Venezuela: Issues in the 111th Congress
Mark P. Sullivan
Specialist in Latin American Affairs
February 8, 2010
Congressional Research Service
7-5700
www.crs.gov
R40938
CRS Report for Congress
P
repared for Members and Committees of Congress
Venezuela: Issues in the 111th Congress
Summary
Under the populist rule of President Hugo Chávez, first elected in 1998 and reelected to a six-year
term in December 2006, Venezuela has undergone enormous political changes, with a new
constitution and unicameral legislature, and a new name for the country, the Bolivarian Republic
of Venezuela. U.S. officials and human rights organizations have expressed concerns about the
deterioration of democratic institutions and threats to freedom of expression under President
Chávez, who has survived several attempts to remove him from power. The government
benefitted from the rise in world oil prices, which sparked an economic boom and allowed
Chávez to increase expenditures on social programs associated with his populist agenda. These
programs have helped reduce poverty levels significantly.
After he was reelected, Chávez announced new measures to move the country toward socialism,
but his May 2007 closure of a popular Venezuelan television station (RCTV) that was critical of
the government sparked protests, and his proposed constitutional amendment package was
defeated in a December 2007 national referendum. State and local elections held in November
2008 were a mixed picture of support for the government, with the opposition winning several
key contests. In February 2009, Venezuelans approved a controversial constitutional referendum
that abolished term limits and allows Chávez to run for re-election in 2012. Since 2009, the
government has increased efforts to suppress the political opposition, including elected officials.
In January 2010, the government shut down broadcast of the cable station RCTV-Internacional,
prompting domestic protests and international concern about freedom of expression.
The United States traditionally has had close relations with Venezuela, the fourth major supplier
of foreign oil to the United States, but there has been friction with the Chávez government. U.S.
officials have expressed concerns about human rights, Venezuela’s military arms purchases, its
relations with Cuba and Iran, and its efforts to export its brand of populism to other Latin
American countries. Declining cooperation on anti-drug and anti-terrorism efforts has also been a
concern. In September 2008, bilateral relations worsened when President Chávez expelled the
U.S. Ambassador to Venezuela, and the United States responded in kind. Under the Obama
Administration, Venezuela and the United States reached an agreement for the return of
respective ambassadors in July 2009. While some observers are hopeful that the return of
ambassadors will mark an improvement in relations, others emphasize continued U.S. concerns
about the Venezuelan government’s treatment of the news media and political opposition and
about interference in the affairs of other countries in the region.
In the 111th Congress, House-passed H.R. 2410 includes a provision noting the close relationship
between Iran and Venezuela, and requiring a report on the actions of Iran and Hezbollah in the
Western Hemisphere, and House-passed H.R. 2194 would amend the Iran Sanctions Act to make
gasoline sales to Iran subject to U.S. sanctions. The Senate approved an amendment (S.Amdt.
1536) to the National Defense Authorization Act for FY2010, S. 1390/H.R. 2647, that would have
required a report on Venezuelan military and intelligence activities, but the measure was not
included in the enacted legislation. Among other initiatives: H.R. 375 would, among its
provisions, place restrictions on nuclear cooperation with countries assisting the nuclear programs
of Venezuela; H.Res. 174 and H.Con.Res. 124 would express concern about anti-Semitism in
Venezuela; and H.Res. 872 would call for the designation of Venezuela as a state sponsor of
terrorism. For more information, see CRS Report RS21049, Latin America: Terrorism Issues.
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Venezuela: Issues in the 111th Congress
Contents
Recent Developments.................................................................................................................. 1
Political Situation........................................................................................................................ 3
Background: Chávez’s Rise to Power and Rule from 1998-2008............................................ 3
Political Developments in 2009 and 2010.............................................................................. 6
February 15, 2009, Term Limits Referendum .................................................................. 6
Repression of the Opposition .......................................................................................... 7
Continued Threats to Freedom of Expression .................................................................. 8
Political Outlook ............................................................................................................. 9
Economic Conditions ................................................................................................................ 11
U.S. Policy................................................................................................................................ 13
Bilateral Relations during the George W. Bush Administration ............................................ 14
Obama Administration Policy.............................................................................................. 15
U.S. Foreign Aid to Venezuela............................................................................................. 17
Human Rights Concerns...................................................................................................... 19
Anti-Semitism............................................................................................................... 21
Energy Issues ...................................................................................................................... 22
Counternarcotics Cooperation ............................................................................................. 24
2009 State Department INCSR Report .......................................................................... 26
July 2009 GAO Report.................................................................................................. 26
Venezuela’s Military Purchases ........................................................................................... 27
Venezuela’s Activities in Latin America .............................................................................. 29
Terrorism Issues.................................................................................................................. 31
Colombian Terrorist Groups .......................................................................................... 31
Deepening Relations with Iran ...................................................................................... 32
Venezuela’s Extradition Request for Luis Posada Carriles.............................................. 35
Legislative Initiatives in the 111th Congress ............................................................................... 37
Considered Measures .......................................................................................................... 37
Other Introduced Measures ................................................................................................. 37
Figures
Figure 1. Map of Venezuela......................................................................................................... 2
Tables
Table 1. U.S. Foreign Aid to Venezuela by Account, FY2006-FY2010....................................... 18
Appendixes
Appendix A. Links to U.S. Government Reports ....................................................................... 39
Appendix B. Key Developments in 2009................................................................................... 40
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Venezuela: Issues in the 111th Congress
Contacts
Author Contact Information ...................................................................................................... 41
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Venezuela: Issues in the 111th Congress
Recent Developments
On February 2, 2010, Director of National Intelligence Dennis Blair testified before the Senate
Select Committee on Intelligence that President “Chávez continues to impose an authoritarian
populist political model in Venezuela that undermines democratic institutions.” Blair maintained
that “Chávez “and his allies are likely to oppose nearly every U.S. policy initiative in the region,
including the expansion of free trade, counter drug and counterterrorism cooperation, military
training, and security initiatives, and even U.S. assistance programs.” Venezuela’s Ambassador to
the United States strongly criticized Blair’s statement, maintaining the assessment was full of
politically motivated and cynical accusations against Venezuela. (See “Obama Administration
Policy” below.)
On February 2, 2010, Venezuelan officials announced the deportation of suspected Colombian
drug trafficker Salomon Camacho Mora to the United States. The officials also announced the
deportation of two other drug traffickers to France and Colombia. (See “Counternarcotics
Cooperation” below.)
On January 25, 2010, two students were killed during demonstrations between pro- and anti-
government supporters. Venezuelan human rights groups called for the government to guarantee
the right to peaceful protest.
On January 24, 2010, the Venezuelan government took six cable channels off the air, including
RCTV Internacional, which had broadcast programs critical of the government. The government’s
action prompted widespread domestic and international criticism, including by the Inter-
American Commission on Human Rights. (See “Continued Threats to Freedom of Expression”
below.)
On January 8, 2010, President Chávez announced a devaluation of the bolivar fuerte and the
creation of a two-tiered exchange rate system. The action will likely help shore up the
government’s fiscal situation, but could lead to a surge in inflation. (See “Economic Conditions”
below).
On December 15, 2009, the House approved H.R. 2194 (Berman), the Iran Refined Petroleum
Sanctions Act of 2009 on December 15, 2009, which would amend the Iran Sanctions Act of 1996
to make gasoline sales to Iran subject to U.S. sanctions. In September 2009, Venezuela reportedly
agreed to provide Iran with gasoline (reportedly some 20,000 barrels per day) in the case of UN
or U.S. sanctions against Iran’s gasoline imports. (See “Deepening Relations with Iran” below.)
On December 10, 2009, a Venezuelan judge released prominent business leader Eligio Cedeño
from prison. Cedeño had been held in pretrial detention in 2007, and some human rights activists
considered him a political prisoner. After his release, Cedeño traveled to the United States and is
awaiting an immigration hearing; Venezuela has asked for his extradition. The judge who released
Cedeño, María Lourdes Afiuni, was arrested just hours after his release on allegations of
corruption, and remains imprisoned. U.N. human rights experts criticized the judge’s arrest as
undermining the rule of law. (See “Human Rights Concerns” below.)
For developments earlier in 2009, see Appendix B at the end of this report.
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Venezuela: Issues in the 111th Congress
Figure 1. Map of Venezuela
Source: Map Resources. Adapted by CRS.
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Political Situation
Background: Chávez’s Rise to Power and Rule from 1998-2008
Over the past decade, Venezuela has experienced significant political changes under the rule of
populist President Hugo Chávez, and for a number of years there has been concern about the
deterioration of democratic institutions and threats to freedom of expression in the country.
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’s rise to
Chávez Biography
power to Venezuelans’ disillusionment with
Hugo Chávez Frias was born on July 28, 1954, in a smal
politicians whom they judge to have
farming town in the western Venezuelan state of Barinas.
squandered the country’s oil wealth through
The son of school teachers, Chávez was a 1975 graduate
of Venezuela’s Military Academy. He reached the rank of
poor management and endemic corruption. A
lieutenant colonel by 1990. In February 1992, Chávez led
central theme of his campaign was
an unsuccessful attempt to overthrow the elected
constitutional reform; Chávez asserted that the
government of President Carlos Andrés Pérez. He was
system in place allowed a small elite class to
imprisoned for two years for the coup attempt before
dominate Congress and that revenues from the
being pardoned. While in the military, Chávez founded
the nationalistic and left-leaning Bolivarian Revolutionary
state-run oil company, Petroleos de Venezuela
Movement, which was later transformed into the Fifth
S.A. (PdVSA), had been wasted.
Republic Movement in the 1998 elections when Chávez
was first elected president.
Although Venezuela had one of the most
Source: Current Leaders of Nations, Gale Group. May
stable political systems in Latin America from
20, 2004.
1958 until 1989, after that period numerous
economic and political challenges plagued the country and the power of the two traditional parties
began to 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.
1 For example, see M. Delal Baer, “Revenge of the Venezuelan Dinosaurs,” Wall Street Journal, June 18, 1993.
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In the first several years of President Chávez’s rule, Venezuela underwent enormous political
changes and even received 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, including the elimination of
the Senate and establishment of a unicameral National Assembly, and expanded the presidential
term of office from five to six years, with the possibility of immediate reelection 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
Patriotic Pole coalition also captured 14 of 23 governorships and a majority of seats in the
National Assembly.
Although President Chávez remained widely popular until mid-2001, his standing eroded 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 April 2002, massive opposition
protests and pressure by the military led to the ouster of Chávez from power for less than three
days. He ultimately was restored to power by the military, however, after an interim president
alienated the military and public by taking hardline measures, including the suspension of the
constitution. In the aftermath of Chávez’s brief ouster from power, the political opposition
continued to press for his removal from office, first through a general strike that resulted in an
economic downturn in 2002 and 2003, and then through a recall referendum that ultimately was
held in August 2004 and which Chávez won by a substantial margin. In 2004, the Chávez
government moved to purge and pack the Supreme Court with its own supporters in a move that
dealt a blow to judicial independence. The political opposition boycotted legislative elections in
December 2005, which led to domination of the National Assembly by Chávez supporters.
The rise in world oil prices beginning in 2004 fueled the rebound of the economy and helped
support an array of social programs and services known as “missions” that helped reduce poverty
by some 20% by 2007.2 In large part because of the economic rebound and attention to social
programs, Chávez was re-elected to another six-year term in December 2006 with almost 63% of
the vote.
After he was reelected, however, even many Chávez supporters became concerned that the
government was becoming too radicalized. Chávez’s May 2007 closure of a popular Venezuelan
television station that was critical of the government, Radio Caracas Television (RCTV), sparked
significant protests and worldwide condemnation. Chávez also proposed a far-reaching
constitutional amendment package that would have moved Venezuela toward a new model of
development known as “socialism in the 21st century,” but this was defeated by a close margin in
a December 2007 national referendum. University students took the lead in demonstrations
against the closure of RCTV, and also played a major role in defeating the constitutional reform.
2 U.N. Economic Commission for Latin America and the Caribbean, Social Panorama of Latin America, 2008, Briefing
Paper, November 2008, p. 11.
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In 2008, President Chávez moved to unite his supporters into a single party—the United Socialist
Party of Venezuela (PSUV)—although several parties that had supported Chávez in the past
declined to join. The Venezuelan government also continued to move forward with
nationalizations in key industries, including food companies, cement companies, and the
country’s largest steel maker; these followed the previous nationalization of electricity companies
and the country’s largest telecommunications company and the conversion of operating
agreements and strategic associations with foreign companies in the oil sector to majority
Venezuelan government control.
State and local elections held in November 2008 revealed a mixed picture of support for the
government and the opposition. Pro-Chávez candidates won 17 of the 22 governors’ races, while
the opposition won governorships in three of the country’s most populous states, Zulia, Miranda
and Carabobo, as well as the states of Nueva Esparta and Táchira (see Figure 1 for a map of
Venezuela). At the municipal level, pro-Chávez candidates won over 80% of the more than 300
mayoral races, while the opposition won the balance. Among the opposition’s mayoral successes
were races for the metropolitan mayor of Caracas, four out of the five smaller municipalities that
make up Caracas (including the poor municipality of Sucre), and the country’s second largest city,
Maracaibo.3
Leading up to the November elections, President Chávez’s PSUV held primary elections around
the country on June 1, 2008, to select candidates, although the process was criticized for a lack of
transparency. The opposition initially had difficulty in agreeing on a single slate of candidates so
as not to split the opposition vote, but by the end of September 2008 had agreed on a unified
candidate for most governor races.4 The opposition includes newer parties such as Justice First
(Primero Justicia), Project Venezuela (Proyecto Venezuela), and A New Era (Un Nuevo Tiempo,
UNT); leftist parties that defected from the Chavista coalition such as the Movement toward
Socialism (Movimiento al Socialismo, MAS) and For Social Democracy (Por la Democracia,
Social, Podemos); and the traditional political parties from the past such as AD and COPEI.5
3 “Both Sides Celebrate in Venezuela,” LatinNews Daily, November 25, 2008; “La oposición venezolana se atribuye un
“triunfo indiscutible” electoral,” Agencia EFE, November 26, 2008; Tyler Bridges, “Chávez Allies Score Big Wins in
Venezuela Elections,” Miami Herald, November 24, 2008; Simon Romero, “Venezuelan Opposition Gains in Several
Crucial Elections,” New York Times, November 24, 2008.
4 Ibid.
5 “Venezuela: Opposition Disarray Hurts Electoral Hopes,” Oxford Analytica, July 1, 2008.
