Venezuela: Political Conditions and U.S. Policy
Prepared for Members and Committees of Congress
Under the populist rule of President Hugo Chávez, first elected in 1998 and most recently
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 has benefitted from the rise in world oil prices, which has sparked an economic boom
and allowed Chávez to increase expenditures on social programs. associated with his populist
agenda. 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 by a close margin in a December 2007 national referendum. State and local
elections scheduled for November 23, 2008 will be a significant political test for the government
and the opposition.
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. Since 2005, President Bush has annually designated Venezuela as a country that has
failed demonstrably to adhere to its obligations under international narcotics agreements, and
since 2006, the Department of State has prohibited the sale of defense articles and services to
Venezuela because of lack of cooperation on anti-terrorism efforts. On September 11, 2008,
bilateral relations worsened when President Chávez expelled the U.S. Ambassador to Venezuela.
Concerns regarding Venezuela in the 110th Congress have focused on human rights, energy, and
terrorism issues. On May 24, 2007, the Senate approved S.Res. 211, expressing profound
concerns regarding freedom of expression. On November 5, 2007, the House approved H.Res.
435, expressing concern about Iran’s efforts to expand its influence in Latin America, and noting
Venezuela’s increasing cooperation with Iran. On July 23, 2008, the House approved H.R. 6545,
which would require a national intelligence assessment on national and energy security issues.
Additional House initiatives that have been introduced include two human rights resolutions,
H.Con.Res. 50 and H.Con.Res. 77; H.Res. 560, expressing concern about Venezuela’s actions in
the oil sector; H.Res. 965, calling upon Venezuela to deny the use of its territory and weapons
from being used by terrorist organizations; H.Res. 1049, calling for Venezuela to be designated a
state sponsor of terrorism; and H.Res. 1483, expressing outrage over the expulsion of U.S.
Ambassadors to Venezuelan and Bolivia, and calling for these countries to resume full
counternarcotics cooperation with the United States. Two Senate bills, S. 193 and S. 1007, would
increase hemispheric cooperation on energy issues.
Developments in 2008...............................................................................................................1
Developments in 2007...............................................................................................................4
Backgr ound ............................................................................................................................... 6
Chávez’s Brief Ouster in April 2002...................................................................................8
Continued Opposition and Strike in 2002 and 2003...........................................................8
August 2004 Presidential Recall Referendum....................................................................9
December 2005 Legislative Elections................................................................................11
December 2006 Presidential Election...............................................................................13
Political Developments in 2007..............................................................................................14
RCTV Closure and Public Reaction.................................................................................15
December 2, 2007 Constitutional Reform Referendum....................................................17
Political Developments in 2008..............................................................................................23
November 2008 State and Local Elections.......................................................................24
Human Rights Concerns.........................................................................................................25
Trafficking in Persons.......................................................................................................26
Venezuela’s Social Missions...................................................................................................28
Overview of U.S.-Venezuelan Relations.................................................................................30
Tensions Increase in 2005.................................................................................................31
Relations in 2006..............................................................................................................32
Relations in 2007..............................................................................................................34
Relations in 2008..............................................................................................................35
U.S. Funding for Democracy Projects....................................................................................36
Venezuela’s Military Purchases...............................................................................................43
Venezuela’s Activities in Latin America.................................................................................44
Chávez Role in Release of FARC Hostages.....................................................................46
March 2008 Ecuador-Colombia Border Crisis.................................................................47
Allegations of Venezuelan Support for the FARC............................................................48
State Sponsors of Terrorism List.......................................................................................49
Iran and Hezbollah............................................................................................................50
Venezuela’s Extradition Requests...........................................................................................51
Legislative Initiatives..............................................................................................................53 th
Figure 1. Map of Venezuela...........................................................................................................57
Table 1. CNE’s December 2, 2007 Constitutional Reform Results...............................................19
Author Contact Information..........................................................................................................58
On October 3, 2008, Venezuelan military intelligence officials detained retired General Raúl
Baduel, and prohibited him from leaving the country on charges of corruption during his tenure as
defense minister. A former Chávez supporter, Baduel has become a staunch critic of the President.
Chávez opponents maintain that the action against Baduel was intended to intimidate the
opposition before the state and municipal elections scheduled for November 23.
On September 26, 2008, 41 members of the U.S. House of Representatives wrote to President
Chávez expressing their outrage over the expulsion of two 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.
On September 18, 2008, Human Rights Watch issued an extensive report examining setbacks in
human rights protections and practices under the Chávez government. Late in the evening, the
Venezuelan government expelled two Human Rights Watch employees visiting the country, an
action that was condemned by numerous human rights groups throughout Latin America. The full
report, “A Decade Under Chávez, Political Intolerance and Lost Opportunities for Advancing
Human Rights in Venezuela, ” is available at http://hrw.org/reports/2008/venezuela0908/.
On September 16, 2008, for the fourth year in a row, President Bush determined that Venezuela
had failed demonstrably to adhere to its obligations under international narcotics control
agreements, but waived sanctions to allow the continuation of U.S. foreign assistance to support
civil society programs and community development programs.
On September 12, 2008, the U.S. Treasury Department froze the assets of two senior Venezuelan
intelligence officials and the former interior minister for allegedly helping the Revolutionary
Armed Forces of Colombia (FARC) with weapons and drug trafficking. The State Department
also declared Venezuela’s U.S. Ambassador Bernardo Alvarez persona non grata.
On September 11, 2008, President Chávez announced that he was expelling the U.S. Ambassador
to Venezuela, Patrick Duddy, and alleged that the Venezuelan government had foiled a U.S.-
backed conspiracy to assassinate him. Chávez also announced that he was recalling the
Venezuelan Ambassador to the United States, Bernardo Alvarez.
On September 10, 2008,two Russian long-range bombers arrived in Venezuela for training
exercises with the Venezuelan military. Days earlier, Russian and Venezuelan officials maintained
that Russian naval ships would participated in joint naval exercises with Venezuela in November.
On August 5, 2008, Venezuela’s Supreme Court held up the comptroller general’s disqualification
of 272 individuals from running for office, including a number of high-profile opposition figures
such as Leopoldo López who had intended to run for mayor of Caracas.
On August 4, 2008, the Venezuelan government made public 26 presidential decrees that had
been enacted on July 31 at the end of an 18-month period in which President Chávez had been
given decree authority by the National Assembly. The decrees covered such areas as tourism,
railways, social security, and financial institutions as well as controversial provisions that would
allow the President to appoint regional leaders with broad budgetary powers, set up a civilian
militia as a branch of the military, and allow the government to expropriate goods from private
businesses and increase state control over food distribution.
On July 23, 2008, the House passed H.R. 6545 (Cazayouz) by a vote of 414-0, 2 present, which
would require a national intelligence assessment on national and energy security issues. This
would include an assessment of “the implications of the potential use of energy resources as
leverage against the United States by Venezuela, Iran, or other potential adversaries of the United
States as a result of increased energy prices.”
On July 17, 2008, the House Subcommittee on the Western Hemisphere of the Committee on
Foreign Affairs held a hearing on Venezuela focusing on recent political developments in
Venezuela and U.S. policy. The hearing featured Assistant Secretary of State for Western
Hemisphere Affairs Tom Shannon who maintained that Venezuela “for the first time in many
years, expressed a willingness to explore improved relations with the United States,” including
counter-drug cooperation. Shannon maintained that “we have told Venezuela that we would like
to explore this diplomatic opening.”
