Tags: reich | chavez | oil

Ambassador: It's Time to Close the Chavez Oil Spigot

Sunday, 08 Mar 2009 10:13 PM

By Dave Eberhart

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WASHINGTON -- Otto J. Reich, former U.S. Ambassador to Venezuela, challenged President Obama to follow through on his promised aggressive policy of reduction of U.S. dependency on foreign oil by nixing the U.S. as the prime customer for Venezuelan oil.

Speaking at the Heritage Foundation, Reich noted that the time for the dramatic unilateral move is ripe -- now that there is an abundance of oil in the world marketplace.

“There are now 80 million barrels being held aboard ships as storage around the world in various locations -- off the coast of China, off the coast of Mediterranean, even in the Gulf of the United States because there is such a glut of petroleum in the world,” said the chief diplomat to Venezuela from 1986-1989 and former special advisor to the Secretary of State.

Reich argued that Venezuelan strongman Hugo Chavez is more a hostage of the U.S. than the U.S. is helpless in the face of some perceived crippling U.S. need for the dictator’s oil.

The U.S., he notes, buys eight out of every 10 barrels that Venezuela produces and provides nine out of every 10 dollars that Venezuela produces in terms of oil exports. Furthermore, Chavez has only between five and 10 days storage capacity -- so that if he doesn’t move his product out to the U.S. market, the whole pipeline of profit goes critical.

“Venezuela, no question, has a fantastic wealth of oil resources, but its storage capacity and refining capacity is very limited,” says the former assistant Secretary of State for Western Hemisphere Affairs, and special envoy for Western Hemisphere Initiatives.

“I can’t think of a better candidate [to cut off as an oil supplier] than the country that has been using our money that we have been sending to purchase this oil to undermine U.S. interests…,” Reich concluded.

Venezuela’s caudillo [strongman] President Hugo Chávez has his sights set on an extended stay in executive office well beyond the possibilities of even a second Obama administration. Like his hero and mentor Fidel Castro, Chávez aspires to remain a thorn in the side for multiple U.S. presidents.

With his Bolivarian Revolution and “socialism for the 21st Century,” Chávez has harnessed Venezuela’s abundant oil wealth to pay for socialist experimentation at home and lavish subsidies for the like-minded in Cuba, Bolivia and Nicaragua.

He advocates Latin America’s independence from U.S. overseas influence and touts establishment of a global, anti-American coalition with Iran, Russia and others.

The Obama administration has yet to speak on the topic, transmitting before January 20 mixed signals ranging from hope of conciliation to tough talk about Chávez’s authoritarian style and dangerous friends.

Reich spoke at the Heritage program in tandem with Michael Rowan, co-author along with Douglas E. Schoen of “The Threat Closer to Home: Hugo Chávez and the War Against America,” published this year by Simon & Schuster.

For his part, Rowan, a political consultant and newspaper columnist, who lived in Caracas from 1993 to 2006, indicts Chavez as a sponsor of terrorism and perhaps public enemy number one to the U.S.

Rowan notes that Venezuela’s productivity has been falling since naturalization of oil in the industry in 1976. Today, it is the richest failed state in the world. This is not the way it has to be, and this is not the way it was, he says. From the 1930s to the 1960s, Venezuela had the highest consistent economic growth rate and the lowest inflation rate in the world.

“But I’m not here to talk about how Venezuela got it wrong,” Rowan says. “You don’t have enough time for me to hear that -- but how America has got Chávez wrong.

“Chávez is a state sponsor of terror,” the author charges. “He has supported the FARC in Columbia, terrorists in Iran, Hezbollah and Hamas -- with oil, money, with weapons, with passports, with vertical support, and not just in the Middle East conflicts but in Venezuela, Cuba, Bolivia, Ecuador, Argentina and Nicaragua for a few.”

The Revolutionary Armed Forces of Colombia – People’s Army (Spanish: Fuerzas Armadas Revolucionarias de Colombia), also known by the acronym of FARC, is a Marxist-Leninist revolutionary guerrilla organization.

FARC is considered a terrorist group by the Colombian government, the U.S. Department of State, Canada and the European Union.

Strange Goings-on

Rowan says Chavez operates a weekly flight between Caracas and Tehran, Iran that has no passenger list, no immigration controls, no materials accounting, and is not open to international inspection.

“To get on that plane you need to be approved by Iranian and Venezuelan security,” he says. “You can get your ticket from a Caracas travel agent, who is designated by the U.S. Treasury Department as a Hezbollah agent and money launderer.”

In Lebanon and Tehran, on the other side of that flight, there is a Venezuelan diplomat who is also designated as a Hezbollah agent, Rowan describes. He facilitates money laundering and transfers shadowy people and material between Venezuela and Hezbollah in the Middle East.

Two governments are now investigating a plot where Hezbollah in Venezuela will kidnap Latin American Jews and sequester them in Lebanon, the author recounts. Last month seven of the 11 people arrested for trashing a Caracas Synagogue were employees of Chávez, who called the break-in a simple robbery.

