Keep the gold in your vaults.
Venezuelan opposition leaders are asking the Bank of England to keep 14 tons of Venezuelan bullion safely locked up in Britain rather than return it to the administration of President Nicolás Maduro because he’s likely to steal or squander it amid the country’s economic collapse.
In a letter sent Friday, former National Assembly President Julio Borges and the political coordinator for the Voluntad Popular party, Carlos Vecchio — both in exile — asked bank governor Mark Carney to refuse Venezuela’s request for the gold.
“This transaction is clearly prompted by illegal and immoral motives: Maduro and his associates have systematically used the assets of the Venezuelan state (including the gold) to sustain money laundering efforts, and to facilitate the widespread and damaging system of corruption and repression financed by the Venezuelan dictatorship using the money of the Venezuelans,” they wrote. “Huge sums have been stolen by Maduro and his associates.”
The Times of London has reported that the Bank of England is dragging its feet — and perhaps refusing — to send the gold back. The bank has not made any public statements about the issue.
The bank holds about 400,000 gold bars for central banks around the world, making it the second-largest depository of the metal after the New York Federal Reserve. For it to refuse a request from one of its clients would be highly unusual.
As Venezuela has seen collapsing oil production, it’s become increasingly reliant on its gold and mineral wealth to stay afloat. Maduro has boasted that the country has the world’s second-largest gold reserves. On Nov. 1, the Trump administration issued an executive order prohibiting U.S. residents and citizens from engaging in any transactions with Venezuela’s “corrupt” gold industry — a move that was largely seen as aimed at Venezuela’s gold trade with Turkey.
The opposition leaders say returning the gold would put the Bank of England at odds with the U.S. sanctions. “We assess that the repatriation of the Venezuelan gold would breach the BoE’s legal obligations to prevent money laundering and corruption,” they wrote. “Moreover, this transaction is a direct effort from the Venezuelan dictatorship to circumvent ongoing sanctions issued by U.S. President Donald Trump.”
Venezuela has had gold deposited at the bank since the 1980s. But starting in 2011, late President Hugo Chávez began bringing the gold back to Venezuela amid much fanfare, saying the nation’s riches belonged in the country. At the time he belittled his critics’ worries that the gold would be squandered.
“They say that Chávez is going to take the gold to the Miraflores [presidential palace] and give it away to Cuba,” he told local media.
Now it’s clear that much of that gold has been sold off during the economic crisis. Caracas Capital Markets, which tracks Venezuela’s finances, says that in 2011, the country had $21.3 billion in gold reserves. But “after a rash of selling gold,” the country had just $6.8 billion as of August, the firm said.
Maduro, who won a highly contested election in May, is due to be sworn in for a new six-year term on Jan. 10. But more than three dozen nations, including the United States and the United Kingdom didn’t recognize the election — casting a shadow over the legitimacy of Maduro’s new term.
For his part, Maduro has long accused Borges, Vecchio and other opposition leaders of being behind coup and murder plots against him and attempts to wreck the economy.