Trump administration faces controversy over funding cartels through Venezuelan gold import policy

War was declared against the cartels, but instead only guaranteed the criminal organization's interests through gold exploitation.

“90% of Venezuela’s gold is produced through criminal means”… Venezuelan gold left in U.S. warehouse

(Mexico City = Yonhap News) Correspondent Song Gwang-ho = A legendary city full of gold. Historically, it is not yesterday or today that mankind set out on a journey to find a golden city. Spaniards roamed Latin America in search of El Dorado, and Americans headed west in search of gold. The result of ‘Go West’ was the ‘California Gold Rush’.

The US Trump administration, which is the most powerful country in the 21st century but is suffering from chronic deficits, also participated in the gold rush. About 180 years ago, Americans headed west, but the Trump administration's gaze is turning south. The target is Venezuela, a treasure trove of oil and gold resources.

However, just as explorers of the past who pursued fantasy encountered difficulties, the Trump administration also encountered reefs. The New York Times (NYT) reported on the 28th (local time) that the Trump administration, which has enormous influence over Venezuela after the ouster of former President Nicolas Maduro, began developing mines in cooperation with global resource companies, but encountered difficulties. This is because the enormous profits from gold mine development are going into the pockets of criminal cartels.

According to the newspaper, immediately after the departure of the Maduro regime, the Trump administration joined hands with global raw material traders such as Trafigura and implemented a new policy to import gold from Venezuela's state-owned mining company Minerven. The White House's plan was to take control of Venezuela's resources and prevent the outflow of wealth to former hostile countries, such as Iran, while revitalizing the U.S. economy.

In fact, Trafigura started operating a pipeline immediately after signing the contract and achieved initial results by transporting 400 kg of gold bars to the United States every month. However, behind the splendid achievements lurked serious structural contradictions.

According to the NYT, criminal organizations, including the notorious local armed gang 'Tren de Guayana', and corrupt military forces are tightly controlling the southern mines, the main gold producing area in Venezuela. Workers and contractors are trapped in an exploitation structure called 'el sistema', in which a certain percentage (about 20%) of the gold mined is paid to gangs as a protection tax.

As a result, the Trump administration, which has made clearing out drug cartels and criminal organizations its top priority, has paradoxically provided legal dollars to local criminal organizations. The White House claims that unlike the previous Venezuelan administration, it is "cleaning up the mining industry," but suspicions that funds from the United States are flowing into criminal cartels persist.

To make matters worse, the fallout became more severe due to the White House's 'speed war' in which resource imports were too hasty in order to achieve political results. The international refining industry is demanding strict due diligence standards that thoroughly verify human rights violations, corruption, connections to criminal organizations, and environmental destruction that may occur during the gold production process.

For this reason, hundreds of millions of dollars worth of gold bars, which Trafigura and others hastily brought in, are currently left in a warehouse in the United States without being able to pass the international verification threshold. Even though gold prices continue to soar, the U.S. government has not been able to enjoy any real benefits as refiners are ignoring Venezuelan gold for fear of being involved in 'criminal laundering'.

“90% of Venezuela’s gold is produced through criminal means,” said Julia Yansura, director of anti-corruption group FACT Koala. “Finding a normal supply chain is like looking for a needle in a haystack.”