VISIT OF SPECIAL COORDINATOR FOR VENEZUELA

C O N F I D E N T I A L SECTION 01 OF 03 CARACAS 001093 SIPDIS HQSOUTHCOM ALSO FOR POLAD DEPARTMENT PASS TO AID/OTI (RPORTER) E.O. 12958: DECL: 07/28/2028 TAGS: PREL PGOV SNAR VE SUBJECT: VISIT OF SPECIAL COORDINATOR FOR VENEZUELA AMBASSADOR ROBINSON - JULY 21-25 REF: A. CARACAS 00945 ¶B. CARACAS 00930 CARACAS 00001093 001.2 OF 003 Classified By: POLITICAL COUNSELOR FRANCISCO FERNANDEZ, REASONS 1.4 (B) AND (D) ¶1. (C) SUMMARY: Special Coordinator for Venezuela Robinson visited Caracas July 21-25. Editor Teodoro Petkoff, Chacao Mayor Leopoldo Lopez, and third-country Ambassadors told him separately that they believed President Chavez's recent public overture to the USG on counter-narcotics cooperation was an insincere election year tactic. Business leaders noted that the economy is more dependent than ever on oil and that corruption remains a problem. Numerous Bolivarian Republic of Venezuela (BRV) officials were either traveling or did not make themselves available for meetings. National Assembly Deputy and member of the "U.S.- Venezuela Friendship Group" Calixto Ortega told Robinson that he expects bilateral relations will improve following the U.S. presidential elections. Robinson reinforced the USG interest in renewing counternarcotics cooperation and expressed a willingness make a return visit in the coming months. END SUMMARY. -------------- Chavez Overture/Domestic Politics -------------- ¶2. (C) Newspaper editor Teodoro Petkoff and Chacao Mayor Leopoldo Lopez told the Special Coordinator in separate meetings that they believe Chavez,s recent public overture to the USG (Ref. A) is part of Chavez,s efforts to improve his public image in an election year. Petkoff also speculated that Chavez may be interested in renewing counter-narcotics cooperation with the USG in order to blunt growing international criticism of the flow of narcotics through Venezuela. Petkoff stressed Chavez,s ability to shift positions in order to sustain himself in power and his willingness to accept defeat, even if only temporarily, such as in the 1992 coup attempt, the 2002 interregnum, and after the defeat of his constitutional package in the 2007 referendum. Lopez urged the USG to promote closer ties between U.S. states and cities with Venezuelan state and local governments, particularly after the November gubernatorial and mayoral elections. ¶3. (C) Both prominent opposition figures said they are still confident that the opposition will agree on consensus candidates before the August 5-12 registration period for candidates contesting the November elections. Both criticized the BRV,s decision to declare 272 candidates ineligible to run based on administrative (not judicial) sanctions. Lopez, who is running for the Caracas mayorship but who is still on the ineligible list, said he still hopes international and domestic pressure will persuade the Supreme Court to declare the list unconstitutional. He lamented that many opposition political parties are not really rallying support for the affected candidates. Lopez said he will try to register on August 5 or 6 so as to force the BRV to deny him "his right" in front of the local media. If he is unable to register as a mayoral candidate, he intends to campaign on behalf of other opposition candidates around Venezuela. -------------- On BRV's Oil Dependence and Corruption -------------- ¶4. (C) Venezuelan-American Chamber of Commerce (VenAmCham) leaders painted a grim picture of Venezuela's economy for the Special Coordinator during a July 22 lunch. They noted that the economy is more dependent than ever on oil revenue flowing through the BRV. While Chavez did not want a strong private sector, they argued, he realized that for the time being he could not eliminate it because the government could not effectively supply the goods and services needed by the economy. Instead, the businessmen argued, Chavez has exerted greater control over the economy. One VenAmCham member told us that the number of bureaucratic steps necessary to export had increased from 4 to 51 under Chavez, making it increasingly difficult to do business in Venezuela. VenAmCham President Ed Jardine (protect) opined that, according to signals sent to VenAmCham, Chavez's recent overture to the USG was a tactical move in the run-up to November elections. ¶5. (C) Economist Orlando Ochoa (strictly protect throughout) told Ambassador Robinson July 23 that the BRV's mishandling CARACAS 00001093 002.2 OF 003 of the economy would lead to a period of economic decline but not collapse - unless induced by political and social factors. High oil prices, Ochoa said, would allow the BRV to defer a correction until after the November 2008 regional elections. He argued a devaluation was likely in 2009. Two mid-sized and three smaller banks were in trouble as a result of the structured notes issue (Ref B),he argued, but the BRV, concerned about a potential loss of confidence in the sector, was not likely to intervene. Opposition politicians, he observed, were not concerned with macroeconomic issues and did not have a coherent economic