Order Code RL32488
CRS Report for Congress
Received through the CRS Web
Venezuela: Political Conditions
and U.S. Policy
Updated March 10, 2006
Mark P. Sullivan
Specialist in Latin American Affairs
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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Venezuela: Political Conditions and U.S. Policy
Summary
Under the populist rule of President Hugo Chávez, first elected in 1998,
Venezuela has undergone enormous political changes, with a new constitution, a new
unicameral legislature, and even a new name for the country, the Bolivarian Republic
of Venezuela. Although Chávez remained widely popular until mid-2001, his
popularity eroded considerably after that, amid concerns that he was imposing a
leftist agenda. In April 2002, massive opposition protests led to the ouster of Chávez
from power for a brief period, but the military restored him to power after an interim
government resorted to such hardline measures as dismantling the National Assembly
and suspending the Constitution. After months of negotiations, the Chávez
government and the political opposition signed an agreement in May 2003 that
ultimately led to an August 2004 presidential recall referendum. Chávez survived the
vote by a margin of 59% to 41%. In December 2005 legislative elections, pro-
Chávez parties won all 167 seats in the National Assembly after opposition parties
pulled out of the race just days before the vote. The country’s next presidential
elections are set for the end of 2006, and there is a strong chance that Chávez could
win another six-year term. The government has benefitted from the rise in world oil
prices, which has sparked an economic boom. As a result, Chávez has been able to
increase government expenditures on anti-poverty and other social programs
associated with the populist agenda of his Bolivarian revolution.
The United States traditionally has had close relations with Venezuela, but there
has been friction in relations with the Chávez government. In 2005, relations
deteriorated markedly, with Venezuela’s cancellation of a bilateral military exchange
program in April and its suspension of cooperation with the Drug Enforcement
Administration in August. U.S. officials have expressed concerns about the
deterioration of democratic institutions and threats to freedom of speech and press,
President Chávez’s plans for military arms purchases, his relations with such
countries as Cuba and Iran, and his efforts to export his brand of populism to other
Latin American countries. A dilemma for U.S. policymakers has been how to press
the Chávez government to adhere to democratic principles without taking sides in
Venezuela’s polarized political conflict. Since Venezuela is the fourth major
supplier of foreign oil to the United States, a key U.S. interest has been ensuring the
continued flow of oil exports.
In the first session of the 109th Congress, the FY2006 Foreign Operations
appropriations measure (P.L. 109-102, H.Rept. 109-265) provided $2 million in
FY2006 for democracy programs in Venezuela, and $2.229 million in assistance under
the Andean Counterdrug Initiative. Pending legislation includes the House-passed
version of H.R. 2601, which would authorize $9 million for each of FY2006 and
FY2007 for democracy programs in Venezuela and would authorize funds for U.S.-
government broadcasting to Venezuela; H.Con.Res. 224 (Fortuño), which calls on the
Venezuelan government to uphold the human rights and civil liberties of the people
of Venezuela; and H.Con.Res. 328 (Mack), which condemns President Chávez’s
“anti-democratic actions” and expresses strong U.S. support for democratic forces in
Venezuela.

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Contents
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Political Situation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Chávez’s Brief Ouster in April 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Continued Opposition and Strike in 2002 and 2003 . . . . . . . . . . . . . . . . . . . 4
August 2004 Presidential Recall Referendum . . . . . . . . . . . . . . . . . . . . . . . . 5
Background Leading to the Referendum . . . . . . . . . . . . . . . . . . . . . . . . 5
Referendum Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
December 2005 Legislative Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Opposition Boycott . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Election Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
International Observers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Political Significance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Political Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Human Rights Concerns
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Economic Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
U.S. Policy
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Background and Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Tensions Increase in 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Developments in 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
General Policy Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
U.S. Funding for Democracy Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Oil Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Counternarcotics Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Venezuela’s “Failed Demonstrably” Designation . . . . . . . . . . . . . . . . 22
Concerns about Venezuela’s Military Purchases . . . . . . . . . . . . . . . . . . . . . 23
Concerns About Venezuela’s Involvement in Latin America . . . . . . . . . . . 23
Venezuela’s Extradition Requests
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Legislative Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
108th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
109th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
List of Figures
Figure 1. Map of Venezuela . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

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Venezuela:
Political Conditions and U.S. Policy
Recent Developments
On March 8, 2006, the State Department issued its annual human rights report
for 2005, which asserted that Venezuela’s “new laws governing libel, defamation, and
broadcast media content, coupled with legal harassment and physical intimidation,”
have “resulted in limitations on media freedoms and a climate of self-censorship.”
(Also see “Human Rights Concerns” below.)
On March 1, 2006, the State Department issued its annual International
Narcotics Control Strategy Report, which maintained that corruption and a weak
judicial system have contributed to an increase in drug trafficking in Venezuela but
also stated that continued U.S. work with Venezuelan law enforcement led to record
cocaine seizures in 2005. (Also see “Counternarcotics Cooperation” below.)
On February 24, 2006, Venezuela announced its intention to reduce flights by
U.S. carriers, effective March 1, until Venezuelan carriers are allowed to expand
service to the United States. Delta and Continental Airlines’ flights to Venezuela
would be terminated, while American Airlines flights would be reduced. Venezuela
subsequently extended the deadline until March 30. American Airlines, which has
met with representatives of the Venezuelan government, has called on the U.S.
Federal Aviation Administration to raise its rating of Venezuela under its International
Aviation Safety Assessments Program. The FAA had downgraded Venezuela’s rating
in 1995, which prohibited expansion of services to the United States by Venezuelan
carriers.
On February 16, 2006, Secretary of State Condoleezza Rice stated in
congressional testimony before the House International Relations Committee that one
of the biggest problems for the United States in Latin America was Venezuela, which
she characterized as “attempting to influence its neighbors away from democratic
processes.” The Secretary also expressed concerns about Venezuela’s relationships
with Cuba and Iran.
On February 2, 2006, Secretary of Defense Donald Rumsfeld compared President
Chávez to Adolf Hitler in terms of someone who was elected legally and then
consolidated power. Chávez subsequently responded by referring to President Bush
as Hitler and as a “madman,” with plans to invade Venezuela.
On February 2, 2006, President Chávez announced that his government would
expel a U.S. naval attache for spying, which U.S. officials strongly denied. In
response, the United States expelled a Venezuelan diplomat based in Washington.

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CRS-2
On February 2, 2006, Director of National Intelligence John Negroponte
expressed concerns in congressional testimony before the Senate Select Committee
on Intelligence that President Chávez “is seeking closer economic, military, and
diplomatic ties with Iran and North Korea.”
On January 13, 2006, the State Department indicated that the United States had
denied licenses to transfer U.S. technology for use in planes (10 military transport
planes and 2 maritime patrol aircraft) that Spanish companies had contracted to sell
to Venezuela.
In December 4, 2005 legislative elections, pro-Chávez parties won all 167 seats
in the National Assembly after opposition parties pulled out of the race just days
before the vote. International observers lamented the withdrawal of the opposition, but
also raised questions and had criticisms regarding the conduct of the elections.
Political Situation
Background
With his election as President in December 1998, Hugo Chávez began to
transform Venezuela’s political system. The watershed election, in which former
coup leader Chávez received 56% of the vote (16% more than his closest rival),
illustrated Venezuelans’ rejection of the country’s two traditional parties, Democratic
Action (AD) and the Social Christian party (COPEI), that had dominated Venezuelan
politics for much of the past 40 years. Elected to a five-year term, Chávez was the
candidate of the Patriotic Pole, a left-leaning coalition of 15 parties, with Chávez’s
own Fifth Republic Movement (MVR) the main party in the coalition.
Most observers attribute
Chávez Biography
Chávez’s rise to power to
Venezuelans’ disillusionment
Hugo Chávez Frias was born on July 28, 1954, in
a small farming town in the western Venezuelan state of
with politicians whom they judge
Barinas. The son of school teachers, Chávez was a 1975
to have squandered the country’s
graduate of Venezuela’s Military Academy. He reached
oil wealth through poor
the rank of lieutenant colonel by 1990. In February
management and endemic
1992, Chávez led an unsuccessful attempt to overthrow
corruption. A central theme of
the elected government of President Carlos Andres
Perez. He was imprisoned for two years for the coup
his campaign was constitutional
attempt before being pardoned. While in the military,
reform; Chávez asserted that the
Chávez founded the nationalistic and left-leaning
system in place allowed a small
Bolivarian Revolutionary Movement, which was later
elite class to dominate Congress
transformed into the Fifth Republic Movement in the
and that revenues from the state-
1998 elections when Chávez was first elected president.
run oil company, Petroleos de
Source: Current Leaders of Nations, Gale Group. May
Venezuela (PdVSA), had been
20, 2004.
wasted.
Although Venezuela had one of the most stable political systems in Latin
America from 1958 until 1989, after that period numerous economic and political
challenges plagued the country and the power of the two traditional parties began to

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CRS-3
erode. Former President Carlos Andres Perez, inaugurated to a five-year term in
February 1989, initiated an austerity program that fueled riots and street violence in
which several hundred people were killed. In 1992, two attempted military coups
threatened the Perez presidency, one led by Chávez himself, who at the time was a
lieutenant colonel railing against corruption and poverty. Ultimately the legislature
dismissed President Perez from office in May 1993 on charges of misusing public
funds, although some observers assert that the President’s unpopular economic reform
program was the real reason for his ouster.1 The election of elder statesman and
former President Rafael Caldera as President in December 1993 brought a measure
of political stability to the country, but the Caldera government soon faced a severe
banking crisis that cost the government more than $10 billion. While the macro-
economy began to improve in 1997, a rapid decline in the price of oil brought about
a deep recession beginning in 1998.
Under President Chávez, Venezuela has undergone enormous political changes,
with a new constitution in place and even a new name for the country, the Bolivarian
Republic of Venezuela, named after the 19th century South American liberator Simon
Bolivar, whom Chávez often invokes. In 1999, Venezuelans went to the polls on
three occasions — to establish a constituent assembly that would draft a new
constitution, to elect the membership of the 165-member constituent assembly, and
to approve the new constitution — and each time delivered victory to President
Chávez. The new document revamped political institutions, eliminating the Senate
and establishing a unicameral National Assembly, and expanded the presidential term
of office from five to six years, with the possibility of immediate re-election for a
second term. Under the new constitution, voters once again went to the polls in July
2000 for a so-called mega-election, in which the President, national legislators, and
state and municipal officials were selected. President Chávez easily won election to
a new six-year term, capturing about 60% of the vote while his opponent, fellow
former coup leader Francisco Arias, received 38%; Chávez’s term will expire in
January 2007. Chávez’s Patriotic Pole coalition also captured 14 of 23 governorships
and a majority of seats in the National Assembly.
From the outset, critics raised concerns about Chávez and his government. They
fear that he is moving toward authoritarian rule and point to his domination of most
government institutions. Some argue that Chávez has replaced the country’s
multiparty democracy with a political system that revolves around himself, in essence
a cult of personality; others point to Chávez’s open admiration of Fidel Castro and
close relations with Cuba as a disturbing sign. Other observers express concern about
the increased role of the military in the government, with Chávez appointing dozens
of retired and active duty officers to key positions, as well as the mobilization of
thousands of army reservists for social projects. Still other critics of Chávez believe
that he is trying to politicize the educational system by making changes to school
curriculums. They fear Chávez’s call for his followers to form political cells in
schools, hospitals, and businesses in order to support his revolution and believe that
1 For example, see M. Delal Baer, “Revenge of the Venezuelan Dinosaurs,” Wall Street
Journal, June 18, 1993.

