AMBASSADOR MEETS WITH HUGO CHAVEZ

C O N F I D E N T I A L SECTION 01 OF 03 CARACAS 002912

E.O. 12958: DECL: 9/25/08
TAGS: PREL PGOV ECON MARR VE
SUBJECT: AMBASSADOR MEETS WITH HUGO CHAVEZ

CLASSIFIED BY AMBASSADOR JOHN F. MAISTO. REASON: 1.5 (B).

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SUMMARY
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1. (C) CORRUPT POLITICIANS, FAILED INSTITUTIONS, AND POPULAR
DESPAIR CHARACTERIZE VENEZUELAN POLITICS, PRESIDENTIAL CANDIDATE
HUGO CHAVEZ TOLD AMBASSADOR DURING A SEPTEMBER 25 MEETING. CHAVEZ
SAID HIS CANDIDACY REPRESENTS THE LAST HOPE OF A FRUSTRATED AND
DESPERATE PEOPLE. THE SUCCESS OF HIS PRESIDENTIAL BID, AND HIS
GOVERNMENT, WILL DETERMINE WHETHER VENEZUELA CONTINUES TO MODERNIZE
WITHIN ITS DEMOCRATIC TRADITION OR FALLS INTO DOMESTIC
CONFRONTATION AND CIVIL WAR. CHAVEZ TOLD THE AMBASSADOR THAT HIS
SUCCESS DEPENDS IN GOOD MEASURE ON HIS RELATIONSHIP WITH THE U.S.
HE COMPLAINED OF A "DIRTY WAR" CARRIED OUT BY HIS POLITICAL ENEMIES
TO SOW DOUBT AND CONFUSION AMONG FOREIGN INVESTORS AND GOVERNMENTS.
HE INSISTED THAT HE WAS A DEMOCRAT WHO RESPECTED THE IMPORTANCE OF
CONSTITUTIONAL ORDER AND INSTITUTIONAL CONTINUITY IN GOVERNMENT.
HE DECLARED HIMSELF IN FAVOR OF ONGOING PRIVATIZATION AND SAID HE
WOULD RESPECT ALL GOV FINANCIAL AND BUSINESS COMMITMENTS, AND
INTERNATIONAL AGREEMENTS. HE RECOGNIZED THE THREAT POSED BY DRUG
TRAFFICKING, MONEY LAUNDERING, AND RELATED CRIMES, AND PROMISED TO
MAKE COUNTERNARCOTICS COOPERATION A KEYSTONE OF HIS GOVERNMENT. HE
ALSO NOTED THAT HE WAS PREPARING A LIST OF MINISTERS WHICH WILL
"SURPRISE A LOT OF PEOPLE." HE ASSERTED THAT CONSTITUTIONAL REFORM
WAS ESSENTIAL TO "RE-LEGITIMIZING" THE STATE AND WINNING BACK THE
CONFIDENCE OF THE PEOPLE. HE COMPLAINED THAT THE CURRENT
CONSTITUTION WAS "ARMORED" AGAINST REFORM EFFORTS, AND THAT
ENTRENCHED POLITICAL PARTIES WOULD RESIST REFORM EFFORTS. HE
ACKNOWLEDGED OUR CONCERN THAT ANY REFORM TAKE PLACE WITHIN A
CONSTITUTIONAL CONTEXT, BUT SAID IT MIGHT BE NECESSARY TO BREAK
WITH THE CURRENT CONSTITUTIONAL ORDER TO CREATE A NEW ONE. HE SAID
HIS MEETING WITH THE AMBASSADOR WOULD ALLOW "A LOT OF PEOPLE TO
BREATHE EASIER," AND LOOKED FORWARD TO A CLOSE RELATIONSHIP. END
SUMMARY.

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MEETING HUGO CHAVEZ
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2. (C) AMBASSADOR MET SEPTEMBER 25 AT THE RESIDENCE WITH LEADING
PRESIDENTIAL CANDIDATE AND FORMER COUPSTER HUGO CHAVEZ. THE
BREAKFAST MEETING, WHICH LASTED MORE THAN THREE HOURS, WAS
AMBASSADOR'S FIRST MEETING WITH CHAVEZ. POLCOUNS ACCOMPANIED THE
AMBASSADOR. CHAVEZ WAS ACCOMPANIED BY CARLOS TINOCO, CHAVEZ'S
DESIGNATED LIAISON TO THE EMBASSY.


