Despite U.S. sanctions, a South Florida businessman is linked to Venezuela’s gold industry
A South Florida businessman is the largest owner of a joint project with the Venezuelan Ministry of Defense to process gold mined in the depths of the Amazon rainforest, despite sanctions imposed by Washington, D.C., on the entire regime of President Nicolás Maduro, as well as on the nation’s billion-dollar mining industry.
Venezuelan-Trinidadian businessman Clemente Ricardo Silva, who lives in the city of Doral, is the main investor in a gold-processing plant under construction in the remote Venezuelan town of Las Claritas, according to military sources and documents obtained by the Miami Herald and el Nuevo Herald. Silva entered into the project in partnership with the Venezuelan military and key figures of the authoritarian government, the sources and documents reveal.
But Silva claims he sold his interest in the project, and showed the Miami Herald copies of two letters that he said were sent to Venezuela’s mining ministry notifying officials of his intentions to get rid of his shares after the United States sanctioned Venezuela’s gold industry on March 19, 2019. However, as of Jan. 20, he and his sons still appear in the country’s corporate registry as the company’s main owners, holding 80 percent of the outstanding shares. And minutes from an October 2019 board meeting show Silva participating as a shareholder. That meeting took place months after Silva says he sold his shares back to the company’s majority investor.
As oil revenues plummet, Venezuela’s fast-growing gold industry has become a crucial source of revenue for Maduro’s regime, which is under broad U.S. sanctions. Gold mining in Venezuela, and across Latin America, is violent, pervaded by organized crime and environmentally destructive. Much of Venezuela’s “blood” gold is sold abroad to unsuspecting consumers, with some of the metal ending up in Miami, a joint Herald investigation with the Colombian news organization InfoAmazonia found last year.
The new plant tied to Silva is being built in Bolivar state, in southeastern Venezuela, in a corner that contains one of the country’s richest deposits of gold. The plant would initially be able to process about 400 tons of gold-rich sands per day to produce between 80 and 150 kilograms of gold per month, or between one and two tons of the metal per year. That’s as much as $100 million annually.
But the bulk of the plant’s gold production is unlikely to reach state coffers, as required by Venezuelan law, said Manuel Cristopher Figuera, former director of the Bolivarian National Intelligence Service.
As is the case with most of the region’s gold production, the complex’s output would likely be delivered to the regime with the profits being used to grease the palms of the military officers that support it, said Cristopher Figuera, a former major general who was Maduro’s chief of intelligence until he defected in April.
The Venezuelan regime uses proceeds from smuggling and selling gold abroad to buy the loyalty of the military as it battles international sanctions and domestic opposition. Wildcat miners, the military and armed Colombian groups, including the National Liberation Army, have on occasion battled for control of the mines, but Maduro’s criminal syndicate aided by the Venezuelan military has emerged in control of the gold mines, said Cristopher Figuera.
“Maduro runs a criminal enterprise,” said Cristopher Figuera, who said he investigated the “looting” of the Venezuelan gold sector before leaving for the United States under imminent risk of arrest.
In this criminal enterprise, “no written traces are left, but instructions are given [under the table], operating as a gang of criminals, for the allocation of these [gold] contracts,” he said in a telephone interview.
Silva became the largest shareholder in the company building the plant, Grupo Orizonia, in February 2019 after financing the purchase of Chinese equipment used in the project.
Returning from Venezuela, Silva confirmed that he had bought the Chinese equipment and bought the shares, but said that he took steps to sell his interest in the company the following month, in March, upon learning that the U.S. administration had sanctioned the Venezuelan state-run gold operations.
“When [the sanctions announcement] came out we introduced a request for the sale” from the Venezuelan Ministry of Mines, Silva said.
According to Silva, the requests were first delivered in March and later in September to the ministry, which he said has yet to answer. The businessman produced copies of the letters he said had been sent, but the Miami Herald could not confirm independently that they had been delivered.
Silva said that he currently doesn’t have direct participation in the business, having signed a private document with the previous majority shareholder of Grupo Orizonia, Américo Figuera, to sell him back 80 percent of the company in exchange for a signed promise to receive his initial investment back once production starts.
Américo Figuera confirmed that a private agreement between him and Silva had taken place concerning the company’s ownership.
But as of today, the transfer of ownership has yet to take place. That fact was acknowledged in the minutes of the last shareholder meeting logged in Venezuela’s corporate registry, where Silva attended as the owner of 30 percent of the business, accompanied by his two sons, Klemens Alejandro Silva and Ricardo Leslie Silva, who are owners of 25 percent each.
In that meeting, held in October, the officers agreed to register a change in Grupo Orizonia’s physical address, moving the company to the same office floor where the headquarters of Silva’s company, the Silva Group, is located in the Venezuelan city of Puerto Ordaz.
Las Claritas
The U.S. government, which deems Maduro’s rule of Venezuela as illegal, has taken a series of steps to curtail the strongman’s sources of income.
U.S. Sen. Marco Rubio has called the trade in illegally mined gold from Venezuela and other Latin American nations a “direct threat” to U.S. national security interests.
The Trump administration last year issued a total economic embargo against Maduro’s regime. The embargo prevents firms from doing business with Venezuela’s government without a specific exemption. Grupo Orizonia does not appear to have such an exemption, which could spell trouble for any U.S. person having an interest in that company.
“If a U.S. person engaged in an unauthorized transaction or other dealings with a government of Venezuela entity, or with any other blocked person operating in Venezuela’s gold sector, it could likely constitute a violation of U.S. sanctions,” a Treasury official speaking on background told the Herald in an email.