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CRS-4
such groups, known as Bolivarian circles, could mirror Cuba’s controversial
neighborhood committees.2
Chávez’s Brief Ouster in April 2002
Although President Chávez remained widely popular until mid-2001, his
standing eroded considerably after that, amid concerns that he was imposing a leftist
agenda on the country and that his government was ineffective in improving living
conditions in Venezuela. In late 2001 and early 2002, opposition to Chávez’s rule
grew into a broad coalition of political parties, unions, and business leaders. Trade
union opposition became stronger amid the President’s attempt to replace the
Venezuelan Workers Confederation (CTV) with a pro-government union. President
Chávez’s own Fifth Republic Movement also became plagued with internal dissent.
In April 2002, massive opposition protests and pressure by the military led to the
ouster of Chávez from power for a brief period. However, he ultimately was restored
to power by the military. Chávez was ousted from office on April 11, 2002, after
protests by hundreds of thousands of Venezuelans and the death of at least18 people.
Venezuelan military leaders expressed outrage at the massacre of unarmed civilians
and blamed President Chávez and his supporters. On April 12, Pedro Carmona of the
country’s largest business association — the Federation of Associations and Chambers
of Commerce and Industry (Fedecamaras) — proclaimed himself interim president,
but Carmona quickly lost the support of the military when he took such hardline
measures as dismantling the National Assembly, firing the Supreme Court, and
suspending the Constitution. Carmona stepped down just a day after he took office,
paving the way for Chávez’s return to power early in the morning of April 14. The
interim government’s hardline polices as well as strong support in the streets from
Chávez supporters convinced military commanders to back Chávez’s return.
Moreover, some military factions had continued to support Chávez during his ouster.
Continued Opposition and Strike in 2002 and 2003
After Chávez’s return to power, some 40 disparate opposition groups united in
a coalition known as the Democratic Coordinator (CD) in an effort to remove Chávez
from office, focusing on efforts to hold him accountable for the death of civilian
protestors in April 2002 and to push for a national referendum on his presidency. The
CD demanded a non-binding referendum on Chávez’s rule in early February 2003,
which they believed would force the President to resign, but Venezuela’s Supreme
Court ruled against holding such a referendum. President Chávez maintained that,
according to the constitution (Article 72), a binding referendum on his rule could take
place after the halfway point of his term, which would occur in August 2003.
From early December 2002 until early February 2003, the CD orchestrated a
general strike that severely curtailed Venezuela’s oil exports and disrupted the
economy but was unsuccessful in getting President Chávez to agree to an early non-
2 For example, see William S. Prillman, “The Castro in Caracas: Venezuelan Strongman
Hugo Chávez, in Fidel’s Image,” National Review, Apr. 3, 2003; Stephen Johnson,
“Venezuela Erupting,” National Review, Mar. 5, 2004.

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CRS-5
binding referendum on his rule or new elections. At various junctures, there were
violent clashes between Chávez supporters and the opposition, resulting in several
deaths. The Chávez government responded to the oil sector strike by firing 13,000-
16,000 PdVSA employees.
August 2004 Presidential Recall Referendum
After months of negotiations facilitated by the OAS and the Carter Center, the
government of Hugo Chávez and the opposition signed an agreement on May 29,
2003, that set forth mechanisms to help resolve the political crisis. Implementation
of the accord was difficult at times and hampered by political polarization between
supporters and opponents of President Chávez. Nevertheless, Venezuela’s National
Electoral Council (CNE) announced on June 8, 2004, that a presidential recall
referendum would be held on August 15, 2004. Chávez won the referendum
convincingly by a margin of 59.3% to 40.7%, according to the CNE’s final official
results.3
Background Leading to the Referendum. For a recall referendum to take
place, the constitution required a petition signed by 20% of registered voters (which
means 2.4 million signatures out of a registry of 12.3 million). Petition signatures
were collected during a four-day period beginning in late November 2003, but on
March 2, 2004, the CNE ruled that there were only 1.83 million valid signatures
supporting a presidential recall referendum. The CNE subsequently updated this to
1.91 million valid signatures, with almost 1.2 million signatures that could be valid
if individuals confirmed their signatures in a reparo or “repair” period. This meant
that about 525,000 signatures of those under review would need to be validated for a
referendum to be required. The CNE’s announcement that there were not yet enough
valid signatures for a referendum prompted strong opposition protests, but the
opposition ultimately agreed to participate in a repair period that was held May 27-31,
2004, in more than 2,600 centers around the country. About 100 observers from the
OAS and the Carter Center monitored the repair period; President Carter reported that
the overall process was peaceful and orderly, although he did note some initial
concern about the temporary suspension of the CNE’s tabulation process.4
On June 3, 2004, the CNE announced that enough signatures had been secured
for a recall referendum, and subsequently scheduled the referendum for August 15.
The date of the referendum was significant because under the constitution, if it were
held after August 19 (one year after the half-way point of Chávez’s term) and Chávez
lost the referendum, then Vice President Jose Vicente Rangel (a Chávez ally) would
serve the remainder of the President’s term until January 2007.
In order for President Chávez to be recalled, the majority of voters needed to vote
“yes” and the number of votes to recall him needed to exceed the number that he
received when last elected in July 2000 (3.75 million). If Chávez had been recalled,
3 “CNE Emitió Resultados Oficiales Del Referendo Revocatorio Presidencial,” Consejo
Nacional Electoral, Aug. 26, 2004.
4 “President Carter’s Trip Report on Venezuela, May 29-June 1, 2004,” The Carter Center,
June 4, 2004.

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CRS-6
new presidential elections would have been held within 30 days. It was unclear
whether President Chávez would have been allowed to run for re-election, but most
observers believed that the Supreme Court would have ruled that he was eligible to
run. One of the problems that plagued the opposition was that it did not have a well-
organized or coherent political coalition. As a result, it could have been difficult for
the opposition to present a single candidate who could have defeated Chávez in new
elections, assuming that he was permitted to run.
Public opinion polls conducted in June and July 2004 by various survey firms
yielded significantly different results, with some favoring the opposition and some
favoring Chávez, but by early August 2004 a number of polls showed Chávez with an
advantage. A June 2004 poll by Datanálisis, a Venezuelan research firm, showed that
57% of Venezuelans would vote to recall President Chávez, while another poll in June
by the U.S.-based Greenberg, Quinlan, Rosner Research firm found that only 44%
would vote to recall the president.5 Another poll by North American Opinion
Research Inc. published in early July 2004 showed that 41% would vote to recall
Chávez, compared to 57% favoring the president.6 A poll in late July by the U.S. firm
of Evans/McDonough and Varianzas Opinión of Venezuela showed that 43% would
vote against Chávez and 51% would vote for him.7 In early August, a newspaper that
has been a strong opposition supporter, Ultimas Noticias, published four polls
showing that Chávez would win by at least 10%.8 Some observers, however,
maintained that many people were not being truthful in these opinion polls because
of fear of retribution for answering truthfully; they maintained that these so-called
“hidden voters” could determine the outcome of the referendum.9
Referendum Results. With a turnout of about 70% of registered voters,
President Chávez won the recall referendum convincingly with 5.80 million people
voting “no” to reject his recall, or 59.25% of the vote, and 3.989 million people, or
40.74%, voting “yes” in favor of his recall.10 Observers from the OAS and the Carter
Center maintained that these results were compatible with their own quick count
results. The opposition claimed that massive fraud had taken place and cited their exit
polls showing that 59% had voted to recall President Chávez.11 The Carter Center and
the OAS conducted a second audit of the vote on August 19-21 and concluded that the
vote results announced by the CNE reflect the will of the Venezuelan people.12
5 “Battle of the Polls is Engaged,” Latin American Weekly Report, July 6, 2004.
6 “Venezuela’s Recall Referendum,” BBC Worldwide Monitoring, July 8, 2004.
7 “A Poll of Polls,” Miami Herald, Aug. 11, 2004.
8 “Chávez on Course for Victory,” Latinnews Daily, Aug. 9, 2004.
9 Steven Dudley, “Chávez Recall Vote Confounds Pollsters,” Miami Herald, Aug. 11, 2004.
10 “CNE Emitió Resultados Oficiales Del Referendo Revocatorio Presidencial,” Consejo
Nacional Electoral, Aug. 26, 2004.
11 Andy Webb-Vidal, “Auditing of Chávez Vote Begins as Fraud Allegations Multiply,”
Financial Times, Aug. 20, 2004.
12 Last Phase of the Venezuelan Recall Referendum: Carter Center Report (English and
Spanish), Carter Center, Aug. 21, 2004.

