THE TEFLON EFFECT: CHAVEZ EVADES SUITCASE SCANDAL

C O N F I D E N T I A L SECTION 01 OF 03 CARACAS 001686 SIPDIS SIPDIS HQSOUTHCOM ALSO FOR POLAD DEPT PASS TO AID/OTI RPORTER E.O. 12958: DECL: 08/23/2017 TAGS: PGOV PREL PHUM VE SUBJECT: THE TEFLON EFFECT: CHAVEZ EVADES SUITCASE SCANDAL FALLOUT REF: A. BUENOS AIRES 01627 ¶B. BUENOS AIRES 01567 ¶C. BUENOS AIRES 01576 CARACAS 00001686 001.2 OF 003 Classified By: Acting Political Counselor Daniel Lawton for Reason 1.4(D). ¶1. (C) Summary. President Chavez so far seems to have escaped largely unscathed by the fallout from the seizure in Buenos Aires of $800,000 cash carried by a U.S.-Venezuelan businessman. Using a variety of public relations tactics, the Bolivarian Republic of Venezuela (BRV) has managed to deflect accusations of BRV plans to use the funds for nefarious purposes or of widespread corruption. Nevertheless, media theories of BRV involvement in the scandal run rampant and have handed the beleaguered opposition a new issue to try to exploit. Although the story is still unfolding, the Embassy believes that the circumstances and timing of the incident point to BRV involvement and should be fully exploited if borne out. End Summary. -------------- -------------- Hodgepodge Strategy: Deny, Accuse, Distract, Investigate -------------- -------------- ¶2. (SBU) The BRV has used a variety of public relations gestures and tactics to manage the fallout from the August 4 seizure in Buenos Aires of $800,000 hand-carried by U.S.-Venezuelan businessman Guido Alejandro Antonini-Wilson on a private jet (reftels). Chavez first denied having any knowledge about the issue. He claimed ignorance on August 7 during a press conference in Buenos Aires, brushed off questions about the "police matter," and denied that Antonini-Wilson was a member of his delegation. Later during his August 19 "Alo, Presidente" radio and television program, he said he refused to further discuss the troublesome luggage and considered it a "case closed." Finance Minister Rodrigo Cabezas, while calling for an investigation into the incident, also strongly denied on August 10 any government association with either the chartered jet or the wayward businessman. ¶3. (SBU) Casting blame elsewhere, the BRV responded to the growing flurry of accusations that Chavez was directly involved in the affair by alleging that the suitcase scandal was a plot manufactured to sully the Venezuelan President's image and detract from the accomplishments of his visit to Argentina. Chavez during the August 19 "Alo, Presidente" blamed the "empire" and its "lackeys" in Argentina and Caracas for trying to sow discord between the BRV and the Kirchners. Communications Minister William Lara on August 21 flatly denied accusations that Chavez had lunch on August 3 with Antonini-Wilson. Foreign Minister Nicolas Maduro said August 13 he believed the Pentagon and CIA were behind the incident. The local media reported that Venezuelan Ambassador to Argentina Arevalo Mendez alleged on August 7 that the scandal was a campaign to "make troubles and distract from President Chavez' trip to Buenos Aires." In the same vein, Vice President Jorge Rodriguez accused the media of "making a stupid smoke screen" of the event. ¶4. (C) There is widespread local speculation that Chavez, after months of delay, chose August 15 to unveil his constitutional reform proposal to distract media and public attention away from the suitcase scandal. The release of the reform package did wrest local headlines away from the incident. Telesur President Andres Izarra denied this and told POLOFF and PD officers on August 15 that Chavez, always attuned to history and anniversaries, timed his address to coincide with the third anniversary of his defeat of the 2004 recall referendum and the 202nd anniversary of an oath taken by Simon Bolivar. ¶5. (C) Even while claiming innocence and tossing out accusations, the BRV bowed to reported pressure from the Kirchner government to launch investigations into the case and dismissed a key PDVSA official tied to the matter. PDVSA confirmed August 17 that it accepted the resignation of the head of PDVSA's Argentine affiliate, Diego Uzcategui-Matheus, whose son reportedly accompanied Antonini-Wilson on the chartered jet (ref c). PDVSA also reported an administrative investigation into reported transgressions of internal PDVSA regulations. Izarra during his August 15 visit to the Embassy did not dispute that Uzcategui was the BRV's "fall CARACAS 00001686 002.2 OF 003 guy" for the scandal. Energy Minister and PDVSA President Rafael Ramirez, Superintendent of Venezuela's tax