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One of the major problems for the opposition was that the Venezuelan government’s comptroller
general disqualified 272 individuals (down from almost 400 originally disqualified) from running
for office, purportedly for cases involving the misuse of government funds.6 There were several
challenges to Venezuela’s Supreme Court that the comptroller general’s action violated the
Constitution, but on August 5, 2008, Venezuela’s Supreme Court upheld the disqualifications. The
Venezuelan government maintained that the majority of those disqualified were from the ranks of
its own supporters,7 while the opposition maintained that a large percentage were from the
opposition, including several high-profile opposition candidates.8 Among those excluded was
Leopoldo López, the popular mayor of Chacao, who was seeking to run for mayor of Caracas.
Political Developments in 2009 and 2010
February 15, 2009, Term Limits Referendum
In the aftermath of the state and municipal elections in November 2008, President Chávez
announced that he would move ahead with plans to seek changes to the constitution that would
lift the two-term limit for the office of the presidency. This would allow him to run for re-election
in 2012 and beyond. The National Assembly voted on January 14, 2009, to hold a referendum on
the constitutional amendment, expanding it further so that the abolition of term limits would
apply to all elected government officials. As a result, the proposed amendment pertained to the
President, all state and municipal officials, and deputies to the National Assembly. The
referendum was scheduled for February 15, 2009, and various polls indicated that the vote would
be close. Ultimately, with a participation rate of 70%, Venezuelans approved the constitutional
reform with almost 55% voting for it and 45% voting against it.9 President Chávez proclaimed
that the vote was a victory for the Bolivarian Revolution, and virtually promised that he would
run for re-election in 2012.10
The amendment was controversial given the defeat of the government’s constitutional reform
package in December 2007, which had included an amendment that would have removed the
presidential two-term limit. Venezuela’s opposition maintained that President Chávez’s effort to
amend the constitution in 2009 was illegal because the constitution (Article 345) prohibits a
constitutional reform that was rejected from being presented again to the National Assembly in
the same constitutional period. According to this view, since the next National Assembly will not
be elected until late 2010 and take office until early 2011, such an amendment should not have
been considered until then.
Similar to the campaign against the government’s December 2007 constitutional reform package,
student groups played a leading role in the opposition to the abolishment of term limits in 2009.
During the referendum campaign, Venezuelan security forces used tear gas, plastic bullets, and
water cannons to disperse several student protests nationwide, although a massive student
6 “Inhabilitaciones a Políticos en Venezuela Se Reducen de 400 a 272,” Agence France-Presse, July 11, 2008.
7 Embassy of the Bolivarian Republic of Venezuela, “Fact Sheet, Myths and Realities of the Disqualifications from
Holding Public Office,” July 17, 2008.
8 Inter-American Commission on Human Rights, Annual Report, 2008.
9 See the results on the website of the National Electoral Council (CNE), available at http://www.cne.gov.ve/
divulgacion_referendo_enmienda_2009/.
10 Juan Forero, “Chávez Wins Removal of Term Limits,” Washington Post, February 16, 2009.
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demonstration was allowed to take place in Caracas. Opposition parties again united against the
referendum, including the democratic socialist Podemos party that had once supported President
Chávez.
During the campaign, President Chávez argued that the constitutional change would only allow
him to run again, but would not mean that he would be re-elected or remain in power indefinitely.
He maintained that he does not want to be “President for life,” but would like to remain in power
until 2019 in order to ensure that his revolutionary project continues.11 Chávez campaigned
vigorously for the amendment, and spent hours on state-run television in support of it. The
President’s support among many poor Venezuelans, who have benefited from increased social
spending and programs, was an important factor in the vote.
One likely reason that President Chávez moved quickly with the referendum was the economic
problems facing Venezuela due to the global financial crisis and the fall in the price of oil. With
declining government revenue, his government faced the possibility of losing support if the
economic situation deteriorated further, especially if the government was forced to cut back on
domestic spending. Such a scenario could have made it more difficult for an amendment on term
limits to be approved. Moreover, the current National Assembly is almost completely dominated
by Chávez supporters because the opposition boycotted the 2005 legislative elections. Assuming
that the opposition would participate in the next legislative elections in 2010, the next National
Assembly would likely include an invigorated opposition that could have made it more difficult
for the government to advance a constitutional amendment to abolish term limits.
Repression of the Opposition
Since 2009, the Chávez government has taken significant actions against opposition leaders
holding elected state and local government positions, and has moved to concentrate power of the
executive branch over state and local governments. The government has taken substantial power
away from opposition governors in five states and key municipalities, including Caracas and
Maracaibo. In March 2009, President Chávez ordered the Navy to seize seaports in states with
opposition governors, including Maracaibo in the state of Zulia and Puerto Cabello in the state of
Carabobo.12 In April 2009, Manuel Rosales, who had been elected mayor of Maracaibo in
November 2008, took refuge in Peru in order to escape a trial on corruption charges that many
observers contend is part of a campaign of political persecution against the opposition. Rosales
had previously served as governor of Zulia state and ran against Chávez for president in 2006.
The elected mayor of metropolitan Caracas, Antonio Ledezma, was stripped of much of his
power, with most of his budget and powers transferred to the central government. His role as
mayor has been superseded by an official appointed by President Chávez. In protest, Ledezma
undertook a six-day hunger strike in July 2009 to call international attention to the government’s
actions against elected opposition leaders in Venezuela.
The imprisonment of student leader Julio César Rivas in September 2009 was viewed as a new
government tactic aimed at cracking down on student-led protests. Rivas was arrested on
September 8 for his role in an August protest against a new education law, and charged with
inciting civil war. He was subsequently released from prison on September 28, but still faces
11 “Venezuela Poll Deadlocked,” LatinNews Daily, January 29, 2009.
12 Simon Romero, “Chávez Tells His Navy To Take Over Key Seaports,” New York Times, March 16, 2009.
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charges and is prohibited from participating in street protests.13 The imprisonment of Rivas
appears to have emboldened Venezuelan student efforts to call attention to the human rights
situation in the country.
Continued Threats to Freedom of Expression
The Chávez government has also continued to threaten independent media. In 2009, the
government began targeting the operation of Globovision, a cable television news station that is
often critical of the government. In July 2009, the Chávez government announced that
administrative proceedings would be opened against 240 radio stations (reportedly more than a
third of all stations) to revoke their licenses because they failed to update their registration papers;
subsequently 34 stations were shut down and more could be closed. Press rights groups such as
the Committee to Protect Journalists maintain that the action was another attempt by the
Venezuelan government to expand pro-government media, control the flow of information, and
suppress dissent.14
In January 2010, the Venezuelan government continued its efforts against independent media by
abruptly shutting down several cable television stations. On January 24, 2010, six cable channels
were taken off the air: Mexican stations American Network, Ritmoson, and Momentum; TV
Chile; America TV from Peru; and RCTV-Internacional. The government maintains that the
stations violated the Law of Television and Radio Social Responsibility by not complying with a
requirement to broadcast government announcements and presidential speeches. (To date, there
reportedly have been 2000 such speeches in the 11 years of President Chávez’s rule.)
International cable stations are not required to comply with this broadcast requirement, but in
December 2009, a decree by the National Telecommunications Commission (CONATEL)
maintained that cable stations would only be considered international if 70% or more of their
programming is foreign. On January 21, 2010, the government announced that 24 international
cable stations would have to transmit government messages and addresses or be sanctioned. This
led to the closure of the six stations, although several days later four of the stations were allowed
to resume broadcasting after submitting documentation to the government regarding their
international programming content. America TV and RCTV-Internacional remain off the air,
although observers expect that America TV will be allowed to resume broadcasting.
Many observers believe that the government’s actions were taken to silence RCTV-Internacional,
which has continued to broadcast criticism of the Chávez government. As noted above, in May
2007, the government’s closure of RCTV as a general broadcast station in Venezuela prompted
domestic protests and widespread international criticism and concerns about freedom of
expression in Venezuela. RCTV-Internacional was allowed to continue broadcasting as a cable
station.
There has been widespread domestic and international criticism of the Venezuela’s recent actions
in shutting down the cable stations. OAS Special Rapporteur for Freedom of Expression Catalina
Botero and the Inter-American Commission on Human Rights’ Commissioner for Venezuelan
Affairs Paulo Sérgio Pinheiro expressed their strong opposition to the Venezuelan government’s
13 Christopher Toothaker, “Venezuela Releases Jailed Student Activist as More Join Hunger Strike Over Prosecutions,”
AP Newswire, September 28, 2009; and Juan Forero, “Politics and Prison in Venezuela; Student Protester’s Saga
Shines New Light on Chávez’s Approach to Dissent,” Washington Post, October 5, 2009.
14 Committee to Protect Journalists, Venezuela Moves to Silence Hundreds of Broadcasters,” July 22, 2009.
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action and requested that guarantees of freedom of expression and due process be reestablished.
According to the OAS officials, the action has enormous repercussions regarding freedom of
expression and noted that channels taken off the air did not have an opportunity to defend
themselves in a due process before an impartial authority.15 Human rights organizations also
strongly criticized the Venezuelan government’s actions, including Human Rights Watch, the
Committee to Protect Journalists, Reporters without Borders, and the Washington Office on Latin
America.
The closure of the stations prompted political protests in the country. In the city of Mérida in
western Venezuela, two students were killed in clashes between pro- and anti-government
supporters on January 25, 2010. Venezuelan human rights groups called for the government to
guarantee the right to peaceful protest.16
Political Outlook
Support for President Chávez has diminished since 2009 for a variety of reasons, such as high
crime, inflation, shortages of some food items and other consumer products, and repression of
political opponents. An October 2009 survey showed Chávez with 46% support, down from 61%
early in the year, and reportedly his popularity has remained below 50% in 2010. Nevertheless,
Chávez still remains the most popular figure in the country and it appears there is no other
national figure that could challenge him at this juncture.17 The government has continued to fund
social programs known as missions, and this has been a major reason for Chávez’s continued
support among poor Venezuelans. Nevertheless, some observers maintain that Chávez is losing
the ideological battle among Venezuelans, and that his popular support is weakening. Some
observers maintain that Chávez enjoys strong support from around 20% of the population and that
the various opposition parties have support from another 20%, while in the middle are some 60%
of Venezuelans who do not consider themselves Chavistas or members of the opposition. The
battle for Venezuela’s political future could well be determined by this large group in the middle.
There are several areas of vulnerability for the Chávez government that pose challenges to his
support. One is the high level of violent crime in the country, which has made citizen security a
top concern among Venezuelans. Caracas reportedly had a rate of 100 homicides for every
100,000 people in 2008, while the country overall had a rate of 49 homicides per 100,000, one of
the highest rates in the world.18 Reported kidnappings have increased over the past decade, from
50 in 1998 to 385 in 2008, but the actual number is thought to be much higher since most go
unreported because of concerns that the police collaborate with the kidnappers.19 In 2009, there
15 Inter-American Commission on Human Rights, “Commissioner for Venezuelan Affairs and IACHR’s Special
Rapporteur for Freedom of Expression Reject the Closing of Cable Television Channels in Venezuela,” Press Release,
R05-10, January 24, 2010.
16 “Provea exige al Ejecutivo Nacional garantizar el derecho a la vida y a la manifestación pacífica,” PROVEA (El
Programa Venezolano de Educación Acción en Derechos Humanos), January 27, 2010.
17 Ian James, “Polls: Chavez’s Popularity Slips in Venezuela,” AP Newswire, October 22, 2009; “Venezuela: Chávez in
Combat Mode,” EIU Business Latin America, February 8, 2010.
18 “Wave of Weekend Violence Leaves 56 Dead in Caracas,” Agence France Presse, October 6, 2009. For a discussion
of Venezuela’s high murder rate, also see Shannon O’Neil, “The Line of Fire, How Venezuela Came to Claim the
Region’s Highest Murder Rate,” Foreign Policy Passport, May 2009; and Sara Miller Liana, “Will Venezuela’s
Murder Rate Hurt Chávez?” Christian Science Monitor, December 3, 2008.
19 Rachel Jones, “Venezuelans Protest Eightfold Rise in Kidnappings, Say Corrupt Police Are Often Involved” AP
Newswire, July 30, 2009; and Oscar Becerra and Andy Webb-Vidal, “Held to Ransom—Kidnapping Trends in Latin
(continued...)
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were reportedly 15,000 homicides in Venezuela, almost double the figure of just over 8,000
killings in 2000.20
Another key challenge to the government is the state of the Venezuelan economy, which is
strongly linked to the price of oil. The economy has already contracted this year by almost 3%
and some forecasts predict a contraction of almost 4% in 2010.21 Moreover, persistent high levels
of inflation have eroded purchasing power, while price controls and an overvalued currency have
hurt domestic industries and resulted in food shortages. Inflation is expected to increase as a
result of the January 2010 devaluation. As the government has moved forward with a state-led
development model, the private sector complains that many companies have been expropriated
without compensation and without appropriate procedures being followed. They describe the
business community as being under siege from the government because of the expropriations, the
overregulation of businesses, and deep distortions in economic policy. As noted below, the
government is facing a significant electricity crisis that has forced it to implement a rationing
system. While the energy crisis is prompted by a severe drought that has depleted hydroelectric
power, critics also blame the government for not investing in power generation power in the
country.
According to some observers, there is an overwhelming sense of fatigue among those opposed to
President Chávez. Despite suffering a setback in December 2007 when voters rejected a package
of controversial constitutional changes, the Chávez government has pressed ahead with many of
the proposed changes by decree or through the Chávez-dominated legislature. While the political
opposition won several key governorships and mayoralties in November 2008, the Chávez
government has systematically targeted many of these elected officials through charges of
corruption or actions to take their resources and powers. This changing of the rules of the game
has left many Venezuelans with a weariness of speaking out against the government and a feeling
that the government will press ahead with its agenda despite public opposition.
Some maintain that the government’s targeting of the opposition is not the main reason why the
political opposition has failed to attract significant popular support. The collapse of the traditional
party system in Venezuela in 1998 is still being felt today. Traditional parties like AD and COPEI
have not rebounded, and other smaller parties from the past like the MAS and Radical Cause
(CAUSA R) are essentially moribund. The newer opposition parties such as Justice First (Primero
Justicia) and A New Time (UNT) have been characterized as newer versions of the traditional
parties that have not attracted large followings. There is reported to be a crisis of leadership in the
parties, with talented people choosing not to go into politics. Currently the opposition does not
have major figures that could attract nation-wide support and challenge Chávez.
The opposition parties were reported to have serious internal problems as well, which could make
it difficult to challenge President Chávez’s United Socialist Party of Venezuela (PSUV)
effectively in elections for the National Assembly scheduled for September 26, 2010. Moreover, a
new electoral law enacted in August 2009 will reduce the number of seats that can be won by
smaller parties and allow the Chávez-dominated National Electoral Council to redraw voting
(...continued)
America,” Jane’s Intelligence Review, May 11, 2009.
20 Ana Maria Matute, “Hubo 15,000 Homicidios en Venezuela Durante 2009,” El Nacional (Venezuela), January 22,
2010.