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CRS-7
On August 26, 2004, the OAS approved a resolution expressing “satisfaction
with the holding of the presidential recall referendum” and calling “upon all players
to respect the results.” In the resolution, the OAS also welcomed the offer made by
President Chávez “to foster national dialogue” and called “for a process of
reconciliation ... in which differences are settled in the framework of the democratic
systems and in a spirit of transparency, pluralism, and tolerance.”13
Various factors explain President Chávez’s victory in the recall referendum. The
economy, fueled by proceeds from high oil prices, turned around in 2004. The
president was able to use oil proceeds to boost social spending for the poor. He made
anti-poverty programs an important focus of his administration. Another factor has
been the strength of the opposition. As noted above, the opposition in Venezuela has
been fragmented and did not wage an effective campaign during the recall referendum.
Even if it had won the referendum, it was unclear whether it would have been able to
present a single candidate to challenge Chávez in a subsequent election.
After the August 2004 recall referendum, President Chávez’s rule was further
strengthened when his allies won a majority of gubernatorial and municipal posts in
elections held in late October 2004 and municipal posts in municipal elections held
in August 2005.
December 2005 Legislative Elections
Opposition Boycott. Just days before the December 4, 2005, elections, in
which all 167 seats in the National Assembly were at stake, Venezuela’s five major
opposition parties announced that they would boycott the election. They maintained
that the National Electoral Council (CNE) was dominated by the government and
accused it of making decisions in favor of parties supporting the government. The
parties withdrawing from the race consisted of the country’s two parties that had been
historically dominant until 1998, Democratic Action (AD) and the Social Christian
Party (COPEI), and three other key opposition parties: the Movement to Socialism
(MAS), the center-right Justice First party (PJ), and Project Venezuela (PV).
Before the boycott, the opposition’s major concern was the CNE’s plan to use
digital fingerprint machines. The opposition feared that the government would be able
to determine how individuals had voted and that this information would be used for
political retribution, just as they assert that there was discrimination against those
people who signed the petition in favor of having the 2004 presidential recall
referendum. On November 28, 2005, however, the CNE, in a decision brokered by
the Organization of American States, announced that it would not use the
controversial digital fingerprint machines. Nevertheless, a day later, opposition
parties began announcing their boycott of the legislative elections. The move surprised
election officials, and some reports indicate that international observers were unhappy
13 Organization of American States, Permanent Council. “Results of the Presidential Recall
Referendum Held in Venezuela on August 15, 2004,” CP/RES. 869 (1436/04), Adopted
Aug. 26, 2004.

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CRS-8
that the opposition had reneged on a commitment to participate in the elections if the
digital fingerprint machines were not used.14
In the lead up to the legislative elections, some opposition groups had also
objected to parties fielding candidates under two separate banners in order to increase
the chances of winning additional seats. (Venezuela’s electoral system utilizes a
combination of proportional representation on a national party list and electoral
districts where individuals who win a majority of votes are elected.) The pro-Chávez
coalition had used this method to win some 77% of seats in municipal elections held
in August 2005. In late October 2005, Venezuela’s Supreme Court rejected an
injunction against this practice that was filed by the opposition AD.15
Election Results. Because of the opposition boycott, pro-Chávez parties won
all 167 seats in the National Assembly, with 114 going to the President’s Fifth
Republic Movement (MVR) and the remaining 53 going to smaller pro-Chávez parties
as well as to independents and representatives of some social groups that support the
government. The voter participation rate was low and estimated at 25%, or 2.9 million
voters out of an electorate of 14.5 million. Legislators were elected for five-year terms
that began on January 5, 2006. In the previous National Assembly, which had 165
members, pro-Chávez supporters controlled 86 seats, while opposition parties
controlled 79. In the lead-up to the December 2005 election, observers predicted that
the opposition would struggle to win one-third of the seats in the Assembly and that
the pro-Chávez parties would win a two-thirds majority control of the legislature. The
opposition’s boycott guaranteed that pro-Chávez supporters will completely control
the legislative branch.
International Observers. Both the OAS and the European Union sent
delegations to observe the elections. Both groups lamented the withdrawal of the
opposition, but also raised questions and had criticisms regarding the conduct of the
elections.
The EU observer group maintained that wide sectors of Venezuelan society do
not have trust in the electoral process and in the independence of the electoral
authority. It found that the electoral campaign focused almost exclusively on the issue
of distrust in the electoral process and the lack of independence of the CNE. Overall,
the EU concluded that the elections represented a lost opportunity and did not
contribute to the reduction of the fracture in Venezuelan society. Nevertheless, the
EU lauded the steps taken by the CNE to open the automated voting system to
external scrutiny and to modify various aspects that were questioned by the
opposition. In particular, the EU stated the CNE’s decision to eliminate the digital
fingerprint devices from the voting process was timely, effective, and constructive,
14 Phil Gunson, “Vote Boycott Sparks Test of Wills,” Miami Herald, Dec. 3, 2005.
15 “Court Rebuffs AD Bid to Change Electoral Rules,” Latin American Weekly Report, Nov.
1, 2005.

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CRS-9
and noted with surprise the opposition’s withdrawal just four days before the
election.16
The OAS delegation noted that there remains a distrust of the CNE on the part
of a significant segment of the population in terms of the origin and composition of
the CNE and the perception that its actions lack transparency and impartiality. It
suggested that a new democratic consensus be reached through dialogue that could
include a discussion of the election of the CNE, the automated voting system, the
electoral law, the process of issuing identification cards, a parliamentary system to
ensure proportional representation of minorities, and the strengthening of the principle
of separation, independence, and balance of powers. It criticized the opposition’s
withdrawal from the election, stating that every democracy requires an institutional
opposition committed to the electoral process, so that it can loyally participate in the
democratic system.17
Political Significance. With Chávez supporters controlling the legislature,
it will be far easier for the government to enact its legislative agenda and to enact
constitutional changes. Chávez supporters have indicated that they would like to
amend the constitution to end limits on presidential re-election. Currently, Chávez is
only eligible to run for one more six-year term in December 2006.
With opposition parties having no representation in the legislature, they will
virtually have no official role in the political system. Some observers question the
wisdom of the opposition’s boycott of the election and contend that the decision not
to participate will erode its legitimacy. According to Jose Miguel Vivanco from
Human Rights Watch, which has been a critic of President Chávez, the opposition’s
tactics will not help them “gain any ground,” and it will be difficult for “them to
present themselves as victims that deserve solidarity from the international
community.”18 Other observers contend that the high abstention rate in the election
could allow the opposition to question the legitimacy of the National Assembly.
According to this view, the boycott helped send a message that democracy is at threat
in Venezuela and could bolster international support to press the Chávez government
for transparency and accountability.
Political Outlook
Even before the August 2004 recall referendum, some analysts maintained that
the vote would not necessarily resolve Venezuela’s political conflict, which has been
fueled by high levels of political polarization between supporters and opponents of
President Chávez. According to this view, dialogue, inclusion, and the advancement
of national reconciliation will be the keys needed to alleviate political conflict in the
16 EU Election Observation Mission to Venezuela, Parliamentary Elections 2005,”
Preliminary Statement,” Dec. 6, 2005.
17 “Preliminary OAS Observations on the Legislative Elections in Venezuela,” Press
Release, Dec. 6, 2005.
18 Juan Forero, “Chavez’s Grip Tightens as Rivals Boycott Vote,” New York Times, Dec. 5,
2005.

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CRS-10
country, regardless of the referendum’s outcome.19 In the aftermath of Chávez’s
victory in the recall referendum, many observers maintained that efforts toward
political reconciliation — by both the government and the opposition — will be the
key to returning political stability to the country. International observers for the
December 2005 legislative elections also concluded that the elections did not
contribute toward reducing political conflict or polarization and maintained that a new
democratic consensus was needed.
The country’s next presidential elections are set for the end of 2006, and there
is a strong chance that Chávez could win another six-year term. The government has
benefitted from the rise in world oil prices, which has increased government revenues,
and sparked an economic boom, with a growth rate of almost 18% in 2004 and 9% in
2005.20 As a result, Chávez has been able to increase government expenditures on
anti-poverty and other social programs associated with the populist agenda of his
Bolivarian revolution. Although some polls have shown President Chávez maintaining
popularity over 70%, others maintain that support for him has begun to erode, with his
popularity dipping below 50%.21 Even if Chávez’s popularity has waned, this does
not necessarily translate into support for the political opposition, which remains weak
and fragmented in the aftermath of the August 2004 recall referendum.
Human Rights Concerns
U.S. officials and human rights organizations have expressed concerns about the
deterioration of democratic institutions and threats to freedom of speech and press in
Venezuela under the Chávez government. The State Department’s human rights
report for 2005 asserts that Venezuela’s “new laws governing libel, defamation, and
broadcast media content, coupled with legal harassment and physical intimidation,”
have “resulted in limitations on media freedoms and a climate of self-censorship.” At
the same time, however, a majority of Venezuelans (almost 60%) have expressed
satisfaction with how democracy in their country is working, according to a 2005 poll
by Latinobarómetro, a far greater percentage than in most Latin American countries.22
The Inter-American Commission on Human Rights (IACHR) issued a report last
year expressing concerns about the Chávez government’s tendency to militarize public
administration. The Commission expressed extreme concern about reports of “undue
influence of the armed forces in the country’s political affairs” and “excessive
involvement by the armed forces in political decision-making.”23 According to the
19 For example, see Marifeli Pérez-Stable, “Venezuela: Only Dialogue Can Restore
Shattered Trust,” Miami Herald, June 10, 2004.
20 Economist Intelligence Unit,”Venezuela Country Report,” Feb. 2006.
21 “Chavez Popularity Sags in Venezuelan Polls,” Voice of America News, Sept. 21, 2005;
Foreign Broadcast Information Service. Highlights: Venezuela Political Press, Oct. 24,
2005, “Poll: Almost 77% of Venezuelans Approve of Chavez’s Performance,” (Ultimas
Noticias, Oct. 23, 2005).
22 “Ten-Year Rut, The Latinobarómetro Poll,” The Economist, Oct. 29, 2005.
23 Inter-American Commission on Human Rights, “Report on the Situation of Human Rights
(continued...)

