SUMATE UNDER SEIGE

C O N F I D E N T I A L SECTION 01 OF 02 CARACAS 002478

SIPDIS

SIPDIS

HQSOUTHCOM ALSO FOR POLAD
DEPT PASS TO AID/OTI RPORTER

E.O. 12958: DECL: 08/17/2016
TAGS: PGOV PREL KDEM VE
SUBJECT: SUMATE UNDER SEIGE

REF: A. CARACAS 02405


B. CARACAS 01997

C. CARACAS 00757

D. CARACAS 00101

E. CARACAS 00113

F. CARACAS 00461

CARACAS 00002478 001.2 OF 002


Classified By: ACTING POLITICAL COUNSELOR DAN LAWTON
FOR REASON 1.4 (D)

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Summary
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1. (C) The National Assembly committee investigating Sumate
released an August 15 report claiming Sumate committed tax
evasion, fraud, foreign exchange law violations, false
accounting, and treason, and called on the tax authority,
foreign exchange commission, and banking officials to
investigate further. The legislature also voted to request,
through the Venezuelan Embassy in the United States, a record
of USG support to Sumate from the U.S. Congress. This is
just the latest in a series of hits, including from the
opposition, that Sumate has taken lately. The BRV's efforts
to throw the book at Sumate will probably scare off some
international support, particularly when the conspiracy trial
resumes, or other cases begin. Embassy will continue seeking
ways to be helpful to Sumate, and will ensure that any
efforts are carefully coordinated with Sumate and will help
the cause of this valiant pro-democracy NGO. End Summary.

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AN Rubber Stamps Accusations
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2. (U) On August 15, the National Assembly (AN) approved the
report from the special committee investigating Sumate's
financing of the canceled opposition primary (Ref A),setting
the stage for even more intense probing of the electoral NGO.
The report concluded that Sumate committed tax evasion,
fraud, foreign exchange law violations, false accounting, and
treason by not properly reporting domestic donations and
foreign funds, including USG grants. The committee also
classified Sumate as a political party, not an NGO, thus
making it subject to electoral law violations for accepting
foreign government funds.


3. (U) In addition, the committee accused Sumate of trying
to evade legal responsibilities when it returned the DRL
money upon notification of the legislative inquiry. Lacking
the legal authority to reach the sweeping conclusions voted
on, the AN undertook to forward the report to the relevant
authorities: the foreign exchange commission (CADIVI),
Superintendent of Banks (Sudeban),tax authority (SENIAT),
and Attorney General's office for follow up action. (Note:
The latter two institutions initiated their own
investigations earlier this month.) The AN also voted to
request through the Venezuelan Embassy in the United States,
a record of USG support to Sumate from the U.S. Congress.

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Sumate Increasingly Isolated
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4. (C) The AN report is just one of a long string of hits
Sumate has taken recently, a factor the BRV probably took
into account in the timing of the AN investigation:

-- Opposition Primary: Sumate's push for the primary to
choose a single opposition candidate elicited resentment from
opposition parties, increasingly jealous of the NGO's
organizational success and its international reputation.

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Leading opposition candidates slammed Sumate for its July
attempt to call them on the carpet (Ref B),including Manuel
Rosales, who said Sumate should leave politics to the
parties. Sumate is widely believed to have been ill-prepared
to stage the primary from a logistical point of view, further
undercutting its credibility with the rest of the opposition.

-- Electoral Registry Audit: Earlier this year, Sumate's
plans to work with Venezuela's autonomous universities to
independently audit the electoral registry using DRL funds
was derailed when the universities decided to seek National
Electoral Council approval for the project (Ref C). When the
universities' bid failed and the CNE arranged for the audit
to be hijacked by BRV schools, the universities proceeded on
their own. This setback, the pending NGO law, and the
continued threat that the trial against the NGO's leaders for
receiving NED funds in 2003 could be resumed, prompted Sumate
to return the DRL money. The return of the funding has been
characterized by the BRV as Sumate's admission of wrongdoing
in accepting it in the first place.

-- Federal Congress of NGOs: In October 2005, Sumate
announced the creation of a NGO congress, or grassroots
networking organization (Refs D and E),that would discuss
and present proposals for pressing social issues, such as
health care and education. While Sumate leaders had told us
the group was growing, Sumate Vice President Maria Corina
Machado told poloffs in May that the government was beginning
to intimidate members. Machado told poloffs in a chance
August 10 meeting that BRV pressure had increased in recent
weeks.

-- NED Trial: Although the conspiracy case against Sumate
for receiving a USD 300,000 NED grant had been dormant for
several months following an appeals court decision that
started the process over again (Ref F),a new judge was
assigned to the case in June. Sumate President Alejandro
Plaz, one of the defendants, told us the judge was selecting
the lay judges (escabinos) in mid-July and the case could
resume at any time.

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Comment
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5. (C) The BRV "investigation" of Sumate was a political
show designed to slam Sumate and indirectly condemn its
perceived backer, "the Empire." It also sent a strong,
intimidating message to civil society about the BRV's ability
to punish, with or without the proposed NGO law. The
findings were a foregone conclusion given legislative
committee leader Jose Albornoz' public statements and his
petition to the Attorney General to arrest Sumate's leaders
before the investigation even began. The BRV's efforts to
throw the book at Sumate will probably dampen international
support when the conspiracy trial resumes, or other cases
begin. Embassy will continue seeking ways to be helpful to
Sumate, and will ensure that any efforts are carefully
coordinated with Sumate to help the cause of this courageous
pro-democracy NGO.

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