21 “Venezuela Country Report,” Economist Intelligence Unit (EIU), January 2010.
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districts, which could make it even more difficult for the opposition to win seats. A key factor for
the opposition parties in those elections is whether they will be able to unify and present a viable
alternative to the PSUV and Chavismo (President Chávez’s leftist ideology). This would entail
the parties agreeing on a single slate of candidates in electoral districts. In the past, many
opposition parties have been reluctant to stand under one banner because they could lose their
legal status as individual parties, but if they manage to unify they could become a significant
force in the National Assembly. As of January 2010, reports indicate that the opposition has made
little progress in agreeing on consensus candidates.22
Economic Conditions
Venezuela’s major economic sector is petroleum, which traditionally has accounted for 80% of
exports and about 25% of gross domestic product.23 The country is classified by the World Bank
as an upper middle income developing country because of its relatively high per capita income of
$9,230 (2008).
Despite the country’s oil wealth, economic conditions in the country deteriorated in the 1990s.
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
2000.24 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.
From 2004 to 2007, fueled by the windfall in international oil prices, the economy rebounded,
with a growth rate over 18% in 2004, about 10% in 2005 and 2006, and 8.2% in 2007.25 Strong
economic growth allowed Chávez 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. The government has nationalized a number of enterprises, including
telecommunications, electricity, and food companies, and in 2008 moved to nationalize cement
companies, the country’s largest steel company, sugar plantations, a dairy products company, and
a cattle estate.
Beginning in 2003, the government began implementing an array of social programs and services
known as misiones or missions. There reportedly have been some 25 missions offering a wide
array of services in the fields of education, health, nutrition, the environment, sports, culture, and
housing, as well as targeted programs for indigenous rights and services for street children and
adolescents.26 The popularity of the missions has been a major factor in President Chávez’s
22 “Venezuela: Chávez in Combat Mode,” EIU Business Latin America, February 8, 2010.
23 “Venezuela Country Profile, 2009,” EIU, p. 17.
24 World Bank, “Venezuela Country Brief,” August 2004.
25 “Venezuela Country Report,” EIU, July 2009 and January 2010.
26 For background on some of the missions, see “Fact Sheet: Social Justice in Venezuela,” Embassy of the Bolivarian
Republic of Venezuela, Washington, DC, July 2008.
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political support among the poor. In the field of education, Misión Robinson has focused on
eliminating illiteracy, while Misión Ribas has provided adult Venezuelans who never finished
high school the opportunity to obtain a secondary education. In the health field, Misión Barrio
Adentro (Inside the Neighborhood Mission) consists of free health care clinics in historically
marginalized areas throughout the country that are staffed primarily by Cuban medical personnel.
A related health mission, Misión Milagro (Miracle Mission), provides free eye care clinics and
eye surgery. In the area of nutrition, Misión Mercal provides food at subsidized prices.
Some observers have praised the missions for constituting an integrated package of poverty-
reduction measures that address the various conditions associated with poverty, representing a
holistic approach to poverty-reduction. The missions are viewed by some as a potentially more
effective alternative to simple cash transfers, which have been the primary basis for poverty-
alleviation programs in Latin America. Some critics of the missions, however, maintain that they
focus on alleviating the harsh conditions associated with poverty rather than addressing the
structural roots of the problem. They maintain that the missions are paternalistic and create a
dependency on the state among the poor, without providing solutions to lift people out of poverty
permanently.27
As a result of the booming economy and increased social spending, poverty rates in Venezuela
have declined, from 48.6% in 2002 to 27.6% in 2008, with extreme poverty or indigence falling
from 22.2% to 9.9% over the same period. (Notably, however, extreme poverty increased from
8.5% in 2007 to 9.9% in 2008.)28 In addition, Venezuela’s ranking on the United Nations
Development Programme’s annual human development index improved from 68 (out of 177
countries) in 2002, when it was categorized as having a medium level of human development, to
58 (out of 182 countries) in 2007, when it was categorized as having a high level of human
development. During this period, Venezuela’s adult literacy rate improved from 93.1% in 2002 to
95.7% in 2007.29
Despite this progress, Venezuela’s economy has experienced significant problems over the past
several years, such as shortages of basic food staples and high levels of inflation that have eroded
purchasing power. In January 2008, the government introduced a new currency, the bolívar
fuerte (strong bolivar), that eliminated three zeroes from the bolívar and was intended in part to
stem high inflation rates, but high inflation continued with an average of about 30% for the year.
Shortages of basic staples continued because of price controls that have stifled local production.
In response, the government raised price caps on basic food items, and nationalized a large dairy
company and a food distribution company that were incorporated into a subsidiary of the
Venezuelan oil company, PdVSA. The policies reportedly worked to help ease shortages for some
staples but not all.30 Shortages of many basic staples were still being reported in 2009, and there
were increasing shortages of water and electricity.31
27 Indira A.R. Lakshmanan “Critics Slam Venezuelan Oil Windfall Spending,” Boston Globe, August 13, 2006; José
Orozco, “With ‘Misiones,’ Chávez Builds Support Among Venezuela’s Poor,” WorldPoliticsWatch, December 10,
2006.
28 U.N. Economic Commission for Latin America and the Caribbean, Social Panorama of Latin America, 2009,
Briefing Paper, November 2009, p. 11.
29 United Nations Development Programme, Human Development Report 2004 and Human Development Report 2009.
30 “A Funny Way to Beat Inflation—Venezuela’s Economy,” The Economist, June 21, 2008; Tyler Bridges, “Chávez’s
biggest opponent: what’s not on a dinner table,” Miami Herald, February 4, 2009.
31 Tyler Bridges, “Consumers in Venezuela Feeling Economic Squeeze,” Miami Herald, May 28, 2009; and Phil
(continued...)
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The global financial crisis and the associated drop in the price of oil also have had significant
effects on the Venezuelan economy. Economic growth slowed in 2008 to 4.8%, and contracted by
almost 3% in 2009; the forecast for 2010 is for continued contraction of almost 4%. Inflation
averaged about 27% in 2009, and the forecast for 2010 is for inflation approaching 31%.32
In late 2009 and January 2010, the Venezuelan government seized control of 11 small troubled
banks and arrested a number of bankers because of corrupt practices. The takeovers do not
appear to be ideologically driven, but appear to have resulted from economic mismanagement.33
In order to maintain public spending, the Chávez government has issued public bonds and has
used some of its substantial foreign reserves. As a result, foreign reserves fell from estimated $42
billion at the end of 2008 to about $32 billion at the end of 2009, still a significant amount.34
The government also took significant action in January 2010 to shore up its fiscal situation by
devaluing Venezuela’s currency. On January 8, President Chávez announced a devaluation of the
bolivar fuerte and the creation of a two-tiered exchange rate system. Previously the currency had
been pegged at 2.15 BsF to the U.S. dollar, and the currency was deemed to be significantly
overvalued (with a black market rate of about 6 BsF to $1). Under the new system, a rate of 2.6
BsF to $1 is available for priority imports such as food, medicine, goods for the public sector, and
machinery for strategic industries, while a rate of 4.3 BsF to $1 is available for all other sectors
purchasing U.S. dollars for imports. Two additional rates will operate outside the two-tier system
– a rate of 5 BsF to $1 through the sale of currency exchange bonds by the Venezuelan Central
Bank, and a floating black market rate. Many observers maintain that the devaluation will ease
the government’s fiscal situation by increasing the value of oil revenue and boosting the
government’s budget. This will allow the government to help sustain or increase public spending
in 2010. At the same time, however, the devaluation is expected to lead to a surge in inflation.35
The government is also facing a serious electricity crisis in part because of a severe drought that
has diminished hydroelectric power reservoirs. Critics also blame the government for the crisis
for not upgrading power generation capacity in the country, and they ridicule the government for
turning to Cuba for advice in dealing with the electricity crisis.36
U.S. Policy
The United States traditionally has had close relations with Venezuela, the fourth major supplier
of foreign oil to the United States, but there has been significant friction with the Chávez
(...continued)
Gunson, “Shortages Eroding Chávez’s Support,” Miami Herald, October 29, 2009.
32 “Venezuela Country Report,” EIU, January 2010.
33 “Venezuela Finance: More Dominoes Topple,” EIU ViewsWire, January 20, 2010; and “Venezuela Country
Report,” EIU, July 2009 and January 2010.
34 “Venezuela Country Report,” EIU, January 2010.
35 “Venezuela Economy: Currency Complexities,” EIU ViewsWire, February 1, 2010; “Venezuela Economy:
Government Bites the Bullet and Devalues,” EIU ViewsWire, January 10, 2010; and “What Are the Effects of
Venezuela’s Currency Devaluation?” Latin America Advisor, Inter-American Dialogue, January 26, 2010.
36 Christopher Toothaker, “Venezuela’s Chávez Turns to Cuban Help with Energy Crisis, Baffling Critics,” AP
Newswire, February 3, 2010.
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government. For several years, U.S. officials have expressed concerns about human rights,
Venezuela’s military arms purchases (largely from Russia), its relations with Cuba and Iran, its
efforts to export its brand of populism to other Latin American countries, and the use of
Venezuelan territory by Colombian guerrilla and paramilitary forces. Declining Venezuelan
cooperation on antidrug and antiterrorism efforts also has been a U.S. concern. Since 2006, the
Department of State has prohibited the sale of defense articles and services to Venezuela because
of lack of cooperation on antiterrorism efforts.
Bilateral Relations during the George W. Bush Administration
Tensions in relations turned especially sour in the aftermath of President Chávez’s brief ouster
from power in April 2002. Venezuela alleged U.S. involvement in the ouster, while U.S. officials
repeatedly rejected charges that the United States was involved.
In the aftermath of the coup, U.S. statements and actions of the interim government represented a
defining moment that influenced the course of bilateral relations over the next several years. After
Chávez’s ouster, the United States expressed solidarity with the Venezuelan people and
maintained that undemocratic actions committed or encouraged by the Chávez administration had
provoked the political crisis.37 Yet at the same time, the leader of the interim government was
dismantling the National Assembly, firing the Supreme Court, and suspending the Constitution.
The interim government’s hardline actions resulted in its loss of support from the Venezuelan
military, and paved the way for Chávez’s return to power. With Chávez’s return, the United States
called on him to heed the message sent by the Venezuelan people by correcting the course of his
administration and “governing in a fully democratic manner.”38 In contrast, many Latin American
nations immediately condemned the overthrow of Chávez, labeling it a coup. The failure of the
United States to quickly condemn the coup and instead to criticize President Chávez upon his
return to power set the stages for continued deterioration in U.S.-Venezuelan relations. Moreover,
even after the coup, the widespread perception that the United States supported continued efforts
by Venezuela’s opposition to remove President Chávez from power contributed to the downward
spiral in bilateral relations.
While strong political rhetoric from both U.S. and Venezuelan officials in the 2002 to 2006 period
contributed to elevated tensions in U.S. relations, the tenor of U.S. political rhetoric changed in
the second half of 2006. When Chávez spoke disparagingly of President Bush at the United
Nations in September 2006, U.S. officials refrained from responding to those personal attacks.
Likewise, when President Chávez led an anti-American rally in Argentina in March 2007 during
President Bush’s visit to Brazil and Uruguay, President Bush ignored the taunts and U.S. officials
emphasized that they wanted to focus on a positive agenda of U.S. engagement with Latin
America.
In the aftermath of Colombia’s March 1, 2008, bombing of a Revolutionary Armed Forces of
Colombia (FARC) camp in Ecuador that killed the terrorist group’s second in command,
Colombian forces captured laptops that contained files potentially linking the Venezuelan
government with efforts to support the FARC. In an apparent shift in policy, however, on June 8,
37 U.S. Department of State, “Venezuela: Change of Government,” Press Statement, April 12, 2002.
38 U.S. Department of State, International Information Program, Washington File, “White House Calls on Venezuela’s
Chávez to Preserve Peace, Democracy,” April 14, 2002.
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2008, President Chávez publicly urged the FARC to end its armed struggle, and release all
hostages.
In 2008, U.S. policy toward Venezuela appeared to be to refrain from getting into any unneeded
conflicts or spats with President Chávez, and instead to focus on a positive U.S. agenda for the
hemisphere. Assistant Secretary of State for Western Hemisphere Affairs Tom Shannon stated in
July 17, 2008, congressional testimony that “we remain committed to a positive relationship with
the people of Venezuela and have the patience and the persistence necessary to manage our
challenging relationship.” Shannon pointed out in his testimony that Venezuela “for the first time
in many years, expressed a willingness to explore improved relations with the United States,”
including counter-drug cooperation, and that “we have told Venezuela that we would like to
explore this diplomatic opening.”39
By September 2008, however, U.S. relations with Venezuela took a significant turn for the worse
when Venezuela expelled U.S. Ambassador Patrick Duddy in solidarity with Bolivian President
Evo Morales who had expelled the U.S. Ambassador in La Paz after accusing him of fomenting
unrest; the U.S. responded in kind with the expulsion of Venezuelan Ambassador Bernardo
Alvarez. Also in September, U.S. officials criticized Venezuela’s efforts against drug trafficking,
and President Bush determined, for the fourth year in a row, that Venezuela had failed
demonstrably to adhere to its obligations under international narcotics control agreements. In
September, U.S. Treasury Department officials froze the assets of two high-ranking Venezuelan
government officials and the former interior minister for allegedly helping the FARC with
weapons and drug trafficking. In October 2008, the Treasury Department also froze the assets of
an Iranian-owned bank based in Caracas linked to an Iranian export bank that allegedly provided
or attempted to provide services to Iran’s ministry of defense.
Obama Administration Policy
During the U.S. presidential campaign, Barack Obama maintained that his Administration would
use principled bilateral diplomacy to engage with such adversaries in the region as Venezuela
under populist President Hugo Chávez.
In response to written questions during her confirmation hearing for Secretary of State before the
Senate Foreign Relations Committee in mid-January 2009, Senator Hillary Clinton characterized
President Chávez as a “democratically elected leader who does not govern democratically.” She
maintained that while the United States should be concerned about Chávez’s actions and posture,
“we should not exaggerate the threat he poses.” Clinton asserted that the United States “should
have a positive agenda for the hemisphere in response to the fear-mongering propagated by
Chávez and [Bolivian President] Evo Morales.” She maintained that the Administration believes
that bilateral cooperation with Venezuela on a range of issues (like counterterrorism,
counternarcotics, energy, and commerce) would be in the mutual interests of Venezuela and the
United States. Clinton maintained that “it remains to be seen whether there is any tangible sign
that Venezuela actually wants an improved relationship with the United States.”40
39 Testimony of Thomas A. Shannon, Assistant Secretary of State for Western Hemisphere Affairs, hearing on
“Venezuela: Looking Ahead,” House Committee on Foreign Affairs, Subcommittee on the Western Hemisphere, July
17, 2008.
