Boris Johnson is a paid consultant to a hedge fund that organised his secret visit to Venezuela’s autocratic leader, President Maduro, and that stands to gain from improved relations between the West and the Latin American republic.
The former prime minister was accompanied on his trip by the founder of the firm, who sat in on discussions with the president.
Johnson took a private jet to Caracas last month for talks with the autocratic president of the oil-rich country who stands accused of vote-rigging, corruption and human rights abuses.
His public position is that he used a 45-minute encounter to spell out conditions for resuming full diplomatic relations with the UK, which does not recognise Maduro’s administration and has frozen $2 billion of its gold reserves in a long-running dispute.
When The Sunday Times revealed details of the trip last week, the former prime minister also said he pressed Maduro to back Ukraine in its war with Russia.
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However, he did not mention that he has been financially compensated for consultancy and speeches by Merlyn Advisors, or that it paid for his flights and expenses. Nor that he was joined on his visit to Venezuela by the firm’s founder, Maarten Petermann, a former senior banker at the investment bank JP Morgan. It is understood that Johnson had a pre-existing relationship with the hedge fund and was not remunerated specifically for the trip.
A spokesman for Johnson said: “Since he has left public office we do not comment on the details of Boris Johnson’s private meetings.” He emphasised that no commercial matters were discussed during the summit.
Johnson’s visit took place during a family holiday to his cousin’s villa in the Dominican Republic and is the latest example of his lucrative post-politics career. In the six months after his resignation, he generated £5 million in earnings, and more recently purchased a £3.8 million mansion in Oxfordshire.
Asked how much he has been paid by Petermann’s company, Johnson declined to comment.
Banker with eyes on Venezuela — and animal welfare
Petermann is the Dutch-born 45-year-old founder of Merlyn Advisors, a London-based hedge fund which is thought to manage more than $500 million in assets and which owns the French football club Lille FC. He has privately expressed his frustration at the state of relations with Venezuela over the course of several years, warning that it would drive Maduro into the hands of hostile countries such as Russia.
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He is connected to Johnson through his role as a trustee of the Aspinall Foundation, the animal conservation charity which hired Carrie Johnson, the former prime minister’s wife. He also spends time at 5 Hertford St, the private members’ club in Mayfair known for its links to the Tory party and whose regular guests include Johnson, Michael Gove and Liz Truss.
Venezuela has the largest oil reserves in the world, meaning that despite its status as a Kremlin ally, it is a strategically significant source of alternative energy.
According to sources, Petermann has repeatedly raised his inability to trade the country’s sovereign debt, the buying and selling of which was banned under Trump-era US sanctions designed to force Maduro from office.
In October President Biden temporarily suspended US Treasury sanctions on Venezuelan bonds, oil and mining in exchange for Maduro making progress on holding “free and fair” presidential elections, which are due to be held this year. The deal caused the price of bonds issued by Venezuela and its state-owned oil company to surge. It later prompted JP Morgan, where Petermann worked for nearly two decades and developed expertise in debt markets, to add Venezuelan bonds to the influential list of investments it manages in emerging economies.
However, hopes of a lasting rapprochement ended almost immediately after the deal was signed. Maduro banned his main opposition rival, María Corina Machado, from running against him, and arrested dozens of pro-democracy activists. Biden reimposed mining sanctions but stopped short of doing the same for bonds amid pressure from Wall Street investors.
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The backdrop to Johnson’s visit was fear that Maduro’s behaviour could scupper the US deal, and set back the ultimate prize of the full restoration of diplomatic relations.
Maduro is still the subject of a $15 million bounty in the US for his alleged drug trafficking and his administration remains under investigation by the International Criminal Court for crimes against humanity, including torture and up to 20,000 extrajudicial executions. His relationship with the British government is especially poor after he threatened to annex an oil and mineral-rich region of Guyana, an English-speaking Commonwealth country, and criticised a Royal Navy vessel being sent to the area.
Hans Humes, chief investment officer at Greylock Capital Management and co-chairman of the Venezuelan creditors’ group which lobbied the White House to end the sanctions on bonds last year, welcomed Johnson’s visit. He said: “Anyone who goes to Venezuela will see that the reality on the ground does not match up with the international perception.” A source said it was important to keep dialogue going and stop western countries from making rash decisions that would undermine investment.
While Johnson has said he was acting as a back channel and relaying the Foreign Office position at all times, those close to the foreign secretary, Lord Cameron of Chipping Norton, have emphasised that Johnson was “doing his own thing”. A source confirmed that Johnson told Cameron of the visit over WhatsApp while en route, and said that he did not mention the connection to Petermann. The fact Johnson has been paid by Merlyn, and that the hedge fund covered the cost of his trip — a detail confirmed by a source briefed on the negotiations — further complicates his position.
David Lammy, Labour’s shadow foreign secretary, has accused Johnson of undermining Britain’s foreign policy, saying the visit poses “serious questions about his continuing influence over UK foreign policy and the coherence of our international approach”.
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The Financial Times first reported on Petermann’s involvement in organising the trip. Neither he nor his company Merlyn Advisors responded to our approach.
A source close to Johnson said that he had spoken about politics alone during the almost hour long “argument” with Maduro and that he had repeatedly raised the opposition leader Machado being kept off the ballot.
The source said: “It was a robust exchange which focused entirely on democracy and human rights and Ukraine. The Chavistas have banned their principal opponent Maria Corina Machado from appearing on the ballot paper. Boris Johnson told Maduro that in a democracy the people, not politicians, decide who should be elected.
“He said there was no hope of normalisation with the West as long as she was off the ballot paper. Maduro said she was a traitor who sided with the United States. Boris said it should be up to the people to judge.”
The source added: “Every time Maduro made a claim about Machado, Boris said it should be up to the people to decide in free and fair elections.” The question of whether or not Machado will stand is unresolved. Opposition leaders are increasingly of the view that she should renounce her presidential ambitions and let somebody else stand if, as seems likely, she is kept off the ballot.
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Johnson also repeated his insistence that he liaised with the Foreign Office before the meeting and debriefed Colin Dick, the chargé d’affaires in Caracas.
If Biden moves to isolate Venezuela once again, those with investments in bonds issued by the country or its state-owned oil-companies will fear a significant depreciation in the value of their assets. When Biden ended sanctions on the trading of such bonds, it was welcomed as a win for Wall Street, which had mounted a months-long lobbying campaign, according to the Wall Street Journal.
The Financial Times said it was a “big win for any US investor that has, in practice, been trapped in the bonds — and the horde of more opportunistic hedge funds that specialise in [distressed debts in developing countries], who can now load up in the hopes of a broader settlement one day”.