The only thing stolen from the Synagogue was a computer file with the name of every Jewish family along with their addresses and network.

“Hezbollah in effect has the kidnap list,” charges Rowan, former president of the International Association of Political Consultants. “In our book we connect these dots. Jewish Venezuelans have also done so -- a population of 30,000 Jewish Venezuelans has dropped by more half since 1999.”

Rowan further charges that by his own words, Chávez is conducting an asymmetric war against America, which he calls the “Evil Empire” and Israel, which he says is perpetrating a holocaust against the people of Palestine.

Chavez infamously called President Bush the devil of the United Nations, adding that President Obama smells of the same stench. He wants the presidents of the U.S. and Israel to be prosecuted internationally for the war in Gaza.

A Force in the U.N.

In 2006 Chávez got 77 national votes to sit on the United Nations Security Council. His campaign message was to let Iran develop its nuclear program -- leave them alone, says Rowan, who in Venezuela’s presidential campaign of 2006 was the strategist for Governor Manuel Rosales.

In 2007, he notes, the Columbian government confiscated 30 kilos of non-enriched uranium in a safe house identified in the computer files of Raul Reyes, the FARC leader who was killed in an Ecuador raid by Columbian forces in March of that year.

“In 2008 Chávez got the Russians to give him enough nuclear technology for processing uranium,” Rowan recounts. “Chávez said it is for peaceful purposes, but why the country with the most oil and gas on the continent and huge cheap hydropower need nuclear power has not been explained. “

Meanwhile, the author notes, Venezuela is mining uranium on a site that is protected by an instruction to shoot down any aircraft entering its airspace. The government says that it is a bicycle factory -- one of the two hundred new businesses capitalized with $20 billion of investment that Venezuela has with Iran. Why a bicycle factory would have such military security has not been explained.

Meanwhile, Hezbollah has taken over a village near the border with Columbia, he describes. Chávez expelled the Christian missionaries there and now the indigenous Indians have all become Muslims. The women cover their bodies and their faces and pray five times a day.

“The men are trained with weapons to prepare for Armageddon with the ‘Evil Empire,’” he charges.

The FARC are also suspected of harboring near that village. The FARC, Hezballoh and other terrorists in Venezuela may all be protected with Venezuelan identity cards and passports, says Rowan. Since 2004, Chávez has added seven million names to their identity card lists.

“No independent audit of those lists has been permitted,” the author charges. “We have no idea who has Venezuelan passports.”

The Terrorist With a Big Foothold in the U.S.

As opposed to the FARC, to Iran, to Hezbollah, to Hamas, to al-Qaida or others on the terrorist list, Chávez has free access to our borders, warns Rowan. He owns 14,000 CITGO gas stations. He moves billions of dollars and people in and out of America every day.

“Chávez has the means, the motive and the opportunity to strike asymmetrically against America whenever he wants,” says the author.

Rowan wants the U.S. to act and act now against the dictator by first declaring Chávez, his corporations, his ministries, and his agents state sponsors of terrors -- wherever the evidence makes a reasonable case.

“It’s true and I would argue that not only this government but several other governments have that information and have not moved on it,” he charges.

Rowan, like Reich, wants the U.S. to stop paying for Chávez’s war against America.

Last year Chávez got some $40 billion in oil revenues; the year before that he raked in $37 billion. With this oil windfall, since 2004, Chávez has spent $100 billion overseas in his war against America, Rowan instructs.

In the U.S. he is spending $250 million a year with lobbyists from both political parties in Hollywood. Then there was the heating oil going to American cities in 23 states in order to convince them that he is the “second coming of Martin Luther King, Jr.,” Rowan says.

“The difference between Chávez and bin Laden is that they both want to destroy the ‘Evil Empire,’ but Chávez wants us to love him while he does it and to pay him while he does it,” he concludes.

Rowan agrees with Reich that all the nonsense should stop and stop now.

“America should never let the oil weapon hold hostage our national security,” Rowan says, “and contrary to Chávez’s continuous propaganda, Venezuela is far more vulnerable to an oil cutoff than America is.

“Over one-third of Chávez’s oil cannot be refined but in America and most of his revenue comes from sales in America -- and not to the Venezuelans at $.12 a gallon and to Cuba or Bolivia or Nicaragua at discount prices for joining in the war against America.”

Fear Mongering with Iran

From 2005 to 2008, Chávez and Ahmadinejad of Iran used the threat of war and the cutoff of oil in the Gulf of Hormuz and in Venezuela to drive up the political risk premium paid for oil, which the Saudis estimated to account for 40 percent of the price in 2006.

“Google these four words and you will find about the media campaign that helped create that political risk premium,” Rowan challenges. “These four words are ‘Chávez, Ahmadinejad, oil, war,’ and you will get more than a million stories in three or four years.