40 Senate Foreign Relations Committee, Questions for the Record, Senator John Kerry, Nomination of Hillary Rodham
Clinton, Department of State, U.S. Secretary of State, January 2009, available at http://www.foreignpolicy.com/files/
(continued...)
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A week before his inauguration, President Obama maintained in an interview that President
Chávez “has been a force that has impeded progress in the region,” and expressed concern about
reports that Venezuela is assisting the FARC.41 President Chávez strongly criticized Obama for
his comments, but subsequently stated that he would like to restore bilateral relations to the same
level as during the Clinton Administration. Chávez suggested that a new period of constructive
relations based on respect might be possible, but that it would depend on the attitude of the
President and Secretary of State.42
At the fifth Summit of the Americas held in Trinidad and Tobago in mid-April 2009, President
Obama met President Chávez along with other hemispheric leaders. Chávez maintained that he
would be open to the U.S. Ambassador returning to Caracas. Two months later, on June 25, 2009,
the State Department announced that the United States and Venezuela had exchanged diplomatic
notes and agreed to return respective ambassadors. This led to U.S. Ambassador to Venezuela
Patrick Duddy resuming his post in Caracas, and to the return of Venezuelan Ambassador
Bernardo Alvarez to Washington, DC.
The return of respective ambassadors has raised some hopes of an improvement in bilateral
relations. In an interview with Globovisión in early July 2009, Secretary of State Clinton
maintained that there needs to be a dialogue between the United States and Venezuela on a range
of issues, and that there are ways for countries that do not agree on many issues to have a
conversation. At the same time, with regard to the political situation in Venezuela, Clinton
maintained that she hoped to see over the next months “recognition that you can be a very strong
leader and have very strong opinions without trying to take on too much power and trying to
silence all your critics.”43
State Department officials have expressed continued concerns about the intimidation of the news
media in Venezuela, and steps taken by the government to restrict political participation and
debate, and Secretary of State Clinton has raised questions regarding Venezuela’s military
purchases.44 Moreover, in September 2009, President Obama made a determination pursuant to
the annual narcotics certification process that Venezuela had “failed demonstrably” during the last
12 months to adhere to international counternarcotics agreements. This marked the fifth
consecutive annual designation of Venezuela in this category.
Director of National Intelligence Dennis Blair testified on February 2, 2010 before the Senate
Select Committee on Intelligence on the annual threat assessment of the U.S. intelligence
community. According to Blair, President “Chávez continues to impose an authoritarian populist
political model in Venezuela that undermines democratic institutions.” Blair maintained that with
regard to foreign policy, “Chávez’s regional influence may have peaked, but he is likely to
support likeminded political allies and movements in neighboring countries and seek to
(...continued)
KerryClintonQFRs.pdf.
41 Nestor Ikeda, “Obama: Chávez “ha impedido” progreso latinoamericano,” AP Spanish Worldstream, January 18,
2009; and Juan Forero, “Obama and Chávez Start Sparring Early,” Washington Post, January 19, 2009.
42 “Venezuelan President Chávez Interviewed on CNN,” CQ Newsmaker Transcripts, February 3, 2009.
43 U.S. Department of State, U.S. Secretary of State Hillary Rodham Clinton, “Interview with Leopoldo Castillo of
Globovision,” July 7, 2009.
44 U.S. Department of State, Secretary of State Hillary Rodham Clinton, “Remarks with Uruguayan President Tabare
Vazquez After Their Meeting,” September 15, 2009.
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undermine moderate, pro-US. governments.” Blair maintained that “Chávez “and his allies are
likely to oppose nearly every U.S. policy initiative in the region, including the expansion of free
trade, counter drug and counterterrorism cooperation, military training, and security initiatives,
and even U.S. assistance programs.”45
Venezuela’s Ambassador to the United States Bernardo Alvarez strongly criticized DNI Blair’s
testimony, maintaining that the assessment was full of politically motivated and cynical
accusations against Venezuela. According to Alvarez, “Venezuela is in the process to extending
democracy to all of its people,” which includes efforts “to guarantee the welfare of our people and
overcome the historical wrongs of poverty and inequality.” Alvarez asserted that there is no “anti-
Americanism in the Government of Venezuela,” but that “we reject imperial policies that dictate
the kind of development and democracy we should seek.”46
U.S. Foreign Aid to Venezuela
Because of Venezuela’s oil wealth and relatively high per capita income level, the United States
has traditionally only provided small amounts of foreign assistance to Venezuela. In recent years,
assistance has focused on counternarcotics and support for democracy programs. Table 1 below
shows U.S. assistance level to Venezuela since FY2006.
From FY2002-FY2007, Venezuela received small amounts of U.S. assistance under the State
Department’s Andean Counterdrug Initiative (ACI) focusing on counternarcotics cooperation and
judicial reform support. Since FY2008, no counternarcotics assistance has been requested for
Venezuela, although in FY2009, the United States provided $0.5 million in International
Narcotics Control and Law Enforcement (INCLE) assistance.
For a number of years, the United States has provided democracy-related assistance to Venezuela
through the U.S. Agency for International Development. In Table 1, all funding for the
Development Assistance (DA), Economic Support Funds (ESF), and Transition Initiatives (TI)
foreign aid accounts are for democracy-related funding; the FY2011 request is for $5 million in
ESF. In addition, the United States has supported democracy assistance in Venezuela through the
U.S. government-funded National Endowment for Democracy (NED), but this type of support
has not been typically reflected in U.S. foreign assistance funding statistics.
45 U.S. Senate Select Committee on Intelligence, “Annual Threat Assessment of the US Intelligence Community,”
prepared testimony by Dennis C. Blair, Director of National Intelligence, February 2, 2009, p. 32, available at:
http://intelligence.senate.gov/100202/blair.pdf
46 Embassy of the Bolivarian Republic of the United States, “Venezuelan Ambassador Responds to Intelligence
Report,” February 4, 2010, available at: http://www.embavenez-us.org/news.php?nid=5265
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Table 1. U.S. Foreign Aid to Venezuela by Account, FY2006-FY2010
U.S. $ millions
FY2009
FY2010
FY2011
FY2006 FY2007 FY2008
(estimate)
(estimate)
(request)
ACI/INCLE 2.229 1.000 0
0.500 0
0
DA
0 0 6.519
0 0 0
ESF
0
1.625 2.976 5.000 6.000 5.000
TI
3.681 3.000 3.649 2.000
NA NA
Total
5.91 5.625 13.144 7.500 6.000 5.000
Source: U.S. Department of State, FY2010 Congressional Budget Justification for Foreign Operations; U.S.
Department of State, Executive Budget Summary, Function 150 & Other International Programs, FY2011; and
information provided to CRS by the Department of State.
Notes: ACI=Andean Counterdrug Initiative; DA=Development Assistance; ESF=Economic Support Funds;
INCLE = International Narcotics Control and Law Enforcement; TI=Transition Initiatives.
Since 2002, USAID has supported democracy projects in Venezuela through its Office of
Transition Initiatives (OTI), with the goals of preserving and strengthening democratic
institutions and encouraging the development of a vibrant and independent civil society.
According to USAID, more than 500 small-grant and technical assistance activities have been
funded by OTI from 2002 through mid-2009. The funding supports projects implemented by five
U.S. organizations: Development Alternatives Inc, which focuses on dialogue, public debate,
citizen participation and leadership training; the International Republican Institute and the
National Democratic Institute, which offer technical assistance for political parties; Freedom
House, which provides technical support to human rights groups; and the Pan-American
Development Foundation, which provides support to civil society.47
NED has funded democracy projects in Venezuela since 1992, but the level of funding has
increased under the Chávez government. The FY2006 Foreign Operations appropriations measure
(P.L. 109-102) provided $2 million in Democracy Funds for NED for democracy programs in
Venezuela. For FY2007, NED funded 17 projects with over $800,000 in funding. For FY2008,
NED funded 18 Venezuela projects with over $1 million in total funding.
The Venezuelan government and Chávez supporters have strongly criticized U.S. government
funding for democracy projects in Venezuela.48 They maintain that NED-funded groups were
headed by people involved in the overthrow of Chávez in April 2002 as well as a group, Súmate,
involved in the signature collecting process for the 2004 recall referendum campaign. Critics of
the USAID and NED democracy programs maintain that they meddle in Venezuelan domestic
politics. They argue that the United States should get out of the business of democracy-promotion
47 U.S. Agency for International Development, USAID/OTI Venezuela Annual Summary Report, October 2006-
September 2007; U.S. Agency for International Development, Congressional Notification, August 20, 2009, CN
#154.and USAID, “Transition Initiatives: Venezuela,” website available at http://www.usaid.gov/our_work/cross-
cutting_programs/transition_initiatives/country/venezuela/index.html.
48 For example, see 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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in Venezuela, maintaining that such activity lends credence to claims by Chávez and others that
the U.S. government is pursing a policy of regime change.49
U.S. officials strongly defend U.S. democracy promotion activities in Venezuela, and Congress
has continued to fund such activities. In particular, U.S. officials 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.”50 According to 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.” NED asserts that all of the Venezuelan programs
that it funds operate on a non-partisan basis.51 As a result of issues raised regarding NED’s
programs in Venezuela, in late 2004 Congress reaffirmed NED’s duty to ensure that all sponsored
activities adhere to core NED principles and required a comprehensive report on NED’s activities
in Venezuela since FY2001 (Division B of P.L. 108-447, H.Rept. 108-792).
Human Rights Concerns
Human rights organizations and U.S. officials have expressed concerns for several years about the
deterioration of democratic institutions and threats to freedom of speech and press in Venezuela
under the Chávez government. The State Department’s February 2009 human rights report stated
that Venezuela’s human rights situation continued to be characterized by “politicization of the
judiciary,” and “official harassment of the media and of the political opposition.”52
Nevertheless, according to a 2008 poll by Latinobarómetro, 49% of Venezuelans expressed
satisfaction with how democracy in their country was working, a greater percentage than in most
Latin American countries and second only to Uruguay. The 2008 figure, however, represented a
10% drop from a similar poll in 2007 that showed that 59% of Venezuelans expressed satisfaction
with their democracy. 53
Human Rights Watch maintains that the Chávez government dealt a severe blow to judicial
independence by packing the Supreme Court with its supporters under a new law that expanded
the court from 20 to 32 justices. Since 2004, according to Human Rights Watch, the packed Court
has fired hundreds of provisional judges and granted permanent judgeships to about 1,000
others.54 The Chávez government enacted a broadcast media law in December 2004 that allows
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 Inter-American Commission on Human Rights (IACHR) and human rights
groups such as the Committee to Protect Journalists, Reporters Without Borders, and the Inter-
49 Tom Barry, “The New Politics of Political Aid in Venezuela,” Venezuelanalysis.com, July 25, 2007 (updated and
corrected on August 25, 2007).
50 “United States Rejects Venezuelan Decision to Try Civic Group,” Department of State, Washington File, July 8,
2005.
51 National Endowment for Democracy, “NED Venezuela Programs FAQ,” available online at http://www.ned.org/
grants/venezuelaFacts.html.
52 See the full report at http://www.state.gov/g/drl/rls/hrrpt/2008/wha/119177.htm.
53 Corporación Latinobarómetro, “Informe Latinobarómetro 2007” and “Informe 2008.”
54 Human Rights Watch, World Report 2008.
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American Press Association maintain that these measures have inhibited freedom of expression,
with newspapers and broadcasters practicing self-censorship.
In September 2008, Human Rights Watch issued an extensive report examining setbacks in
human rights protections and practices under the Chávez government. The report states that under
President Chávez, the Venezuelan government has: tolerated, encouraged, and engaged in wide-
ranging acts of discrimination against political opponents and critics; undermined freedom of
expression through a variety of measures aimed at reshaping media content and control; sought to
remake the country’s labor movement in ways that violate basic principles of freedom of
association; and undermined its own ability to address the country’s long-standing human rights
problems through its adversarial approach to local rights advocates and civil society
organizations. The report makes recommendations for the Venezuelan government to take actions
in each of these areas in order to promote a more inclusive democracy.55
In response to the release of the Human Rights Watch report, the Venezuelan government
expelled two staff members of the human rights organization visiting the country on September
18, 2008, an action that was condemned by numerous human rights groups throughout Latin
America.56 On September 26, 2008, 41 members of the U.S. House of Representatives wrote to
President Chávez expressing their outrage over the expulsion of the Human Rights Watch staff,
and urging the President to embrace the recommendations of the report and strengthen the
promotion of human rights, democratic institutions, and political pluralism in the country.
In November 2008, the Washington-based Due Process of Law Foundation issued a report
criticizing the imprisonment of eight police officials accused of murder in April 2002 during a
massive opposition demonstration that led to the temporary ouster of President Chávez. The
report alleged violation of the police officials’ due process and raised concerns about the
independence of the judges in the case.57
In the lead-up to the November 23, 2008, state and municipal elections, human rights groups
called attention to attacks against media and journalists who were critical of the Chávez
government. Venezuelan security forces used force to break up several student protests around the
country in the lead up to the February 2009 referendum on abolishing term limits.
As noted above, the Chávez government has taken additional measures since 2009 to stifle
political opponents, including elected state and local government officials, other political
opponents, media outlets such as Globovisión and RCTV-Internacional that have been critical of
the government, and university students (see “Repression of the Opposition” and “Continued
Threats to Freedom of Expression” above).
In addition to the elected opposition, the Chávez government has moved to silence other
opponents. There are now reportedly more than 40 political prisoners in the country, with another
2,000 people under investigation for what many observes say are trumped up charges.58 In April
55 Human Rights Watch, “A Decade Under Chávez, Political Intolerance and Lost Opportunities for Advancing Human
Rights in Venezuela,” September 2008, available at http://hrw.org/reports/2008/venezuela0908/.
56 Phil Gunson, “Rights Groups Decry Monitors’ Ouster,” Miami Herald, September 20, 2008.
57 Phil Gunson, “Rights Group Assails Detention of Police,” Miami Herald, November 28, 2008; Due Process of Law
Foundation, “Dependencia Judicial en Venezuela,” Washington, November 2008.