3. (C) AMBASSADOR TOLD CHAVEZ THAT HE HAD JUST RETURNED FROM
WASHINGTON, WHERE CONCERN ABOUT VENEZUELA'S POLITICAL AND ECONOMIC
SITUATION WAS PALPABLE. AMBASSADOR NOTED THAT HE WAS MEETING WITH
MAJOR PRESIDENTIAL CANDIDATES TO LAY OUT THE U.S. POSITION
REGARDING THE ELECTIONS AND OUR RELATIONSHIP WITH THE GOVERNMENT
WHICH RESULTS. AMBASSADOR MADE THE FOLLOWING POINTS:

-- WE SUPPORT THE ELECTORAL PROCESS. WE WANT FREE, FAIR, AND
TRANSPARENT ELECTIONS. WE WILL RECOGNIZE WHOMEVER WINS THOSE
ELECTIONS. WE EXPECT TO CONTINUE OUR EXCELLENT BILATERAL
RELATIONSHIP WITH VENEZUELA FOLLOWING THE ELECTIONS.

-- THE BASIS OF OUR BILATERAL RELATIONSHIP HAS BEEN A SHARED
COMMITMENT TO DEMOCRATIC, CONSTITUTIONAL GOVERNMENT. HOWEVER
TATTERED VENEZUELA'S INSTITUTIONS MIGHT BE, THEY ARE FUNCTIONING
DEMOCRATIC INSTITUTIONS. ANY EFFORT TO REFORM THE STATE THROUGH A
CONSTITUTIONAL ASSEMBLY MUST PRESERVE CONTINUITY OF DEMOCRATIC
INSTITUTIONS. JUDICIAL REFORM IS ESSENTIAL, IS UNDER WAY, AND IS
SUPPORTED BY THE U.S. WITHOUT AN INDEPENDENT LEGISLATURE, THERE IS
NO DEMOCRACY.

-- CHAVEZ'S RHETORIC REGARDING A CONSTITUTIONAL ASSEMBLY HAS BEEN
PROVOCATIVE AND CONFUSING. HE SOUNDS AS THOUGH HE IS PROMOTING NOT
A CONSTITUTIONAL ASSEMBLY, BUT A REVOLUTIONARY JUNTA DESIGNED TO
CAUSE THE COLLAPSE OF EXISTING INSTITUTIONS AND INSTALL A TO-BE-
DETERMINED FORM OF GOVERNMENT.

-- FOREIGN INVESTMENT REQUIRES CLEAR AND RELIABLE RULES.
UNCERTAINTY CAUSED BY CHAVEZ'S ECONOMIC AND POLITICAL RHETORIC HAS
PUT THE BRAKES ON MUCH INVESTMENT. THE PROSPECT OF CONTINUING
UNCERTAINTY CAUSED BY A CONFLICTIVE CONSTITUTIONAL ASSEMBLY PROCESS
WOULD STOP FOREIGN INVESTMENT COLD, AND WOULD LEAVE VENEZUELA
WITHOUT THE FOREIGN CAPITAL IT NEEDS FOR ECONOMIC GROWTH. THE
CONSEQUENCES OF SUCH A SITUATION FOR THE NEXT GOVERNMENT WOULD BE
DISASTROUS.

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CHAVEZ SAYS HIS PIECE
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4. (C) CHAVEZ SAID HE WELCOMED THE MEETING WITH THE AMBASSADOR,
SAYING, "A LOT OF PEOPLE WILL BREATHE EASIER." HE NOTED THAT ALL
VENEZUELANS RECOGNIZED THE IMPORTANCE OF THE U.S. TO VENEZUELA'S
WELL-BEING, BOTH ECONOMICALLY AND POLITICALLY. HE ACKNOWLEDGED HIS
OWN ADMIRATION FOR THE U.S., WHICH HE TRACED TO HIS EARLY LOVE OF
BASEBALL AND HIS CONTACT WITH U.S. MILITARY OFFICERS DURING HIS
SERVICE IN THE ARMED FORCES. HE REGRETTED THAT HIS RELATIONSHIP
WITH THE U.S. HAD FALLEN ON HARD TIMES FOLLOWING THE 1992 COUP
ATTEMPT AND HIS IMPRISONMENT, BUT LOOKED FORWARD TO "RE-
ESTABLISHING" THIS RELATIONSHIP AND WORKING TOGETHER CLOSELY IN THE
EVENT HE WERE ELECTED.


