US embassy cable - 04CARACAS2147

C O N F I D E N T I A L SECTION 01 OF 02 CARACAS 002147 
 
SIPDIS 
 
 
    STATE FOR WHA/CCA 
NSC FOR CBARTON 
USCINCSO ALSO FOR POLAD 
 
E.O. 12958: DECL: 06/26/2014 
TAGS: PGOV, ETTC, KDEM, VE 
SUBJECT: TITLE III LIBERTAD ACT WAIVER: VENEZUELA 
 
REF: SECSTATE 135512 
 
CLASSIFIED BY: MARK WELLS, ACTING POLITICAL COUNSELOR, FOR REASONS 1.4( 
B) AND (D). 
 
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SUMMARY 
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1. (C) VENEZUELAN PRESIDENT HUGO CHAVEZ IS PERHAPS THE 
CLOSEST INTERNATIONAL ALLY OF FIDEL CASTRO.  THE TWO NATIONS' 
TRADE RELATIONSHIP IS BASED ON VENEZUELA'S CONCESSIONARY 
PETROLEUM EXPORTS TO CUBA.  THE GOV HAS NOT TAKEN ANY STEPS 
OF WHICH POST IS AWARE IN THE LAST SIX MONTHS TO ADVANCE 
DEMOCRACY, HUMAN RIGHTS, AND FUNDAMENTAL FREEDOMS IN CUBA. 
OBVIOUSLY, THERE IS LITTLE JUSTIFICATION FOR RECOMMENDING A 
WAIVER FOR VENEZUELA UNDER TITLE III OF THE LIBERTAD ACT. 
GIVEN CHAVEZ'S AFFINITY FOR EXPLAINING WORLD EVENTS IN TERMS 
OF U.S. IMPERIALISM, ANY ACTION TAKEN BY THE USG AGAINST A 
VENEZUELAN COMPANY IN VIOLATION OF TITLE III WOULD HEIGHTEN 
THE GOV'S ANTI-U.S. RHETORIC DURING A CRITICAL JUNCTURE FOR 
VENEZUELA'S DEMOCRACY.  END SUMMARY. 
 
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CUBA-VENEZUELA RELATIONSHIP 
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2. (C) PRESIDENT HUGO CHAVEZ HAS WORKED DURING HIS FIVE YEARS 
OF RULE TO STRENGTHEN TIES WITH THE GOC.  CHAVEZ SIGNED THE 
CUBA-VENEZUELA COOPERATION AGREEMENT IN 1998, WHICH PROVIDES 
CUBA WITH PETROLEUM AT CONCESSIONARY TERMS.  IN EXCHANGE, 
CUBAN DOCTORS, TEACHERS, AND COACHES PARTICIPATE IN GOV 
SOCIAL PROGRAMS FOCUSED ON THE POOR, A MAJOR COMPONENT OF 
CHAVEZ'S SO-CALLED "BOLIVARIAN REVOLUTION."  THE GOC IS IN 
ARREARS IN ITS OIL PAYMENTS TO THE VENEZUELAN STATE IN 
AMOUNTS POSSIBLY EXCEEDING $1 BILLION. 
 
3. (C) WHILE CLAIMING TO DISAGREE WITH CASTRO'S COMMUNIST 
SYSTEM, CHAVEZ NEVERTHELESS SYMPATHIZES DEEPLY WITH CASTRO TO 
THE POINT OF ADMIRATION.  CHAVEZ VIEWS CASTRO AS BRAVELY 
STANDING AGAINST U.S. HEGEMONY IN THE HEMISPHERE.  THE GOV 
DOES NOT BELIEVE THERE IS ANY REASON TO PRESSURE CUBA ON 
DEMOCRACY AND HUMAN RIGHTS. 
 
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IMPACT OF TITLE III 
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4. (C) CHAVEZ WIELDS ANTI-U.S. RHETORIC TO SOLIDIFY HIS 
DOMESTIC SUPPORT AND ADVANCE HIS ANTI-"NEOLIBERAL" VIEWS. 
WERE THE TITLE III WAIVER BE ALLOWED TO LAPSE, CHAVEZ WOULD 
USE IT FOR HIS PROPAGANDA MESSAGE TO DECRY U.S. 
UNILATERALISM.  THIS COULD AFFECT U.S. INTERESTS IN KEEPING 
THE PRESIDENTIAL RECALL REFERENDUM AGAINST CHAVEZ FOCUSED ON 
    THE ELECTORAL PROCESS.  HOWEVER, THE AUGUST 15 REFERENDUM IS 
LIKELY TO BE WON OR LOST ON THE BASIS OF DOMESTIC ISSUES. 
 
5. (C) WE ARE NOT AWARE OF SPECIFIC VENEZUELAN PRIVATE OR 
STATE-OWNED COMPANIES THAT WOULD BE AFFECTED BY THE 
IMPOSITION OF TITLE III.  THERE HAVE BEEN REPORTS THAT 
VENEZUELAN STATE OIL COMPANY PDVSA MIGHT TAKE OVER OPERATION 
OF THE CIENFUEGOS OILS REFINERY, BUT AS OF NOW THE 
ARRANGEMENT HAS NOT BEEN FINALIZED.  IT IS ALSO REPORTED THAT 
THE CUBAN STATE FOOD PURCHASING AGENCY ALIMPORT ACTS AS AN 
INTERMEDIARY IN THE PURCHASE OF COMMODITIES BY THE GOV 
MINISTRY OF AGRICULTURE AND RELATED AGENCIES.  NUMEROUS 
VENEZUELAN FIRMS ARE SAID TO HAVE TIES WITH CUBAN 
COUNTERPARTS BUT THESE APPEAR TO BE COMMERCIAL RATHER THAN 
THE INVESTMENT RELATIONSHIPS THAT WOULD CONSTITUTE THE 
"TRAFFICKING" CONTEMPLATED BY TITLE III. 
 
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COMMENT 
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6. (C) THE GOV UNDER CHAVEZ HAS DONE NOTHING TO IMPROVE 
CUBA'S HUMAN RIGHTS AND DEMOCRACY RECORD AND CANNOT BE 
EXPECTED TO DO SO IN THE FUTURE.  THERE IS NO JUSTIFICATION, 
THEREFORE, TO SUPPORT A WAIVER OF TITLE III OF THE LIBERTAD 
 
CARACAS 00002147  002 OF 002 
 
LY 
STANDING AGA) 
      2004CARACA02147 - CONFIDENTIAL