58 Juan Forero, “Politics and Prison in Venezuela,” Washington Post, October 5, 2009.
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2009, a former Defense Minister in the Chávez government who subsequently became a strong
critic of President Chávez during the 2007 constitutional reform campaign was arrested on
charges of corruption and remains imprisoned. The Chávez government also has sought to
increase its control of the military by ousting military officers who might be considered disloyal
to the government.59 Nongovernmental organizations in Venezuela have expressed concern about
potential legislation that would tighten control over groups that receive assistance from abroad,
and fear that the government will prevent groups critical of the government from receiving
outside assistance.60
Critics of the government assert that the judiciary and criminal justice system is being used as a
political tool against political opponents. This includes the case of prominent business leader
Eligio Cedeño who had been imprisoned since 2007 in pretrial detention until a judged released
him on December 10, 2009, instead requiring that he report to court every 15-days.61 Following
his release, Cedeño subsequently traveled to the United States and is awaiting an immigration
hearing; Venezuela has asked for his extradition. The judge who released Cedeño, María Lourdes
Afiuni, was arrested just hours after his release on allegations of corruption, and remains
imprisoned. President Chávez has urged that the judge receive the maximum sentence of 30
years. Three U.N. human rights experts criticized the judge’s arrest, maintaining that Venezuela’s
reprisal against the judge created a climate of fear that undermines the rule of law and obstructs
justice.62
Anti-Semitism
Over the past several years, there has been a rise in anti-Semitic acts in Venezuela. This has
included police raids on a Jewish center in Caracas in 2004 and 2007, and the vandalizing of a
synagogue in Caracas in January 2009. The State Department’s February 2009 human rights
report stated that government institutions and officials and government-affiliated media outlets
promoted anti-Semitism through numerous anti-Semitic comments. Incidents of graffiti,
intimidation, vandalism, and other physical attacks against Jewish institutions were reported to be
frequent.
On February 2, 2009, 16 Members of Congress, including Chairman of the House Foreign Affairs
Subcommittee on the Western Hemisphere Eliot Engel spoke out against the January 2009
synagogue attack in a letter to President Chávez. They stated in the letter that they believed that
the attack was “a direct result of the dangerous environment of fear and intimidation against the
Jewish community which your government has fostered.” The Members called on Chávez “to end
the bullying and harassment of the Jewish community” and “to extend the community the robust
protection it deserves in light of the threats it faces.”63
59 Simon Romero and Maria Eugenia Diaz, “Chávez Seeks Tighter Grip on Military,” New York Times, May 30, 2009.
60 Tyler Bridges, “Hugo Chávez Tightens Control by Silencing Adversaries,” Miami Herald, May 8, 2009.
61 For example, see the following white paper prepared by lawyers defending Eligio Cedeño, “Bolivarian Rule of
Lawlessness, The Eligio Cedeño Case: The Erosion of Judicial Autonomy under Hugo Chávez,” by Robert Amsterdam,
Gonzalo Himiob Santomé, and Antonio Rosich, June 2009, available at http://www.robertamsterdam.com/venezuela/
2009/06/new_white_paper_on_venezuelas_political_prisoners.htm.
62 U.N. Experts Say Venezuela’s Chávez Creating Fear,” Reuters, December 16, 2009.
63 House Committee on Foreign Affairs, Subcommittee on the Western Hemisphere, “Engel Condemns Attack on
Synagogue in Venezuela,” February 2, 2009.
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According to the State Department’s 2009 international religious freedom report, Venezuelan
government officials publicly condemned the synagogue attack after Foreign Minister Nicolás
Maduro met with leaders of the Confederation of Jewish Associations in Venezuela (CAIV) on
February 4, 2009. President Chávez also subsequently phoned the president of CAIV to condemn
the attack and promised to guarantee the safety of the Jewish community. Criminal charges have
been filed against 11 people for the attack, including several police officers.
Energy Issues
Since Venezuela is a major supplier of foreign oil to the United States, providing almost 11% of
U.S. crude oil imports, a key U.S. interest has been ensuring the continued flow of oil exports.
Venezuela was the fourth largest foreign supplier of oil to the United States in 2008 (after Canada,
Saudi Arabia, and Mexico), exporting almost 1.2 million barrels per day of crude oil and products
to the United States. 64 These exports amounted to almost $49 billion, accounting for 95% of
Venezuela’s total exports to the United States.65 Some 69% 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.66
Venezuela’s state-run oil company, PdVSA, owns CITGO, which operates three crude oil
refineries and a network of some 14,000 retail gasoline stations in the United States.
Venezuela’s proven oil reserves are estimated to be 99 billion barrels of oil (the second largest in
the hemisphere after Canada), while its proven natural gas reserves are estimated to be 176
trillion cubic feet (the second largest in the hemisphere after the United States).67 Most of
Venezuela’s proven natural gas reserves are associated gas linked to its oil production, but in
September 2009, the Spanish energy company Repsol YPF announced a major offshore gas find
in the Gulf of Venezuela involving gas that reportedly could amount to 7-8 trillion cubic feet.68
The Chávez government benefitted from the rise in world oil prices in late 2007 and 2008, which
increased government revenues and sparked an economic boom. As a result, Chávez was able to
increase government expenditures on anti-poverty and other social programs associated with his
populist agenda. In April 2008, the government approved a measure that taxes foreign oil
companies 50% when crude oil is $70 a barrel, and 60% when oil exceeds $100 a barrel.69 The
rapid decline in the price of oil since the last quarter of 2008, however, has reduced government
revenue.
Under President Chávez, the Venezuelan government moved ahead with asserting greater control
over the country’s oil reserves. By March 2006, it had completed the conversion of its 32
operating agreements with foreign oil companies to joint ventures, with the Venezuelan
government now holding a majority share of between 60-80% in the ventures. In 2007, the
government completed the conversion of four strategic associations involving extra-heavy oil
Orinoco River Basin projects. Six foreign companies had been involved in the projects—U.S.-
64 U.S. Energy Information Administration, “U.S. Imports by Country of Origin,” October 29, 2009.
65 Department of Commerce statistics, as presented by World Trade Atlas.
66 U.S. Energy Information Administration, “Venezuela Energy Profile,” October 13, 2009.
67 Marilyn Radler, “Oil, Gas Reserves Rise as Oil Output Declines,” Oil & Gas Journal, December 21, 2009.
68 “Repsol YPF Confirms Large Gas Find Off Venezuela,” Oil & Gas Journal, September 28, 2009.
69 “Venezuela Passes Tax on Oil Companies,” New York Times, April 16, 2008.
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based ConocoPhillips, Chevron, and ExxonMobil, Norway’s Statoil-Hydro, Britain’s BP, and
France’s Total.
In the conversion to Venezuelan government majority ownership, Chevron and BP maintained
their previous investments, Total and Statoil-Hydro reduced their holdings, while ConocoPhillips
and ExxonMobil chose to leave the projects.70 However, Statoil-Hydro, Total, and Italy’s Eni
subsequently signed agreements that could result in additional investments in the Orinoco Belt
projects.71 Other state-owned oil companies, such as Iran’s Petropars, the China National
Petroleum Corporation, Cuba’s Cupet, as well as Russian companies such as Gazprom, TNK-BP,
and Lukoil have also signed agreements for exploration in the Orinoco region.
According to some critics, majority state ownership in the oil sector has slowed the rate of foreign
investment. Production also has reportedly not been able to recover from the firing of some
18,000 PdVSA employees in early 2003 and from continued underinvestment in maintenance and
repairs.72 The U.S. Energy Information Administration reports that Venezuela’s total oil
production amounted to 2.6 million barrels per day (mbd) in 2008, with 2.4 million barrels per
day in crude oil production.73 The Venezuela government maintains that its oil production level is
more than 3 million barrels per day, and maintains that its output figures have been manipulated
for political reasons. In 2009, PdVSA hired a UK-based inspection firm to certify its volume of
oil exports in an attempt to bolster the country’s credibility in its oil data.74
Despite notable frictions in bilateral relations, Venezuela continues to be a major supplier of oil to
the United States. Even though Venezuela opposed 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.
On numerous occasions, however, Chávez has threatened to stop selling oil to the United States.
In February 2006, he asserted that the “U.S. government should know that, if it crosses the line, it
will not get Venezuelan oil.”75 In April 2006, he warned that his government would blow up its oil
fields if the United States ever were to attack.76 In November 2006 (amid Venezuela’s presidential
election campaign), President Chávez asserted that Venezuela would “not send one more drop of
oil to the U.S.” if the United States or its “lackeys” in Venezuela try a “new coup,” fail to
recognize the elections, or try to overthrow the oil industry. Many observers believe Chávez’s
threats have been merely part of his rhetoric that is designed to bolster his domestic political
support. Venezuela’s Ambassador to the United States asserted in July 2006 that oil-cutoff
comments by Venezuelan officials, including President Chávez, only reflect what would be
Venezuela’s response against aggression initiated by the U.S. government.77 Once again in
70 U.S. Energy Information Administration, “Country Analysis Briefs: Venezuela,” January 2009.
71 Benedict Mander “Venezuela’s Oil Belt Reopens to Private Groups,” Financial Times, March 11, 2008.
72 Danna Harman, “Venezuela’s Oil Model: Is Production Rising or Falling?,” Christian Science Monitor, May 31,
2006.
73 U.S. Energy Information Administration, “Venezuela Energy Profile,” October 13, 2009.
74 Raúl Gallegos, “Venezuela Moves To Bolster Credibility In Oil Output Data,” Dow Jones Newswires, May 26, 2009.
75 “U.S. Warned to Back off or Risk Losing Oil Supply,” Miami Herald, February 18, 2006; “Chávez Threatens To Cut
Oil in Case U.S. ‘Crosses Line,’” Open Source Center, Foreign Broadcast Information Service, February 18, 2006.
76 “Chávez Says He’ll Blow up Oil Fields If U.S. Attacks,” Miami Herald, April 20, 2006.
77 Andy Webb-Vidal, “Venezuela Will Not Cut Off Oil Despite Hostile U.S. Attitude,” Financial Times, August 1,
2006.
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February 2008, President Chávez threatened to stop oil exports to the United States, this time if
ExxonMobil was successful in freezing billions in Venezuelan oil assets in a dispute over
compensation for its Orinoco oil investments. State Department officials played down the threat,
pointing out that Chávez has made the same threat in the past, but has never cut oil.78 A week
later, on February 17, Chávez said that he would only stop sending oil if the United States
attacked Venezuela.79
Because of these comments, however, some observers have raised questions about the security of
Venezuela as a major supplier of foreign oil. In June 2006, the Government Accountability Office
(GAO) issued a report, requested by then-Senate Foreign Relations Committee Chairman Richard
Lugar, on the issue of potential Venezuelan oil supply disruption. At the time, the GAO report
concluded that a sudden loss of all or most Venezuelan oil from the world market could raise
world prices up to $11 per barrel and decrease U.S. gross domestic product by about $23 billion.80
There are also concerns that Venezuela is looking to develop China as a replacement market,
although Venezuelan officials maintain that they are only attempting to diversify Venezuela’s oil
markets. In 2007, China imported about 80,000 barrels per day of oil from Venezuela.81
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. Venezuela suspended its cooperation with the
U.S. Drug Enforcement Administration in August 2005 because it alleged that DEA agents were
spying on Venezuela. U.S. officials maintained that the charges were baseless. From 2005 to
2008, President Bush annually 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. At the same time, the President waived economic sanctions that would have
curtailed U.S. assistance for democracy programs in Venezuela. President Obama took the same
actions in September 2009, marking the fifth consecutive year for Venezuela’s designation as a
country not adhering to its anti-drug obligations.82
In mid-2006, the United States and Venezuela were on the verge of signing an anti-drug
cooperation agreement that would allow the DEA to continue working with the Venezuelan
government, but approval of the agreement has still not taken place.83 In August 2006,
Venezuelan officials said that they were reconsidering signing the agreement in response to the
announcement by then-Director of National Intelligence John Negroponte of the establishment of
a new position of Mission Manager for Cuba and Venezuela. According to the Bush
Administration’s September 2006 justification for determining that Venezuela had “failed
demonstrably” to adhere to counternarcotics obligations, “the role and status of the DEA in
78 Benedict Mander, “U.S. Shrugs Off Chávez Threat Over Oil,” Financial Times, February 12, 2008.
79 “Venezuela: Chávez Dials Back Threat to Halt Oil,” Los Angeles Times, February 18, 2008.
80 U.S. Government Accountability Office, “Energy Security: Issues Related to Potential Reductions in Venezuelan Oil
Production,” GAO-06-668, June 2006.
81 U.S. Energy Information Administration, “Country Analysis Briefs: Venezuela,” January 2009.
82 White House, Office of the Press Secretary, “Presidential Determination No. 2009-30,” September 15, 2009.
83 “DEA to Continue Working with Venezuela,” Latin American Regional Report, Andean Group, July 2006;
“Venezuela, U.S. to Sign Anti-drug Agreement,” Miami Herald, June 27, 2006.
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Venezuela remains in limbo since the host country refuses to sign a memorandum of
understanding authorizing” a DEA presence “even after successfully concluding a lengthy
process of negotiation with U.S. officials.”84
U.S. officials increased their criticism of Venezuelan antidrug efforts in August and September
2008, maintaining that the country was playing a leading role in drug trafficking in the Western
Hemisphere. The White House Office of National Drug Control Policy maintained that the
number of drug flights leaving Venezuela increased tenfold from 21 metric tons in 2002 to 220
metric tons in 2007 and that the figure would be higher in 2008.85 At the time of President Bush’s
fourth consecutive determination in September 2008 that Venezuela had failed demonstrably to
adhere to its obligations under international narcotics control agreements, the State Department
noted that the flow of drugs bound for the United States and Europe continued to grow, and that
Venezuela continued to refuse to renew counternarcotics cooperation agreements with the United
States.86 Also in September 2008, the Treasury Department froze the assets of two senior
Venezuelan intelligence officials—General Hugo Carvajal and General Henry Rangel—and the
former interior minister, Ramón Rodríguez Chacín, for allegedly helping the Revolutionary
Armed Forces of Colombia (FARC) with drug and weapons trafficking.87
Venezuelan officials maintain that their government has been taking significant antidrug
measures. In 2008, the government began a program aimed at destroying clandestine airstrips
used by Colombian drug traffickers and at tracking drug smuggling planes. By September 2008,
Venezuelan officials maintained that they had destroyed more than 200 illegal landing strips.88
According to Venezuelan government statistics, Venezuela seized almost 60 metric tons of illicit
drugs in 2009 (down from a high of 77.5 metric tons in 2005), with cocaine seizures of almost 28
metric tons accounting for 46% and marijuana seizures of 32 metric tons accounting for almost
54% of seizures.89
Venezuelan officials also maintain that Venezuela has cooperated extensively with other countries
in combating drug trafficking. They point to cooperation with Colombia, including the return of
captured Colombian drug traffickers and a joint eradication program to target coca, poppy, and
cannabis cultivation in the common Sierra de Perijá mountain area bordering the two countries.
Venezuelan officials also assert that the country is setting up a radar system, purchased from
China that when in operation will help it monitor suspected drug flights.
On February 2, 2010, Venezuelan officials announced the deportation of suspected Colombian
drug trafficker Salomon Camacho Mora to the United States. The officials also announced the
84 U.S. Department of State, “Memorandum of the Secretary of State: Presidential Determination on Major Drug
Transit or Major Illicit Drug Producing Countries for Fiscal Year 2007,” Presidential Determination No. 2006-24,
White House Press Release, September 15, 2006.