5. (C) CHAVEZ COMPLAINED THAT HIS POLITICAL ENEMIES HAD SULLIED
HIS IMAGE THROUGH A "DIRTY WAR," ACCUSING HIM OF BEING EVERYTHING
FROM A COMMUNIST TO A WIFE-BEATER. HE EXPRESSED AMAZEMENT AT THE
INVENTIVENESS OF SOME OF HIS ENEMIES--HIS FAVORITE RUMOR WAS THAT
HE ALWAYS SET A PLACE AT HIS DINNER TABLE FOR BOLIVAR--AND SAID
THAT HE OFTEN FELT "LIKE THE ACCUSED IN THE DOCK," RESPONDING TO
ONE ALLEGATION AFTER ANOTHER. HE THEN MADE THE FOLLOWING POINTS:

-- I AM A DEMOCRAT. MY ROLE IN THE 1992 COUP ATTEMPT HAS RAISED
MANY DOUBTS ABOUT MY COMMITMENT TO DEMOCRATIC PRINCIPLES. "I KNOW
YOU HAVE CONCERNS ABOUT ME, AND I UNDERSTAND WHY." THE 1992 COUP
ATTEMPT, SEEN IN HINDSIGHT, WAS "INCORRECT." HOWEVER, MY OWN
FORMATION WITHIN THE ARMED FORCES, AND THE BLATANT CORRUPTION
WITHIN THE GOVERNMENT AND THE MILITARY HIGH COMMAND, HAD LEFT ME
AND MY COLLEAGUES LITTLE CHOICE.

-- I AM THE HOPE OF THE PEOPLE, AND WITHOUT ME DEMOCRACY WILL NOT
LAST. VENEZUELAN POLITICS IS CHARACTERIZED BY CORRUPT POLITICIANS,
FAILED INSTITUTIONS, AND POPULAR DESPAIR. THE HISTORY OF THE LAST
DECADE, FROM THE 1989 SOCIAL UPRISING TO MY OWN CANDIDACY, HAS BEEN
A SERIES OF EFFORTS BY THE "PEOPLE" TO MAKE AN INCREASINGLY
ISOLATED AND INSULATED POLITICAL CLASS RESPOND TO THE NEEDS OF THE
COUNTRY. THE UNWILLINGNESS OF THE TRADITIONAL POLITICAL PARTIES TO
RESPOND TO THE "CRY OF THE PEOPLE" HAS DRIVEN VENEZUELA DANGEROUSLY
NEAR THE BRINK OF SOCIAL CHAOS AND CIVIL WAR. MY CANDIDACY HAS
REIGNITED HOPE THAT MEANINGFUL POLITICAL CHANGE COULD BE ACHIEVED
THROUGH DEMOCRATIC MEANS. IF THAT HOPE IS FRUSTRATED VENEZUELA
WOULD FACE A DARK AND FOREBODING FUTURE.

-- I WILL REFORM THE STATE THROUGH THE CONSTITUTIONAL ASSEMBLY.
THE STATE NEEDS TO BE "RE-LEGITIMIZED" AND THE CONFIDENCE OF THE
PEOPLE WON BACK. THE ONLY WAY TO DO THIS IS THROUGH A
CONSTITUTIONAL ASSEMBLY. THE POPULARITY OF THE CONCEPT OF SUCH AN
ASSEMBLY IS PROOF THAT IT REPRESENTS A PROFOUND LONGING OF THE
PEOPLE. FURTHER PROOF OF THIS IS THE EFFORT BY OTHER PARTIES TO
GET ON BOARD THE CONSTITUTIONAL ASSEMBLY BANDWAGON. THE CONSENSUS
FORMING AROUND THE IDEA OF A CONSTITUTIONAL ASSEMBLY, HOWEVER,
HIDES THE STRONG OPPOSITION TO THE IDEA IN NARROW BUT STILL
POWERFUL SECTORS OF POLITICAL SOCIETY. I WORRY THAT I WILL NOT
HAVE THE STRENGTH IN THE CONGRESS AND THE STATE ASSEMBLIES TO WIN
APPROVAL OF THE CONSTITUTIONAL AMENDMENT NECESSARY TO CALL A
CONSTITUTIONAL ASSEMBLY. IF THE PARTIES WERE TO FRUSTRATE THE
STRONG DESIRE OF THE PEOPLE FOR A CONSTITUTIONAL ASSEMBLY, I MIGHT
HAVE TO BREAK WITH THE CURRENT CONSTITUTIONAL ORDER TO CREATE A NEW
ORDER. WHATEVER PATH IS TAKEN TO SUCH AN ASSEMBLY, IT WOULD NOT BE
A REVOLUTIONARY JUNTA, BUT AN ELECTED BODY WITH SHARPLY DEFINED
RESPONSIBILITIES. PERHAPS MY MOST REVOLUTIONARY IDEA, IN THE
CONTEXT OF VENEZUELAN POLITICS, IS THE DEMAND THAT ELECTIONS FOR
THE CONSTITUTIONAL ASSEMBLY BY DIRECT, AND CANDIDATE AND
GEOGRAPHY-BASED, AND NOT PARTY LIST-BASED.