On July 6, 2008, President Chávez met briefly with U.S. Ambassador Patrick Duddy and
expressed a desire to reopen cooperation with the United States on drug trafficking and other
On June 18, 2008, the U.S. Treasury Department’s Office of Foreign Assets Control announced
that it was freezing the U.S. assets of two Venezuelans for providing financial and other support
to Hezbollah. (See “Terrorism Issues” below.)
On June 8, 2008, President Chávez called for the Revolutionary Armed Forces of Colombia
(FARC) to release all hostages unconditionally and to cease military operations, maintaining that
guerrilla warfare “has passed into history.”
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.
On June 4, 2008, the Department of State upgraded the assessment of Venezuela its annual 2008
Trafficking in Persons (TIP). Since 2004, Venezuela had been on the Tier 3 list for trafficking in
persons, which meant that the government was categorized as one that has failed to make
significant efforts to bring itself into compliance with the minium standards for the elimination of
trafficking in persons. In the 2008 report, however, the State Department placed Venezuela on the
Tier 2 Watch List category because the government was judged to be making significant efforts to
combat trafficking in persons. (See the full TIP report, available at http://www.state.gov/g/tip/rls/
On May 14, 2008, for the third year in a row, the State Department determined, pursuant to
Section 40A of the Arms Control Export Act, that Venezuela was not cooperating fully with
United States antiterrorism efforts (Federal Register, May 20, 2008, p. 29172).
On April 30, 2008, the State Department issued its annual Country Reports on Terrorism, which
maintained that “President Chávez persisted in his public criticism of U.S. counterterrorism
efforts and deepened Venezuelan relationships with state sponsors of terrorism Iran and Cuba.”
The report further stated that President Chávez’s ideological sympathy for Colombian guerrilla
groups, along with high levels of corruption among Venezuelan officials, limited Venezuelan
cooperation with Colombia in combating terrorism. (See the report’s chapter on the Western
Hemisphere, available at http://www.state.gov/s/ct/rls/crt/2007/103710.htm.)
On April 10, 2008, the House Subcommittee on the Western Hemisphere of the Committee on
Foreign Affairs held a hearing on the Ecuador-Colombia border crisis featuring the Secretary
General of the Organization of American States, José Miguel Insulza. In response to questioning,
Insulza maintained that he not seen any evidence of Venezuelan government support for the
FARC. (See “Allegations from Captured FARC Computers” below.)
On March 11, 2008, the State Department issued its 2007 human rights report, which 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. See the full
report available at http://www.state.gov/g/drl/rls/hrrpt/2007/100657.htm.
On March 7, 2008 at a Rio Group summit in the Dominican Republic, Colombian President
Alvaro Uribe apologized for the military incursion into Ecuador and vowed that it would never
happen again. President Chávez played a role in the resolution of the crisis, and his government
subsequently announced that it was fully reestablishing ties with Colombia. (See section on
“March 2008 Ecuador-Colombia Border Crisis” below.)
On March 1, 2008, the Colombian military bombed a FARC camp in Ecuador, killing the
guerrilla group’s second in command, Raúl Reyes. Venezuela subsequently broke relations with
Colombia, and President Chávez ordered the mobilization of troops along its border with
Colombia. The captured laptops of Raúl Reyes contained files potentially linking the Venezuelan
government with efforts to secure arms and support the FARC. Venezuelan officials denied the
allegations, and dismissed the captured files as fabricated. Interpol has been asked to verify
whether the files are authentic.
On February 29, 2008, the State Department issued its annual International Narcotics Control
Strategy Report (INCSR), which 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. According to the report,
Venezuela has minimized all counternarcotics related cooperation contact with the U.S.
government. The full INCSR report is available at http://www.state.gov/p/inl/rls/nrcrpt/2008/.
(See “Counternarcotics Cooperation” below.)
On February 27, 2008, the FARC released four hostages, all former members of the Colombian
Congress, to Venezuelan officials in Colombian territory.
On February 10, 2008, President Chávez again threatened to stop oil exports to the United States,
this time if ExxonMobil was successful in freezing billions in Venezuela oil assets in a
compensation dispute for its Orinoco oil investments. A week later, however, Chávez said on
February 17 that he would only stop sending oil if the United States attacked Venezuela.
On January 11, 2008, President Chávez called for the international community to no longer label
the FARC and the National Liberation Army (ELN) as terrorist groups, an action that prompted
condemnation from Colombia and other nations.
On January 10, 2008, the FARC released to Venezuelan officials two prominent Colombians that
had been held hostage for several years.
On December 31, 2007, President Chávez granted amnesty to those in Venezuela facing charges
who had supported the short-lived coup that ousted him temporarily from power in April 2002.
Critics maintained that the amnesty was discriminatory because it did not include those
individuals who fled Venezuela to other countries. (See “Venezuela’s Activities in Latin America”
On December 11, 2007, three Venezuelans 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. All four 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.
On December 2, 2007, Venezuelan voters rejected the Chávez government’s constitutional
referendum proposals by a close margin. Among the most controversial provisions were
amendments that would have removed presidential term limits, eliminated the independence of
the Central Bank, and given the President power to suspend certain constitutional rights during a
state of national emergency. There had been growing opposition to the constitutional changes,
including opposition by university students, business groups, the Catholic Church, and some
prominent former supporters of President Chávez. (See section below on “December 2, 2007
Constitutional Reform Referendum.”)
On November 22, 2007, Colombian President Alvaro Uribe withdrew support of efforts by
President Chávez to mediate with the FARC for the release of some 45 hostages, including three
American contractors held since 2003. In August 2007, Uribe had authorized Chávez to mediate
with the FARC, but halted the efforts when the Venezuelan President broke protocol by having
direct contact with the top commander of the Colombian army. Venezuela responded with a
public statement accepting Colombia’s decision, but expressing its frustration.
On November 15, 2007, the House Subcommittee on International Organizations, Human Rights,
and Oversight of the Committee on Foreign Affairs held a hearing focusing on the case of Luis
Posada Carriles. Venezuela has requested the extradition of Posada for his alleged role in the 1976
bombing of a Cuban airliner that killed 73 people. (See “Venezuela’s Extradition Requests”
On November 5, 2007, the House approved by voice vote H.Res. 435 (Klein), which expressed
concern over Iran’s efforts to expand its influence in Latin America. The resolution also noted
examples of Venezuela’s increasing relations and cooperation with Iran.
On September 14, 2007, President Bush, determined (pursuant to international drug control
certification procedures set forth in U.S. legislation) that Venezuela, for the third year in a row
had failed demonstrably to adhere to its obligations under international counternarcotics
agreements. State Department officials maintained that, although Venezuela indicated that it had
developed some new programs to fight drug trafficking, its efforts continued to be limited.
Venezuela maintains that the U.S. determination process continues to be politicized and
disregards Venezuela’s international cooperation and advances in counternarcotics efforts. (See
“Counternarcotics Cooperation” below.)