85 Costa Ocando and Gerardo Reyes, “Drug Flights Operate Out of Venezuela,” Miami Herald, September 14, 2008.
86 U.S. Department of State, “Remarks on Release of the Annual Report on the Major Illicit Drug Producing Countries
for Fiscal Year 2008,” David T. Johnson, Asst. Secretary of State for International Narcotics and Law Enforcement
Affairs, September 16, 2008.
87 Phil Gunson, “U.S. Slams Venezuelan Hugo Chávez Top Intelligence Men, Miami Herald, September 13, 2008;
Federal Register, September 19, 2008, pp. 54453-54454.
88 Juan Forero, “Venezuela Steps Up Efforts to Thwart Cocaine Traffic,” Washington Post, April 7, 2008; “Venezuela
Claims Counterdrug Progress, Disputes U.S. Criticism,” Open Source Center, October 1, 2008.
89 Republica Bolivariana de Venezuela, Oficina Nacional Antidrogas,Observatorio Venezolano de Drogas,
Estadísticas, Incautaciones y Detenidos por Delito de Drogas en Venezuela, ONA-OVD-O-IE-51, December 2009.
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deportation of two other drug traffickers to France and Colombia. Venezuela has periodically
deported drug traffickers directly to the United States and also to Colombia, after which they have
been extradited to the United States.
2009 State Department INCSR Report
The Department of State, in its February 2009 International Narcotics Control Strategy Report
(INCSR), maintained that Venezuela is one of the preferred routes for trafficking illicit narcotics
out of Colombia because of the permissive and corrupt environment in Venezuela and because of
counternarcotics successes in Colombia. The majority of narcotics transiting Venezuela are
destined for the United States, according to the report, but an increasing percentage has started to
flow toward western Africa and then toward Europe. Venezuela’s corruption problem has been
compounded by the transit of drugs, as has the increased level of crime and violence throughout
the country. According to the report, the annual flow of narcotics trafficking through Venezuela
has increased fivefold since 2002, from 50 metric tons to an estimated 250 metric tons in 2007.
According to the State Department report, the government of Venezuela has almost eliminated all
counternarcotics related cooperation contact with the U.S. government, including, despite
repeated U.S. requests for the signing of an anti-drug agreement negotiated with Venezuela in
2005. In 2007, Venezuela ended the judicial sector’s participation in several United Nations
Office of Drugs and Crime (UNODC) programs funded by the U.S.-government, and maintained
that it would not participate in any programs receiving U.S. funding. Venezuela has not made the
U.S.-funded Container Inspection Facility (CIF) at Puerto Cabello operational, even though the
facility was completed in 2006. The State Department report did maintain, however, that
Venezuela generally continues to authorize the U.S. government to board Venezuelan flagged
vessels on the high seas suspected of being engaged in narcotics trafficking.
Looking ahead, the State Department maintained in the report that the United States remains
prepared to renew cooperation with Venezuela to fight the increasing flow of illegal drugs, and
pointed to two Venezuelan steps that would be positive: (1) the signing of the outstanding
bilateral anti-drug agreement negotiated in 2005 and (2) stemming the rise in drug transshipments
from Colombia by working with the United States to make the CIF operational.
July 2009 GAO Report
On July 20, 2009, the U.S. Government Accountability Office (GAO) issued a report on the status
of drug trafficking through Venezuela and the status of U.S.-Venezuelan counternarcotics
cooperation. According to the report, U.S. and Colombian officials assert that Venezuela has
extended a lifeline to Colombian illegally armed groups by providing significant support and safe
haven along the border. U.S. officials also contended that a high level of corruption within the
Venezuelan government, military, and other law enforcement and security forces contributes to
the permissive environment. While the Venezuelan government maintains that counternarcotics
cooperation with the United States was not necessary because it has its own programs,
Venezuelan officials expressed willingness for greater technical cooperation with the United
States if the Venezuelan government would allow it. The report concluded that the lack of
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Venezuelan counternarcotics cooperation is a significant impediment to the U.S. capacity to
interdict drugs en route to the United States.90
Venezuela’s Military Purchases
For several years, U.S. officials have expressed concerns about Venezuela’s purchases of military
equipment. In January 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 12
military transport 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 initially responded by indicating that it would go ahead with the sale of the
airplanes utilizing non-U.S. technology, but in mid-October 2006, Spain’s Foreign Minister
announced that such an alternative was not economically feasible and the deal was cancelled.91
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 expressed interest in purchasing at least a dozen light-
attack aircraft, manufactured by Embraer (Empresa Brasileira de Aeronáutica, SA) that contain
U.S. technology.92
In May 2006, the State Department determined (pursuant to Section 40A of the Arms Export
Control Act) that Venezuela was not fully cooperating with U.S. antiterrorism efforts, an action
that triggered a prohibition on the sale or license of defense articles and services to Venezuela.
Since then, the State Department has made the same annual determination each year, most
recently in May 2009.
Venezuela is buying significant amounts of military equipment from Russia, more than $6 billion
since 2005. This has included 24 Sukhoi Su-30 fighter jets, helicopters, armored personnel
carriers, air defenses missiles, and small arms.93 The Venezuelan government maintains that it is
buying the Russian fighter jets because the United States is refusing to sell the country spare parts
for its aging fleet of F-16 fighters that it purchased in the 1980s. In September 2008, Russia
announced that it would loan $1 billion to Venezuela for arms purchases and military
development.94 After visiting Russia in September 2009, President Chávez announced that Russia
would grant Venezuela a $2.2 billion credit line to purchase arms, although it is unclear whether
this includes the $1 billion loan promised in 2008. Chávez also announced that Venezuela would
buy 92 tanks and air defense weapons systems from Russia, although some observers have
questioned whether Russia will actually follow through with the missile sales.95
90 U.S. Government Accountability Office, “Drug Control: U.S. Counternarcotics Cooperation with Venezuela Has
Declined,” GAO-09-806, July 20, 2009.
91 Renwick McLean, “U.S. Objections Lead Spain to End Venezuela Deal,” New York Times, October 19, 2006.
92 U.S. Department of State, Daily Press Briefing, January 13, 2006; Phil Gunson and Pablo Bachelet, “Spain’s Planes
for Chávez Can’t Use U.S. Components,” Miami Herald, January 14, 2006; Leslie Crawford and Andy Webb-Vidal,
“Spain to Defy U.S. over Military Sale to Venezuela,” Financial Times, January 14, 2006.
93 U.S. Senate Select Committee on Intelligence, “Annual Threat Assessment of the US Intelligence Community,”
prepared testimony by Dennis C. Blair, Director of National Intelligence, February 2, 2009, p. 33.
94 Megan K. Stack, “Venezuela Signs Deals with Russia,” Los Angeles Times, September 27, 2008.
95 “Russia, Venezuela: Chávez Touts Russia Arms Deals,” Stratfor, September 14, 2009.
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Over the past several years, several Directors of National Intelligence (DNI) have expressed
concerns about Venezuela’s military purchases. In January 11, 2007, testimony before the Senate
Select Committee on Intelligence, then-DNI John Negroponte expressed concern that President
Chávez’s military purchases and moves toward developing his own weapons production
capability were increasingly worrisome to his neighbors, and could fuel an arms race in the
region. In February 5, 2008, testimony before the same committee, then-DNI Michael McConnell
again noted growing anxiety among Venezuela’s neighbors because of this arms build-up.
McConnell also testified at a February 27, 2008, Senate Armed Services Committee hearing that
Venezuela’s military build-up is probably three to four times what would be needed for external
defense. With regard to rifles from Venezuela potentially ending up in the hands of the FARC,
DIA Director Maples maintained at the hearing that he had not seen that, and that the likely
purpose was “using asymmetric capabilities and tactics and empowering the population in some
way, in a home guard sense.”
Under the Obama Administration, current DNI Dennis Blair testified before the Senate Select
Committee on Intelligence on February 12, 2009, that while the Chávez government’s military
purchases from Russia have been significant, Venezuela’s overall military capabilities remain
plagued by logistic, maintenance, and transportation shortfalls.96 More recently, on February 2,
2010, Blair again testified before the Senate Select Committee on Intelligence that while
Venezuela’s military acquisitions from Russia are significant, more than $6 billion since 2005,
“their armed forces lack the training and logistics capacity to use these to their full capacity.”97
U.S. officials expressed concern in May 2009 that Venezuela’s arms purchases were exceeding
the country’s needs and specifically expressed concern about Venezuela’s purchase of shoulder-
fired anti-aircraft missiles (SA-24 man-portable missiles) from Russia.98 In September 2009,
Secretary of State Clinton noted U.S. concern about Venezuela’s arms purchases, which she
maintained raised questions about a potential arms race in the region. The Secretary urged
Venezuela to be transparent in its purchases and clear about the purposes of the purchases. She
maintained that Venezuela “should be putting in place procedures and practices to ensure that the
weapons that they buy are not diverted to insurgent groups or illegal organizations, like drug
trafficking gangs and other criminal cartels.”99
President Chávez has vowed to continue with his nation’s military purchases, asserting that he is
acquiring the minimum equipment for Venezuela to defend itself from the United States.
Venezuelan Foreign Minister Nicolás Maduro maintains that the purchases are a sovereign
decision and that U.S. criticisms have “no political or moral weight.”100
96 U.S. Senate Select Committee on Intelligence, “Annual Threat Assessment of the Intelligence Community,” prepared
testimony by Dennis C. Blair, Director of National Intelligence, February 12, 2009, p. 32.
97 U.S. Senate Select Committee on Intelligence, “Annual Threat Assessment of the US Intelligence Community,”
prepared testimony by Dennis C. Blair, Director of National Intelligence, February 2, 2009, p. 33.
98 Juan O. Tamayo, “Missile Buildup Has U.S. on Edge,” Miami Herald, May 31, 2009.
99 U.S. Department of State, Secretary of State Hillary Rodham Clinton, “Remarks with Uruguayan President Tabare
Vazquez After Their Meeting,” September 15, 2009.
100 James Suggett, “Venezuela: U.S. Criticisms of Venezuelan Arms Purchases Lack ‘Moral Weight,’”
Venezuelanalysis.com, September 16, 2009.
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Venezuela’s Activities in Latin America
As U.S.-Venezuelan relations have deteriorated over the past several years, the Chávez
government has focused its relations with Latin America and its activities in the region in part as
a means of countering the United States and U.S. interests and influence in the hemisphere. In
February 2008, then-DNI Michael McConnell testified before the Senate Select Committee on
Intelligence that Chávez will continue to attempt to unite Latin America under his leadership
behind an anti-U.S. and radical leftist agenda, but noted that as time passes, Chávez’s leadership
ambitions are likely to encounter growing opposition.
Over the years, there have been concerns about President Chávez’s attempts to export his brand of
populism to other Latin America countries. He has strongly supported Bolivia’s President Evo
Morales, and offered assistance to help Bolivia re-write its constitution and implement radical
reforms to the economy. In Peru’s 2006 presidential elections, Chávez openly supported the
unsuccessful presidential candidacy of a nationalist former army colonel who had led a failed
military uprising in 2000. Current Peruvian President Alan Garcia, a strong U.S. ally, has
expressed concern about Venezuelan activities in Peru. Venezuela also has had close relations
with Nicaragua under the presidency of Daniel Ortega, providing substantial assistance, and with
Ecuador under the presidency of Rafael Correa.
In 2004, President Chávez 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, and cooperation in a range of areas
including health, education, culture, investment, and finance. Currently, eight countries in the
region have joined ALBA. Venezuela and Cuba were the first countries to launch ALBA in 2004,
while Bolivia joined in 2006, and Nicaragua in 2007. In 2008, the Caribbean nation of Dominica
joined in January, while Honduras joined in August, but subsequently withdrew in January 2010
under the de facto government of Roberto Micheletti. In June 2009, three additional countries
joined—Ecuador, St. Vincent and the Grenadines, and Antigua and Barbuda.
In December 2007, Venezuela and six other South American countries—Argentina, Bolivia,
Brazil, Ecuador, Paraguay, and Uruguay—signed the founding act of a new Bank of the South, a
Chávez initiative to offer a new source of development financing apart from the World Bank and
the International Monetary Fund. In September 2009, the seven countries signed an agreement to
provide an initial $7 billion in capital for the bank, with Argentina, Brazil, and Venezuela each
agreeing to provide $2 billion, Ecuador and Uruguay to deposit $400 million each, and Bolivia
and Paraguay to deposit $100 million each. No date has been set for the bank’s operational start
up.101
Since 2005, President Chávez has used so-called “oil diplomacy” to provide oil to Caribbean
Basin nations on preferential terms in a program known as PetroCaribe, prompting U.S. concern
that Venezuela is using these programs to increase its influence in the region. Under the program,
Venezuela initially offered to supply 190,000 barrels per day of oil to the region on preferential
terms with 50% of the oil financed over 25 years at an annual interest rate of 1%. At a July 2008
PetroCaribe summit, President Chávez announced that up to 60% of the oil could be financed
while oil prices remained over $100 a barrel, and this would rise to 70% financed if oil prices rise
to over $150 a barrel. Most Caribbean nations are members, with the exception of Barbados and
101 “Venezuela’s Chávez, Six Others OK ‘Bank of the South,’” Dow Jones News Service, September 27, 2009.
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Trinidad and Tobago. Cuba, a major beneficiary, receives over 90,000 barrels per day (bpd) of oil
under the program. In Central America, Nicaragua and Honduras joined PetroCaribe in 2007 and
Guatemala joined in July 2008. PetroCaribe also has 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.
In addition to these preferential oil arrangements, Venezuela is investing in energy sectors in
several Latin American countries. Chávez has pledged to invest $1.5 billion in Bolivia’s gas
industry. Ecuador and Venezuela have signed agreements for joint development in oil, gas,
refining, and petrochemical sectors. In 2005, PdVSA signed an agreement to build an oil refinery
in northeastern Brazil. Construction on the 200,000 bpd refinery began in September 2007, and is
to be supplied with oil from both Brazil and Venezuela when it begins operations in 2010.