vision. ¶6. (C) Ochoa also claimed many former Chavez loyalists were upset with the Venezuelan president's complacent attitude towards corruption. While Chavez does not like the widespread corruption among his associates, Ochoa believes Chavez condones it and believe it necessary to keep his political machine operating smoothly. Ochoa argued that the USG could help cement Chavez's ultimate decline by gathering and, at the right time and ideally in conjunction with the Europeans, releasing detailed evidence of corruption in Chavez's regime. "Corruption could do to Chavez what Montesinos did to Fujimori in Peru," he concluded. -------------- U.S. - Venezuela Relations -------------- ¶7. (SBU) Foreign Minister Nicolas Maduro and Vice Minister for North American Affairs Jorge Valero were out of the country at the time of the Special Coordinator's visit. Director for North American and Multilateral Affairs Yaneth Arocha canceled a previously scheduled meeting with Ambassador Robinson. National Anti-Drug Office (ONA) Director Nestor Reverol did not make himself available to meet with the Special Coordinator. Former Vice President Jose Vicente Rangel expressed initial interest in meeting with the Special Coordinator, but was traveling outside Caracas and unable to meet. During his July 27 broadcast of "Alo, Presidente," President Chavez, apparently reacting to A/S Shannon's congressional testimony reference to the Special Coordinator's visit, complained that the BRV must do the inviting. "The gringos must learn that this is our house," bellowed Chavez. ¶8. (C) National Assembly Deputy Calixto Ortega, one of five Venezuelan members of the inter-parliamentary U.S.- Venezuelan "Friendship Group," met July 23 with the Special Coordinator. Ortega said he expected U.S.- Venezuelan relations to improve, no matter who wins the U.S. presidential elections. Ortega criticized the President for pulling Venezuela into the congressional debate over the FTA with Colombia and insisted that the BRV and Venezuelan people are not "anti-American." Asked about President Chavez,s comments in Russia about preparing to defend itself against a U.S. "invasion," Ortega said he rules out such a threat, but added that many Chavez supporters genuinely believe the threat of U.S. intervention is real. ¶8. (C) Ortega conceded that narcotics trafficking is a growing problem in Venezuela, but referred any follow-up to Chavez,s overture on counter-narcotics cooperation to the Foreign Ministry and the National Anti-Drug Office (ONA). An unsuccessful United Socialist Party of Venezuela (PSUV) pre-candidate for the Maracaibo mayorship, Ortega said he feared that PSUV primaries are producing numerous mayoral candidates who are not likely to appeal to voters outside the party. -------------- GLOBO, RCTVI Still Feeling the Pressure -------------- ¶9. (C) Lawyers for RCTVI and Globovision told Special Coordinator that the BRV continues to harass and pressure the critical media, albeit in a more discrete manner than it has done previously. Lawyer for RCTVI Jorge Paris Mogna said that the BRV routinely excludes non-government media from official press conferences and events. He added that reporters are often denied access to information and meetings with government officials. Margarita Escudero Leon, lawyer for all-news cable network Globovision, noted that while the BRV has not publicly reiterated its desire to sanction or close the network, the government randomly submits it to inspections from the tax collections agency (SENIAT). Both lawyers claimed the government rewards non-critical media CARACAS 00001093 003.2 OF 003 outlets by buying commercial air time with them and retracts those financial incentives when a network is uncooperative. -------------- Third-Country Diplomats -------------- ¶10. (C) The Dutch, Finnish, Canadian, and French Ambassadors to Venezuela told Special Coordinator July 23 that Chavez's overture to the USG on counter-narcotics was likely insincere. Dutch Ambassador Hinkinus Nijenhuis said Chavez was probably trying to garner favor with those sectors of Chavismo that would like to see renewed cooperation with the USG on anti-drug issues. He noted, however, that in the end Chavez prefers a hard-line stance against the U.S. and will return to his anti-American rhetoric. Ambassador Nijenhuis added that the Netherlands and BRV have some cooperation on counter-narcotics matters, particularly information sharing. (Note: Dutch law enforcement officials shared similar remarks with Embassy law enforcement officers in previous meetings. End Note.) ¶11. (C) French Ambassador Hadelin de la Tour-Du Pin speculated that U.S. - Venezuelan relations are unlikely to change following the U.S. presidential elections. He added that Chavez would prefer to see Republican presidential candidate John McCain win in the upcoming elections because the Venezuelan president needs an adversary and it would be difficult for him to portray Barack Obama as an enemy of his socialist revolution. Several of the other Ambassadors expressed similar remarks regarding the U.S. presidential election. DUDDY