CHAVEZ NAMES A "YES" CABINET/PREVIEWS HIS

C O N F I D E N T I A L SECTION 01 OF 03 CARACAS 000052

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E.O. 12958: DECL: 01/08/2017
TAGS: PGOV PREL PHUM PINR VE
SUBJECT: CHAVEZ NAMES A "YES" CABINET/PREVIEWS HIS
"SOCIALIST" AGENDA

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Classified By: POLITICAL COUNSELOR ROBERT DOWNES,
REASON 1.4 (D)


1. (C) Summary. President Chavez used the televised January
8 swearing-in ceremony for his new cabinet to preview his
plans to steer his government toward "socialist" reforms,
including expropriations of privatized industries and the
revision of Venezuela's commercial code. He also harshly
criticized OAS Secretary General Miguel Insulza and
Venezuelan Catholic Church officials for raising concerns
about his decision not to renew the license of an independent
television broadcaster. Chavez instructed new Vice President
Jorge Rodriguez to lead the implementation of the Bolivarian
Republic of Venezuela's (BRV's) shift to "socialism" in
coordination with Chavez' unquestioningly loyal 27-member
cabinet. With Vice President Rangel's departure,
presidential brother and new Education Minister Adan Chavez
may be the only government official capable of influencing
Chavez' political decisions. Neither Rodriguez nor Adan
Chavez are likely to be accessible to the opposition and
diplomatic community in the way that Rangel and his staff
were, nor are they likely to moderate Chavez' tone or
direction. Chavez pledged to outline more of his plan of
government at his own swearing-in on January 10. End
Summary.

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Chavez Previews An Even More Radical Agenda
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2. (SBU) President Hugo Chavez swore in his new cabinet
January 8 in a well-choreographed televised ceremony on the
stage of a Caracas auditorium filled with loyal supporters.
The backdrop to the stage was a 20-foot tall photo of the
face of an impassioned Chavez. Typically, the BRV uses
paintings of Simon Bolivar as backdrops. Chavez also
delivered a rambling, two-hour speech in which he lashed out
at OAS Secretary General Insulza and the Catholic Church and
previewed his administration's domestic plans for his next
six-year term of office. He stressed that his re-election on
December 3 was not a destination, but rather a "point of
departure." Chavez unequivocally signaled that he seeks
additional ambitious and profound political, social, and
economic change and does not intend to lead a government of
continuity. He promised to reveal additional plans and
details of the "next phase of the revolution" when he is
officially sworn in January 10 in the National Assembly.


3. (SBU) Chavez specifically identified what he called five
new "transformational motors" of his administration. In the
coming weeks he said he intends to:

--- request that the National Assembly pass an enabling act
that will give him and his cabinet legislative authority to
issue decrees that will facilitate further social and
economic regulation;
--- seek constitutional reforms toward the formation of the
"Socialist Bolivarian Republic of Venezuela";
--- promote "popular education" in schools, workplaces,
public plazas to inculcate socialist values;
--- institute a "new geometry of power," ostensibly to make
government more responsive to the public; and,
--- expand local councils by creating regional and national
councils to supplant the institutions of the "bourgeois
state."


4. (SBU) Chavez listed a number of measures he would decree
once an omnibus enabling act is passed. Chavez said he would
"nationalize" (which could mean that he intends to
expropriate with compensation) CANTV, Venezuela's most
important telecommunications company in which Verizon owns
28.5 percent. He also pledged to assume government control
over all industries that had been privatized before,
including the electricity sector in which American firms have
invested. With respect to oil, Chavez said he the BRV will
continue to seek majority ownership in the four strategic
associations in the Faja region. He also said he would seek
the revocation of constitutional provisions that protect the
autonomy of the Central Bank and pledged to rewrite the
country's commercial code, the system of laws that currently
govern how private enterprise functions in Venezuela. Septel
will provide immediate business reaction to these proposed
measures.

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Chavez Blasts the OAS SecGen and Church

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5. (SBU) Both Chavez and his new Vice President Jorge
Rodriguez staunchly defended Chavez' decision not to renew
the broadcasting license of the opposition-oriented
television station RCTV (septel). In a pugnacious first
address as VP, Rodriguez accused RCTV of using airtime to
incite "assassination, civil war, insults, slander, and the
mistreatment of people" and asserted that the only television
station ever shut down was the government-owned VTV station
the night of the short-live April 11 coup. Chavez insisted
that "no one and nothing" can change his decision to transfer
RCTV's concession.