authority (Seniat) Vielma Mora, and other BRV officials have also publicly noted their plans to conduct and support any investigations into irregularities surrounding the undeclared $800,000. -------------- Chavez is Rubber... -------------- ¶6. (C) Thus far, Chavez seems to have mostly avoided paying a significant political cost as a result of the suitcase scandal. Brazilian Embassy First Secretary Audo Faleiro and Head of the Regional Integration and Mercosur Section Leandro Zenni Estevao expressed their surprise to Polcouns August 20 that Chavez had not been more directly linked to the scandal nor suffered more from the resulting fallout. They also insinuated that it was highly unlikely he was not involved in the cash transfers given the timing of Antonini-Wilson's trip to Buenos Aires just days before Chavez' arrival. Venezuelan press coverage of the scandal has been largely overshadowed by Chavez' proposals for sweeping constitutional changes and, more recently, by Chavez' offer to mediate hostage exchange negotiations between the Revolutionary Armed Forces of Colombia (FARC) and the Colombian government. -------------- ...And the Opposition Lacks Glue -------------- ¶7. (C) The response from the Venezuelan opposition has been characteristically ad hoc. Various opposition leaders have called for investigations into the case and attempted to link it to Chavez' profligate foreign spending. Secretary General of COPEI Luis Planas, for example, demanded on August 21 that the BRV fully investigate the matter and cited it as an illustration of how Chavez spends Venezuela's resources financing political activities in other countries rather than solving domestic problems. Venezuelan business federation Fedecamaras on August 14 asked for an explanation of the $800,000. An opposition organized "March of the Briefcases" to PDVSA's headquarters in Caracas, scheduled for August 15, fizzled after the protesters learned that a pro-Chavez counter rally had been planned to confront them at their destination. Since then, their attention has largely been diverted to trying to devise a strategy (or strategies) to counter Chavez' constitutional reforms. -------------- Conspiracies Flourish -------------- ¶8. (C) Local theories abound as to the destination of Antonini-Wilson's $800,000, with many of them revolving around Venezuelan government support for leftist political leaders and groups (ref b). Allegations from both the Venezuelan and Argentine opposition, as reported in regional press, suggest that Antonini-Wilson was acting as Chavez' handler to deliver the cash to Buenos Aires in support of Cristina Kirchner's presidential bid, which Chavez has openly endorsed. Others speculate that the money was being delivered to Argentine "piquetero" protest groups, in particular to social protest leader and former Kirchner government official Luis D'Elia. Opposition sources are also alleging that a "ninth passenger," who might have been a high-level Venezuelan military officer charged with overseeing the transport of the money, was on board the flight. Still more hypotheses reported in Uruguayan press say the $800,000 was sent to support Uruguayan President Vazquez, while some link it to a suspended shipment from Venezuela's Military Industries, Inc. (CAVIM) of 15,000 Iranian produced bullets to the Uruguayan military. Others simply chalk it up to nefarious and corrupt activity by one U.S.-Venezuelan businessman and a cadre of PDVSA officials. Some believe the money was either being laundered or used to influence contracts between Argentine and Venezuelan firms. Others believe that, given Venezuelan currency controls in place and the reported sequential nature of the bills, the issuance had to come from the BRV. -------------- Comment -------------- CARACAS 00001686 003.2 OF 003 ¶9. (C) The Argentine-Venezuela suitcase affair has highlighted Chavez' nonstick quality that has allowed him to redirect and escape blame for his domestic failings and international shenanigans time and time again. As part of his deflection strategy, he also demonstrated his ability to make maximum advantage of only token public gestures of amends when facing domestic and international pressure. While explanations for the bag of cash run the gamut, the circumstances and timing of the scandal point to BRV involvement. If Antonini-Wilson was indeed acting as a go-between in Chavez' regional meddling activities, his failure to deliver the goods may indicate that the BRV, long accustomed to working without domestic accountability, is getting sloppy abroad or there is simply too much money awash. FRENCH