Sen. Cruz: Pressure the Maduro Regime by Cutting Off its Illicit Gold Trade with Bad Actors

WASHINGTON, D.C. – U.S. Sen. Ted Cruz (R-Texas) today participated in the Foreign Relations Subcommittee on Western Hemisphere, Transnational Crime, Civilian Security, Democracy, Human Rights, and Global Women’s Issues Hearing titled “U.S.-Venezuela Relations and the Path to a Democratic Transition.”

Sen. Cruz raised the imprisonment of U.S. citizens unlawfully detained by the Maduro regime in Venezuela:

“Maduro’s regime has been holding six CITGO employees, including five U.S. citizens who live in Texas, for over a year now,” Sen. Cruz said. “The CITGO executives have been detained on baseless charges and subjected to harsh imprisonment. It is well past time to secure their release and it is my hope that the new Venezuelan government will work with the U.S. to swiftly ensure their safe return.” 

Sen. Cruz also called attention to how illegal gold trading is preserving the illegitimate Maduro regime, and highlighted his recently introduced 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:

“In Venezuela, the gold trade is Maduro’s best and perhaps his last lifeline. In 2018 alone, Venezuela exported $900 million worth of gold to Turkey,” Sen. Cruz said. “To cut off this lifeline I’ve introduced a bill--along with Chairman Rubio--that says: if a country or bank conducts precious metal transactions that are subject to sanctions, as moving gold for Venezuela or Iran would be, that the Secretary of Treasury can take those transactions into account when deciding about a broader conclusion that such country or bank shall be designated as a jurisdiction of primary money laundering concern.” 

Watch Sen. Cruz’s full line of questioning here. Excerpts from his exchange with the Honorable Elliott Abrams, Special Representative for Venezuela, and the Honorable Mark Green, Administration of USAID, can be found below: 

Sen. Cruz: “Thank you, Mr. Chairman. Gentlemen good morning, and thank you for your good work. Globally gold has become a key way that bad actors conduct illicit financial activities. In Venezuela, the gold trade is Maduro’s best and perhaps his last lifeline. In 2018 alone, Venezuela exported $900 million worth of gold to Turkey. According to the U.S. Treasury Department, Turkey has been making large purchases of gold, almost certainly including illicit purchases from Venezuela. To cut off this lifeline I’ve introduced a bill--along with Chairman Rubio--that says: if a country or bank conducts precious metal transactions that are subject to sanctions, as moving gold for Venezuela or Iran would be, that the Secretary of Treasury can take those transactions into account when deciding about a broader conclusion that such country or bank shall be designated as a jurisdiction of primary money laundering concern. Mr. Abrams, can you please describe the role that illicit gold and precious metals transactions plays in sustaining the Maduro regime?”

Hon. Elliott Abrams: “Thanks, Senator. It’s critical. What we did on PDVSA cut off a lot of cash. The oil they were giving to Russia and China was to offset previous debts; they weren't getting cash. So, they lose that cash. Where can they find cash today? Gold is one of the very few places and it’s the biggest one.”

Sen. Cruz: “I understand that the administration is in possession of a list of Turkish entities that are moving gold for Venezuela, based on publicly sourced information. Can you outline how the administration intends to approach these and other bad actors?” 

Hon. Elliott Abrams: “First, we talk to the governments in question, and in some cases, the enterprises in question and--almost every case to say--you ought to stop doing this. You ought to stop doing it because it’s wrong and you ought to stop doing it because there are going to be sanctions. And we’ve had some success in other areas of the world in getting companies to say, ‘Ok, we don’t want to yet risk of sanctions. We’ll stop.’ We have not had that success in the case of gold sales in the Middle East more generally.” 

Sen. Cruz: “Mr. Green, what initiatives could USAID encourage in Venezuela, or other partners in the region, to deter Maduro’s illicit mining and trade of gold and to safeguard the supply chain for Venezuelans?”

USAID Administrator Mark Green: “Thank you, Senator. Actually, in countries like Colombia and Peru we have well-developed, successful licit mining programs which use environmentally sound methods for mining. Secondly, because it’s licit it actually provides a revenue source that can be reinvested in the communities and creates good-paying jobs and chokes off the source of illicit gold revenues that we know that narcos and criminal gangs too often use. So, I would propose in that day after in Venezuela that we ramp up investments like this. This is a way of creating very good paying jobs around which you can raise families and build communities.”

Sen. Cruz: “Thank you. Maduro’s regime has been holding six CITGO employees, including five U.S. citizens who live in Texas, for over a year now. The CITGO executives have been detained on baseless charges and subjected to harsh imprisonment. It is well past time to secure their release and it is my hope that the new Venezuelan government will work with the U.S. to swiftly ensure their safe return. Mr. Abrams, is the administration in discussions with either the Guaidó administration or the Maduro regime on the imprisonment of the CITGO executives who are U.S. dual nationals? And can you describe what efforts are being made to secure their release?” 

Hon. Elliott Abrams: “As you know senator, we are unable to get consular access to them. The position of the regime is because they are also Venezuelan citizens, you don’t get to see them. So we have not been able to do that. It is also true that the church in Venezuela has asked to see them on kind of pastoral visits. Refused, ‘no.’ We are in touch with the families. We keep pressing the regime because there are two court orders for their release which the regime simply refuses to implement. So, we keep pressing. We do keep raising it. I’m absolutely confident that at the point in which Interim President Guaidó takes over, their release will be very rapid.”

Sen. Cruz: “Well, good. And I would encourage you to continue to make that a high priority. A final question for both of you. This is a pivotal time in Venezuela’s history. It’s a time with enormous opportunity but also enormous risk. There are some 3,000 generals in Venezuela. Each of those generals now has to decide with whom he stands: with the illegitimate and oppressive Maduro regime or with the legitimate and recognized Guaidó government. What do both of you believe could be effective --both carrots and sticks--for those 3,000 generals to encourage them to stand on the right side of history, with the people of Venezuela and not to support a dictator on his way out the door?”

Hon. Elliott Abrams: “I’d say there are two parts to that, the Venezuela part and the American part. The legitimate National Assembly has passed a transition law that speaks of amnesty. And there are further debates in the National Assembly in Venezuela about saying more about that, being more detailed about what an amnesty would consist of. On our part, we’ve made it very clear that sanctions can be removed. Visa revocations can be reversed and visas can be granted. For those who are actually indicted, that’s a different story-- indicted or convicted. They should have their lawyers deal with the Department of Justice. But from the Treasury and State point of view, these things are reversible and we’re trying to make the argument--and more importantly, President Guaidó and the National Assembly are making the argument--that they are open to those who are willing to change.”

Sen. Cruz: “Thank you.”

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