US embassy cable - 05CARACAS150

C O N F I D E N T I A L SECTION 01 OF 03 CARACAS 000150 
 
SIPDIS 
 
NSC FOR CBARTON 
USCINCSO ALSO FOR POLAD 
 
E.O. 12958: DECL: 01/10/2014 
TAGS: PREL, ECON, OVIP, VE 
SUBJECT: VENEZUELA: CODEL DODD MEETS BUSINESS, POLITICAL 
AND JUDICIAL LEADERS 
 
REF: CARACAS 00367 
 
Classified By: A/DCM Abelardo A. Arias for Reason 1.4(d) 
 
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Summary 
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1. (C)  CODEL Dodd met January 9 with Venezuelan business 
leaders who noted their concern with increased GOV 
involvement in the private sector and recommended the USG 
emphasize multilateral cooperation in dealing with President 
Hugo Chavez.  Meeting with the National Assembly leadership, 
the CODEL discussed increased U.S.-Venezuelan cooperation on 
issues like commerce and energy, terrorism, narcotrafficking, 
and corruption investigations.  Supreme Court President Ivan 
Rincon told the Senators he had been assured World Bank 
funding for judicial reform, and the court structure that 
necessitated an expansion would not lead to additional court 
chambers.  The Senators also briefly met with representatives 
of the opposition.  They emphasized the importance of having 
a trustworthy National Electoral Council for the legislative 
elections scheduled for December.  End Summary. 
 
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Meeting with Business Leaders 
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2.  (C) The Ambassador hosted a meeting for Senators 
Christopher Dodd (D-CT), Lincoln Chafee (R-RI), William 
Nelson (D-FL) with business leaders from sectors ranging from 
banking and consulting services to food processing, consumer 
goods, and natural gas production January 9.  Also present 
were Senate Foreign Relations Staffer Janice O'Connell, Dodd 
Staffer Jonathan Pearl, Nelson Staffer Dan McLaughlin, and 
Chafee Staffer Deborah Brayton.  Imelda Cisneros, President 
of the Venezuela-U.S. Chamber of Commerce (VENAMCHAM) and 
head of the Caracas offices of consulting firm Arthur D. 
Little, led off by noting that 2004 had been a good business 
year, as the oil-based economic recovery had kicked in. 
However, economic growth was not sustainable over the long 
haul with current policies.  She noted that while VENAMCHAM 
had been able to engage in dialogue with specific officials, 
the overall direction of GOV policies was disturbing, with 
ever-greater state involvement in the economy and the 
isolation of Venezuela from the process of U.S.-led free 
trade agreements. 
 
3.  (C) Proctor and Gamble executive Ed Jardine echoed her 
views, suggesting that 2005 would be a year of 4-6 pct GDP 
growth and that the GOV, with a an eye to Presidential 
elections would do everything possible to keep the economy 
pumped up through 2006.  He said that the head offices of 
U.S. corporations in Venezuela remained cautious about 
investing, especially as GOV rhetoric, including most 
recently threats of expropriation of agricultural land, was 
very ominous.  Nelson Ortiz, President of the Caracas Stock 
Exchange, noted the increasing direct GOV presence in key 
sectors, such as food, where in order to gain political 
support, it sold products to low income consumers at 
below-cost prices with which private businesses could not 
compete. 
 
4.  (C) Senator Dodd asked the business leaders what the 
appropriate USG response should be.  Andres Duarte, a 
petroleum and port services entrepreneur, suggested that the 
USG should avoid where possible direct, bilateral 
confrontation with the GOV "as this is exactly what Chavez 
wants," and instead should, where possible, cloak itself in 
multilateral approaches, calling the GOV to account for its 
performance in terms of obligations which it has assumed 
under international treaties (trade, human rights, labor, 
etc.).  Kellogg's country manager Arthur Gelles noted the 
importance of highlighting the benefits to the country that 
multinational companies provide and their commitment to 
corporate social responsibility projects.  Gustavo Vollmer, 
whose family-owned businesses range from sugar and rum to 
banking, urged the USG to forge a common agenda with 
different hemispheric partners in the face of Chavez's 
"leftist and militarist" model.  Economic consultant Pedro 
Palma summed up the businessmen's thinking by saying that the 
USG must not present Chavez with an easy target, but that it 
should be under no illusions - his control of the congress, 
the courts, the military and the bureaucracy mean that 
Venezuela is not now a functioning democracy as we understand 
the term.  The senators expressed appreciation for the views 
expressed at the meeting and committed themselves to pressing 
to keep Venezuela and Latin America more generally high on 
the U.S. foreign policy agenda. 
 
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Meeting the National Assembly Leadership 
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5. (U) The CODEL and the Ambassador met with National 
Assembly President Nicolas Maduro (Fifth Republic Movement -- 
MVR), First Vice President Ricardo Gutierrez (Podemos), and 
Second Vice President Pedro Carreno (MVR) January 10.  Maduro 
told the Senators that while Venezuela's economic 
recuperation exceeded expectations, there was still much to 
do.  Maduro also noted that political stability increased 
after President Hugo Chavez won the recall referendum and the 
"the large victory for the people we represent" during the 
regional elections.  Separately, Maduro said it was time to 
solve the difficult and conflictive relationship that existed 
between the U.S. and Venezuela by cooperating on trade, 
narcotrafficking and terrorism. 
 