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CRS-11
State Department’s February 2005 human rights report on Venezuela, “the military
has played an increasingly larger role in civilian life,” with active and retired military
officers holding high-ranking government positions. Under President Chávez, the
military has also become involved in numerous public service and development
projects. This coincides with Chávez’s view of the “military as an instrument of social
transformation,” part of his so-called Bolivarian revolution.24
Some observers are concerned that Chávez is using his political strength to push
toward authoritarian rule. Human Rights Watch maintains that the Chávez
government dealt a severe blow to judicial independence by packing the Supreme
Court with his supporters under a new law that expanded the court from 20 to 32
justices. The Chávez government enacted a broadcast media law in December 2004
that could allow the government to restrict news coverage that is critical of the
government, while in March 2005 it amended Venezuela’s criminal code to broaden
laws that punish “disrespect for government authorities.” The IACHR, human rights
groups, and other observers have expressed concerns that these measures have
restricted freedom of expression, with newspaper and broadcasters practicing self-
censorship.25 The government has also reportedly used the tax code to intimidate
media critics.26 Other observers, however, assert that freedom of the press and
assembly thrive in Venezuela, and that allegations of threats to Venezuelan judicial
independence are grossly exaggerated.27 As some human rights groups have noted,
even before the Chávez government took office, Venezuela’s Supreme Court was
highly politicized and undermined by chronic corruption.28
The IACHR has also expressed concerns about acts of violence and persecution
against human rights activists. In recent testimony before the Commission, members
of several Venezuelan human rights organizations asserted that the government has
labeled members of human rights groups as traitors and coup plotters. One example
is Carlos Ayala, a former president of the IACHR, who has been charged with
supporting the April 2002 coup against Chávez even though he had opposed the coup
attempt. The charges were filed after Ayala initiated human rights cases against the
government.29
23 (...continued)
in Venezuela,” December 29, 2003 (original in Spanish); released in Mar. 2004.
24 Michael Shifter, “Chávez Should Not Steer U.S. Policy,” Financial Times, Apr. 7, 2005.
25 Inter-American Commission on Human Rights, “IACHR Reports on Human Rights
Situation at the Conclusion of its Session,” Press Release, Oct. 28, 2005; Danna Harman,
“Latin Strongman Rebels Against U.S.-Centric News,” Christian Science Monitor, May 13,
2005
26 Foreign Broadcast Information Service, “Analysis: Venezuela: Government Using Laws
to Harass Media Critics,” Nov. 4, 2005.
27 Mark Weisbrot, “Chavez is Admired in Latin America,” Augusta Chronicle, June 20,
2005; “U.S. Criticism of Chávez Unfounded,” Miami Herald, Dec. 20, 2004.
28 “Freedom in the World 2005, Country Reports,” Freedom House, p. 700.
29 “Venezuela’s Conscience,” Washington Post, Oct. 30, 2005.

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CRS-12
Human rights groups and the Bush Administration have criticized Venezuela’s
charges against four leaders of the Venezuelan civic group Súmate (Join Up) for
accepting U.S. foreign assistance for a program to encourage citizen participation in
the presidential recall referendum. The four, including María Corina Machado who
met with President Bush in May 2005, are charged with conspiring against the
government and could face up to 16 years in prison. Súmate asserts that there are
more than 200 political prisoners in Venezuela today, and that there is targeted
political retribution and discrimination against those who signed a petition in favor of
having the 2004 presidential recall referendum.30
Finally, there has been increasing concern about the Venezuelan government’s
expropriations of large land holdings and private companies that observers see as a
violation of property rights and due legal process. In August 2005, the government
expropriated Empresas Polar, the country’s largest food and beer company, for
reportedly underutilizing its land and capital. In early September 2005, the
government seized a tomato processing plant belonging to H.J. Heinz, a U.S.
company. The Venezuelan government reportedly is reviewing some 700 large land
holdings and companies to see if they are underutilized, as part of a campaign to turn
them into productive enterprises for poor farmers and workers.31
Economic Conditions
Venezuela’s major economic sector is petroleum, which accounts for one-third
of its gross domestic product and 80% of exports. While the country is classified by
the World Bank as an upper middle income developing country because of its
relatively high per capita income of $4,020 (2004), economic conditions in the country
have deteriorated over the past decade. The percentage of Venezuelans living in
poverty (income of less than $2 a day) increased from 32.2% to 48.5% of the
population between 1991 and 2000, while the percentage of the population in extreme
poverty (income of less than $1 a day) increased from 11.8% in 1990 to 23.5% in
2000.32
In 2002-2003, the country’s political instability and polarization between the
government and the opposition contributed to a poor investment climate, capital flight,
and declines in GDP. The national strike orchestrated by the opposition from late
2002 to early 2003 contributed to a contraction of the national economy by almost 9%
in 2002 and 7.7% in 2003.
Since 2004, the economy has rebounded, with a growth rate over of almost 18%
in 2004 and a growth rate of 9% in 2005 fueled by the windfall in international oil
30 House International Relations Committee, Subcommittee on the Western Hemisphere,
Hearing on Democracy in Venezuela, Statement of Ana Julia Jatar, Súmate, Nov. 17, 2005.
31 Jens Gould, “Chávez Now Aims for Corporate-Owned Land,” Christian Science Monitor,
Nov. 1, 2005.
32 World Bank, “Venezuela Country Brief,” Aug. 2004.

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CRS-13
prices. A growth rate over 6% is forecast in 2006.33 Given this positive outlook, the
Chávez government is expected to move ahead with economic goals that fit into his
“Bolivarian revolution.” These include the expansion of a state-led development
model, land reform, renegotiation of contracts with large foreign investors (especially
in the petroleum sector), the restructuring of operations at the state oil company, and
diversification of trade and investment partners. As noted above, the government is
using the windfall in oil profits to boost social spending and programs to fight poverty.
U.S. Policy
Background and Overview
Although the United States has traditionally had close relations with Venezuela,
characterized by an important trade and investment relationship and cooperation in
combating the production and transit of illegal narcotics, there has been friction and
tension in relations with the Chávez government. In the aftermath of the September
11 terrorist attacks, U.S. officials became far less tolerant of President Chávez’s anti-
American rhetoric.
After Chávez’s brief ouster in April 2002, the United States expressed solidarity
with the Venezuelan people, commended the Venezuelan military for refusing to fire
on peaceful demonstrators, and maintained that undemocratic actions committed or
encouraged by the Chávez administration provoked the political crisis.34 With
Chávez’s return to power, the United States called on President Chávez to heed the
message sent by the Venezuelan people by correcting the course of his administration
and “governing in a fully democratic manner.”35 In contrast, many Latin American
nations condemned the overthrow of Chávez, labeling it a coup. Venezuelan
allegations of U.S. involvement in the attempted overthrow of President Chávez have
contributed to strained relations. U.S. officials have repeatedly rejected the charges
that the United States was involved.36 In the aftermath of Chávez’s temporary ouster,
the Department of State’s Office of the Inspector General undertook a review of U.S.
policy toward Venezuela and concluded that the Department of State had not played
any role in President Chávez’s overthrow.37
The Bush Administration expressed strong support for the work of the OAS to
bring about a resolution to the crisis. With U.S. support, the OAS approved a
33 Economist Intelligence Unit, “Venezuela Country Report,” Feb. 2006.
34 U.S. Dept. of State, “Venezuela: Change of Government,” Press Statement, Apr. 12, 2002.
35 U.S. Dept. of State, International Information Programs, “White House Calls on
Venezuela’s Chávez to Preserve Peace, Democracy,” Washington File, Apr. 14, 2002.
36 U.S. Dept. of State, International Information Programs, Washington File, “U.S. Again
Rejects Charges of Meddling in Venezuelan Affairs,” Apr. 19, 2004.
37 U.S. Department of State and the Broadcasting Board of Governors, Office of Inspector
General, “A Review of U.S. Policy Toward Venezuela November 2001 — April 2002,”
Report Number 02-OIG-003, July 2002.

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CRS-14
resolution on December 16, 2002, that rejected any attempt at a coup or interruption
of the constitutional democratic order in Venezuela, fully supported the work of the
Secretary General in facilitating dialogue, and urged the Venezuelan government and
the Democratic Coordinator “to use good faith negotiations to bring about a
constitutional, democratic, peaceful, and electoral solution...” Beginning in January
2003, the United States joined with five other nations — Brazil, Chile, Mexico, Spain,
and Portugal, in establishing a group known as the “Friends of Venezuela” — to lend
support to the OAS Secretary General’s efforts. U.S. officials welcomed the May 2003
accord ultimately signed, and maintained that the United States would continue to
work to facilitate a peaceful, constitutional, democratic, and electoral solution to
Venezuela’s political impasse.
Comments by Venezuelan and some U.S. officials at times exacerbated tensions
in the bilateral relationship. In the lead-up to the “repair” period held in late May
2004, Assistant Secretary of State for Western Hemisphere Affairs Roger Noriega
maintained that it was already clear that “the requisite number of people supported the
[recall] petition.”38 Venezuelan Vice President Jose Vicente Rangel strongly criticized
Noriega’s statement as prejudging the outcome of the “repair” period. President
Chávez, who has often used anti-American rhetoric to shore up his domestic support,
maintained that President Bush would be his greatest rival in the recall referendum,
and that the United States would “govern” in Venezuela if the opposition wins the
recall referendum and subsequent election.39
After the August 2004 recall referendum, the Administration congratulated the
Venezuelan people for their commitment to democracy and commended the work of
the OAS and Carter Center. At the same time, U.S. officials stressed the importance
of reconciliation on the part of the government and the opposition in order to resolve
their political differences peacefully.
Tensions Increase in 2005. In 2005, however, Administration officials
voiced increasing concern about President Chávez, and tensions increased in U.S.-
Venezuelan relations, with elevated rhetoric on both sides. In both March and
September 2005, State Department officials testified to Congress that President
Chávez’s “efforts to concentrate power at home, his suspect relationship with
destabilizing forces in the region, and his plans for arms purchases are causes of major
concern.” They asserted that the United States “will support democratic elements in
Venezuela so they can fill the political space to which they are entitled.”40 Secretary
of Defense Donald Rumsfeld expressed concerns in March about Venezuela’s plan
to buy 10 military helicopters and 100,000 AK-47 rifles from Russia and questioned
38 David R. Sands, “U.S. Casts Wary Eye on Venezuela Vote; Action Promised if Vote is
Rigged,” Washington Times, May 26, 2004.
39 Alice M. Chacon, “Venezuelan President Says His Greatest Rival is George W. Bush,”
Associated Press, June 12, 2004.
40 House International Relations Committee, Subcommittee on the Western Hemisphere,
Hearing on “The State of Democracy in Latin America,” Testimony of Roger F. Noriega,
Assistant Secretary of State for Western Hemisphere Affairs, Mar. 9, 2005; Hearing on
“Keeping Democracy on Track: Hotspots in Latin America,” Testimony of Charles A.
Shapiro, Principal Deputy Assistant Secretary of State, Sept. 28, 2005.