-- I RECOGNIZE THE IMPORTANCE OF FOREIGN INVESTMENT, AND I WANT
MORE OF IT. I KNOW THAT FOREIGN INVESTMENT IS VITAL TO ECONOMIC
GROWTH AND WELL-BEING. I WILL DO EVERYTHING POSSIBLE TO ASSUAGE
THE CONCERNS OF DOMESTIC AND FOREIGN INVESTORS. MY POSITION
REGARDING ECONOMIC REFORM AND INVESTMENT HAS BEEN MISREPRESENTED IN
THE PRESS. I SUPPORT THE ONGOING PRIVATIZATION OF STATE ASSETS,
WITH THE EXCEPTION OF PDVSA (THE STATE OIL COMPANY). I WILL
RECOGNIZE ALL CONTRACTS AND FINANCIAL COMMITMENTS MADE BY THE
PREVIOUS GOVERNMENT. "MY GOD, MY GOVERNMENT'S SUCCESS WILL DEPEND
ON ATTRACTING INVESTMENT. I HAVE MORE INTEREST--BOTH PERSONALLY
AND POLITICALLY--THAN ANYONE ELSE IN A GOOD INVESTMENT CLIMATE."

-- I WANT TO SELL MORE OIL TO THE U.S. THE ENERGY RELATIONSHIP
BETWEEN THE U.S. AND VENEZUELA JOINS BOTH COUNTRIES AT THE HIP. IT
IS IN BOTH COUNTRIES' INTEREST TO PRESERVE AND PROMOTE THAT
RELATIONSHIP. I REGRET THAT SOME OF MY COMMENTS REGARDING PDVSA,
CITGO, AND PDVSA HEAD LUIS GIUSIT HAVE BEEN MISINTERPRETED. "I
WILL WANT TO SELL YOU MORE AND MORE OIL."

-- I WILL WORK TO FIGHT DRUG TRAFFICKING. DRUG TRAFFICKING, MONEY
LAUNDERING, AND RELATED CRIMES PRESENT A SERIOUS THREAT TO
DEMOCRATIC GOVERNMENT. I WILL MAKE SUCCESSFUL COUNTERNARCOTICS
COOPERATION A KEYSTONE OF MY GOVERNMENT.

-- I WILL PRESERVE THE INSTITUTIONALITY OF THE ARMED FORCES. THE
ARMED FORCES ARE VITAL TO THE STABILITY OF VENEZUELAN DEMOCRACY,
AND CANNOT BE POLITICIZED. ALLEGATIONS THAT I WOULD REINCORPORATE
IN THE ARMED FORCES THOSE OFFICERS CASHIERED FOLLOWING THE 1992
COUP ATTEMPT ARE FALSE. I WILL NOT PUNISH THOSE OFFICERS WHO
OPPOSED THE 1992 COUP ATTEMPT.

-- I WILL SURPRISE YOU WITH MY CABINET MEMBERS. I HAVE MADE NO
COMMITMENTS REGARDING WHO WOULD FILL MY MINISTERIAL POSITIONS. I
HAVE BEEN VERY CAREFUL, RECOGNIZING THAT WHO I SELECT FOR THESE
POSITIONS WOULD SEND A STRONG SIGNAL TO OBSERVERS AND INVESTORS
ABOUT HIS GOVERNMENT. I WILL CONTINUE TO KEEP MY CABINET CHOICES
UNDER WARPS UNTIL AFTER THE ELECTIONS. "YOU WILL BE SURPRISED. I
WILL PICK A VERY GOOD GROUP."