On August 15, 2007, President Chávez announced his proposals for constitutional reform to the
On June 26, 2007, Venezuela announced that two U.S. oil companies, ConocoPhillips and
ExxonMobil, would be leaving their Orinoco belt oil projects after not being able to negotiate
new terms for their minority partnership with the Venezuelan government. Venezuela’s state-
owned oil company, Petroleos de Venezuela S.A. (PdVSA) announced the signing of new Orinoco
partnership agreements with four other foreign oil companies—BP, Total, Statoil, and U.S.-owned
On June 21, 2007, the House approved by voice vote H.Amdt. 358 (Mack) to H.R. 2764, the
FY2008 State Department and Foreign Operations appropriations bill, which would direct $10
million in international broadcasting operations for targeted broadcasting for Venezuela. The
House subsequently approved H.R. 2764 on June 22, 2007.
On June 12, 2007, the State Department issued its annual Trafficking in Persons Report, which
again categorized Venezuela as a Tier 3 country that has not made adequate efforts to combat
trafficking in persons. (See the report at http://www.state.gov/g/tip/rls/tiprpt/2007/.)
On May 27, 2007, the Chávez government refused to renew the broadcast license of Radio
Caracas Television (RCTV), which frequently carried programing critical of the government, and
the station went off the air. The government’s action prompted international condemnation and
sparked extensive student-led protests in Venezuela. (See “RCTV Closure and Public Reaction”
On May 24, 2007, the Senate approved S.Res. 211 (Lugar) by unanimous consent, expressing
profound concerns regarding freedom of expression and Venezuela’s decision not to renew the
license of RCTV.
On May 14, 2007, for the second year in a row, the State Department determined, pursuant to
Section 40A of the Arms Export Control Act, that Venezuela was not cooperating fully with U.S.
antiterrorism efforts. Other countries on the list are Cuba, Iran, North Korea, and Syria.
On April 30, 2007, the State Department issued its annual Country Reports on Terrorism, which
asserted that President Chávez “persisted in public criticism of U.S. counterterrorism efforts,
deepened Venezuelan relationships with Iran and Cuba, and was unwilling to prevent Venezuelan
territory from being used as a safe haven” by Colombian terrorist groups.
On March 9, 2007, the Inter-American Commission on Human Rights (IACHR) issued a
statement expressing concern about the human rights situation in Venezuela and appealing to the
government to allow an IACHR representative to visit the country.
On March 6, 2007, the State Department released its annual human rights report, which stated
that Venezuela’s human rights situation was characterized by “politicization of the judiciary,
harassment of the media, and harassment of the political opposition.” (See the full report at
On March 1, 2007, the Department of State released its 2007 International Narcotics Control
Strategy Report (INCSR), which maintained that Venezuela is one of the principal drug-transit
countries in the hemisphere because of its geography, rampant high-level corruption, weak
judicial system, and lack of international counternarcotics cooperation.
In February 7, 2007, testimony before the House Foreign Affairs Committee, Secretary of State
Condoleezza Rice stated that she believes “there’s an assault on democracy in Venezuela” and
that “the president of Venezuela is really destroying his own country economically, politically.”
Venezuelan Foreign Minister Nicolas Maduro responded by saying that “no U.S. official has the
morality to qualify Venezuelan democracy or the democratic leadership of President Chávez.”
In January 11, 2007, testimony before the Senate Select Committee on Intelligence, Director of
National Intelligence John Negroponte stated that President Chávez “is among the most stridently
anti-American leaders anywhere in the world, and will continue to try to undercut U.S. influence
in Venezuela, in the rest of Latin America, and elsewhere internationally.” Negroponte also
expressed concern that the Venezuelan leader’s military purchases and moves toward developing
his own weapons production capability are increasingly worrisome to his neighbors, and could
fuel an arms race in the region.
On January 10, 2007, President Chávez was sworn in to another six-year term, pledging to move
Venezuela toward socialism and proposing changes to the constitution that would allow the
president to be reelected indefinitely instead of the current two-term limit.
On January 8, 2007, President Chávez announced plans to nationalize the country’s largest
telecommunications company, CANTV, which is partly owned by Verizon Communications, and
electricity companies, which would include EdC (Electricidad de Caracas), which is majority-
owned by the U.S.-based AES Corporation. In February, the Venezuelan government negotiated
agreements for the purchase of the majority stake of AES in EdC and for Verizon’s stake in
CANTV, with officials from both AES and Verizon describing the agreements as fair.
On January 5, 2007, Secretary General of the Organization of American States José Miguel
Insulza issued a statement expressing concern that Venezuela’s decision not to renew the license
of RCTV gave the appearance of censorship.
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 Chavez Biography
power to Venezuelans’ disillusionment with Hugo Chávez Frias was born on July 28, 1954, in a small
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
poor management and endemic corruption. Venezuela’s Military Academy. He reached the rank of
A central theme of his campaign was lieutenant colonel by 1990. In February 1992, Chávez led an unsuccessful attempt to overthrow the elected government
constitutional reform; Chávez asserted that of President Carlos Andres Perez. He was imprisoned for
the system in place allowed a small elite two years for the coup attempt before being pardoned.
class to dominate Congress and that While in the military, Chávez founded the nationalistic and
revenues from the state-run oil company, left-leaning Bolivarian Revolutionary Movement, which was
Petroleos de Venezuela S.A. (PdVSA), had later transformed into the Fifth 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 20,
stable political systems in Latin America 2004.
from 1958 until 1989, after that period
numerous economic and political challenges plagued the country and the power of the two
traditional parties began to 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 1
President’s unpopular economic reform program was the real reason for his ouster. 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
Under President Chávez, Venezuela has undergone enormous political changes, with a new
constitution in place and even a new name for the country, the Bolivarian Republic of Venezuela, th
named after the 19 century South American liberator Simon Bolivar, whom Chávez often
invokes. In 1999, Venezuelans went to the polls on three occasions—to establish a constituent
assembly that would draft a new constitution, to elect the membership of the 165-member
constituent assembly, and to approve the new constitution—and each time delivered victory to
President Chávez. The new document revamped political institutions, eliminating the Senate and
establishing a unicameral National Assembly, and expanded the presidential term of office from
five to six years, with the possibility of immediate 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
For example, see M. Delal Baer, “Revenge of the Venezuelan Dinosaurs,” Wall Street Journal, June 18, 1993.
From the outset, critics raised concerns about Chávez and his government. They feared that he
was moving toward authoritarian rule and pointed to his domination of most government
institutions. Some argue that Chávez had replaced the country’s multiparty democracy with a
political system that revolves around himself, in essence a cult of personality; others pointed to
Chávez’s open admiration of Fidel Castro and close relations with Cuba as a disturbing sign.
Other observers expressed concern about the increased role of the military in the government,
with Chávez appointing dozens of retired and active duty officers to key positions, as well as the
mobilization of thousands of army reservists for social projects. Still other critics of Chávez
believed that he was trying to politicize the educational system by making changes to school
curriculums. They feared Chávez’s call for his followers to form political cells in schools,
hospitals, and businesses in order to support his revolution and believe that such groups, known 2
as Bolivarian circles, could mirror Cuba’s controversial neighborhood committees.
Although President Chávez remained widely popular until mid-2001, his standing eroded
considerably after that, amid concerns that he was imposing a leftist agenda on the country and
that his government was ineffective in improving living conditions in Venezuela. In late 2001 and
early 2002, opposition to Chávez’s rule grew into a broad coalition of political parties, unions,
and business leaders. Trade union opposition became stronger amid the President’s attempt to
replace the Venezuelan Workers Confederation (CTV) with a pro-government union. President
Chávez’s own Fifth Republic Movement also became plagued with internal dissent.