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CRS-15
why Venezuela needs the weapons.41 U.S. officials have also expressed concerns
about Venezuela’s plans to buy patrol boats and military transport aircraft from Spain
as well as a decision by Venezuela in April 2005 to cancel a U.S.-Venezuelan bilateral
military exchange program.
On May 31, 2005, President Bush met with Maria Corina Machado, the founder
of Súmate, a Venezuelan civic group that was involved in the signature drive for the
August 2004 recall referendum. The meeting exacerbated the already tense U.S.-
Venezuelan bilateral relations. Machado is facing charges in Venezuela for conspiring
against the government by accepting U.S. funding from the National Endowment for
Democracy for Súmate’s activities leading up to the recall referendum. U.S. officials
and some Members of Congress have strongly defended the NED’s activities in
Venezuela and have criticized the Venezuelan government’s efforts to intimidate the
leaders of Súmate. (See U.S. Funding for Democracy Projects, below.)
In early August 2005, Venezuela suspended its cooperation with the U.S. Drug
Enforcement Administration (DEA) because it alleged that DEA agents were spying
on Venezuela. U.S. officials asserted that the accusations were “baseless and
outrageous” but also indicated that the United States would like to improve U.S.
relations with Venezuela and reverse the negative trend in relations over the past few
months.42
While traveling in South America in August 2005, Secretary of State Donald
Rumsfeld asserted that “there certainly is evidence that both Cuba and Venezuela have
been involved in the situation in Bolivia in unhelpful ways.”43 Some Members of
Congress, such as Senator Arlen Specter, reportedly called for the Secretary to tone
down his rhetoric.44 Specter met with President Chávez and Venezuelan ministers in
mid-August 2005 to discuss cooperation on drug interdiction. Subsequently, on
September 15, 2005, President Bush designated Venezuela as a country that has
“failed demonstrably during the previous 12 months to adhere to their obligations
under international counternarcotics agreements.” At the same time, the President
waived economic sanctions that would have curtailed U.S. assistance for democracy
programs in Venezuela. (Also see Counternarcotics Cooperation below.)
On August 22, 2005, the comments of TV evangelist Pat Robertson that the
United States should “assassinate” Chávez evoked a strong response from Venezuelan
officials and from many U.S. policymakers. The State Department responded by
41 Todd Benson, “Rumsfeld in Brazil, Criticizes Venezuela on Assault Rifles,” New York
Times, Mar. 24, 2005.
42 Lauren Monsen, “United States Hopes for Improved Cooperation,” Washington File, U.S.
Department of State, Aug. 19, 2005.
43 Josh White, “Rumsfeld in Latin America, Voices Democracy Concerns,” Washington
Post, Aug. 17, 2005.
44 Holly Yeager, “Senator Takes Rumsfeld to Task Over Chavez Criticism,” Financial
Times, Aug. 20, 2005.

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CRS-16
labeling Robertson’s comments as “inappropriate.”45 (For further information on the
U.S. prohibition against assassination, see CRS Report RS21037, Assassination Ban
and E.O. 12333: A Brief Summary, by Elizabeth B. Bazan.)
In testifying to Congress on November 17, 2005, the new Assistant Secretary of
State for Western Hemisphere Affairs Thomas Shannon asserted that there is “a
growing hemispheric and international consensus that democracy in Venezuela is in
grave peril.” He stated that the United States was working multilaterally and
bilaterally with Latin American and European nations to support Venezuelan civil
society, speak out against abuses of democracy, and hold Venezuela accountable to
its commitments under the Inter-American Democratic Charter. He described U.S.
funding for democracy projects in Venezuela as “working to preserve political and
civic space for increasingly at-risk groups.”46 Reflecting an escalation of the
Venezuelan President’s harsh rhetoric, Chávez responded to Shannon’s comments by
calling President Bush a “crazy, genocidal killer.”47
U.S. reaction to the Venezuelan elections on December 5, 2005, was restrained,
with a State Department spokesman indicating that United States would wait until the
OAS and EU observers make their reports. Nevertheless, the State Department did
point to the high voter abstention rate in the election and maintained that it reflected
“a broad lack of confidence in the impartiality and transparency of the electoral
process.”48 (There was a 75% abstention rate in the December legislative election,
compared to an abstention rate of 44% in the last legislative election in July 2000,
which occurred at the same time that voters elected a president and state and local
officials.49)
Developments in 2006. U.S.-Venezuelan relations have continued to be tense
in 2006, with several incidents and rhetoric exacerbating the poor state of relations.
On February 2, 2006, Secretary of Defense Donald Rumsfeld compared President
Chávez to Adolf Hitler in terms of someone who was elected legally and then
consolidated power.50 Chávez responded by referring to President Bush as Hitler and
as a madman, with plans to invade Venezuela. On February 2, 2006, President
Chávez announced that his government would expel a U.S. naval attache for spying,
which U.S. officials strongly denied. In response, the United States expelled a
Venezuelan diplomat based in Washington. In February 16, 2006 congressional
testimony, Secretary of State Condoleezza Rice stated that one of the biggest problems
for the United States in Latin America was Venezuela, which she characterized as
45 U.S. Department of State, Daily Press Briefing, Aug. 23, 2005.
46 House International Relations Committee, Subcommittee on the Western Hemisphere,
Hearing on Democracy in Venezuela, Statement by Asst. Sec. of State Thomas A. Shannon,
Nov. 17, 2005.
47 “Venezuela: Chávez Responds to Shannon’s Criticism,” Latinnews Daily, Nov. 18, 2005.
48 U.S. Department of State, Daily Press Briefing, Dec. 5, 2005.
49 “State Department Holds Fire on Election Result,” Latinnews Daily, Dec. 6, 2005.
50 “Donald H. Rumsfeld Delivers Remarks at the National Press Club,” CQ Transcriptions,
Feb. 2, 2006.

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CRS-17
“attempting to influence its neighbors away from democratic processes.” Secretary
Rice also expressed concerns about Venezuela’s relationship with Cuba, describing
it as “a particular danger to the region,” and also referred to both countries as Iran’s
“sidekicks” in reference to those countries’ votes in the International Atomic Energy
Agency against reporting Iran to the U.N. Security Council over its uranium
enrichment program.51 Also in February 2006 congressional testimony, Director of
National Intelligence John Negroponte expressed concern that President Chávez “is
seeking closer economic, military, and diplomatic ties with Iran and North Korea.”52
At the same time, however, other U.S. officials have maintained that despite
differences with Venezuela, the United States stands ready to work with the
Venezuelan government on a variety of issues. Past cooperation on counter-narcotics
trafficking is one area lauded by U.S. officials, who have expressed hope that a
potential new counter-narcotics agreement will continue that record of cooperation.
The State Department’s March 2006 International Narcotics Control Strategy Report,
while maintaining that corruption and a weak judicial system have contributed to an
increase in drug trafficking, also asserted that continued U.S. work with Venezuelan
law enforcement led to record cocaine seizures in 2005.
General Policy Approaches
A dilemma for U.S. policymakers has been how to press the Chávez government
to adhere to democratic principles without appearing to interfere in Venezuelan
domestic affairs or taking sides in the country’s polarized political conflict. The
appearance of U.S. interference in Venezuela could result in increased popular support
for the Chávez government. In the lead up to the recall referendum, the Chávez
government portrayed the opposition as supported by the U.S. government and the
United States as Venezuela’s main adversary. As noted above, for the most part, the
Bush Administration worked through the OAS and the Carter Center from 2002-2004
to help resolve the country’s political crisis. At the same time, U.S. officials have not
refrained from criticizing the Chávez government on various occasions for its anti-
democratic actions.
According to press reports, the Administration was involved in a major
reassessment of policy toward Venezuela in the spring of 2005, with the policy review
resulting in a two-prong strategy to increase support to civil groups in Venezuela and
to convince other countries that Chávez should be viewed as a troublesome meddler
in other countries’ affairs.53 Some observers, however, have expressed concerns that
a more aggressive approach could create further estrangement and tension in the
bilateral relationship.
51 House International Relations Committee, Hearing on the Fiscal Year 2007 International
Affairs Budget, Testimony of Secretary of State Condoleezza Rice, Feb. 16, 2006.
52 Senate Select Intelligence Committee, Hearing on World Wide Threats, Testimony of
Director of National Intelligence John Negroponte, Feb. 2, 2006.
53 Pablo Bachelet, “U.S. Tries Everything, But Can’t Slow Chávez,” Miami Herald, Sept.
7, 2005; Pablo Bachelet, “U.S. Exploring Taming Chávez,” Miami Herald, Mar. 18, 2005;
Juan Forero “U.S. Considers Toughening Stance Toward Venezuela,” New York Times, Apr.
26, 2005.

