US embassy cable - 98CARACAS2912

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