Identifier
Created
Classification
Origin
07CARACAS434
2007-03-02 13:41:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Caracas
Cable title:  

CODEL JACKSON LEE VISITS CARACAS

Tags:  PGOV PREL ECON VE 
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RUMIAAA/HQ USSOUTHCOM MIAMI FL
UNCLAS SECTION 01 OF 04 CARACAS 000434 

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DEPT PASS TO AID/OTI RPORTER

E.O. 12958: N/A
TAGS: PGOV PREL ECON VE
SUBJECT: CODEL JACKSON LEE VISITS CARACAS


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SUMMARY
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UNCLAS SECTION 01 OF 04 CARACAS 000434

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DEPT PASS TO AID/OTI RPORTER

E.O. 12958: N/A
TAGS: PGOV PREL ECON VE
SUBJECT: CODEL JACKSON LEE VISITS CARACAS


--------------
SUMMARY
--------------


1. (SBU) Congresswoman Sheila Jackson Lee visited Caracas
February 19-22. During her visit, she met with
representatives of civil society, visited an Embassy
supported orphanage, met with union leaders, U.S. businesses,
U.S. oil company executives, representatives of the Foreign
Ministry, National Assembly, PDVSA, and the press. The
Congresswoman promoted engagement between Washington and the
Bolivarian Republic of Venezuela. Venezuelan government
officials barred Embassy officers from most of the meetings
with BRV representatives. END SUMMARY.

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CIVIL SOCIETY
--------------


2. (SBU) The Congresswoman attended a luncheon with
representatives of human rights NGOs at the Ambassador's
Residence. These representatives detailed their activities
in Venezuela to monitor and prevent abuses against
journalists and in trying to coordinate the education,
prevention and treatment of HIV/AIDS. They also described
the difficult political climate in Venezuela, where the
government's hyper sensitivity often results in attacks on
the whistle blowers rather than the problems they expose.


3. (SBU) After the luncheon, the Congresswoman traveled with
the Ambassador to an orphanage supported by the Embassy
community's "Helping Hands" group. Helping Hands promotes
community involvement in charitable activities in the Caracas
metropolitan area. The orphanage of 30 children is run by a
nun and has been sponsored by the Embassy since October of

2003. The Congresswoman toured the facility, met with some
of the workers, and spoke with the children about their
aspirations.


4. (SBU) The BRV organized a meeting with representatives of
Venezuela's Afro-Caribbean community to discuss issues
particular to their community, including developmental
projects sponsored by the BRV. The group was very positive
about Chavez' efforts to include new segments of society in
the political process and looked forward to future
interaction with the Congresswoman and the Embassy.


5. (SBU) The president of Venezuelan Electoral NGO Sumate
described for the Congresswoman the current political

environment in Venezuela and the Venezuelan electoral
process, including the 2004 recall referendum and the most
recent Presidential election in December 2006. He detailed
the proposal for a new NGO law, which like legislation
recently passed in Russia, would require NGOs to register
with the government and would also require all foreign
funding to go through a central, government controlled
account. He also detailed the on-going judicial proceedings
against Sumate and its leadership for accepting a grant from
the National Endowment for Democracy (NED) to promote grass
roots democratic efforts. The Congresswoman was concerned by
the demonization of NED and noted that it was set up
precisely to avoid these types of conflicts caused by being
associated with U.S. foreign policy.

--------------
LABOR RELATIONS
--------------


6. (SBU) Representatives of some of Venezuela's largest
public sector unions representing federal employees,
including specifically educators, health care workers and the
Ministry of Labor, gave the Congresswoman an overview of
union activities in Venezuela. They described the
difficulties they face, including declining membership and
BRV inattention. They asserted that various ministries have
refused to negotiate collective bargaining agreements for the
past few years. In addition, Chavez-supported unions are
eating into their base, and attempts to work with these
unions or reconcile their differences have been unsuccessful.
The Congresswoman stated she would work to engage the U.S.
labor movement to help their Venezuelan colleagues and
invited them to the United States for meetings and to learn
more about the labor movement there.

--------------
VENECONOMICS 101
--------------

CARACAS 00000434 002 OF 004




7. (SBU) Congresswoman Jackson Lee received an overview of
the current economic environment from two of Venezuela's most
prominent economic commentators, Robert Bottome and Orlando
Ochoa, during a February 20 lunch hosted by the DCM. Jackson
Lee noted that while she was in Venezuela to learn, her sense
was that Chavez had done a lot for the poor. She was also
interested in how sustainable were Chavez, economic
measures. Both economists were very clear that the
oil-windfall had allowed Chavez to fund his economic and
political initiatives (many of which had been tried in the
past by other governments) but that the situation was not
sustainable. Both noted that while a large section of the
poor had benefited from BRV transfer payments, little in the
way of job creation or foreign direct investment was taking
place given the anti-private enterprise policies being
adopted by the BRV.