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CRS-18
There are other schools of thought about the appropriate U.S. policy toward
Venezuela. Some maintain that the United States should work to normalize relations
with the Chávez government and attempt to work cooperatively on issues of mutual
concern, such as drug trafficking. Some also maintain that United States should
ensure that no U.S. funding goes to any groups headed by individuals who participated
in the April 2002 ouster of President Chávez or to any partisan groups.54
Another longer-term policy approach advocated by some is that the United States
should work to address the circumstances that led to the rise to power of Chávez. This
policy approach pertains not just to Venezuela, but to other countries in Latin America
struggling with high levels of unemployment, crime, and political corruption.55
U.S. Funding for Democracy Projects
The United States has provided funding for democracy projects in Venezuela
through the National Endowment for Democracy (NED) since 1992, but the level of
funding has increased over the past several years under the Chávez government. In the
FY2006 Foreign Operations appropriations measure (P.L. 109-102), Congress
provided $2 million in Democracy Funds for NED for democracy programs in
Venezuela. In FY2005, NED provided $902,000 for 16 democracy projects in
Venezuela. Prior to that, NED funded 13 democracy projects with about $874,000 in
FY2004, and funded 15 democracy projects with $1.05 million in FY2003.
In addition to the NED funding, the United States has provided Economic
Support Funds (ESF) for democracy-related projects in Venezuela. For FY2006,
although the Administration requested $500,000 in ESF for such projects, it did not
allocate any ESF for Venezuela. In FY2005, $2.4 million in ESF was provided, while
$1.497 million (including $1 million in reprogrammed funds to support political
reconciliation) was provided in FY2004, and $470,000 in FY2003.
In other legislative action in the 109th Congress, the House-passed version of the
FY2006 and FY2007 Foreign Relations Authorization Act, H.R. 2601 (H.Rept. 109-
168), would authorize $9 million in Economic Support Funds for each of FY2006 and
FY2007 to fund support for a variety of activities in support of democratic and
accountable governance in Venezuela.
The Venezuelan government and some other critics have criticized NED’s
funding of opposition groups.56 They maintain that the NED has funded groups
headed by people involved in the overthrow of Chávez in April 2002 as well as a
54 Testimony of Mark Weisbrot, Center for Economic and Policy Research, at a hearing of
the Senate Foreign Relations Committee on “The State of Democracy in Venezuela,” June
24, 2004.
55 Testimony of Miguel Diaz, Center for Strategic and International Studies, at a hearing of
the Senate Foreign Relations Committee on the “The State of Democracy in Venezuela,”
June 24, 2004.
56 Testimony of Mark Weisbrot, Center for Economic and Policy Research, at a hearing of
the Senate Foreign Relations Committee on “The State of Democracy in Venezuela,” June
24, 2004.

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CRS-19
group, Súmate, involved in the signature collecting process for the recall referendum
campaign. Critics argue that Súmate led the signature drive for the recall referendum,
and question whether the NED should have funded such a group.
U.S. officials and some Members of Congress strongly defended the NED’s
activities in Venezuela and have criticized the Venezuelan government’s efforts to
intimidate the leaders of Súmate by charging them with conspiring against the
government. The State Department asserts that the charges are without merit, and
constitute an attempt “to intimidate members of civil society for exercising their
democratic rights.”57
According to the NED, its program in Venezuela “focuses on promoting citizen
participation in the political process, civil and political rights, freedom of expression
and professional journalism, and conflict mediation.” The NED asserts that all of the
Venezuelan programs that it funds operate on a non-partisan basis. It maintains that
Súmate, which received a grant of $53,400 in September 2003, mobilized a citizen
campaign to monitor the signature collection process and that the money was used “in
developing materials to educate citizens about the constitutional referendum process
and to encourage citizens to participate.”58 NED officials also assert that they did not
fund the Democratic Coordinator for the development of its July 2004 consensus
platform. The NED points out that it did fund a consensus building project in 2002
for one of the NED’s core institutions, the Center for International Private Enterprise
(CIPE). For the project, CIPE partnered with a Venezuelan group, the Center for the
Dissemination of Economic Information (CEDICE) to work with several Venezuelan
nongovernmental organizations and the business sector for the development of a
broad-based consensus.59 In early September 2005, the board of the NED approved
a new $107,000 grant to Súmate for a program to train thousands of people on their
electoral rights.60
As a result of the controversy, the conference report to the FY2005 Consolidated
Appropriations Act (Division B of P.L. 108-447, H.Rept. 108-792) required a
comprehensive report on NED’s activities in Venezuela since FY2001, and reaffirmed
NED’s duty to ensure that all sponsored activities adhere to core NED principles. The
reporting requirement had first been included in the report to the House version of the
FY2005 Commerce, Justice, and State Appropriations bill (H.R. 4754, H.Rept. 108-
576).
57 “United States Rejects Venezuelan Decision to Try Civic Group,” Department of State,
Washington File, July 8, 2005.
58 National Endowment for Democracy, “NED Venezuela Programs FAQ,” available online
at [http://www.ned.org/grants/venezuelaFacts.html].
59 Telephone conversation with NED official July 15, 2004; also see Andres Oppenheimer,
U.S. Group’s Funds Aid Democracy, Miami Herald, July 15, 2004.
60 Pablo Bachelet, “Citizens Group to Get U.S. Funds,” Miami Herald, Sept. 13, 2005.

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Oil Issues
Since Venezuela is a major supplier of foreign oil to the United States (the fourth
major foreign supplier in 2004, after Canada, Mexico, and Saudi Arabia), a key U.S.
interest has been ensuring the continued flow of oil exports. Some 68% of
Venezuela’s oil exports are destined for the United States, highlighting the
dependency of Venezuela on the U.S. market, and oil exports account for the
overwhelming majority of Venezuela’s exports to the United States. In 2005,
Venezuela’s total exports destined for the United States amounted to almost $34
billion, with oil products accounting for $31.6 billion, or 93% of the total.61 The
December 2002 strike orchestrated by the opposition reduced Venezuela’s oil exports,
but by May 2003, Venezuelan officials maintained that overall oil production returned
to the pre-strike level. Venezuelan officials maintain that national production currently
amounts to about 3.3 billion barrels per day but independent analysts assert that the
figure is about 2.6 billion barrels per day.62 Venezuela’s state-run oil company,
Petroleos de Venezuela (PdVSA), owns CITGO, which operates three crude oil
refineries and a network of some 14,000 retail gasoline stations in the United States.
Despite the friction in U.S.-Venezuelan relations and Venezuela’s opposition to
the U.S. war in Iraq, the Chávez government announced before the military conflict
that it would be a reliable wartime supplier of oil to the United States. At various
junctures, however, Chávez has threatened to stop selling oil to the United States. In
April 2004, President Chávez threatened to do so if the United States did not stop
“intervening in Venezuela’s domestic affairs.”63 More recently, on February 17, 2006,
President Chávez asserted that the “U.S. government should know that, if it crosses
the line, it will not get Venezuelan oil,”64 while Venezuela’s Minister of Energy and
Petroleum Rafael Ramirez warned the United States on February 26, 2006, that
Venezuela could steer oil exports away from the United States to diversify its
markets.65 Many observers believe that Chávez’s threats have been merely part of his
rhetoric that is designed to bolster his domestic political support, although Chávez’s
recent threat came just a day after Secretary of State Rice strongly criticized
Venezuela in testimony before the House International Relations Committee.
Some observers, however, have raised questions about the security of Venezuela
as a major supplier of foreign oil for the United States. There are also concerns that
Venezuela is looking to supplant China as a replacement market, although Venezuelan
officials maintain that they are only attempting to diversify Venezuela’s oil markets.
Senate Foreign Relations Committee Chairman Richard Lugar has asked the
Government Accountability Office (GAO) to study the issue of potential Venezuelan
61 Department of Commerce statistics, as presented by World Trade Atlas.
62 Economist Intelligence Unit, “Country Report: Venezuela,” Dec. 2005.
63 “Chávez Threatens to Halt Oil to U.S.,” Miami Herald, Apr. 19, 2004.
64 “U.S. warned to back off or risk losing oil supply,” Miami Herald, Feb. 18. 2006; “Chávez
Threaten To Cut Oil in Case U.S. ‘Crosses Line,’” Open Source Center, Foreign Broadcast
Information Service, Feb. 18, 2006.
65 Juan Forero, “Venezuela Cautions U.S. It May Curtail Oil Exports,” New York Times,
Feb. 27, 2006.

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CRS-21
oil supply disruption, and the GAO is expected to complete its study by the end of
June 2006.66
By the end of 2005, the Venezuelan government had completed the conversion
of 32 foreign operating agreements with foreign oil companies to joint ventures, with
the Venezuelan government now holding a majority share of between 60-70% in the
ventures. Majority state ownership of the oil units fulfills a policy goal of the Chávez
government to assert greater control over the country’s oil reserves but could dampen
future foreign investment in the oil sector.67
Counternarcotics Cooperation
Because of Venezuela’s extensive 1,370-mile border with Colombia, it is a major
transit route for cocaine and heroin destined for the United States. As noted above,
Venezuela suspended its cooperation with the U.S. DEA in early August 2005 because
it alleged that DEA agents were spying on Venezuela. U.S. officials maintained that
the charges were baseless. Subsequently, in September 2005, the United States
designated Venezuela as a country that has failed demonstrably in counter-narcotics
efforts (see below for further discussion).
According to the Department of State, in its March 2006 International Narcotics
Control Strategy Report (INCSR), despite political tensions in U.S.-Venezuelan
relations, continued DEA work with Venezuelan law enforcement led to record
cocaine seizures by Venezuela in 2005. The DEA estimated that cocaine seizures in
the first eight months of 2005 amounted to approximately 30 metric tons, well ahead
of 2004 seizures. During the same time period, the Venezuelan government reported
that 54 metric tons of cocaine were seized, but this figure included seizures made by
third countries in international waters that were returned to Venezuela. The report also
noted Venezuela’s promulgation of two significant anti-drugs laws in October 2005,
the “Law against Organized Crime” and the “Law against the Trafficking and
Consumption of Narcotics and Psychotropic Substances” and noted that these law put
Venezuelan law in line with the 1988 U.N. Drug Convention.
Despite the increase in seizures and other positive actions by the Venezuelan
government, the INCSR report also maintained that “rampant corruption at the highest
levels of law enforcement” and “a weak judicial system” contributed to an increase
in drug trafficking during 2005. The report noted that in January 2005, Venezuela
refused to renew its participation in the Cooperating Nations Information Exchange
System (CNIES) designed to track suspect aircraft.
During November 17, 2005 testimony before the House International Relations
Committee’s Western Hemisphere Subcommittee, Assistant Secretary of State
Thomas Shannon indicated that the United States was in discussions with the
Venezuelan government in order to get anti-drug cooperation back on track. In
66 Andy Webb-Vidal, “U.S. to look into Venezuela oil supply reliance,” Financial Times,
Jan. 14, 2005.
67 Andy Webb-Vidal, “Venezuela Takes Control of Private Oilfields,” Financial Times, Jan.
3, 2006.

