US embassy cable - 04CARACAS3956

C O N F I D E N T I A L SECTION 01 OF 03 CARACAS 003956 
 
SIPDIS 
 
STATE FOR WHA/AND AND WHA/CAR 
NSC FOR CBARTON 
USCINCSO ALSO FOR POLAD 
STATE PASS USAID FOR DCHA/OTI 
 
E.O. 12958: DECL: 12/28/2014 
TAGS: PGOV, PHUM, KDEM, VE 
SUBJECT: VENEZUELAN ELECTORAL COUNCIL EYES THE FUTURE 
 
 
Classified By: Mark Wells, Acting Political Counselor, 
for Reason 1.4(b). 
 
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Summary 
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1. (C) National Electoral Council (CNE) Director Jorge 
Rodriguez is the odds-on favorite to replace outgoing CNE 
President Francisco Carrasquero, who will move to the 
recently-expanded Supreme Court (TSJ) in January. 
Carrasquero's departure will leave two vacancies on the CNE's 
five-person board that the TSJ will need to fill.  The CNE 
continues to make personnel changes, replacing career 
employees with persons loyal to President Hugo Chavez. 
Preparations have begun for three electoral events in 2005. 
CNE Director Oscar Battaglini proposed to use Venezuela's 
Smartmatic voting machines in Haiti and Honduras, but 
Smartmatic officials indicate the idea was a non-starter. 
End summary. 
 
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Changes At The Top 
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2. (C) National Electoral Council (CNE) President Francisco 
Carrasquero was named in early December to one of the new 
magistrate positions in the Constitutional Chamber of the 
Supreme Court (TSJ) that was created by the TSJ law passed 
earlier this year.  An illness (some say heart problem) 
prevented Carrasquero from being sworn-in with the other 
appointees on December 15, and his swearing-in was 
re-scheduled for January 17.  Carrasquero's departure means 
there will be two vacant seats on the CNE's five-person 
board, the other left when the CNE's pro-opposition Vice 
President Ezequiel Zamora resigned in protest in September 
over a dispute involving the regional elections.  (Note: 
When the National Assembly failed to reach a two-thirds 
majority to name the CNE board in 2003, the TSJ's 
Constitutional Chamber found the Assembly in omission and 
appointed the five board members with a 3-2 advantage to the 
GOV.  Electoral law stipulates that vacancies be filled by 
alternates, but Zamora's alternates were viewed as too 
sympathetic to the opposition.  CNE Director Jorge Rodriguez 
said Carrasquero's replacement will once again be decided by 
the Constitutional Chamber rather than the National Assembly.) 
 
3. (C) Rodriguez is widely believed to be a shoo-in for 
Carrasquero's job.  As the head of the National Electoral 
Board (JNE), the electoral operations committee subordinate 
to the CNE board, Rodriguez was the organizing force behind 
the August 15 presidential recall referendum and the October 
31 regional elections.  Chavez opponents complain that 
Rodriguez, a psychiatrist by training, manipulated both 
elections to ensure GOV victories.  Jorge Tirado, a 
consultant for the Smartmatic consortium that provides the 
CNE's electronic voting system, told poloff December 20 that 
Rodriguez is lobbying for the job.  Tirado said Rodriguez and 
Carrasquero do not get along and rarely consult with one 
another outside of the board meetings.  Tirado said Rodriguez 
is pushing for his key assistant (and alternate director), 
Tibisay Lucena, to succeed him as head of the JNE.  Tirado 
said another alternate, Esther Gauthier, has political 
backing from the National Assembly to fill the Vice President 
position.  Tirado said that neither candidate had the job 
locked up and predicted the debate would continue until after 
Carrasquero departs. 
 
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CNE Faces Heavy Schedule 
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4. (C) Tirado said the CNE is planning for three electoral 
events in 2005.  The recall referendum against nine 
opposition National Assembly deputies and the election of the 
governor of Delta Amacuro State and six make-up elections for 
mayoral seats will take place April 10 (using Tirado's 
tentative planning dates).  Elections for city councils and 
neighborhood councils ("parroquias") are tentatively set for 
July 31.  This election, Tirado said, will encompass 
thousands of positions and tens of thousands of candidates, 
making it the most difficult from a technical standpoint. 
Lastly, National Assembly elections are planned for December 
5. 
 
