Hunting Hugo

Dispatches From the Edge

Conn Hallinan

Oct. 27, 2006

There are times when the tensions between Venezuela and the Bush Administration seem closer to commedia dell arte than politics: Venezuelan President Hugo Chavez compares President George W. Bush to the devil, right down to the smell of sulfur; Homeland Security responds by strip searching Venezuela’s Foreign Minister at a New York airport; Venezuela seizes 176 pounds of frozen chicken on its way to the U.S. Embassy in Caracas.

But recent initiatives by the White House suggest that the Administration has more than tit for tat in mind.

In late June, Southern Command, the arm of the U.S. military in Latin America, concluded that efforts by Venezuela, Ecuador and Bolivia to extend state control over their oil and gas reserves poised a threat to U.S. oil supplies.

While Latin America produces only 8.4 percent of the world’s oil output, it supplies 30 percent of the U.S.’s needs.

“A re-emergence of state control of the energy sector will likely increase inefficiencies and, beyond an increase in short-term profits, will hamper efforts to increase long-term supplies and production,” the study concludes. In an interview with the Financial Times, Col. Joe Nunez, a professor of strategy at the U.S. Army War College, added an observation that ought to send a collective chill down the backs of the three countries named: “It is incumbent upon the Command to contemplate beyond strictly military matters.”

That one of the U.S. military’s most powerful arms should find itself deep in the energy business should hardly come as a surprise.

Four months after Bush took office, Vice-President Dick Cheney’s National Energy Policy Development Group recommended that the administration “make energy security policy a priority of our trade and foreign policy.”

The Administration has faithfully followed that blueprint for the past years, where it has used war and muscular diplomacy to corner energy supplies for U.S. in the Middle East and Central Asia

But what most Americans don’t know is that Venezuela sits on the largest energy reserves in the world, a staggering 1.3 trillion barrels of oil, almost three times the reserves of Saudi Arabia, Iraq, the United Arab Emirates and Kuwait combined.

Most Venezuelan oil is heavy and expensive to refine, but as long as oil stays above $30 a barrel—and few doubt it will go lower—it is an almost endless gold mine.

The bone the U.S. is picking with Hugo is not about bombast; it’s about oil.

Shortly after Southern Command’s report, the White House appointed J. Patrick Maher, a 31-year Central Intelligence Agency veteran, to head up a special task force for gathering intelligence on Venezuela and Cuba. Only North Korea and Iran have similar posts. In a move that almost exactly parallels how intelligence was handled in the run up to the Iraq war, Maher will bypass the CIA and report directly to President Bush.

Maher’s appointment followed a full court press by a group of neo-conservatives grouped around National Security Director John Negroponte, then CIA chief Porter Goss, Secretary of State Condoleezza Rice, and her deputy, Robert Zoellick.

The campaign against Chavez on the executive side is matched by a similar push on the congressional side. Senator Richard Lugar (R-In), chair of the Senate Foreign Relations Committee, recently urged the Bush Administration to adopt “contingency plans” in case of a disruption of oil supplies from Venezuela. In a July letter to Rice, the Senator said that Venezuela has an “undue ability to impact USA security and our economy.” Lugar went on to warn that there was a “real risk” that Venezuela could “act in concert” with other countries and that “we have a responsibility to plan appropriate contingencies that protect the American people.”

The current campaign against Chavez is really Round Two in the White House’s drive to unseat him.

As Freedom of Information Act documents reveal, the Bush Administration already tried to overthrow Chavez in an April 2002 coup.

Then Assistant Secretary of State for Western Hemisphere Affairs, Otto Reich, met several times with coup leaders, and Deputy Secretary of Defense for Western Hemispheric Affairs, Rogelio Pardo-Maurer met with military coup leader Gen. Lucas Romero Rincon.

Cuban exile Reich, and Pardo-Maurer, were major players in the 1980s Contra war against Nicaragua. Pardo-Maurer was the Contra’s leading spokesperson, and Reich was forced to resign from the Reagan Administration for planting false stories in the U.S. Media.

The CIA, through the National Endowment for Democracy and the United States Agency for International Development, bankrolled Chavez’s opponents, and helped organize and support the strike by white collar oil workers and ships captains eight months after the coup collapsed.

Since then, the Administration has kept up a drumbeat of attacks. Rice warned that Chavez was, “A major threat to the region,” U.S. Defense Secretary Donald Rumsfeld compared Chavez to Adolph Hitler, and Zoellick told the Senate that Chavez was part of a new “creeping authoritarianism.”

In March, a National Security Strategy document charged that Chavez was “undermining democracy,” and at an Oct. 2 meeting of Latin American defense ministers in Managua, Nicaragua, Gen. Bantz J. Craddock of Southern Command called Chavez a “destabilizing” force in the region.

What really worries the U.S. is that Chavez is trying to diversify Venezuela’s clientele.

Venezuela is currently building a pipeline across Colombia in order to ship more oil to China, and is working on plans for a $25 billion pipeline across the Amazon to markets in Chile, Brazil, Uruguay and Argentina. According to the Latin American Energy Organization, the Great Southern Pipeline could save Latin Americans $100 billion in lower gas and oil prices over the next 20 years.

China is pouring in billions to develop fields in Venezuela, Bolivia and Ecuador to give it the inside corner on future resources.

The “China connection” is one that concerns the Bush Administration, not only because it siphons off oil that normally would go to the U.S., but also because the White House sees China as a rival and has done its best to elbow Peking out of the Middle East and Central Asia.

But Latin America is a different place than it was a decade ago when it was mired in debt, characterized by low growth and beholden to the International Monetary Fund and the World Bank. When Rice told House members that the Bush Administration was building a “united front” against Venezuela, it is likely to be a narrow front indeed.

Venezuela has helped bail Ecuador and Argentina out of debt, invested in projects in Bolivia, and poured almost $20 billion in bond purchases and debt relief into Latin America. In contrast, U.S. aid to the region is $1.7 billion a year, and a billion of that is for the U.S. war on drugs.

Given Chavez’s enormous popularity in his country and Latin America—according to Datanalius, his positive rate on the continent is 77 percent—it is hard to see what the White House can do about Venezuela’s president.

But that is not likely to discourage it from trying, and the people the Administration has recruited to target him are just the kind of operatives who won’t shy away from anything up to, and including, the unthinkable: assassination.

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