--------------
CHAVEZ' ADVISOR
--------------


8. (SBU) The Venezuelan Embassy in Washington arranged for
the Congresswoman to meet with Alex Main, one of Chavez'
international advisors. Main, an American citizen who has
worked for Chavez for the past five years, appeared
uncomfortable with the Ambassador's presence at the meeting.
The Ambassador excused himself, after which Main also
requested that PolCouns and Econoff be excluded from the
meeting, which lasted for an hour and a half.

--------------
U.S. INVESTMENT AND NATIONALIZATIONS
--------------


9. (SBU) Jackson Lee met with Julian Nebreda, general manager
of the U.S. energy firm AES for Latin America, over a
February 21 breakfast hosted by the DCM. The purpose was to
discuss the BRV,s nationalization of Electricidad de Caracas
(EDC),of which AES owns an 82 percent share. Nebreda said
that the negotiations were professional (a U.S. law firm
represented the BRV) but that the nationalization had been
unexpected, as EDC had always been a privately held utility.
He suggested that he thought the price AES was offered was
fair. Nebreda also offered that in the specific case of EDC,
he did not think the BRV had purposely gone after the company
because it was U.S. based.


10. (SBU) Bernardo Bur, an operations manager at the oil
services firm Baker Hughes, met with the Congresswoman on the
morning of February 20. Bur confirmed that Baker Hughes does
business in Venezuela in all of its divisions, although
drilling services dominate the portfolio here. The company
has a permanent presence in Venezuela, with two plants in
country that produce oil field equipment sold in Venezuela
and throughout Latin America. Mr. Bur said Baker Hughes'
business was overwhelmingly with PDVSA. He added that
business was booming in Venezuela for Baker Hughes and that
Venezuela remained the capital of the oil business in Latin
America. While Bur realized that many IOC,s were now under
some pressure from the BRV, and some were reconsidering their
business strategy in Venezuela, Baker Hughes had no
complaints, as contracts were growing and PDVSA was paying.


11. (SBU) The Congresswoman met with ExxonMobil Venezuela
President Tim Cutt on February 21. Cutt reviewed the current
state of negotiations between his company and the BRV for the
migration of the Cerro Negro strategic association to a PDVSA
controlled joint venture. He said ExxonMobil was concerned
about compensation for lost value as well as governance
issues in the new joint venture. Cutt also stated ExxonMobil
was waiting for approval on its development plan for the La
Ceiba field.


12. (SBU) In addition, Representative Jackson Lee had lunch
with Chevron Latin America President Ali Moshiri. He stated
Chevron was open to selling its portion of the Hamaca
Strategic Association to the BRV if that was the most
profitable route for the company. Though, he made clear that
Chevron was committed to staying in Venezuela.

--------------
PRESS CONFERENCE
--------------


13. (SBU) Approximately 15 members of local and international
press corps attended a press conference with the

CARACAS 00000434 003 OF 004


Congresswoman at the Embassy. After noting the importance of
re-establishing the U.S.-Venezuelan relationship and saying
that "Venezuela has many friends in this new Congress," the
Congresswoman described the importance of transparency in the
nationalization process, and hoped that the government would
allow sufficient time for the negotiations. She also said
she would urge Congress to "reconsider sanctions on the
F-16s," referring to the decision to halt arms sales to
Venezuela, as required by U.S. statute, following its failure
to fully cooperate on counterterrorism matters.

--------------
BRV MEETINGS
--------------


14. (SBU) At the Ministry of Foreign Relations (MRE),the
Congresswoman met with the Vice Foreign Minister (VFM) for
North America Jorge Valero as well as the VFM for Africa
Reinaldo Jose Bolivar. The Ambassador, Polcouns, and Econoff
attended the meeting with Valero. Polcouns and Econoff also
attended the meeting with Bolivar despite strong suggestions
from MRE officials that they should not join. The
Congresswoman opened by thanking VFM Valero for CITGO's
generosity in helping Gulf Coast residents after Hurricane
Katrina, and noting that she was visiting Venezuela looking
for "opportunity and friendship." She noted that the United
States and Venezuela could try to work together on certain
issues, including combating drug trafficking and improving
trade ties. The importance of negotiating transparently with
companies threatened with nationalization was a common theme
during the Congresswoman's visit, and was mentioned here as
well. She hoped that cultural exchanges between the two
countries would increase and favorably commented on
Venezuela's plans to purchase 4000 tons annually of coca leaf
from Bolivia.