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CRS-22
January 2006, press reports indicated that the United States and Venezuela had
approved a new anti-drug cooperation agreement, but U.S. officials maintain that the
agreement is still under review.68
Venezuela has received small amounts of U.S. assistance under the
Administration’s Andean Counterdrug Initiative: $5 million in FY2002; $2.075
million in FY2003; $5 million in FY2004; almost $3 million in FY2005; and an
estimated $2.229 million in FY2006. The FY2007 request is for $1 million in ACI
funding for Venezuela. ACI programs in Venezuela focus on counternarcotics
cooperation and judicial reform support. ACI funds will also help complete a Port
Security Container Inspection facility in Puerto Cabello. (For further information, see
CRS Report RL33253, Andean Counterdrug Initiative (ACI) and Related Funding
Programs: FY2006 Assistance, by Connie Veillette.)
Venezuela’s “Failed Demonstrably” Designation. On September 15,
2005, President Bush designated Venezuela, pursuant to international drug control
certification procedures set forth in the Foreign Relations Authorization Act, FY2003
(P.L. 107-228), as a country that has failed demonstrably to adhere to its obligations
under international narcotics agreements, although he waived economic sanctions that
would have curtailed U.S. assistance for democracy programs in Venezuela. Small
amounts of U.S. counter-narcotics assistance to Venezuela under the Andean Counter-
drug Initiative will also continue. (For background on the law, see CRS Report
RL32038, Drug Certification/Designation Procedures for Illicit Narcotics Producing
and Transit Countries, by K. Larry Storrs.)
According to the State Department’s justification for Venezuela’s designation,
some 150 metric tons of cocaine and increasing quantities of heroin move through its
territory annually. The justification noted that despite Venezuela’s increase in drug
seizures over the past four years, Venezuela has not addressed the increasing use of
Venezuelan territory to transport drugs to the United States. According to the State
Department, the overall picture is one of decreasing Venezuelan focus on
counternarcotics initiatives and reduced cooperation with the United States. It noted
that President Chávez suspended cooperation with the DEA and that many of
Venezuela’s most effective high-level officials in law enforcement and national drug
policy were removed from their posts in 2005.
Venezuelan officials maintain that the decision to designate Venezuela was
purely political because of the overall state of U.S.-Venezuelan relations. They assert
that Venezuela has made considerable counter-narcotics efforts that were lauded in
the State Department’s March 2005 International Narcotics Control Strategy
Report.69
68 “U.S., Venezuela Forge New Deal on Drug Busts,” Miami Herald, Jan. 20, 2006; U.S.
Department of State, Release of the 2006 International Narcotics Control Strategy Report,
Mar. 1, 2006.
69 Ian James, “Venezuela Says U.S. Move to Call Country Uncooperative on Drugs is Pure
Politics,” Associated Press, Sept. 16, 2005.

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CRS-23
Concerns about Venezuela’s Military Purchases
As noted above, the Bush Administration has expressed concerns about
Venezuela’s purchases of military equipment. These have included agreements to
purchase 15 helicopters (with potentially another 18) and 100,000 assault rifles from
Russia and 12 aircraft (10 transport planes and 2 maritime patrol aircraft) and several
coastal and ocean patrol boasts from Spain.
On January 13, 2006, the State Department indicated that the United States had
denied licenses — required by the Arms Export Control Act — to transfer U.S.
technology for use in planes that Spanish companies had contracted to sell to
Venezuela. According to a State Department spokesman, the proposed sale could
contribute to de-stabilization in Latin America. Spain responded by indicating that
it would go ahead with the sale of the airplanes, but with non-U.S. technology.
Venezuela responded to the U.S. action by labeling it as “imperialist.” The State
Department official also indicated that the United States had expressed similar
concerns to Brazil about military sales to Venezuela. Venezuela is interested in
purchasing at least a dozen light-attack aircraft, manufactured by Embrarer, that
contain U.S. technology. 70
In response to the U.S. action, President Chávez vowed to continue with his
nations’s military purchases, asserting that he was acquiring the minimum equipment
for Venezuela to defend itself from the United States. Defense Intelligence Agency
Director Lt. Gen. Michael Maples expressed concern in February 2006 congressional
testimony about Venezuela’s arms purchases, maintaining that Venezuela was seeking
to increase their capability for their own defense and to operate elsewhere in Latin
America and the Gulf area.71
Concerns About Venezuela’s Involvement in Latin America
There have been long-held suspicions that Chávez has supported leftist
Colombian guerrillas, although Chávez denies such support. The State Department’s
April 2005 Country Reports on Terrorism maintains that Colombia’s three terrorist
groups — the leftist Revolutionary Armed Forces of Colombia (FARC) and the
National Liberation Army (ELN), and the rightist United Self-Defense Forces of
Colombia (AUC) — often cross into sparsely populated Venezuelan border areas,
regarding it as a safe area to rest, secure logistical supplies, and transship arms and
drugs. They also commit kidnapping and extortion for profit in Venezuelan territory.
The report maintained, however, that “it is unclear to what extent and at what level the
Venezuelan Government approves of or condones material support to Colombian
terrorists.” Nevertheless, the State Department asserted in the report that President
70 U.S. Department of State, Daily Press Briefing, Jan. 13, 2006; Phil Gunson and Pablo
Bachelet, “Spain’s Planes for Chávez Can’t Use U.S. Components,” Miami Herald, Jan. 14,
2006; Leslie Crawford and Andy Webb-Vidal, “Spain to Defy U.S. over Military Sale to
Venezuela,” Financial Times, Jan. 14, 2006.
71 Senate Armed Services Committee, Hearing on Worldwide Threats to U.S. National
Security, Testimony of Lt. Gen. Michael D. Maples, Direction, DIA, Feb. 28, 2008.

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CRS-24
Chávez’s ideological affinity with the FARC and ELN limited antiterrorism
cooperation with Colombia.
U.S. officials also have expressed concerns about President Chávez’s close
relationship with Cuba’s Fidel Castro, but Chávez defends his relationship with Cuba.
Venezuela supplies oil to Cuba on a concessionary basis, which in 2005 reportedly
increased from 53,000 to 90,000 barrels per day. In return, Venezuela has received
support from thousands of Cuban health care workers and sports instructors in the
country. During an April 2005 trip to Cuba, Presidents Chávez and Castro announced
commercial deals worth over $400 million, including a joint shipyard to build small
navy ships and a joint housing construction company.
President Chávez’s popularity has grown throughout Latin America, in part
because of his strong stance toward the United States and also because of his so-called
“oil diplomacy.” He has launched a Bolivarian Alternative for the Americas (ALBA)
as an alternative to the Free Trade Area of the Americas. ALBA advocates a socially
oriented trade block that would include mechanisms for poverty reduction. At the June
2005 OAS meeting held in Florida, Latin American governments refrained from
supporting a U.S. proposal that would have established a permanent committee to
monitor democracy in the region. They viewed it as an attempt to monitor Venezuela
through the OAS. During the Fourth Summit of the Americas held in November 2005
in Argentina, President Chávez, while participating in a counter-summit, denounced
the FTAA and strongly criticized the Bush Administration. Chávez is also funding a
new 24-hour hemispheric television network, TV of the South (Televisora del Sur or
Telesur) that began broadcasts in July 2005. Some observers fear that the network
will spread Chávez’s populist and anti-U.S. rhetoric throughout the hemisphere.
Venezuela is offering oil to Caribbean nations on preferential terms in a new
program known as PetroCaribe, and there has been some U.S. concern that the
program could increase Venezuela’s influence in the Caribbean region. Since 1980,
Caribbean nations have benefitted from preferential oil imports from Venezuela and
Mexico under the San Jose Pact, and since 2001, Venezuela has provided additional
support for Caribbean oil imports under the Caracas Energy Accord. PetroCaribe,
however, would go further with the goal of putting in place a regional supply, refining,
and transportation and storage network, and establishing a development fund for those
countries participating in the program. Under the program, Venezuela announced that
it would supply 190,000 barrels per day of oil to the region, with countries paying
market prices for 50% of the oil within 90 days, and the balance paid over 25 years at
an annual rate of 2%. When the price of crude oil is over $50 a barrel, as it is now, the
interest rate is cut to 1%.72 Venezuela is moving ahead with additional preferential
oil agreements in the Andean region (known as PetroAndina) and with other South
American countries (PetroSur).73
There also are U.S. concerns about that President Chávez is exporting his brand
of populism to other Latin America countries, especially the Andean nations of
72 “Venezuela: Caribbean Will Receive 190,000 bpd,” Latinnews Daily, Sept. 8, 2005.
73 Steven Dudley, “Chávez Oil Diplomacy Attracting New Friends,” Miami Herald, Nov.
17, 2005.

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CRS-25
Ecuador, Bolivia, and Peru. He strongly supports Bolivia’s President Evo Morales,
and offered $30 million in assistance for development projects and assistance to help
Bolivia re-write its constitution and implement radical reforms to the economy.
Chávez has also openly supported the presidential candidacy of Ollanta Humala in
Peru, a nationalist former army colonel who had led a failed uprising against former
President Fujimori in 2000.
Despite Chávez’s advances throughout the region, there has been friction at times
with various countries and leaders. A diplomatic row in November 2005 with
Mexican President Vicente Fox led to the two countries recalling their ambassadors.
President Chávez had referred to Fox as a “puppy” of the United States, while Fox
accused Chávez of intolerance at the recent Summit of the Americas in Argentina.74
In early January 2006, Peru withdrew its ambassador from Venezuela and accused
Chávez of meddling in Peru’s internal affairs because of his meeting with populist
presidential candidate Ollanta Humala.
Beyond Latin America, the Bush Administration has expressed concerns with
Venezuela’s growing relations with Iran. In February 2006, Secretary of State Rice
referred to Venezuela, along with Cuba, as “sidekicks” of Iran in reference to those
countries’ votes in the International Atomic Energy Agency against reporting Iran to
the U.N. Security Council over its uranium enrichment program.75 In testimony before
the Senate Select Intelligence Committee in early February, Director of National
Intelligence John Negroponte expressed concern that President Chávez “is seeking
closer economic, military, and diplomatic ties with Iran and North Korea.”76 Iran and
Venezuela signed an agreement for a $200 million fund to finance joint investment
and social projects, and commercial agreements in the early stages include plans for
a cement factory, oil exploration in the Orinoco River belt, and a joint operation to
build oil and liquid natural gas tankers.77
Venezuela’s Extradition Requests
Venezuela has requested the extradition of three of its citizens from the United
States in two controversial terrorism cases. In early 2004, the Chávez government
requested the extradition of two former Venezuelan National Guard lieutenants, José
Antonio Colina and German Rodolfo Varela, charged with the February 2003
bombings of the Spanish Embassy and the Colombian Consulate in Caracas. Both
applied for political asylum because they claimed that they would be executed or
tortured if returned to Venezuela. They have been held since December 2003 by U.S.
74 Phil Gunson, “Venezuela, Mexico Rift Widens in War of Words,” Miami Herald, Nov.
15, 2005.
75 Pablo Bachelet, “Rice Bashes Venezuelan Leader, Politics,” Miami Herald, Feb. 17, 2006;
House International Relations Committee, Hearing on the Fiscal Year 2007 International
Affairs Budget, Testimony of Secretary of State Condoleezza Rice, Feb. 16, 2006.
76 Senate Select Intelligence Committee, Hearing on World Wide Threats, Testimony of
Director of National Intelligence John Negroponte, Feb. 2, 2006.
77 Steven Dudley, “Chávez’s Wooing of Iran Called Troubling,” Miami Herald, Mar. 2,
2006.