Colombia and Venezuela signed an agreement in July 2006 for a gas pipeline project initially to
supply gas to Venezuela from northern Colombia, and then reverse the flow once Venezuela
developed its own natural gas reserves. The pipeline went online in early 2008, although in
September 2009, Colombia reduced its gas exports to Venezuela because of an increase in its own
natural gas needs as a result of drought conditions. In Cuba, PdVSA helped refurbish an oil
refinery in Cienfuegos, and has signed an exploration and production agreement with Cupet,
Cuba’s state-oil company.102
The potential use of Venezuela’s windfall oil profits abroad to influence activities in other Latin
American countries was highlighted in December 2007 when three Venezuelans—Franklin
Duran, Moises Maionica, and Carlos Kauffmann—and one Uruguayan national were arrested and
charged in U.S. federal court in Miami with acting and conspiring to act as agents of the
Venezuelan government without prior notification to the U.S. Attorney General. (A fifth foreign
national wanted in the case, Antonio José Canchica Gomez, reportedly a Venezuelan intelligence
official, remains at large.) All four defendants were alleged to have conspired in a scheme to
conceal the source and destination and the role of the Venezuelan government in the attempted
delivery of $800,000 to Argentina by a U.S. businessman, Guido Alejandro Antonini Wilson. The
funds were alleged to be destined for the presidential campaign of Argentine President Cristina
Fernández de Kirchner. High-level Venezuelan officials also were alleged to be involved in the
matter, including from the Office of the Vice President and the Intelligence and Preventative
Services Directorate (DISIP).103 Ultimately three of the four defendants facing trial—Maionica,
Kauffmann, and Wanseele—pled guilty, while Duran was tried and convicted in early November
2008 and later sentenced to four years in prison.
102 “Venezuela: Oil Revenues Boost International Influence,” Oxford Analytica, July 19, 2006.
103 United States District Court, Southern District of Florida, Case No. 1:07-cr-20999-JAL, Document 24, December
20, 2007.
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Terrorism Issues
U.S. officials have expressed concerns over the past several years about Venezuela’s lack of
cooperation on antiterrorism efforts, President Chávez’s sympathetic statements for Colombian
terrorist groups, and Venezuela’s relations with Cuba and Iran. Since May 2006, the Secretary of
State has made an annual determination that Venezuela has not been “cooperating fully with
United States antiterrorism efforts” pursuant to Section 40A of the Arms Export Control Act (P.L.
90-629). As a result, the United States has imposed an arms embargo on Venezuela since 2006,
which ended all U.S. commercial arms sales and re-transfers to Venezuela. When the State
Department issued its first determination in 2006, it maintained that it was based on Venezuela’s
near lack of antiterrorism cooperation over the previous year, citing its support for Iraqi
insurgents and Iran’s development of nuclear capabilities, the country’s status as a safe haven for
Colombian and Basque terrorist groups, and its effort to derail hemispheric efforts to advance
counter-terrorism policies in the OAS. For several years, U.S. officials also have expressed
concern that Venezuelan citizenship, identity, and travel documents are easy to obtain, making the
country a potentially attractive way-station for terrorists.
Colombian Terrorist Groups104
There has been considerable concern in recent years regarding the question of whether
Colombian guerrilla groups might be receiving support from Venezuela. The State Department’s
April 2009 Country Reports on Terrorism maintained that while Venezuelan President Hugo
Chávez’s ideological sympathy for two Colombian guerrilla groups—the Revolutionary Armed
Forces of Colombia (FARC) and the National Liberation Army (ELN)—had limited Venezuelan
cooperation with Colombia in combating terrorism, President Chávez publicly changed course in
June 2008 and called on the FARC to release all hostages unconditionally, declaring that armed
struggle is “out of place” in modern Latin America. In July 2008, the Venezuelan military
detained a senior FARC official and handed him over to Colombian authorities. Nevertheless, as
stated earlier in September 2008, the Treasury Department froze the assets of two senior
Venezuelan intelligence officials—General Hugo Carvajal and General Henry Rangel—and the
former interior minister, Ramón Rodríguez Chacín, for allegedly helping the FARC with weapons
and drug trafficking.105
Information on captured computer files from Colombia’s March 2008 raid of a FARC camp in
Ecuador had raised questions about potential support of the FARC by the Chávez government.
Venezuelan officials have dismissed the data as having been fabricated even though Interpol
verified in May 2008 that the files had not been tampered with since they were seized. On June 6,
2008, two Venezuelan nationals (one a national guard sergeant) and two Colombians were
arrested in eastern Colombia for gun-running. The four were captured with some 40,000 rounds
of ammunition allegedly destined for the FARC. In light of the captured FARC documents, some
observers, including some Members of Congress, had called on the Bush Administration in 2008
to designate Venezuela as a state sponsor of terrorism pursuant to Section 6(j) of the Export
Administration Act (EAA) of 1979 (P.L. 96-72). Other countries currently on the state sponsors of
terrorism list include Cuba, Iran, Sudan, and Syria. The Bush Administration began an initial
104 For additional information, see CRS Report RL32250, Colombia: Issues for Congress, by June S. Beittel.
105 Phil Gunson, op. cit., September 13, 2008; Federal Register, September 19, 2008, pp. 54453-54454.
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inquiry into designating Venezuela as a state sponsor in March 2008, but did not make such a
designation.
In the April 2009 terrorism report, the State Department stated that the FARC, ELN, and remnants
of the rightist paramilitary United Self-Defense Forces of Colombia (AUC) often crossed into
Venezuelan territory to rest and regroup as well as to extort protection money and kidnap
Venezuelans in order to finance their operations. According to the report, the Venezuelan
government did not systematically police its country’s border with Colombia to prevent the
movement of armed groups or to interdict the flow of narcotics. Some limited amounts of
weapons and ammunition from official Venezuelan stocks and facilities were reported to have
ended up in the hands of Colombian terrorist groups.
Venezuela’s relations with Colombia deteriorated in 2009 amid new allegations that some
Venezuelan officials continued to assist the FARC in helping them arrange weapons deals and
obtain identity cards.106 Relations have also deteriorated because of Venezuelan opposition to
Colombia’s agreement with the United States for the use of seven military facilities in the
country. In late July 2009, the government of Sweden requested an explanation from Venezuela of
how the Colombian FARC had obtained Swedish-made anti-tank rocket launchers that had been
sold to Venezuela in the 1980s. In October 2008, three of the launchers were reportedly recovered
from a FARC arms cache. 107 President Chávez asserted that the missiles were stolen in a robbery
in 1995, and that Colombia made the claims to divert attention from the plan to open seven of its
military bases to the United States.108 In late October and early November 2009, Venezuelan-
Colombian tensions intensified after several incidents: the kidnapping and murder of ten members
of an amateur Colombian soccer team in the Venezuelan border state of Táchira; Venezuela’s
arrest of two Colombian nationals for allegedly spying in Venezuela; and the killing of two
members of Venezuela’s National Guard at a roadside checkpoint in Táchira state near the border.
On November 8, 2009, a comment by President Chávez during his weekly television ordering the
Venezuelan armed forces to prepare for war led Colombia to say that it would resort to the OAS
and the UN Security Council. Chávez subsequently clarified that his remarks were intended to
increase Venezuela’s preparedness against the threat from the use of seven Colombian bases by
the U.S. military.109
Deepening Relations with Iran
There has been increasing concern in recent years about Iran’s growing interest in Latin America,
particularly its relations with Venezuela under President Chávez. Venezuela’s relations with Iran
have been longstanding because they were both founding members of OPEC in 1960. Under the
government of President Mohammed Khatami (1997-2005), Iran made efforts to increase its trade
with Latin America, particularly Brazil, and there were also efforts to increase cooperation with
Venezuela.
Not until President Mahmoud Ahmadinejad’s rule began in 2005, however, did Iran aggressively
work to increase its diplomatic and economic linkages with Latin American countries. A major
106 Simon Romero, “Evidence Shows Venezuelan Aid to Rebel Group,” New York Times, August 3, 2009.
107 “Rebels Obtained Arms Sold to Venezuela, Colombia Says,” New York Times, July 28, 2009.
108 “Venezuelan Arms in FARC Hands Were Stolen: Chávez,” Agence France Presse, August 5, 2009.
109 “Venezuela-Colombia: A ‘Call to War’ with Consequences for Chávez,” Latin America Weekly Report, November
12, 2009.
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rationale for this increased focus on Latin America appears to be Iran’s efforts to overcome its
international isolation. For some observers, a key reason for Ahmadinejad’s increased interest in
the region, especially with countries such as Venezuela, has been to develop leverage against the
United States in its own neighborhood, rather than any real economic interest in Latin America.110
Iranian President Ahmadinejad has visited Caracas on several occasions since 2006, and President
Chávez has visited Iran several times, most recently in September 2009. The personal relationship
between the two leaders has driven the strengthening of bilateral ties. Venezuela also has played a
key role in the development of Iran’s expanding relations in Latin America. Director of National
Intelligence (DNI) Dennis Blair maintained in February 2009 congressional testimony that
Venezuela “is serving as a bridge to help Iran build relations with other Latin American
countries.”111
In February 2008 testimony before the Senate Select Intelligence Committee, then-DNI Michael
McConnell maintained that most cooperation between Iran and Venezuela has been on the
economic and energy fronts, but that military cooperation is growing, and the two nations have
discussed cooperation on nuclear energy.112 The two nations have signed a variety of agreements
in agriculture, petrochemicals, oil exploration in the Orinoco region of Venezuela, and the
manufacturing of automobiles, bicycles, and tractors. During an April 2009 trip to Tehran, Chávez
and Ahmadinejad inaugurated a new development bank for economic projects in both countries,
with each country reportedly providing $100 million in initial capital.113 Weekly flights between
the two countries began in 2007; the State Department has expressed concern about these flights
in its annual terrorism report, maintaining that the flights, which connect Iran and Syria with
Caracas, are only subject to cursory immigration and customs controls.
In September 2009, Venezuela and Iran signed three energy sector memorandums of
understanding during President Hugo Chávez’s visit to Tehran. As reported in the press, the first
of these agreements would provide for Venezuela’s state-owned oil company, Petroleos de
Venezuela S.A. (PdVSA), to acquire a 10% stake in Iran’s South Pars gas project valued at some
$760 million. The second agreement would provide for Iran’s state oil company, Petropars, to
invest $760 million in developing two oil fields in Venezuela. Under the third agreement, in the
case of UN or U.S. sanctions against Iran’s gasoline imports, Venezuela would supply Iran with
gasoline (reportedly some 20,000 barrels per day) with the money earned from the gasoline sales
to be deposited to a fund that would be set up by Iran to finance Venezuelan purchases of Iranian
machinery and technology.114
While such gasoline sales to Iran would not currently subject PdVSA to U.S. sanctions under the
Iran Sanctions Act (ISA), House-passed H.R. 2194 the Iran Refined Petroleum Sanctions Act,
approved in December 2009, would amend the ISA to make such sales sanctionable.115 A number
110 Farideh Farhi, “Iran in Latin America: Threat or Axis of Annoyance?” paper presented at conference of the
Woodrow Wilson International Center for Scholars, Washington, DC, July 10, 2008.
111 Dennis C. Blair, Director of National Intelligence, “Annual Threat Assessment of the Intelligence Community for
the Senate Select Committee on Intelligence,” February 12, 2009.
112 J. Michael McConnell, Director of National Intelligence, “Annual Threat Assessment of the Director of National
Intelligence for the Senate Select Committee on Intelligence,” February 5, 2008, p. 36.
113 Parisa Hafezi, “Iran and Venezuela Open Joint Bank to Boost Ties,” Reuters News, April 3, 2009.
114 “Venezuela Pledges to Help Iran with Investment, Gasoline Supplies,” The Oil Daily, September 10, 2009.
115 For further information on the ISA and other U.S. sanctions on Iran, see CRS Report RS20871, Iran Sanctions, by
Kenneth Katzman.
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of observers, however, have raised questions about whether Venezuela would have the ability to
provide gasoline to Iran since it needs to import gasoline to help meet its own domestic demand.
Venezuela reportedly has been facing significant refining problems because of mismanagement
and a drop in foreign investment.116 Moreover, while Venezuela potentially could use a third-party
gasoline supplier close to the Persian Gulf to purchase and resell the gasoline to Iran, finding a
third party could prove difficult if U.S. sanctions are imposed against suppliers of gasoline.117
Venezuelan comments about support for Iran’s nuclear program and about potential Iranian
support for the development of nuclear energy in Venezuela have raised concerns among U.S.
officials and other observers. President Chávez repeatedly has expressed support for Iran’s
development of nuclear energy for peaceful purposes, including most recently during a
September 2009 visit to Iran.118 President Chávez also announced during the visit that Venezuela
is working on a preliminary plan for the construction of a “nuclear village” in Venezuela with
Iranian assistance so that “the Venezuelan people can count in the future on this marvelous
resource for peaceful purposes.”119 The transfer of Iranian nuclear technology from Iran would be
a violation of U.N. Security Council Resolutions—1737 (2006), 1747 ( 2007), and 1803 (2008)—
that imposed restrictions on Iran’s nuclear technology transfers.
In late September 2009, comments by Venezuelan officials offered conflicting information about
Iran’s support for Venezuela’s search for uranium deposits. Venezuelan Minister of Basic Industry
and Mining Rodolfo Sanz said that Iran was assisting Venezuela in detecting uranium reserves in
the west and southwest of Venezuela.120 Subsequently, however, Venezuela’s Minister of Science,
Technology, and Intermediary Industry Jesse Chacon denied that Iran was helping Venezuela seek
uranium, while Venezuela’s Minister of Energy Rafael Ramirez maintained that Venezuela has yet
to develop a plan to explore or exploit its uranium deposits.121
To date, the United States has imposed sanctions on two companies in Venezuela because of
connections to Iran’s proliferation activities. In August 2008, the State Department imposed
sanctions on the Venezuelan Military Industries Company (CAVIM) pursuant to the Iran, North
Korea, and Syria Nonproliferation Act (P.L. 109-353) for allegedly violating a ban on technology
that could assist Iran in the development of weapons systems.122 The sanctions prohibit any U.S.
government procurement or assistance to the company. In October 2008, the U.S. Treasury
Department imposed sanctions on an Iranian-owned bank based in Caracas, the Banco
Internacional de Desarollo, C.A., under Executive Order 13382 that allows the President to block
the assets of proliferators of weapons of mass destruction and their supporters. The bank is linked
to the Export Development Bank of Iran (EDBI), which the Treasury Department asserts has
116 “Iran Sanctions (Special Series), Part 3, Preparing for the Worst,” Stratfor, September 25, 2009; “Venezuelan Oil
Expert Questions Viability of Chávez Energy Accords,” BBC Monitoring Americas, September 14, 2009.
117 “Iran, Venezuela: Testing the Mettle of an Alliance,” Stratfor, September 9, 2009.
118 “Visiting Chávez Backs Iran Nuclear Programme,” Tehran Press TV Online, September 5, 2009.
119 “Iran Will Not Back Down on Nuclear Energy: Hugo Chávez” Agence France Presse, September 4, 2009.
120 See the following press reports: “Iran Helps Venezuela Find Uranium Deposits,” BBC Monitoring Caucasus,
September 26, 2009; and “Iran Helps Venezuela Find Uranium Deposits,” Tehran Press TV Online, September 26,
2009.