15. (SBU) VFM Valero responded that there were areas where
the BRV was prepared to work with the U.S., so long as the
U.S. respected Venezuela's sovereignty. He claimed that the
problem with U.S.-Venezuelan relations was that the United
States had supported "un-democratic" opposition groups
against Chavez, including during the 2002 coup. VFM Valero
said that he hoped for a dialogue with the United States
based on the Brownfield-Maduro in December 2006. They also
discussed the discounted heating oil that CITGO provides to
neighborhoods in New York and Massachusetts. The
Congresswoman recommended that the BRV expand this project
and also seek to work with small and medium minority-owned
businesses. The Congresswoman assured Valero that she would
take his message back to Congress, and noted that she hoped
her meeting would serve as an ice breaker and lead to future
dialogue.


16. (SBU) During her meeting with the VFM for Africa,
Reinaldo Jose Bolivar, the VFM began by noting the cultural
relationships between Venezuela's Afro-Caribbean community
and the African American community in the United States.
According to him, due to many Venezuelans' African heritage,
Chavez has increased Venezuela's activity in Africa. Bolivar
noted that in 2005, when his office was created, Venezuela
lacked diplomatic relationships with 20 African countries,
whereas today there are only four countries with which it
needs to initiate relations. Venezuela has signed 30
cooperation accords with African nations, and is now an
observer at the African Union. Bolivar believes that
institutions like the Bank of the South, the University of
the South, the news channel TeleSur, and the discounted oil
program PetroSur will help Africa as well. The Congresswoman
responded that the United States desires to work together
with Venezuela on African issues and that the 43 members of
the Congressional Black Caucus were very involved with
Africa. She applauded the BRV's efforts to combat poverty,
disease and lack of education in Africa and hoped that
Venezuela would work with the United States to try and stop
the "horror occurring in Darfur."


17. (SBU) During her meeting with the First Vice President of
the National Assembly (AN) Desiree Santos Amaral, the
Congresswoman discussed the possibility of restarting a
dialogue between the U.S. Congress and Venezuelan National
Assembly. The meeting included deputies Calixto Ortega,
Francisco Torrealba, and Aurora Morales. Ortega and Santos
were involved in the "Boston Group," which was a bipartisan
group of deputies that first met in Boston to dialogue and
resolve differences. Torrealba is the new president of the
U.S.-Venezuela parliamentary "friendship group." The
Congresswoman extended an invitation to AN President Cilia

CARACAS 00000434 004 OF 004


Flores to visit the United States. The assembled deputies
repeated their desire to work with the U.S. Congress through
the friendship group or an inter-parliamentary exchange. All
were pointed in their deference to Chavez, noting that in
Venezuela only the executive conducts foreign policy. They
also discussed the prevalence of women in high positions in
the BRV, including the new President of the Supreme Court,
two of five leaders in the AN, and three of the five members
of National Electoral Council (CNE).


18. (SBU) The VP ended the discussion noting that she had
worked as a journalist for 33 years (for the populist tabloid
"Ultimas Noticias") and that the Venezuelan people were
completely with Chavez, despite "lies" by the opposition.
All deputies gave the Congresswoman blank stares when asked
about the infamous Tascon list (a list compiled by one of
their colleagues of the names of millions of Venezuelans who
signed a recall petition against Chavez that is used to
blacklist Venezuelans from government jobs and contracts,
from obtaining passports and from many other public and
private services).


19. (SBU) The Congresswoman met with PDVSA VP Luis Vierma and
discussed energy issues. PDVSA officials did not allow
econoffs to attend the meeting. According to the
Congresswoman, they made a presentation about PDVSA's
activities and discussed the
importance of transparency in the nationalization process.

--------------
FREEDOM OF THE PRESS
--------------


20. (SBU) To cap off her visit to Venezuela, Jackson Lee
dined with representatives of Venezuela's private media,
including television station managers, newspaper editors and
lawyers. (Notable in this group was Marcel Granier,
president of the embattled RCTV television station, which the
BRV has promised to close because of its anti-government
stance.) This group detailed the tightening noose around the
private sector media and the political attacks against their
members by Chavez and the BRV, including the planned closure
of Venezuela's largest and oldest television station, RCTV.
The Congresswoman promised to follow up and the Embassy will
forward information on these politically-motivated attacks to
her office.


21. (SBU) Representative Jackson Lee did not have an
opportunity to clear this cable before departing.

BROWNFIELD