In April 2002, massive opposition protests and pressure by the military led to the ouster of
Chávez from power for a brief period. However, he ultimately was restored to power by the
military. Chávez was ousted from office on April 11, 2002, after protests by hundreds of
thousands of Venezuelans and the death of at least 18 people. Venezuelan military leaders
expressed outrage at the massacre of unarmed civilians and blamed President Chávez and his
supporters. On April 12, Pedro Carmona of the country’s largest business association—the
Federation of Associations and Chambers of Commerce and Industry (Fedecamaras)—
proclaimed himself interim president, but Carmona quickly lost the support of the military when
he took such hardline measures as dismantling the National Assembly, firing the Supreme Court,
and suspending the constitution. Carmona stepped down just a day after he took office, paving the
way for Chávez’s return to power early in the morning of April 14. The interim government’s
hardline polices as well as strong support in the streets from Chávez supporters convinced
military commanders to back Chávez’s return. Moreover, some military factions had continued to
support Chávez during his ouster.
After Chávez’s return to power, some 40 disparate opposition groups united in a coalition known
as the Democratic Coordinator (CD) in an effort to remove Chávez from office, focusing on
efforts to hold him accountable for the death of civilian protestors in April 2002 and to push for a
national referendum on his presidency. The CD demanded a non-binding referendum on Chávez’s
rule in early February 2003, which they believed would force the President to resign, but
For example, see William S. Prillman, “The Castro in Caracas: Venezuelan Strongman Hugo Chávez, in Fidel’s
Image,” National Review, April 3, 2003; Stephen Johnson, “Venezuela Erupting,” National Review, March 5, 2004.
Venezuela’s Supreme Court ruled against holding such a referendum. President Chávez
maintained that, according to the constitution (Article 72), a binding referendum on his rule could
take place after the halfway point of his term, which would occur in August 2003.
From early December 2002 until early February 2003, the CD orchestrated a general strike that
severely curtailed Venezuela’s oil exports and disrupted the economy but was unsuccessful in
getting President Chávez to agree to an early non-binding referendum on his rule or new
elections. At various junctures, there were violent clashes between Chávez supporters and the
opposition, resulting in several deaths. The Chávez government responded to the oil sector strike
by firing 13,000-16,000 PdVSA employees.
After months of negotiations facilitated by the Organization of American States (OAS) and the
Carter Center, the government of Hugo Chávez and the opposition signed an agreement on May
29, 2003, that set forth mechanisms to help resolve the political crisis. Implementation of the
accord was difficult at times and hampered by political polarization between supporters and
opponents of President Chávez. Nevertheless, Venezuela’s National Electoral Council (CNE)
announced on June 8, 2004, that a presidential recall referendum would be held on August 15,
CNE’s final official results.
For a recall referendum to take place, the constitution required a petition signed by 20% of
registered voters (which means 2.4 million signatures out of a registry of 12.3 million). Petition
signatures were collected during a four-day period beginning in late November 2003, but on
March 2, 2004, the CNE ruled that there were only 1.83 million valid signatures supporting a
presidential recall referendum. The CNE subsequently updated this to 1.91 million valid
signatures, with almost 1.2 million signatures that could be valid if individuals confirmed their
signatures in a reparo or “repair” period. This meant that about 525,000 signatures of those under
review would need to be validated for a referendum to be required. The CNE’s announcement
that there were not yet enough valid signatures for a referendum prompted strong opposition
protests, but the opposition ultimately agreed to participate in a repair period that was held May
27-31, 2004, in more than 2,600 centers around the country. About 100 observers from the OAS
and the Carter Center monitored the repair period; President Carter reported that the overall
process was peaceful and orderly, although he did note some initial concern about the temporary 4
suspension of the CNE’s tabulation process.
On June 3, 2004, the CNE announced that enough signatures had been secured for a recall
referendum, and subsequently scheduled the referendum for August 15. The date of the
referendum was significant because under the constitution, if it were held after August 19 (one
year after the half-way point of Chávez’s term) and Chávez lost the referendum, then Vice
“CNE Emitió Resultados Oficiales Del Referendo Revocatorio Presidencial,” Consejo Nacional Electoral, August 26,
4 “President Carter’s Trip Report on Venezuela, May 29-June 1, 2004,” The Carter Center, June 4, 2004.
President Jose Vicente Rangel (a Chávez ally) would serve the remainder of the President’s term
until January 2007.
In order for President Chávez to be recalled, the majority of voters needed to vote “yes” and the
number of votes to recall him needed to exceed the number that he received when last elected in
July 2000 (3.75 million). If Chávez had been recalled, new presidential elections would have
been held within 30 days. It was unclear whether President Chávez would have been allowed to
run for reelection, but most observers believed that the Supreme Court would have ruled that he
was eligible to run. One of the problems that plagued the opposition was that it did not have a
well-organized or coherent political coalition. As a result, it could have been difficult for the
opposition to present a single candidate who could have defeated Chávez in new elections,
assuming that he was permitted to run.
Public opinion polls conducted in June and July 2004 by various survey firms yielded
significantly different results, with some favoring the opposition and some favoring Chávez, but
by early August 2004 a number of polls showed Chávez with an advantage. A June 2004 poll by
Datanálisis, a Venezuelan research firm, showed that 57% of Venezuelans would vote to recall
President Chávez, while another poll in June by the U.S.-based Greenberg, Quinlan, Rosner 5
Research firm found that only 44% would vote to recall the president. Another poll by North
American Opinion Research Inc. published in early July 2004 showed that 41% would vote to 6
recall Chávez, compared to 57% favoring the president. A poll in late July by the U.S. firm of
Evans/McDonough and Varianzas Opinión of Venezuela showed that 43% would vote against 7
Chávez and 51% would vote for him. In early August, a newspaper that has been a strong
opposition supporter, Ultimas Noticias, published four polls showing that Chávez would win by 8
at least 10%. Some observers, however, maintained that many people were not being truthful in
these opinion polls because of fear of retribution for answering truthfully; they maintained that 9
these so-called “hidden voters” could determine the outcome of the referendum.
With a turnout of about 70% of registered voters, President Chávez won the recall referendum
convincingly with 5.80 million people voting “no” to reject his recall, or 59.25% of the vote, and 10
3.989 million people, or 40.74%, voting “yes” in favor of his recall. Observers from the OAS
and the Carter Center maintained that these results were compatible with their own quick count
results. The opposition claimed that massive fraud had taken place and cited their exit polls 11
showing that 59% had voted to recall President Chávez. The Carter Center and the OAS
“Battle of the Polls is Engaged,” Latin American Weekly Report, July 6, 2004.
6 “Venezuela’s Recall Referendum,” BBC Worldwide Monitoring, July 8, 2004.
7 “A Poll of Polls,” Miami Herald, August 11, 2004.
8 “Chávez on Course for Victory,” Latinnews Daily, August 9, 2004.
9Steven Dudley, “Chávez Recall Vote Confounds Pollsters,” Miami Herald, August 11, 2004.
10 “CNE Emitió Resultados Oficiales Del Referendo Revocatorio Presidencial,” Consejo Nacional Electoral, August
11 Andy Webb-Vidal, “Auditing of Chávez Vote Begins as Fraud Allegations Multiply,” Financial Times, August 20,
conducted a second audit of the vote on August 19-21 and concluded that the vote results 12
announced by the CNE reflect the will of the Venezuelan people.