121 “Venezuela Denies Iran is Helping It,” New York Times, September 27, 2009; and Fabian Cambero, “Interview:
Venezuela Says No Plans Yet on Exploring Uranium,” Reuters, September 27, 2009.
122 Although the sanction became effective in August 2008, it was not published in the Federal Register until October
2008. See Federal Register, pp. 63226-63227, October 23, 2008.
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provided or attempted to provide services to Iran’s Ministry of Defense and Armed Forces
Logistics.123
Another reason for U.S. concerns about Iran’s deepening relations with Venezuela is Iran’s ties to
the radical Lebanon-based Islamic group Hezbollah (Party of God), which is reported to have
been linked to the 1994 bombing of a Jewish cultural center in Buenos Aires. On June 18, 2008,
the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced that it was
freezing the U.S. assets of two Venezuelans—Ghazi Nasr al Din (a Venezuelan diplomat serving
in Lebanon) and Fawzi Kan’an—for providing financial and other support to Hezbollah. U.S.
citizens are also prohibited in engaging in any transactions with the two Venezuelans, including
any business with two travel agencies in Caracas owned by Kan’an.124
In the 111th Congress in June 2009, the House approved a provision in the Foreign Relations
Authorization Act for FY2010 and FY2011, H.R. 2410 (section 1011), that would require a report
within 90 days after enactment of the act on Iran’s and Hezbollah’s actions in the Western
Hemisphere. The provision cites the State Department’s 2008 terrorism report that noted the
passengers on the weekly flights connecting Tehran and Damascus with Caracas were reportedly
subject to only cursory immigration and customs controls in Caracas. The provision also states
that Iran has sought to strengthen ties with several Western Hemisphere countries in order to
undermine U.S. foreign policy. In addition, as noted above, the House approved H.R. 2194
(Berman), the Iran Refined Petroleum Sanctions Act of 2009 on December 15, 2009, which
would amend the Iran Sanctions Act of 1996 to make gasoline sales to Iran subject to U.S.
sanctions.
Venezuela’s Extradition Request for Luis Posada Carriles
Venezuela has requested the extradition of anti-Castro Cuban activist Luis Posada Carriles for his
alleged role in the 1976 bombing of a Cuban airliner that killed 73 people.125 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.126 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.127 He had been acquitted 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.128 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.
123 U.S. Department of the Treasury, Press Release, “Export Development Bank of Iran Designated as a Proliferator,”
October 22, 2008.
124 “Treasury Targets Hizballah in Venezuela,” States News Service, June 18, 2008.
125Also see CRS Report RL32730, Cuba: Issues for the 109th Congress, by Mark P. Sullivan.
126 Alfonso Chardy and Nancy San Martin, “Lawyer Expects Posada to Show Soon,” Miami Herald, April 14, 2005.
127 Ann Louise Bardach, “Our Man’s in Miami. Patriot or Terrorist?” Washington Post, April 17, 2005.
128 Oscar Corral and Alfonso Chardy, “Victim’s Kin Oppose Posada Bid for Asylum,” Miami Herald, May 7, 2005.
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U.S. Immigration and Customs Enforcement (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.129 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 could not be deported to Venezuela because
he could be tortured.130 ICE reviewed the case and determined on March 22, 2006, that Posada
would not be freed from a federal immigration facility in El Paso, Texas.131
In November 2006, however, a U.S. federal judge, who was considering Posada’s plea that he be
released, ordered the government to supply evidence, by February 1, 2007, justifying his
continued detention. On January 11, 2007, a federal grand jury in Texas indicted Posada on seven
counts for lying about how he entered the United States illegally in March 2005, whereupon he
was transferred from immigration detention in El Paso to a county jail in New Mexico near the
Texas border.
Posada was released from jail in New Mexico on April 19, 2007, and allowed to return to Miami
under house arrest to await an upcoming trial on immigration fraud charges, but on May 9, 2007,
a federal judge in Texas dismissed the charges. The judge maintained that the U.S. government
mistranslated testimony from Posada and manipulated evidence.132 On June 5, 2007, Justice
Department prosecutors filed a notice of appeal with the 5th U.S. Circuit Court of Appeals in New
Orleans and on November 6, 2007, federal prosecutors filed a brief requesting that the court
reverse the lower court’s decision.133 Both Venezuela and Cuba strongly denounced Posada’s
release, contending that he is a terrorist, and in mid-March 2008, the two countries raised the
issue at a UN Security Council meeting on the UN’s anti-terrorism strategy. Venezuela maintains
that the State Department has ignored its request to extradite Posada.
In a new turn of events, Posada was again indicted by a federal grand jury in Texas on April 8,
2009. In the 10-count indictment, Posada was accused, among other things, of lying during
immigration proceedings regarding his involvement in bombings in Havana in 1997. Originally, a
federal trial was set to begin in August 2009 but was rescheduled until February 2010 in order to
give him time to prepare his defense. Press reports maintain that Posada is also being investigated
by a grand jury in New Jersey for his role in the 1997 bombings in Cuba.134
129 Department of Homeland Security, Office of Public Affairs, Statement, May 17, 2005.
130 Alicia Caldwell, “Judge Says Cuban Militant Can’t Be Deported to Venezuela,” Associated Press, September 28,
2005.
131 Oscar Corral, “Cuban Exile Militant Luis Posada Denied Release,” Miami Herald, March 22, 2006.
132 Carol J. Williams, “Pressure Grows to Prosecute Cuban Exile,” Los Angeles Times, May 10, 2007.
133 The federal prosecutors’ brief is available at http://media.miamiherald.com/smedia/2007/11/06/20/Posada_5CA_07-
50737_electronic_copy.source.prod_affiliate.56.pdf.
134 Alfonso Chardy and Jay Weaver, “Posada a Target of New Federal Probes,” Miami Herald, November 12, 2006,
and “Grand Jury Indicts Cuban Exile Militant Luis Posada Carriles,” Miami Herald, January 12, 2007; Jay Weaver,
“U.S. Probes Haunt 80-year Old Anti-Castro Cuban,” Houston Chronicle, March 2, 2008; Jay Weaver, “Posada Gets
More Time for Perjury Defense,” Miami Herald, June 16, 2009.
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Legislative Initiatives in the 111th Congress
Several initiatives have been considered or introduced in the 111th Congress regarding Venezuela
and proliferation, terrorism, and human rights concerns.
Considered Measures
On December 15, 2009, the House approved H.R. 2194 (Berman), the Iran Refined Petroleum
Sanctions Act of 2009, which would amend the Iran Sanctions Act of 1996 to make gasoline sales
to Iran subject to U.S. sanctions.
On July 22, 2009, the Senate approved S.Amdt. 1536 (Martinez) to the Senate version of the
National Defense Authorization Act for FY2010, S. 1390, that would have required the Director
of National Intelligence to provide a report within180 days on issues relating to Venezuelan
military and intelligence activities. The Senate subsequently approved S. 1390 on July 23, 2009,
and then approved the language of S. 1390 as an amendment to H.R. 2647, the House legislative
vehicle for the defense authorization measure. The House bill did not include a similar Venezuela
report requirement, and the October 7, 2009, conference report to the measure did not include the
Senate provision (H.Rept. 111-288).
On June 10, 2009, the House approved its version of the Foreign Relations Authorization Act for
FY2010 and FY2011, H.R. 2410, with a provision in Section 1011 that requires a report within 90
days after enactment of the act on Iran’s and Hezbollah’s actions in the Western Hemisphere. The
provision cites the State Department’s 2008 terrorism report noting passengers on the weekly
flights connecting Tehran and Damascus with Caracas were reportedly subject to only cursory
immigration and customs controls in Caracas. The provision also notes that Iran has sought to
strengthen ties with several Western Hemisphere countries in order to undermine U.S. foreign
policy.
Other Introduced Measures
H.R. 375 (Ros-Lehtinen), introduced January 9, 2009, as the Western Hemisphere
Counterterrorism and Nonproliferation Act of 2009, would, among its provisions, place
restrictions on nuclear cooperation with countries assisting the nuclear programs of Venezuela or
Cuba (section 209). The bill would also authorize the President to impose foreign aid and export
controls on countries that the President determines is engaged in military cooperation or
nonmarket-based trade with a state sponsor of terrorism, is carrying out policies that threaten U.S.
national security interests, or is not fully cooperating with U.S. counterterrorism or
nonproliferation efforts (section 106). It would also amend annual international drug control
certification procedures to include progress in adhering to obligations under international
counterterrorism agreements and the implementation of effective counterterrorism measures
(section 104).
H.R. 2475 (Ros-Lehtinen), the Foreign Relations Authorization and Reform Act for FY2010 and
FY2011 introduced on May 19, 2009, includes a provision (section 728) identical to that in H.R.
375 described above that would place restrictions on nuclear cooperation with countries assisting
the nuclear programs of Venezuela or Cuba.
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Before Venezuela’s February 2009 constitutional referendum was held, H.Res. 161 (Mack) was
introduced on February 11. The resolution would have expressed the sense of the House
regarding the need for free, democratic, transparent, and fair elections in Venezuela without
threats or intimidation.
Two introduced resolutions would express concern about anti-Semitism in Venezuela. H.Res. 174
(Hastings), introduced February 13, 2009, would acknowledge “the growing threat of anti-
Semitism throughout South America, namely in Venezuela, Bolivia, and Argentina.” H.Con.Res.
124 (Mack), introduced May 12, 2009, would express the support of Congress for the Jewish
community in Venezuela. Among its provisions, the resolution would condemn anti-Semitic acts
in Venezuela and urge the government of Venezuela to take verifiable steps to ensure the safety of
the Jewish community in the country. The resolution also would express grave concern regarding
the increased collaboration between Iran, Hezbollah, and the Venezuelan government, and the
ramifications of such collaboration on the Jewish community in Venezuela.
H.Res. 872 (Mack), introduced October 27, 2009, condemns the Venezuelan government “for its
state-sponsored support of international terrorist groups;” calls on the Secretary of State to
designate Venezuela as a state sponsor of terrorism; and urges increased and sustained
cooperation on counterterrorism initiatives between the government of the United States and
allies in Latin America.
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Appendix A. Links to U.S. Government Reports
Background Note, Venezuela
Date: July 2009
Full Text: http://www.state.gov/r/pa/ei/bgn/35766.htm
Congressional Budget Justification for Foreign Operations FY2010, Book II (p. 659)
Date: May 28, 2009
Full Text: http://www.state.gov/f/releases/iab/fy2010cbj/pdf/index.htm
Country Reports on Human Rights Practices 2008, Venezuela
Date: February 25, 2009
Full Text: http://www.state.gov/g/drl/rls/hrrpt/2008/wha/119177.htm
Country Reports on Terrorism 2008 (Western Hemisphere Overview)
Date: April 30, 2009
Full Text: http://www.state.gov/s/ct/rls/crt/2008/122435.htm
International Religious Freedom Report 2009, Venezuela
Date: October 26, 2009
Full Text: http://www.state.gov/g/drl/rls/irf/2009/127408.htm
International Narcotics Control Strategy Report 2009, Vol. I (Venezuela, pp. 618-622)
Date: February 27, 2009
Full Text: http://www.state.gov/p/inl/rls/nrcrpt/2009/vol1/index.htm
International Narcotics Control Strategy Report 2009, Vol. II (Venezuela, pp. 535-538)
Date: February 27, 2009
Full Text: http://www.state.gov/p/inl/rls/nrcrpt/2009/vol2/index.htm
National Trade Estimate Report on Foreign Trade Barriers 2009, Venezuela
Date: March 2009
Full Text: http://ustraderep.gov/assets/Document_Library/Reports_Publications/2009/; go to
“2009_National_Trade_Estimate_Report_on_Foreign_Trade_Barriers/”; then go to
“asset_upload_file940_15513.pdf”
Trafficking in Persons Report 2009 (Venezuela, pp. 298-299)
Date: June 16, 2009
Full Text: http://www.state.gov/g/tip/rls/tiprpt/2009/index.htm
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Appendix B. Key Developments in 2009
On October 27, 2009, the House Subcommittee on the Western Hemisphere held a hearing on
“Iran in the Western Hemisphere” that focused extensively on Venezuela’s deepening relations
with Iran.
On September 15, 2009, President Obama made a determination pursuant to the annual narcotics
certification process that Venezuela had “failed demonstrably” during the last 12 months to
adhere to international counternarcotics agreements. This marked the fifth consecutive annual
designation of Venezuela in this category. At the same time, President Obama waived economic
sanctions that would have cut U.S. funding for democracy programs in Venezuela.
On July 27, 2009, the government of Sweden asked for an explanation from Venezuela of how the
Revolutionary Armed Forces of Colombia (FARC) obtained Swedish-made anti-tank rocket
launchers that had been sold to Venezuela in the 1980s. President Chávez asserted that the
missiles were stolen in a robbery in 1995, and that Colombia made the claims to divert attention
from the plan to open seven of its military bases to the United States.
On July 22, 2009, the Senate approved an amendment to the Senate version of the National
Defense Authorization Act for FY2010, S. 1390/H.R. 2647 that would have required the Director
of National Intelligence to provide a report within 180 days on issues relating to Venezuelan
military and intelligence activities. The House version of the bill did not include a similar
provision, and it was stripped from the conference report on the measure (H.Rept. 111-288 filed
October 7, 2009).
On July 20, 2009, the U.S. Government Accountability Office issued a report on the status of
drug trafficking through Venezuela and the status of U.S.-Venezuelan counternarcotics
cooperation. The report concluded that the lack of Venezuelan counternarcotics cooperation is a
significant impediment to the U.S. capacity to interdict drugs en route to the United States.
According to the report, U.S. and Colombian officials assert that Venezuela has extended a
lifeline to illegally armed Colombian groups by providing significant support and safe haven
along the border.
On June 25, 2009, the State Department announced that the United States and Venezuela agreed
to return respective ambassadors. This led to U.S. Ambassador to Venezuela Patrick Duddy
resuming his post in Caracas, and to the return of Venezuelan Ambassador Bernardo Alvarez to
Washington.
On February 15, 2009, Venezuelans voted in a national referendum to approve a constitutional
amendment abolishing term limits for elected local, state, and national officials, including
President. The amendment was approved with almost 55% voting for it and 45% voting against it.
President Chávez proclaimed that the vote was a victory for the Bolivarian Revolution, and
virtually promised that he would run for re-election in 2012.
On January 30, 2009, an unidentified group of assailants vandalized a synagogue in Caracas.
President Chávez and other Venezuelan officials strongly condemned the attack. Subsequently, on
February 2, 2009, 16 Members of Congress spoke out against the attack in a letter to President
Chávez. The Members called on Chávez “to end the bullying and harassment of the Jewish
community” and “to extend the community the robust protection it deserves in light of the threats
it faces.”
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Author Contact Information
Mark P. Sullivan
Specialist in Latin American Affairs
msullivan@crs.loc.gov, 7-7689
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