Identifier
Created
Classification
Origin
05CARACAS150
2005-01-18 19:50:00
CONFIDENTIAL
Embassy Caracas
Cable title:  

VENEZUELA: CODEL DODD MEETS BUSINESS, POLITICAL

Tags:  PREL ECON OVIP VE 
pdf how-to read a cable
This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 03 CARACAS 000150 

SIPDIS

NSC FOR CBARTON
USCINCSO ALSO FOR POLAD

E.O. 12958: DECL: 01/10/2014
TAGS: PREL ECON OVIP VE
SUBJECT: VENEZUELA: CODEL DODD MEETS BUSINESS, POLITICAL
AND JUDICIAL LEADERS

REF: CARACAS 00367

Classified By: A/DCM Abelardo A. Arias for Reason 1.4(d)

-------
Summary
-------

C O N F I D E N T I A L SECTION 01 OF 03 CARACAS 000150

SIPDIS

NSC FOR CBARTON
USCINCSO ALSO FOR POLAD

E.O. 12958: DECL: 01/10/2014
TAGS: PREL ECON OVIP VE
SUBJECT: VENEZUELA: CODEL DODD MEETS BUSINESS, POLITICAL
AND JUDICIAL LEADERS

REF: CARACAS 00367

Classified By: A/DCM Abelardo A. Arias for Reason 1.4(d)

--------------
Summary
--------------


1. (C) CODEL Dodd met January 9 with Venezuelan business
leaders who noted their concern with increased GOV
involvement in the private sector and recommended the USG
emphasize multilateral cooperation in dealing with President
Hugo Chavez. Meeting with the National Assembly leadership,
the CODEL discussed increased U.S.-Venezuelan cooperation on
issues like commerce and energy, terrorism, narcotrafficking,
and corruption investigations. Supreme Court President Ivan
Rincon told the Senators he had been assured World Bank
funding for judicial reform, and the court structure that
necessitated an expansion would not lead to additional court
chambers. The Senators also briefly met with representatives
of the opposition. They emphasized the importance of having
a trustworthy National Electoral Council for the legislative
elections scheduled for December. End Summary.

--------------
Meeting with Business Leaders
--------------


2. (C) The Ambassador hosted a meeting for Senators
Christopher Dodd (D-CT),Lincoln Chafee (R-RI),William
Nelson (D-FL) with business leaders from sectors ranging from
banking and consulting services to food processing, consumer
goods, and natural gas production January 9. Also present
were Senate Foreign Relations Staffer Janice O'Connell, Dodd
Staffer Jonathan Pearl, Nelson Staffer Dan McLaughlin, and
Chafee Staffer Deborah Brayton. Imelda Cisneros, President
of the Venezuela-U.S. Chamber of Commerce (VENAMCHAM) and
head of the Caracas offices of consulting firm Arthur D.
Little, led off by noting that 2004 had been a good business
year, as the oil-based economic recovery had kicked in.
However, economic growth was not sustainable over the long
haul with current policies. She noted that while VENAMCHAM
had been able to engage in dialogue with specific officials,
the overall direction of GOV policies was disturbing, with
ever-greater state involvement in the economy and the
isolation of Venezuela from the process of U.S.-led free

trade agreements.


3. (C) Proctor and Gamble executive Ed Jardine echoed her
views, suggesting that 2005 would be a year of 4-6 pct GDP
growth and that the GOV, with a an eye to Presidential
elections would do everything possible to keep the economy
pumped up through 2006. He said that the head offices of
U.S. corporations in Venezuela remained cautious about
investing, especially as GOV rhetoric, including most
recently threats of expropriation of agricultural land, was
very ominous. Nelson Ortiz, President of the Caracas Stock
Exchange, noted the increasing direct GOV presence in key
sectors, such as food, where in order to gain political
support, it sold products to low income consumers at
below-cost prices with which private businesses could not
compete.


4. (C) Senator Dodd asked the business leaders what the
appropriate USG response should be. Andres Duarte, a
petroleum and port services entrepreneur, suggested that the
USG should avoid where possible direct, bilateral
confrontation with the GOV "as this is exactly what Chavez
wants," and instead should, where possible, cloak itself in
multilateral approaches, calling the GOV to account for its
performance in terms of obligations which it has assumed
under international treaties (trade, human rights, labor,
etc.). Kellogg's country manager Arthur Gelles noted the
importance of highlighting the benefits to the country that
multinational companies provide and their commitment to
corporate social responsibility projects. Gustavo Vollmer,
whose family-owned businesses range from sugar and rum to
banking, urged the USG to forge a common agenda with
different hemispheric partners in the face of Chavez's
"leftist and militarist" model. Economic consultant Pedro
Palma summed up the businessmen's thinking by saying that the
USG must not present Chavez with an easy target, but that it
should be under no illusions - his control of the congress,
the courts, the military and the bureaucracy mean that
Venezuela is not now a functioning democracy as we understand
the term. The senators expressed appreciation for the views
expressed at the meeting and committed themselves to pressing
to keep Venezuela and Latin America more generally high on
the U.S. foreign policy agenda.