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CRS-26
Immigration and Customs Enforcement (ICE). In February 2005, a U.S. immigration
judge denied them asylum because of “serious reasons for believing” that they were
involved in the bombings but prohibited the United States from deporting them to
Venezuela because of the likelihood of being tortured.78 The Department of
Homeland Security (DHS) has asked an immigration appeals court to deport the two
Venezuelans, arguing that they would not be tortured if returned home. As evidence,
they cite the treatment of a former general arrested in Venezuela for the same case.79
In late December 2005, Colina and Varela — on a hunger strike for a month in protest
of being held by U.S. immigration — were transferred from Florida to Houston for
medical treatment. They ended their 33-day hunger strike in early January 2006.
In another controversial case, Venezuela has requested the extradition of anti-
Castro activist Luis Posada Carriles for his alleged role in the 1976 bombing of a
Cuban airliner that killed 73 people.80 In April 2005, Posada’s lawyer announced that
Posada had entered the United States illegally from Mexico and would apply for
asylum because he has a “well-founded fear of persecution” for his opposition to Fidel
Castro.81 Posada had been imprisoned in Venezuela for the bombing of the Cuban
airliner but reportedly was allowed to “escape” from prison in 1985 after his
supporters paid a bribe to the prison warden.82 He had been acquitted for the bombing
but remained in prison pending a prosecutorial appeal. Posada also reportedly
admitted, but later denied, involvement in a string of bombings in Havana in 1997,
one of which killed an Italian tourist.83 More recently, Posada was imprisoned for
several years in Panama for his involvement in an alleged plot in November 2000 to
kill Fidel Castro. He was convicted on weapons charges in the case and sentenced to
eight years in prison, but ultimately was pardoned by outgoing President Mireya
Moscoso in August 2004.
ICE arrested Posada on May 17, 2005, and subsequently charged him with
illegally entering the United States. A DHS press release indicated that ICE does not
generally deport people to Cuba or countries believed to be acting on Cuba’s behalf.84
Venezuela has pledged that it would not hand Posada over to Cuba, but on September
26, 2005, a U.S. immigration judge ruled that Posada cannot be deported to Venezuela
78 Gerardo Reyes and Alfonso Chardy, “Wanted Chavez Foes Flee to South Florida,” Miami
Herald, Apr. 5, 2005.
79 Alfonso Chardy, “Deport Venezuelan Bombing Suspects, U.S. Urges Court,” Miami
Herald, Mar. 25, 2005.
80 Also see CRS Report RL32730, Cuba: Issues for the 109th Congress, by Mark P. Sullivan.
81 Alfonso Chardy and Nancy San Martin, “Lawyer Expects Posada to Show Soon,” Miami
Herald, Apr. 14, 2005.
82 Ann Louise Bardach, “Our Man’s in Miami. Patriot or Terrorist?,” Washington Post, Apr.
17, 2005.
83 Oscar Corral and Alfonso Chardy, “Victim’s Kin Oppose Posada Bid for Asylum,” Miami
Herald, May 7, 2005.
84 Department of Homeland Security, Office of Public Affairs, Statement, May 17, 2005.

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CRS-27
because he could be tortured.85 ICE is reviewing the case and is expected to decide
by April 2006 whether Posada will be freed from an immigration facility in El Paso,
Texas, and allowed to stay in the United States.86
Legislative Initiatives
108th Congress. In the 108th Congress, Members of Congress had expressed
concerns about the political situation in Venezuela. The Senate Foreign Relations
Committee held hearing in June 2004 on the status of democracy in Venezuela and the
August recall referendum.87 As noted above (U.S. Funding for Democracy Projects),
the conference report to the FY2005 Consolidated Appropriations Act (Division B of
P.L. 108-447, H.Rept. 108-792) required a comprehensive report on NED’s activities
in Venezuela since FY2001 and reaffirmed NED’s duty to ensure that all sponsored
activities adhere to core NED principles.
Also in the 108th Congress, two resolutions were introduced in the House, but no
action was taken on these measures. H.Res. 716, introduced by Representative Elton
Gallegly on July 14, 2004, would, among other provisions, have encouraged
Venezuelans to participate in a constitutional, peaceful, democratic, and electoral
solution to the political crisis in Venezuela, and appealed to the Venezuelan
government and the opposition to support a free, fair, and transparent recall
referendum in accordance with the Venezuelan Constitution. H.Res. 867, introduced
by Representative Tom Lantos on November 20, 2004, would have expressed support
for the National Endowment for Democracy in Venezuela. The resolution would have
expressed the view that charges against Súmate were politically motivated. As noted
above, Súmate is a Venezuelan civic organization involved in voter education and
electoral observation that received funding from the National Endowment of
Democracy. The resolution also would have welcomed the dropping of charges by the
Venezuelan government against Súmate. Earlier in the year, in a July 12, 2004, letter
to President Chávez, the House International Relations Committee expressed serious
concern about the treatment of the leaders of Súmate.
109th Congress. In the 109th Congress, there has been legislative action on
several initiatives on Venezuela and oversight hearings have been held in the house.
The FY2006 Foreign Operations appropriations measure (P.L. 109-102, H.R. 3057,
H.Rept. 109-265) provided $2 million in Democracy Funds for the NED for
democracy programs in Venezuela and $2.252 million in funding under the Andean
Counterdrug Initiative, although slightly less will be provided because of a 1% across-
the-board rescission in the Defense Department appropriations measure (P.L. 109-
148) that affected Foreign Operations funding. The Administration also had requested
85 Alicia Caldwell, “Judge Says Cuban Militant Can’t Be Deported to Venezuela,”
Associated Press, Sept. 28, 2005.
86 Oscar Corral, “Cuban Exile Now Awaits Decision on His Future,” Miami Herald, Jan. 25,
2006.
87 Senate Foreign Relations Committee, Subcommittee on Western Hemisphere, Peace
Corps, and Narcotics Affairs, “The State of Democracy in Venezuela,” Hearing, June 24,
2004.

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CRS-28
$500,000 in Economic Support Funds for Venezuela, although no specific earmark
was provided in the conference report to P.L. 109-102, and the Administration
ultimately did not allocate the assistance.
In other action, the House-passed version of H.R. 2601 (H.Rept. 109-168), the
FY2006 and FY2007 Foreign Relations Authorization Act, has a provision (Section
1025) that would authorize $9 million in Economic Support Funds for each of
FY2006 and FY2007 “to fund activities which support political parties, the rule of
law, civil society, an independent media, and otherwise promote democratic,
accountable governance in Venezuela.”
H.R. 2601 also has a provision, in Section 106(5), that would authorize funds for
the “Broadcasting Board of Governors to carry out broadcasting to Venezuela for at
least 30 minutes per day of balanced, objective, and comprehensive television news
programming, radio news programming, or both.”
With regard to the human rights situation in Venezuela, H.Con.Res. 224
(Fortuño), introduced July 28, 2005, calls on the Venezuelan government to uphold
the human rights and civil liberties of the people of Venezuela. H.Con.Res. 324
(Mack), introduced December 18, 2005, condemns “the anti-democratic actions of
Venezuelan President Hugo Chávez “and expresses the sense of Congress that the
United States should strongly support aspirations of the democratic forces in
Venezuela.”
On November 17, 2005, the House International Relations Committee,
Subcommittee on the Western Hemisphere, held a hearing on the status of democracy
in Venezuela. Earlier in the year, the subcommittee held hearings on March 9 and
September 28, 2005, regarding the state of democracy in the Latin America, both of
which touched on Venezuela.

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CRS-29
Figure 1. Map of Venezuela
Martinique
Fort-de-
(FR.)
France
C a r i b b e a n S e a
Castries
Saint Lucia
Saint Vincent and
Barbados
The Grenadines
Kingstown
Aruba
Netherlands
Bridgetown
(Neth.)
Antilles
Oranjestad
(Neth.)
Saint
Curacao
Aruba
Bonaire
George's Grenada
Willemstad
Punto
Golfo
Fijo
de
Tobago
Venezuela
Coro
Isla la
La Asuncion
Port-of-
Tortuga
Trinidad
Isla de
Riecito
Spain
Margarita
and
Guiria
Maracaibo
La Guaira
Tobago
Gulf
Cabimas
Cumana
San Felipe
Maracay
Caracas
of
Barcelona
Paria
Trinidad
Los
Baraquisimeto
Valencia
Teques
Maturin
Atlantic
San Juan
Valera
San
Ocean
de los
Guanare
Carlos
Tucupita
Morros
Barinas
Curiapo
Merida
Ciudad
Ciudad Guayana
Bolivar
Cabruta
San Fernando
Bochinche
San Cristobal
Guasipati
Caicara
Ciudad Piar
El Amparo
Tumeremo
El Dorado
El Jobal
La Paragua
Canaima
Guyana
V e n e z u e l a
Puerto
Ayacucho
San Juan
Santa Elena
de Manapiare
de Uairen
San Fernando
de Atabapo
C o l o m b i a
Esmeralda
Venezuela
International Boundary
State Capital
B r a z i l
National Capital
0
50
100
150 Kilometers
0
50
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150 Miles
Source: Map Resources. Adapted by CRS. (K.Yancey 7/15/04)
crsphpgw

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