On August 26, 2004, the OAS approved a resolution expressing “satisfaction with the holding of
the presidential recall referendum” and calling “upon all players to respect the results.” In the
resolution, the OAS also welcomed the offer made by President Chávez “to foster national
dialogue” and called “for a process of reconciliation ... in which differences are settled in the 13
framework of the democratic systems and in a spirit of transparency, pluralism, and tolerance.”
Various factors explain President Chávez’s victory in the recall referendum. The economy, fueled
by proceeds from high oil prices, turned around in 2004. The president was able to use oil
proceeds to boost social spending for the poor. He made anti-poverty programs an important
focus of his administration. Another factor has been the strength of the opposition. As noted
above, the opposition in Venezuela has been fragmented and did not wage an effective campaign
during the recall referendum. Even if it had won the referendum, it was unclear whether it would
have been able to present a single candidate to challenge Chávez in a subsequent election.
After the August 2004 recall referendum, President Chávez’s rule was further strengthened when
his allies won a majority of gubernatorial and municipal posts in elections held in late October
Just days before the December 4, 2005, elections, in which all 167 seats in the National Assembly
were at stake, Venezuela’s five major opposition parties announced that they would boycott the
election. They maintained that the National Electoral Council (CNE) was dominated by the
government and accused it of making decisions in favor of parties supporting the government.
The parties withdrawing from the race consisted of the country’s two parties that had been
historically dominant until 1998, Democratic Action (AD) and the Social Christian Party
(COPEI), and three other key opposition parties: the Movement to Socialism (MAS), the center-
right Justice First party (PJ), and Project Venezuela (PV).
Before the boycott, the opposition’s major concern was the CNE’s plan to use digital fingerprint
machines. The opposition feared that the government would be able to determine how individuals
had voted and that this information would be used for political retribution, just as they assert that
there was discrimination against those people who signed the petition in favor of having the 2004
presidential recall referendum. On November 28, 2005, however, the CNE, in a decision brokered
by the Organization of American States, announced that it would not use the controversial digital
fingerprint machines. Nevertheless, a day later, opposition parties began announcing their boycott
of the legislative elections. The move surprised election officials, and some reports indicate that
international observers were unhappy that the opposition had reneged on a commitment to 14
participate in the elections if the digital fingerprint machines were not used.
Last Phase of the Venezuelan Recall Referendum: Carter Center Report (English and Spanish), Carter Center,
August 21, 2004.
13 Organization of American States, Permanent Council. “Results of the Presidential Recall Referendum Held in
Venezuela on August 15, 2004,” CP/RES. 869 (1436/04), Adopted August 26, 2004.
14 Phil Gunson, “Vote Boycott Sparks Test of Wills,” Miami Herald, December 3, 2005.
In the lead up to the legislative elections, some opposition groups had also objected to parties
fielding candidates under two separate banners in order to increase the chances of winning
additional seats. (Venezuela’s electoral system utilizes a combination of proportional
representation on a national party list and electoral districts where individuals who win a majority
of votes are elected.) The pro-Chávez coalition had used this method to win some 77% of seats in
municipal elections held in August 2005. In late October 2005, Venezuela’s Supreme Court 15
rejected an injunction against this practice that was filed by the opposition AD.
Because of the opposition boycott, pro-Chávez parties won all 167 seats in the National
Assembly, with 114 going to the President’s Fifth Republic Movement (MVR) and the remaining
53 going to smaller pro-Chávez parties as well as to independents and representatives of some
social groups that support the government. The voter participation rate was low and estimated at
year terms that began on January 5, 2006. In the previous National Assembly, which had 165
members, pro-Chávez supporters controlled 86 seats, while opposition parties controlled 79. In
the lead-up to the December 2005 election, observers predicted that the opposition would struggle
to win one-third of the seats in the Assembly and that the pro-Chávez parties would win a two-
thirds majority control of the legislature. The opposition’s boycott guaranteed that pro-Chávez
supporters will completely control the legislative branch.
Both the OAS and the European Union sent delegations to observe the elections. Both groups
lamented the withdrawal of the opposition, but also raised questions and had criticisms regarding
the conduct of the elections.
The EU observer group maintained that wide sectors of Venezuelan society do not have trust in
the electoral process and in the independence of the electoral authority. It found that the electoral
campaign focused almost exclusively on the issue of distrust in the electoral process and the lack
of independence of the CNE. Overall, the EU concluded that the elections represented a lost
opportunity and did not contribute to the reduction of the fracture in Venezuelan society.
Nevertheless, the EU lauded the steps taken by the CNE to open the automated voting system to
external scrutiny and to modify various aspects that were questioned by the opposition. In
particular, the EU stated the CNE’s decision to eliminate the digital fingerprint devices from the
voting process was timely, effective, and constructive, and noted with surprise the opposition’s 16
withdrawal just four days before the election.
The OAS delegation noted that there remains a distrust of the CNE on the part of a significant
segment of the population in terms of the origin and composition of the CNE and the perception
that its actions lack transparency and impartiality. It suggested that a new democratic consensus
be reached through dialogue that could include a discussion of the election of the CNE, the
automated voting system, the electoral law, the process of issuing identification cards, a
“Court Rebuffs AD Bid to Change Electoral Rules,” Latin American Weekly Report, November 1, 2005.
16 “EU Election Observation Mission to Venezuela, Parliamentary Elections 2005,” Preliminary Statement, December
parliamentary system to ensure proportional representation of minorities, and the strengthening of
the principle of separation, independence, and balance of powers. It criticized the opposition’s
withdrawal from the election, stating that every democracy requires an institutional opposition 17
committed to the electoral process, so that it can loyally participate in the democratic system.
With Chávez supporters controlling the legislature, it will be far easier for the government to
enact its legislative agenda and to enact constitutional changes. With opposition parties having no
representation in the legislature, they will virtually have no official role in the political system.
Some observers question the wisdom of the opposition’s boycott of the election and contend that
the decision not to participate will erode its legitimacy. According to Jose Miguel Vivanco from
Human Rights Watch, which has been a critic of President Chávez, the opposition’s tactics will
not help them “gain any ground,” and it will be difficult for “them to present themselves as 18
victims that deserve solidarity from the international community.” Other observers contend that
the high abstention rate in the election could allow the opposition to question the legitimacy of
the National Assembly. According to this view, the boycott helped send a message that democracy
is at threat in Venezuela and could bolster international support to press the Chávez government
for transparency and accountability.
In Venezuela’s December 3, 2006, presidential election, President Chávez was resoundingly
elected to another six-year term in an election that international observers judged to be
satisfactory. In the lead up to the vote, polls showed Chávez with a lead of more than 20% over
opposition candidate Manuel Rosales in an election with 22 candidates on the ballot. The final
result showed Chávez with 62.87% and Rosales with 36.88%.
The government benefitted from the rise in world oil prices, 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 the populist agenda of his
Bolivarian revolution. His reelection demonstrated strong and widespread support for his social
policy of redistributing the country’s oil wealth. Most observers credit the government’s
numerous misiones or social programs as the key to the government’s support and do not believe
that Venezuelans’ support for President Chávez is ideologically based.