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COMMENT
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5. (C) CHAVEZ WAS ON HIS BEST BEHAVIOR DURING THIS FIRST MEETING.
HE WAS AT PAINS TO UNDERSCORE THE IMPORTANCE OF A GOOD RELATIONSHIP
WITH US TO THE SUCCESS OF HIS GOVERNMENT, SHOULD HE BE ELECTED, AND
HIS OWN PERSONAL ADMIRATION AND AFFINITY FOR THE U.S. HE DID NOT
RAISE THE VISA ISSUE DURING THE MEETING, LARGELY BECAUSE WE HAD
TOLD HIS ADVISORS THAT OUR ANSWER WOULD BE NEGATIVE. HOWEVER, HE
DID SAY TO THE AMBASSADOR ALONE THAT HE APPRECIATED AND FULLY
RESPECTED WHAT THE SECRETARY SAID ABOUT THE SUBJECT DURING THE
OASGA IN JUNE, AND HOW THE AMBASSADOR HAS HANDLED IT PUBLICLY. HE
ALSO NOTED, "I LOOK FORWARD TO THE DAY I CAN WATCH A BASEBALL GAME
IN YANKEE STADIUM."


6. (C) CHAVEZ WAS ALSO INTENT ON CASTING THE MEETING AS AN
OPPORTUNITY TO PRESENT HIMSELF AS HE REALLY IS, WITHOUT THE
NEGATIVE FILTER OF THE MEDIA OR HIS ENEMIES. HE ACKNOWLEDGED THAT
AT THIS POINT HE CAN ONLY INSIST THAT HE IS A DEMOCRAT, AND WILL
NOT BE ABLE TO PROVE THAT HE IS ONE UNTIL HE ATTAINS OFFICE. THE
SAME IS TRUE REGARDING HIS PROCLAIMED COMMITMENT TO PRIVATIZATION,
ECONOMIC REFORM, AND THE DESIRE TO ATTRACT INVESTMENT. HE SEEMED
RESIGNED TO THIS, SAYING, "I HOPE GOD GRANTS ME THE OPPORTUNITY TO
PROVE THIS TO YOU."


7. (C) WE WILL HAVE PROBLEMS WITH CHAVEZ, HOWEVER, AROUND THE
ISSUE OF THE CONSTITUTIONAL ASSEMBLY. AT THIS POINT, HE SEEMS
INTENT ON BREAKING WITH THE CURRENT CONSTITUTIONAL ORDER TO
ESTABLISH THE ASSEMBLY, FOLLOWING A POPULAR REFERENDUM. THIS WOULD
BE A PROVOCATIVE MOVE WHICH WOULD LEAD TO IMMEDIATE CONFRONTATION
WITH THE CONGRESS AND MANY OF THE PRINCIPAL POLITICAL PARTIES.
NEVERTHELESS, HE UNDERSTOOD AMBASSADOR'S INSISTENCE ON MAINTAINING
THE CONTINUITY OF DEMOCRATIC INSTITUTIONS AND THE CONSTITUTIONAL
PROCESS, AND THE NECESSITY OF COMPROMISING WITH HIS POLITICAL
ENEMIES TO GUARANTEE CONTINUITY. WE STILL HAVE SEVERAL MONTHS TO
WORK ON HIM REGARDING THE MEANS OF ESTABLISHING AN ASSEMBLY, SHOULD
HE CONTINUE TO MAINTAIN HIS LEAD IN THE POLLS AND WIN THE
ELECTIONS. THIS MEETING WAS A GOOD FIRST ENCOUNTER, AND WILL
FACILITATE FURTHER CONTACT, BOTH WITH CHAVEZ AND WITH HIS TEAM. IT
WILL ALSO PROVIDE US WITH OTHER OPPORTUNITIES TO PUBLICLY TALK
ABOUT THE BASIS OF OUR BILATERAL RELATIONSHIP, OUR COMMITMENT TO
DEMOCRATIC, CONSTITUTIONAL GOVERNMENT, AND THE ROLE WE SEE FOR
OURSELVES IN ENHANCING THE GOVERNABILITY OF THE NEXT PRESIDENT,
WHOMEVER THAT MIGHT BE.


MAISTO