--------------
Meeting the National Assembly Leadership
--------------


5. (U) The CODEL and the Ambassador met with National
Assembly President Nicolas Maduro (Fifth Republic Movement --
MVR),First Vice President Ricardo Gutierrez (Podemos),and
Second Vice President Pedro Carreno (MVR) January 10. Maduro
told the Senators that while Venezuela's economic
recuperation exceeded expectations, there was still much to
do. Maduro also noted that political stability increased
after President Hugo Chavez won the recall referendum and the
"the large victory for the people we represent" during the
regional elections. Separately, Maduro said it was time to
solve the difficult and conflictive relationship that existed
between the U.S. and Venezuela by cooperating on trade,
narcotrafficking and terrorism.


6. (C) Senator Dodd told Maduro that the U.S. Congress wanted
relations with Venezuela to move forward and reiterated the
points Maduro had suggested for increased cooperation, adding
energy. Second Vice President Pedro Carreno noted
Venezuela's parliamentary investigative committees could be a
mechanism for cooperation and coordination. Carreno also
suggested working together on cooperation for the extradition
of corrupt officials, repatriation of capital and assets, and
eliminating fiscal havens, which he called a breeding ground
for corruption, money laundering and drugs. Returning to the
social programs involving health, education and food, Senator
Chafee asked what the U.S. could do to help. First Vice
President Ricardo Gutierrez suggested establishing
legislative working groups for these issues. Gutierrez also
said he would like to see cooperation in education and
scientific development, perhaps through university exchanges
or cooperation, which he called the key to development.


7. (C) Senator Nelson asked the deputies to deliver a message
to Chavez. He said after the elections, it was time to move
on to a mutually beneficial relationship. However, he noted,
there was no sign that President Chavez wanted to do that.
Senator Nelson asserted that President Leonel Fernandez
(Dominican Republic) had promised to speak to Chavez to
facilitate better relations, but Nelson had heard nothing
back. Maduro asserted that mechanisms were being created to
improve relations, citing Venezuelan Ambassador to the U.S.
Bernardo Alvarez as the representative in charge of that
relationship. He said the deputies would tell Chavez about
the talk with the Senators and let him evaluate it.

--------------
Meeting with the Boston Group
--------------


8. (C) Following the meeting with the National Assembly
leadership, the Senators and the Ambassador met with Boston
Group members Saul Ortega (MVR, also President of the Foreign
Relations Committee),Pedro Diaz Bloom (Proyecto Venezuela),
Pedro Pablo Alcantara (Accion Democratica -- AD),Victor
Cedeno (COPEI) and Foreign Relations Committee deputy Victor
Hugo Morales (MVR). Diaz cited the establishment of a
television station to broadcast National Assembly updates
proposed by Boston Group members proposed, and which Maduro
has included in the agenda for 2005, as an example of the
Group's success. Alcantara lamented the opposition did not
have representation in the new National Assembly leadership,
saying the opposition represented an important part of
Venezuela. Alcantara, Cedeno and Morales told the Senators
that Venezuela was fighting for democracy. Morales said
Venezuela is fighting terrorism and narcotrafficking, but
development is its biggest problem. Senator Dodd welcomed
Diaz Bloom's suggestion to include Senators in the Boston
Group, and told the deputies the U.S. and Venezuela should
continue to work together.

--------------
Meeting with the Supreme Court President
--------------

9. (C) The Ambassador, Senators Dodd, Chafee and Nelson, and
Foreign Relations staffer O'Connell also met with Supreme
Court President Ivan Rincon January 10. Rincon said the
World Bank has guaranteed to fund the Supreme Court's
judicial reform project, contrary to what National Assembly
deputy Julio Borges (Primero Justicia) had told the press.
(Note: Rincon's assertion that the World Bank guaranteed
funding also counters what David Varela, resident
representative of the World Bank told the Embassy. ) Rincon
said he hoped the National Assembly would choose the new
National Electoral Council (CNE) directors instead of leaving
it to the Supreme Court who had had to choose the current
directors. Regarding the Court's recent expansion, Rincon
told the Senators that Venezuela's court structure and
mandate drove the expansion and pointed out how Venezuela's
system differs from that of the U.S. and other countries.
Despite the expansion, Rincon said, the number of chambers
would remain unchanged.

--------------
Getting Opposition Views
--------------


10. (C) The Senators also met briefly with nearly a dozen
opposition representatives at a lunch hosted by the
Ambassador. (The event had to be cut short when President
Chavez opened time to meet with the Codel early that
afternoon.) The Venezuelans commented principally on the
importance of having a trustworthy National Electoral Council
to oversee the legislative elections in December. Many
Venezuelans would not participate, they asserted, if
confidence in the institution was not bolstered through the
selection of new members expected in the coming months.
Senator Dodd drew the attention of the Chavez opponents to
the municipal elections coming at mid-year, citing it as an
opportunity for them to begin building voter support. The
opposition representatives also highlighted President
Chavez's control at present over all the branches of
Venezuelan government, citing for example the recent packing
of the country's Supreme Court with Chavez loyalists. Asked
by the Senators about the prospects for dialogue with the
GoV, they were not optimistic. "The government only wants
interlocutors of its own choosing," one of the
representatives noted.

--------------
Comment
--------------


11. (C) The new National Assembly leadership composed of
Chavez supporters spoke about cooperation, but their actions
will be dictated by Chavez's decisions. The National
Assembly is more likely to concentrate on a domestic,
Chavez-prescribed agenda for 2005.


12. (U) CODEL Dodd did not have the opportunity to clear this
message before its departure.
McFarland