For the opposition, the most significant aspect of the race was that Rosales conceded his defeat in
a legitimate election. Although the political opposition remained weak and fragmented in the
aftermath of the August 2004 recall referendum and their boycott of the December 2005
legislative elections, it managed to agree on a single unified presidential candidate for 2006,
Manuel Rosales, who was governor of the western oil-rich state of Zulia and former mayor of
Maracaibo, Venezuela’s second largest city. A primary had been scheduled for August 13, 2006 to
select the opposition candidate, but on August 9, eight other candidates dropped out of the
presidential race in support of Rosales who was the frontrunner. Those standing down in favor of
“Preliminary OAS Observations on the Legislative Elections in Venezuela,” Press Release, December 6, 2005.
18 Juan Forero, “Chávez’s Grip Tightens as Rivals Boycott Vote,” New York Times, December 5, 2005.
Rosales included Julio Borges of the center-right Justice First Party, and Teodoro Petkoff, a leftist
newspaper editor and former planning minister.
Although Rosales trailed in the polls, most observers credit him with running a strong campaign
that resonated with many Venezuelans. He ran a populist campaign that emphasized social justice
and an alliance between lower income sectors and the middle class. He criticized the Chávez
government for not doing enough to reduce poverty and called for a program to transfer oil
revenues directly to the poor via a debit card, controversially named “Mi Negra,” that would
provide payments to poor families ranging from $280 to $460 monthly. He supported efforts to
bolster the private sector and a strategy to increase both domestic and foreign investment. Rosales
also called for efficiency and transparency in the judicial system and has pledged to crack down
on soaring crime. He vowed to call new legislative elections with a system of proportional
representation and supported a reduction in the presidential term of office from six to four years.
He criticized President Chávez for providing so much assistance to foreign countries while there
is extensive poverty in Venezuela, and he criticized the government’s alliances with countries like 19
Cuba and Iran.
Opposition supporters and other observers had complained that President Chávez had used state
resources for his reelection, with government expenditures for advertising and access to
television. They argued that the Chávez government had distributed Christmas bonuses for
public-sector employees earlier than normal in order to gain favor in the presidential vote.
Observers also asserted that the government was using political coercion to ensure support among
public sector employees and pointed to a video of Venezuela’s Minister of Energy and Petroleum 20
urging PdVSA workers to support Chávez’s reelection.
Both the Organization of American States and the European Union sent delegations to observe the
elections and, despite various problems, judged the elections to have been held in a satisfactory
manner. According to a preliminary statement by the EU, “the high turnout, peaceful nature, and
general acceptance of results of the presidential elections in Venezuela open the way forward to 21
substantial improvements in the quality and public confidence in electoral processes.” The OAS
congratulated “the Venezuelan people, its government, and its political parties and democratic 22
institutions for the civic behavior that prevailed during the electoral process.”
As President Chávez was inaugurated to another six-year term in January 2007, he announced a st
number of measures to further strengthen his power and move Venezuela toward his vision of 21
century socialism. He called for the National Assembly to approve a new law that would enable
“Can Rosales Win?,”Andean Group Report, November 7, 2006; “Venezuela: Opposition Candidate Proposes
Building New Social Democracy,” Open Source Center (Caracas Globovision Television) November 7, 2006; Simon
Romero, “Venezuelans Square Off Over Race, Oil and a Populist Political Slogan,” New York Times, November 12,
20 Steven Dudley, “Government Power Give Chávez Campaign Edge,” Miami Herald, November 11, 2006; Elizabeth
M. Nunez, “Opponents of Chávez Release Video,” Associated Press, November 3, 2006.
21 European Union Election Observation Mission, Presidential Elections Venezuela 2006, Preliminary Statement,
December 5, 2006.
22 “OAS Hears Reports on Elections in Ecuador and Venezuela,” Organization of American States, Press Release,
December 13, 2006.
him to pass laws by decree. Subsequently, on January 31, the Assembly approved a law giving
Chávez broad powers, for a period of 18 months, to enact measures by decree in a number of
economic, social, and military areas. Critics fear that the move will further undermine democratic
institutions and lead to authoritarianism, while supporters maintain that the measure will help the
President move ahead more quickly to enact a new economic and social model in Venezuela.
Among other proposals announced by the President in January were plans to eliminate the
autonomy of the central bank; to make PdVSA a majority shareholder of current Orinoco Belt oil
projects with foreign companies; to change the constitution to allow the president to be reelected
indefinitely instead of the current two-term limit; to launch a new drive for “Bolivarian popular
education” that would deepen Venezuela’s new social values; to create federations of communal
councils (thousands of local communal councils were established in 2006) that could eventually
replace state government institutions; and to nationalize the country’s largest telecommunications 23
company, CANTV, and electricity companies, including EdC (Electricidad de Caracas).
CANTV is partly owned by Verizon Communications, while EdC is majority-owned by the U.S.-
based AES Corporation. When the nationalizations of CANTV and EdC were announced, there
was considerable concern that the companies would not receive adequate compensation. In
February 2007, the Venezuelan government ultimately negotiated agreements for the purchase of
the majority stake of AES in EdC and for Verizon’s stake in CANTV. Officials of both AES and 24
Verizon described the agreements as fair. Foreign investors will likely be wary of investing in
Venezuela giving the nationalizations and the government’s increasing role in the economy.
On December 28, 2006, President Chávez announced that his government would not renew the
broadcast license for RCTV, Venezuela’s oldest television station, which frequently carried
programming critical of the Chávez government. Venezuelan officials maintained that the non-
renewal of RCTV’s license was for its actions in support of the April 2002 coup against President
Chávez. Because of this, they assert that it was within the government’s rights not to renew
RCTV’s public broadcasting license, but that RCTV could continue to broadcast on private cable
or satellite stations. RCTV maintains that its broadcast license is valid until 2022, not May 27,
2007, as claimed by the Venezuelan government, and that the action by the government is part of
an effort to silence public opinion.
The OAS Office of the Special Rapporteur for Freedom of Expression expressed concern in late
December 2006 about Venezuela’s decision and its effect on freedom of expression. OAS
Secretary General José Miguel Insulza issued a statement on January 5, 2007, expressing concern
that Venezuela’s decision not to renew the license of Radio Caracas Television (RCTV) gave the
appearance of censorship. He expressed hope that the action would be reversed by the Venezuelan 25
government. The Inter-American Commission on Human Rights expressed concern about
“21 Century Socialism,” Latin American Regional Report, Andean Group, January 2007; Gregory Wilpert, “Chávez
Sworn in to Second Full Term as Venezuela’s President,” Venezuelanalysis.com, January 10, 2007.
24 “AES to Sell Utility Stake to Venezuela,” Washington Post, February 9, 2007; “Venezuela: Government Buys
Verizon’s Stake in CANTV,” Latinnews Daily, February 13, 2007.
25 Organization of American States, “OAS Secretary General Expresses Concern Over Decision Not to Review
Broadcasting License of Venezuelan Television Station,” Press Release, January 5, 2007.
freedom of expression in Venezuela and called on the Venezuelan government to protect 26
pluralism in the media.
Numerous human rights also organizations denounced Venezuela’s decision not to renew RCTV’s
license as a violation of freedom of speech. These included the Inter-American Press Association,
Reporters Without Borders, the Committee to Protect Journalists, the Instituto Prensa y Sociedad,
and Human Rights Watch, which maintained that the government’s decision was politically 27
motivated and was a serious setback for freedom of expression.