6. (C) Senator Dodd told Maduro that the U.S. Congress wanted 
relations with Venezuela to move forward and reiterated the 
points Maduro had suggested for increased cooperation, adding 
energy.  Second Vice President Pedro Carreno noted 
Venezuela's parliamentary investigative committees could be a 
mechanism for cooperation and coordination.  Carreno also 
suggested working together on cooperation for the extradition 
of corrupt officials, repatriation of capital and assets, and 
eliminating fiscal havens, which he called a breeding ground 
for corruption, money laundering and drugs.  Returning to the 
social programs involving health, education and food, Senator 
Chafee asked what the U.S. could do to help.  First Vice 
President Ricardo Gutierrez suggested establishing 
legislative working groups for these issues.  Gutierrez also 
said he would like to see cooperation in education and 
scientific development, perhaps through university exchanges 
or cooperation, which he called the key to development. 
 
7. (C) Senator Nelson asked the deputies to deliver a message 
to Chavez.  He said after the elections, it was time to move 
on to a mutually beneficial relationship.  However, he noted, 
there was no sign that President Chavez wanted to do that. 
Senator Nelson asserted that President Leonel Fernandez 
(Dominican Republic) had promised to speak to Chavez to 
facilitate better relations, but Nelson had heard nothing 
back.  Maduro asserted that mechanisms were being created to 
improve relations, citing Venezuelan Ambassador to the U.S. 
Bernardo Alvarez as the representative in charge of that 
relationship.  He said the deputies would tell Chavez about 
the talk with the Senators and let him evaluate it. 
 
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Meeting with the Boston Group 
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8. (C) Following the meeting with the National Assembly 
leadership, the Senators and the Ambassador met with Boston 
Group members Saul Ortega (MVR, also President of the Foreign 
Relations Committee), Pedro Diaz Bloom (Proyecto Venezuela), 
Pedro Pablo Alcantara (Accion Democratica -- AD), Victor 
Cedeno (COPEI) and Foreign Relations Committee deputy Victor 
Hugo Morales (MVR).  Diaz cited the establishment of a 
television station to broadcast National Assembly updates 
proposed by Boston Group members proposed, and which Maduro 
has included in the agenda for 2005, as an example of the 
Group's success.  Alcantara lamented the opposition did not 
have representation in the new National Assembly leadership, 
saying the opposition represented an important part of 
Venezuela.  Alcantara, Cedeno and Morales told the Senators 
that Venezuela was fighting for democracy.  Morales said 
Venezuela is fighting terrorism and narcotrafficking, but 
development is its biggest problem.  Senator Dodd welcomed 
Diaz Bloom's suggestion to include Senators in the Boston 
Group, and told the deputies the U.S. and Venezuela should 
continue to work together. 
 
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Meeting with the Supreme Court President 
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9. (C) The Ambassador, Senators Dodd, Chafee and Nelson, and 
Foreign Relations staffer O'Connell also met with Supreme 
Court President Ivan Rincon January 10.  Rincon said the 
World Bank has guaranteed to fund the Supreme Court's 
judicial reform project, contrary to what National Assembly 
deputy Julio Borges (Primero Justicia) had told the press. 
(Note: Rincon's assertion that the World Bank guaranteed 
funding also counters what David Varela, resident 
representative of the World Bank told the Embassy. )  Rincon 
said he hoped the National Assembly would choose the new 
National Electoral Council (CNE) directors instead of leaving 
it to the Supreme Court who had had to choose the current 
directors.  Regarding the Court's recent expansion, Rincon 
told the Senators that Venezuela's court structure and 
mandate drove the expansion and pointed out how Venezuela's 
system differs from that of the U.S. and other countries. 
Despite the expansion, Rincon said, the number of chambers 
would remain unchanged. 
 
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Getting Opposition Views 
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10.  (C)  The Senators also met briefly with nearly a dozen 
opposition representatives at a lunch hosted by the 
Ambassador.  (The event had to be cut short when President 
Chavez opened time to meet with the Codel early that 
afternoon.)  The Venezuelans commented principally on the 
importance of having a trustworthy National Electoral Council 
to oversee the legislative elections in December.  Many 
Venezuelans would not participate, they asserted, if 
confidence in the institution was not bolstered through the 
selection of new members expected in the coming months. 
Senator Dodd drew the attention of the Chavez opponents to 
the municipal elections coming at mid-year, citing it as an 
opportunity for them to begin building voter support.  The 
opposition representatives also highlighted President 
Chavez's control at present over all the branches of 
Venezuelan government, citing for example the recent packing 
of the country's Supreme Court with Chavez loyalists.  Asked 
by the Senators about the prospects for dialogue with the 
GoV, they were not optimistic.  "The government only wants 
interlocutors of its own choosing," one of the 
representatives noted. 
 
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Comment 
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11. (C) The new National Assembly leadership composed of 
Chavez supporters spoke about cooperation, but their actions 
will be dictated by Chavez's decisions.  The National 
Assembly is more likely to concentrate on a domestic, 
Chavez-prescribed agenda for 2005. 
 
12. (U) CODEL Dodd did not have the opportunity to clear this 
message before its departure. 
McFarland