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LATIN AMERICA | 15-01-2020 17:42

The banker, the Trump donor and the secret trip to meet Venezuela's VP

When a major Trump donor travelled to Caracas in November for secret talks with Venezuela’s vice-president, he was not, it turns out, the most important visitor

When Erik Prince, a major Trump donor and private security mogul, travelled to Caracas in November for secret talks with Venezuela’s vice-president, he was not, it turns out, the central figure orchestrating the meetings.

That person was a controversial British deal-maker by the name of Ian Hannam. A former JPMorgan banker, arranged the trip as part of his year-long scouting effort for possible gold investments in the crisis-battered nation.

Prince’s meeting with Vice-President Delcy Rodríguez has been reported; Hannam’s role hasn’t.

The discussion of mining ventures with Rodriguez raises fresh questions about whether Prince, a Michigan native and brother of Education Secretary Betsy DeVos, violated US law against doing business with sanctioned officials. Hannam is British and not subject to the same restrictions. 

The trip is part of an intense behind-the-scenes scrimmage for Venezuela’s wealth and resources as it grapples with political gridlock, international sanctions and a humanitarian crisis. 

Juan Guaidó, the opposition leader who’s recognised as interim head of state by the US and more than 50 countries, is wrestling for control of the legislature with a lawmaker backed by President Nicolás Maduro and Russia.

The plan for the November bid was to see if Prince could help with security in the dangerous gold mining regions of Venezuela where Hannam sought business, one of the people said. Prince, a former US Navy SEAL and founder of the security firm Blackwater, also pushed for the freedom of six imprisoned Citgo executives during his visit. His effort to secure their release - five are dual U.S. citizens - offered an official reason for Prince’s trip that wouldn’t contravene sanctions, several people notified. 

Contacted for comment, Hannam declined to provide details, saying only, “We never discussed business or the Citgo Six.”

A lawyer for Prince, Matthew Schwartz, said his client went to Caracas “as a private citizen” and “received clear legal guidance which he scrupulously followed. While there, he did not discuss any business nor did he receive anything of value.”

Elliott Abrams, the State Department’s special envoy for Venezuela, said lasts month that the meetings “would appear to violate US sanctions.”

Hannam is no stranger to Venezuela. In 2008, while at JPMorgan, he was the financial adviser for a deal in which the Russian miner Peter Hambro invested in a Venezuelan gold mining venture with Vancouver-based Rusoro Mining Ltd. 

At the time, Rusoro was the partner of choice for Hugo Chávez’s government.

Much in common

Prince and Hannam have much in common. Both have military backgrounds, a proclivity for controversy and a taste for nations under duress where the risks are as great as the potential rewards.

Both tried to do business in Afghanistan. Hannam co-founded a US company called Centar, which has been trying to develop copper and gold assets in the war-torn nation. In October 2018, he declared Centar had secured approval to develop those assets from the Afghan government after years of delay, thanking the Trump administration and US Defense Department for funding the tender process. 

The year before, Academi chairman pitched a plan to US President Donald Trump to privatise the war in Afghanistan using security contractors funded by the nation’s strategic mineral resources.

Blackwater, owned by Prince before he sold it a decade ago, became infamous after its employees shot unarmed Iraqi civilians in 2007. Hannam, a former Special Forces captain in the British military, was once called the “King of Mining” for his role advising major miners such as BHP Billiton and helping orchestrate the US$90-billion Glencore-Xstrata merger. In 2014 he was fined £450,000 by the UK’s Financial Conduct Authority for market abuse. Hannam, who didn’t contest the penalty, was said to have disclosed inside information to a potential customer in 2008 about his client Heritage Oil Plc.

Early in 2019, the former military proposed a plan that called for thousands of soldiers-for-hire to oust Maduro. On the November trip he made a less aggressive pitch to send security personnel to help pave the way for new presidential elections – the Trump administration’s end goal.

US officials have denied that Prince acted as their secret envoy and have threatened to sanction him. Yet Prince told confidants he was cleared to go by multiple senior officials and traveled under the protection of a special license obtained by a law firm that represents a Citgo 6 family, two people familiar with the matter stated.

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by Stephanie Baker and Ben Bartenstein, Bloomberg

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