Thousands of protestors marched in Caracas at events in April and May 2007 denouncing the
government decision, but the government followed through with its decision and RCTV ceased
its public broadcasting on May 27. The closure of RCTV prompted protests, primarily by students
who oppose the government’s action as a violation of freedom of their civil rights. The strength
and endurance of the student-led protests appear to have taken the government by surprise. Polls
reportedly show that more than 70% of Venezuelans disagree with President Chávez’s decision to 28
close RCTV. Nevertheless, the government has threatened legal action against another private
television station, Globovisión, accusing it of inciting assassination attempts against President
Chávez. Venezuelan Foreign Minister Nicolas Maduro has asserted that the United States is
behind plans to destabilize Venezuela.
Several countries, including the United States, spoke out against Venezuela’s action. The U.S.
Senate approved S.Res. 211 (Lugar) on May 24, 2007 by unanimous consent expressing profound
concerns regarding freedom of expression in Venezuela and the government’s decision not to
renew the license of RCTV. In the aftermath of RCTV’s closure, the State Department issued a 29
statement calling on Venezuela to reverse its policies that limit freedom of expression. The
European Parliament adopted a resolution on May 24, 2007, expressing concern about
Venezuela’s action, and calling for the government to ensure equal treatment under the law for all
media. On May 31, 2007, the Brazilian Senate issued a strong statement calling for President
Chávez to review his decision. The Chilean Senate also supported a resolution against the closure
of RCTV. At the OAS General Assembly meeting held in Panama June 3-5, 2007, several nations,
such as Canada, Chile, El Salvador, Guatemala, and Peru, in addition to the United States, spoke
out for freedom of the press. Ultimately, however, the OAS did not approve a resolution
specifically criticizing Venezuela for its actions, but adopted a resolution reaffirming the right to
freedom of expression and calling upon member states to respect and ensure respect for this 30
In July 2007, RCTV resumed broadcasting through cable and satellite, as RCTV International (a
subsidiary of RCTV). Only about a third of Venezuelan households, however, have access to 31
cable or satellite television. The government responded to the broadcaster’s return to the
Inter-American Commission on Human Rights, “IACHR Concerned About Freedom of Expression in Venezuela,”
Press Release, May 25, 2007.
27 “Venezuela: Shutdown Harms Free Expression,” Press Release, Human Rights Watch, May 25, 2007.
28Richard Lapper, “TV Channel Axed in Latest Chávez Drama,” Financial Times, May 26, 2007.
29 U.S. Department of State, “Statement on Closing of Venezuela’s Only Independent Television Network with
Nationwide Broadcast Coverage,” Daily Press Briefing, May 29, 2007.
30 Organization of American States, Declaration and Resolutions Adopted by the General Assembly, June 5, 2007, pp.
100-103, AG/RES. 2287, Right to Freedom of Thought and Expression and the Importance of the Media.
31 Benedict Mander, “Television Channel Critical of Chavez Returns,” Financial Times, July 16, 2007.
airwaves by ordering RCTV International to register as a Venezuelan broadcaster in order to be
subject to local regulations. Otherwise, it would face losing its licence to broadcast via cable.
Since RCTV International is based in Miami, it claims that it is not a national broadcaster and
therefore exempt from registration and local regulations. The Venezuelan National
Telecommunications Commission rejected this argument and threatened cable companies with
fines if they continued to carry RCTV International. On August 2, 2007, the Venezuelan Supreme
Court ruled that cable companies could continue to carry RCTV International without fear of
government retaliation, since no clear regulation exists defining what constitutes a national 32
broadcaster. Venezuela’s telecommunications minister, Jesse Chacon, responded to the Supreme
Court’s decision by stating that norms that clearly define a national broadcaster would be
elaborated in order to compel RCTV International to submit to government regulation.
In August 2007, Venezuelan President Hugo Chávez announced his proposals for constitutional
reform that would alter 33 of the 350 articles of the 1999 Venezuelan constitution, and that he
claimed would move Venezuela toward a new a model of development known as “socialism in st
the 21 century” embracing participatory democracy and a mixed economy. According to the
Venezuelan government, the purpose of the reforms was to speed the redistribution of Venezuela’s
oil resources to benefit the poor; de-centralize political power to grant citizens more direct say in
their affairs; and outline the legal foundation of a new, more equitable model of development and 33
democracy. Venezuela’s National Assembly debated the proposals in three rounds, and ended up
adding reforms to amend 36 additional articles for a total of 69 constitutional amendments that
were finalized by the Assembly on November 2, 2007.
The amendments were subject to a public referendum held on December 2, 2007, with the 69
reforms split into two parts. Block “A” consisted of amendments to 46 of the constitution’s
articles, including the 33 reforms proposed by Chávez and 13 proposed by the National
Assembly. Block “B” consisted of amendments to 23 articles proposed solely by the National
Among some of the proposals for constitutional changes included in Block A of the referendum
were the following amendments:
• to lower the voting age from 18 to 16 years of age (Article 64);
• to prohibit foreign financing of associations with political goals, and provide for
government financing of electoral activities (Article 67);
• to decrease the workweek from 44 to 36 hours and the workday from 8 hours to 6
hours (Article 90);
• to recognize Venezuela’s multi-cultural diversity and the importance of its
indigenous, European, and African cultures (Article 100);
• to provide that the government promote and develop distinct forms of businesses
and economic units of social property and social production or distribution in
“RCTV Allowed to Broadcast Despite Misgivings,” Latin American Andean Group Report, August 2007.
33 “Constitutional Reforms in Venezuela,” Embassy of the Bolivarian Republic of Venezuela, Washington, D.C.,
order to create the best conditions for the collective and cooperative construction
of a socialist economy (Article 112);
• in addition to private property, to add several new classifications for property –
public, social, collective, and mixed (Article 115);
• to remove the presidential two-term limit, and extend the presidential term from
six to seven years (Article 230);
• to state that the socioeconomic system of Venezuela is founded on socialist and
anti-imperialist principles, among others (Article 299); and
• to eliminate the independence of the Central Bank, which would include putting
international reserves under the administration and direction of the President
Among some of the proposals for constitutional changes included in Block B of the referendum
were the following amendments:
• to prohibit discrimination based on health and sexual orientation (Article 21);
• to give the President power to suspend certain constitutional rights, such as the
right of information and certain rights of due process (that are protected under the
current constitution) during a declared “state of exception” (national emergency),
but prohibit the suspension of the rights to life, defense, and personal integrity or
the suspension of prohibitions against torture, being held incommunicado, or
disappearance (Article 337);
• to remove the time limitation for a declared state of exception (Article 338);
• to increase the percentage of signatures required for citizens to initiate
constitutional amendments from 15% to 20% of those on the electoral registry
One of the most controversial reforms would have extended the presidential term from six to
seven years and abolished the presidential two-term limit by allowing indefinite reelection, a
reform that would have allowed President Chávez, last elected in 2006, to run for reelection in
while government officials pointed out that constitutional provisions would still require the
president to be re-elected each term, with the possibility of facing a recall referendum midway in
the presidential term.