“Now, facing a recession and with Ahmadinejad, Chavez may use the terrorist tool against America just the way he used the oil tool against America. We have to be alert to that threat,” he warns.

“Why are Venezuelans letting this happen?” the author asks rhetorically.

His short answer: Venezuela is not a democracy.

“Chavez controls the voter rules, the electronic voting machines,” Rowan instructs. “He does a centralize count on every election. No one knows the actual voting tabulation from 2004 to today.

“Chavez has also abused the power, the law, the public funds to centralize power, to suppress freedom in Venezuela and it is working like it worked in Cuba, like it worked in the Soviet Union. It has been going on for 10 years. He is succeeding.

“Today, Venezuela is as much a kidnapped victim as the 700 victims still held by the FARC or the Jews that the Hezbollah made plans to ransom from Lebanon. Venezuela is suffering from the Stockholm syndrome,” Rowan adds.

“It is cowering before the kidnapper. Like Patty Hurst, the country is being kidnapped. It is held in seclusion -- deprived of food and water, conditioned to behave through rewards and revolutionary behavior or submission and prosecuted for expressing God- given freedoms, human rights and dignity.

“Chavez has kidnapped Venezuela, its institutions. He is conditioning Venezuelans and Americans to believe that the kidnapping did not take place but that something wonderful is happening,” Rowan says.

“A revolutionary paradise is being created. America should not go along with this hoax -- not only because it is not true for Venezuelans, not only because it is a violation of law and morality, but also because Chavez is a real and present danger to our national security and it is our duty as citizens to recognize the threat and to do something about it -- and do it now.”

Beyond a Kinder and Gentler Approach

For his part, Reich thinks the softer touch with Chavez and Venezuela has played its course – and to no avail.

“There is no other country in the world that has provided more attention to and resources to alleviating poverty in Latin American than the United States,” Reich says. “We have provided the equivalent of two Marshall Plans in terms of money -- twice the enormous quantities that were devoted to Western Europe in the Marshall Plan -- and yet, although poverty has been reduced in many countries, it still exists because the conditions that lead to poverty were not caused by the United States.

The Marshall Plan, officially the European Recovery Program, was the plan of the U.S. for rebuilding the countries of Western Europe – and discouraging communism -- after World War II.

But, maintains Reich, the super Marshall Plan for Latin America was foiled by inefficiency, corruption, and rulers who cared more about money in their pocket then they cared about raising the standards of living of their people.

“It is no coincidence, for example, that Venezuela has made more money in the last 10 years from the increased price of oil than it made probably in the previous 100 years -- but the people of Venezuela have not really benefited,” Reich says.

“But Chavez has used this money to support like minded political parties around Latin America and the world,” Reich charges. “He has given away literally billions of dollars. One Venezuelan group calculated, I believe, $25 billion or more in Chavez gifts to foreign counties and foreign political parties and terrorist groups.

“So it isn’t the fault of the United States in attempting to alleviate poverty in a region that has caused the emergence of somebody like Chavez,” Reich concludes. “We can talk about what led to Chavez. I have my own theories having lived in Venezuela and, frankly, I think that the political elites and economic elites in Venezuela deserve most of the blame. The ones in the last 40 years, since the end of the dictatorship that ended in 1958 -- 40 years later in1998 Chavez was elected.”

Reich laments that he and others are lambasted as hypocrites “because we say we are for democracy and yet Chavez is a democrat, the alleged leader -- so why we are we attempting to destabilize him by saying that he is a threat to the United States.”

However, qualifies Reich, to qualify as a true democracy, you have to minimally give people opportunities – political, economic and social opportunities.

“The entity of Hugo Chavez, Inc. controls the executive branch, the legislative branch, the judicial branch, the military, every element of society-- and then it is gradually eroding the civil liberties, for example, trade unions, newspapers, the Church, private schools, all of the elements of a civil society,” Reich says.

Chavez Is Past Ignoring

Rowan notes that Venezuela is just about to run out of money and is headed into a huge rough patch.

“So they are running into the fact that they have no way of actually producing any wealth and it is going to get very, very bad. The question is do we want to contribute to the downfall here, or would we like to help Chavez in any way we can?

“If we want to help him, I think just keep doing what you are doing -- ignoring him.”

Rowan knows what he is talking about. As a political consultant, he has worked in over a dozen nations, including the United States, Israel, Venezuela and Bolivia.

He has written over 500 columns and articles about the political economies of Latin America.

The equally savvy Reich summed up his take on Chavez with a couple of startling comparisons.

“Winston Churchill wrote in the prologue to the six volume history of World War II, and I paraphrase, something to the effect of this could have been avoided if the western democracies had seen all of the warning signs.

“Churchill was referring, of course, to Hitler’s many warnings of what he was going to do if he had the opportunity. The United States refused to see the aggressiveness of the Japanese Empire until, of course, December 7, 1941 when it was too late.

“The fact that we don’t want to face these threats doesn’t mean that they don’t exist…”

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