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But CNE Continues To Clean House 
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5. (C) Prior to the presidential recall referendum, the 
pro-Chavez majority of the CNE board began to replace career 
employees, either forcing them into retirement or firing 
them.  Pedro Valladares, the leader of the CNE workers' union 
(aligned with the opposition), told poloff December 21 that 
260 employees have been forcibly retired and 110 dismissed 
since September 2003.  Prior to Chavez, Valladares said, 
political parties filled CNE positions on a loose quota 
system, with rotations in management jobs based on which 
party was in power.  Under Chavez, the CNE has been removing 
those employees and replacing them with pro-Chavez loyalists, 
he said.  Valladares said some fired workers had successfully 
contested their dismissals in administrative labor courts. 
Work areas such as computer systems and the electoral 
registry were "completely closed off" to all but a handful of 
select employees, Valladares added. 
 
6. (C)  Valladares said that, despite the removal of career 
employees, the number of total employees on the payroll had 
increased from about 2,000 in September 2003 to about 4,000 
today.  Valladares, who sees payroll records as a part of his 
union duties, said many new positions were added in regional 
CNE offices in state capitals.  In addition, Valladares said 
that many of the temporary employees hired to process the 
signatures collected by the opposition for the recall 
referendum are still on the job, but do not have much to do. 
He alleged that some people on the CNE payroll are phantom 
employees and or do not work at CNE facilities.  Valladares 
said the workers received a 40-percent pay increase when the 
new board was installed (which included the same increase for 
board members), but he said no raises are contemplated for 
this year.  He said this had caused a morale problem among 
workers, especially since the CNE received its full budget 
for 2004 plus a supplemental, most of which went to purchases 
of the Smartmatic electronic voting machines and Cogent 
fingerprint capture system. 
 
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CNE Thinks Internationally 
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7. (C) Tirado confirmed that CNE Director Oscar Battaglini -- 
considered the most revolution-minded of CNE directors -- had 
offered to lend a number of Venezuela's Smartmatic machines 
to the OAS for upcoming elections in Haiti.  Smartmatic Vice 
President Bob Cook told poloff December 23, however, that 
there had been no follow-up to the Battaglini proposal.  Cook 
said the company is, in fact, working independently from the 
CNE with a Haitian consortium to sell the OAS and GOH with an 
electronic voting system for Port-au-Prince using up to 6,000 
voting machines.  Tirado said he accompanied the CNE's Lucena 
to Honduras to offer the machines and technical assistance 
for the Honduran presidential elections in 2005.  Tirado did 
not believe the offer would work out, however, as the 
machines will be needed in Venezuela about the same time for 
the National Assembly elections.  Tirado said a group of 
Central American countries may instead collaborate on a World 
Bank loan to purchase common election equipment, which 
Smartmatic hopes to supply.  Cook pointed out that any CNE 
offer to lend equipment to a third country would require 
Smartmatic participation, since the company still owns the 
rights to most of the operating software. 
 
8. (C) Tirado mentioned that the CNE owed Smartmatic more 
than US$10 million for the additional machines purchased for 
the regional elections, a result of Smartmatic's foregoing a 
letter of credit to cover the sale.  Cook said his company 
plans to sell between 4,000 and 5,000 new voting machines to 
the CNE in 2005.  He said Smartmatic will roll out a new 
voting machine early next year that will be cheaper than the 
previous model.  Smartmatic has yet to sign service contracts 
with the CNE for the 2005 electoral events, but Cook said he 
has no reason to expect his company would not win the 
contracts. 
 
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Comment 
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9. (C) Chavez needs a compliant CNE open to manipulation to 
maintain his grip on elected offices.  Rodriguez is 
intelligent, crafty, and particularly mean-spirited when it 
comes to the opposition.  Given the inability of the National 
Assembly to fulfill its constitutional role of approving CNE 
directors with a two-thirds majority, we expect the TSJ to 
name Rodriguez to Carrasquero's position as well as the two 
replacement directors.  It is likely the replacements will be 
Chavez sympathizers, giving Chavez a sure 4-1 vote on future 
electoral questions.  The CNE loaning out its voting machines 
and giving technical assistance to other countries seems for 
now to be a nascent concept.  The idea probably surfaced as a 
way to shore up the CNE's image both internationally and 
domestically.  The CNE's technical assistance to other 
countries, however, may be also be a means to influence the 
management of electoral processes throughout the region. 
 
Brownfield