Silva is a wealthy businessman who owns several corporations in Venezuela, mostly dedicated to shipping and air transportation through the Orinoco, the country’s largest river and the main waterway to the mining-rich state of Bolivar.
According to his corporate website, the Silva Group owns four different companies operating in the country: Consorcio SMT Silva, C.A., Silva Shipping Agency, SermaTransil C.A. and S&S Orinoco Aviation.
Silva also owns two million-dollar homes in Miami-Dade County, county property records show. In 2012, he paid $1.2 million for a condo on Brickell Key. Three years later, he purchased a five-bedroom Doral house for $1.25 million.
Until 2018, the businessman operated a shipping transfer station off Venezuela’s eastern coast working under contract for state-run Ferrominera del Orinoco, which produces iron. The station, consisting of two large ships owned by Silva, received iron transported through the Orinoco river in barges out of Bolivar state. The group provides helicopter services to mining operations in the area.
But it was in 2018, when Silva appeared to have struck gold, literally, that he got involved with Grupo Orizonia.
Documents obtained by the Miami Herald and el Nuevo Herald show that Grupo Orizonia signed an exclusive and potentially highly lucrative contract to build a gold-processing cyanidation plant in Las Claritas as a joint venture with the Military Anonymous Company for the Mining, Oil and Gas Industries, or “Camimpeg.” Maduro created Camimpeg in 2016 to grant the military a slice of the country’s mining and oil operations. Mixing cyanide with gold ore is a method to extract the precious metal from rock.
Located very close to the Tepuyes, the awe-inspiring mesas adorning the Venezuelan jungle, the cyanidation plant under construction is only the first step of an operation that aspires to be large-scale.
“We are talking initially about a plant ... that can produce more than 100 kilos [of gold] per month,” said a source familiar with the project who asked for anonymity to discuss confidential business dealings. “But there are extensions being planned to build a much larger complex, which could end up increasing the initial capacity by five to ten times, depending on the number of mills installed.”
Under the terms of the contract signed with the military company in 2018, Grupo Orizonia would obtain 45 percent of the production of the metal produced, committing to deliver 30 percent to Camimpeg and another 25 percent to the state-owned Venezuelan Mining Corporation (CVM).
While Camimpeg and CVM are not specifically sanctioned by the U.S. government, the U.S. Treasury Department has sanctioned Venezuela’s state-owned mining firm, Minerven.
That’s because the country’s rapidly expanding gold industry had become a “lifeline” for Maduro’s regime, according to Benjamin Gedan, deputy director of the Latin American program at the Wilson Center, a Washington, D.C., think tank.
“The U.S. government thought that once you choke off the oil industry, you would essentially be suffocating the entire economy — but in fact the government has been nimble in finding other sources of revenue, especially gold,” said Gedan, who served in the Obama administration’s National Security Council and was responsible for Venezuelan policy. “No one calculated that they would so quickly be able to generate an industry almost from scratch. ... To the extent that international actors are buying Venezuelan gold, it’s providing a lifeline to the regime.”
Former Venezuelan government officials said that as of the last year the mining region known as the Arco Minero produced roughly 35 metric tons of gold annually, more than four times the official figure released by the state. That would make the country one of the largest producers of gold in Latin America, although still well behind leader Peru, which mines about 150 metric tons per year. (In 2010, Venezuela produced just 12 tons of gold, according to the U.S. Geological Survey.)
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Under the table
Top members of the Venezuelan regime have plundered billions of dollars from the state’s coffers during the two decades since the late President Hugo Chávez began his socialist revolution in 1999, absorbing through many corruption networks much of the oil income and the huge loans contracted by the nation that were never spent on social programs or in the development of the country, said a retired high-ranking military officer who spoke on condition of anonymity.
But gold mining offered the government criminal consortium a universe of new opportunities, since it was the regime itself that ended up drafting the new rules of the game that allows it to operate without any type of control.
“When they arrived, they found that the oil was completely systematized, dominated by rules and controls that they had a hard time evading. That created difficulties to steal the wealth and it took them time to get their people in place, and it was after a long process of preparations that they could start the plunder. [It was] something they did until they broke the industry,” the retired high-ranking officer said.
“Maduro and his illicit network are misusing Venezuela’s gold-mining operations as another way to steal from the Venezuelan people after having mismanaged and plundered Venezuela’s crumbling oil industry,” the U.S. State Department said when the gold sanctions were announced in March.
“Today’s action will prevent Maduro and other corrupt actors from further enriching themselves at the expense of the long-suffering Venezuelan people. In addition, it will help stop mining-related environmental damage and labor exploitation in Venezuela’s gold industry,” the State Department added in a press release.
Tareck El Aissami, one of the regime’s central figures, runs Venezuela’s mining operations as the nation’s industry minister. He was sanctioned by Washington in February 2017 for “playing a significant role in international narcotics trafficking.”
Most of the miners working in the sector are forced to deliver the bulk of their output to the consortium instead of selling it to the Venezuelan Central Bank as stipulated by law.
The consortium run under the table by the regime has at least six cyanidation plants capable of processing about 16 tons of gold a year, but it also forces small independent miners to sell them their production under threat of using violence, arrests or interrupting the supply of fuel. Those tactics could provide them as much as another 12 tons a year, sources say.
According to the testimonies of different sector sources, the operation could be generating more than $1.5 billion a year, depending on the gold content of the sands processed, in a business in which the presidential family emerges as the main beneficiary.
“With gold it is different, because gold has no controls. If the mining complex processes a thousand kilos of gold, nobody controls them,” the retired high-ranking officer said. “And they share the loot themselves.”
This story was originally published January 28, 2020 at 6:00 AM.
