."




Related Issues

  1. National Security