6. (U) Reacting sharply to OAS Secretary General Insulza's
communique urging Chavez to reconsider his RCTV decision,
Chavez called for Insulza's resignation and pledged to
confront him on the margins of Nicaraguan President Daniel
Ortega's January 10 inauguration. Chavez also called Insulza
a vulgar term charitably translated as "idiot" ("pendejo,
from the p to the o") and asked rhetorically whether the OAS
SecGen aspires to be the "viceroy of the (U.S.) empire."
Chavez also took aim at Venezuelan Catholic Church leaders
for voicing concerns about his RCTV decision and the future
of Venezuelan democracy. He urged Cardinal Urosa Savino to
stay out of politics ("the shoemaker should mind shoes"),and
citing Marx, warned the Church against trying to become an
"opiate of the people."
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Cabinet of Loyalists Installed
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7. (U) With the backdrop of an enormous photograph of
himself, Chavez personally swore in new Vice President Jorge
Rodriguez and a 27-member cabinet. Prior to the swearing in,
Chavez issued a decree changing the names of the ministries
to begin with the phrase "Popular Power of...", similar to
the nomenclature of Cuban ministries. Fourteen of the
cabinet members, including Foreign Minister Nicolas Maduro,
Defense Minister Raul Isaias Baduel, Energy Minister Rafael
Ramirez, and Communications and Information Minister Willian
Lara, continue with their current responsibilities. Eleven
members of the cabinet are former members of the National
Assembly, seven held key positions in Chavez' re-election
campaign, and five have military experience.


8. (U) Chavez created two new ministries: telecommunications,
which former Justice and Interior Minister Jessie Chacon will
occupy, and Indigenous Peoples, which National Assembly
deputy Nilcia Maldonado will lead. He also dropped from the
cabinet the Integration and Foreign Trade Ministry, formerly
held by Gustavo Adolfo Marquez Marin. The BRV President also
instructed his new cabinet to work Mondays to Wednesdays in
the office and to go on inspection tours and meet with people
outside their offices Thursdays to Sundays. He tasked VP
Rodriguez to lead BRV efforts and to form teams among the
cabinet to ensure implementation of Chavez' "socialist"
vision.


9. (C) Chavez' cabinet picks reflect an additional shift to
the left, particularly his selection of presidential brother
Adan Chavez to be Education Minister and former army officer
Pedro Carreno to be Interior and Justice Minister. In
addition to Adan Chavez, Pedro Carreno, and Nilcia Maldonado,
the new ministers are:

Finance - Rodrigo Cabezas
Tourism - Olga Cristina Azuaje
Higher Education - Luis Acuna
Health - Erick Rodriguez
Labor - Jose Ramon Rivero
Environment - Yubiri Ortega
Science and Technology - Hector Navarro
Popular Participation - David Velasquez
Presidential Secretariat - Hugo Cabezas

Biographic details will follow (septels). Chavez awarded
national medals to outgoing Vice President Jose Vicente
Rangel and the departing ministers. A choked up Rangel
promised to "spread and defend" Chavez' "revolution" from
outside the government.

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Comment
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10. (C) After eight years in power, Chavez has gained a
well-deserved reputation for being a predictably
unpredictable megalomaniac. But Chavez' January 8 rambling
diatribe appeared to demonstrate that the re-elected
Venezuelan president has shed whatever few moderating tethers
to which he previously acceded. He also appears determined
to build up his already outsized personality cult even more.
Despite winning re-election by a big margin on December 3,
2006 and surrounding himself with obsequious party stalwarts,
Chavez nevertheless appears even more defensive, increasingly
thin-skinned, and confrontational with respect to the few
existing institutions capable and willing to criticize his
policies.


11. (C) Chavez has stacked his cabinet with loyalists who can
be expected to amplify and execute Chavez' plans, rather than
shape or temper the Venezuelan president's ideas. With the
departure of former VP Rangel, Adan Chavez may be the only
person in the current government who has some direct
influence on Hugo Chavez, and Adan is widely perceived as
pushing his presidential brother further to the left.
Moreover, Rangel and his staff represented one of the few
open channels of communication to the BRV for the Embassy,
the opposition, NGO's, and other diplomatic missions.


12. (C) Chavez told his supporters -- and the world -- on
January 8 that he intends to make good on his campaign
promised to "expand" and "deepen" his Bolivarian -- and now
socialist -- "revolution." While Chavez and his new VP made
the usual chest-thumping references to standing up to the
(U.S.) "empire," neither focused their comments on foreign
policy. Chavez will probably say more on that subject on
January 10. Nevertheless, by tapping Rodriguez, a loyal and
hard-line caretaker VP, Chavez may feel secure that all will
be well on the home front, putting him in an even better
position to try to position himself internationally as the
leader of an anti-American alliance. In the short term,
Chavez' bags are already packed. He plans to fly to Managua
to attend Nicaraguan President Daniel Ortega's January 10
swearing-in only hours after his own swearing-in. Chavez is
also slated to travel to Ecuador to attend President Rafael
Correa's inauguration less than one week later.

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