Other proposed reforms that raised concerns included amendments that would have: given the
state greater control over the economy; eliminated the independence of the Central Bank and put
international reserves under the control of the President; given the President power to suspend
certain rights (right of information and certain rights of due process) during a state of emergency
that are currently protected under the existing constitution; and removed the time limits that a
state of emergency could be imposed.
Various provisions that would promote a “socialist economy” and “socialist democracy” were
also controversial. The reforms would have declared that the socioeconomic system was based on
socialist principles, and that state should promote the active participation of citizens, restoring
power to the people and creating the best conditions for the construction of a socialist democracy.
The proposed reforms would have allowed for changes in the administrative division of
Venezuelan territory and the structure of local government, which according to President Chávez,
would represent “a new geometry of power.” New federal districts with economic and political
autonomy would be created and existing communal councils (thousands have been created since
2006) would be given legal status and empowered. As a result of this change, the government
could channel funds and resources directly to the federal districts and communal councils,
bypassing local government officials. National budget payments to the states would have
increased from 20% to 25% of the budget, with 5% designated for financing the communal
councils. Councils of popular power (such as communal councils, workers councils, student
councils, youth councils fishermen councils etc) would have been established as a means of
citizen participation. The work of the missions (the social programs begun by the Chávez
government in 2003) would be set forth in the constitution as an official part of public
administration created to satisfy the urgent needs of the population.
The proposed constitutional reforms also included changes to the structure of the military. The
military would have been defined as a patriotic, popular, and anti-imperialist body with the
objective of guaranteeing Venezuela’s independence and sovereignty. The National Reserves
would be transformed into the “National Bolivarian Militia,” which would constitute the fifth
official component of the armed forces.
While initially it appeared that President Chávez’s overall popularity and the decision to include
such popular measures in the reform as decreasing the work day would help ensure passage of the
referendum, its approval no longer appeared certain in the days leading up to the vote. There was
growing opposition to the constitutional reforms, including by a number of student organizations,
business groups, the Catholic Church, and even some past supporters of President Chávez, such
as the popular former minister of defense General Raúl Baduel. Various polls in November 2007 34
showed that those opposing the referendum had gained momentum and were in the majority.
Despite the polls, many observers still maintained that the government had the organization and
resources to mobilize its supporters, and pointed out that Chávez, who still remains popular, had 35
never lost an election.
Table 1. CNE’s December 2, 2007 Constitutional Reform Results
Yes (votes) Yes (%) No (votes) No (%)
Block A 4,404,626 49.34% 4,521,494 50.65%
Block B 4,369,014 48.99% 4,539,707 51.01%
Source: National Electoral Council, Bolivarian Republic of Venezuela, December 7, 2007.
Early in the morning of December 3, 2007, Venezuela’s National Electoral Council (CNE)
announced that both blocks had been rejected by a slim margin, with Block A defeated by 1.41%
and Block B defeated by 2.11%. President Chávez immediately addressed the country on national
television, and conceded the loss. The CNE subsequently issued an updated total of the vote on
Ian James, “Venezuelan Voters Oppose Chávez’s Proposed Constitutional Changes, Poll Shows,” Associated Press,
November 24, 2007; Enrique Andres Pretel, “Poll Says Chávez Loses Venezuela Referendum Lead,” Reuters News,
November 24, 2007.
35 Tyler Bridges, “Turnout of anti-Chávez Voters is Questionable,” Miami Herald, November 25, 2007.
December 7, 2007 that changed the margin only slightly, with Block A defeated by 1.31% and
Block B defeated by 2.02%. (Table 1 above shows the CNE’s final vote totals.)
A key to the failure of the reform effort appears to lie with the large abstention of Venezuelans
that in the past supported President Chávez. About 56% of the electorate participated in the
referendum vote compared to almost 75% in the December 2006 presidential election. About
three million fewer voters supported the constitutional reform than voted for Chávez in 2006.
President Chávez acknowledged these statistics in his concession speech pointing out the
abstention of many of his supporters. In contrast, those rejecting the constitutional reform
received almost 250,000 votes more than opposition candidate Manuel Rosales had in the 2006
presidential election, just a slight increase.
There are a number of factors that resulted in Chávez supporters staying home for the
referendum. One of the most significant was former and current supporters of President Chávez
concerned that the Chávez government is becoming too radicalized with power too concentrated
in the presidency. In the National Assembly, the Podemos Party, a democratic socialist party that
had been supportive of the Chávez government, called the reform amendments a “constitutional
coup,” and was the sole party to vote against the reforms. Its leader Ismael García and other party
members were dubbed traitors for opposing the reform effort. The party, which actively
participated in the “No” campaign, had originally supported the establishment of a Constituent
Assembly to amend the Constitution. It is likely that the opposition of Podemos contributed to the
No vote, and also resulted in Chavistas (Chávez supporters) abstaining.
Another significant defection from the Chavista camp was the ex-wife of President Chávez,
Marisabel Rodriguez, who actively opposed the reform, maintaining that it would concentrate
absolute power. Rodriguez has a significant political profile in Venezuela, and was a member of
the Constituent Assembly that drafted the current 1999 Constitution, which she maintains was a 36
product of legitimate and valid public debate.
Perhaps the most significant opposition from within the Chavista movement was from retired
General Raúl Baduel, former commander of the Venezuelan army and former Defense Minister,
who in early November 2007 labeled the reform proposal a coup d’etat intended to abolish checks 37
on the President’s expanding power. Baduel had been one of Chávez’s closest advisors since he
helped him return to power in April 2002, and reportedly commands respect among many 38
Chavistas and within the Venezuelan military. Badhuel asserted that the constitutional reform
proposal was “nothing less than an attempt to establish a socialist state in Venezuela.” He also
cited the government’s failure to address such severe problems as high rates of crime and
violence, inflation, a housing shortage, and poor education and health care, and maintained that
the current constitution gives ample room for any decent and honest government to address these 39
Chris Kraul, “Despite Outcry, Chávez Plan Likely to Pass,” Los Angeles Times, November 15, 2007.
37 Simon Romero, “Venezuelan General Likens Chávez’s Proposals for Constitution to a Coup,” New York Times,
November 6, 2007.
38 John Otis, “One-time Allies Blast Chávez’s Push for Power,” Houston Chronicle, November 17, 2007.
39 Raul Isaias Baduel, “Why I Parted Ways with Chávez,” New York Times, December 1, 2007.
Despite a booming Venezuelan economy and a fall in poverty rates over the past several years,
several significant economic problems in Venezuela contributed to the rejection of the
constitutional reform. Inflation, estimated at over 20% in 2007, has been the highest in the region.
Price controls on basic staples like milk, eggs, and chicken have resulted in significant product
shortages and long lines as domestic production has dwindled. Venezuela’s currency is also
significantly overvalued, with a substantial difference between the official exchange rate and the
parallel market. The economic difficulties caused Venezuelans to question the government’s
management of the economy, asking such questions as how a booming economy could be
experiencing so many problems.
As expected, the political opposition also strongly criticized the proposed constitutional changes,
maintaining that the reforms would be a means for President Chávez to extend his power and
remain in office indefinitely, while steering Venezuela towards Cuban-style totalitarianism.
Opposition leader and former presidential candidate Manuel Rosales of the Un Nuevo Tiempo
(UNT) party called the proposed changes a “constitutional coup,” and warned that the reform
would further exacerbate shortages for basic products as the country moves toward a socialist 40
system. An important aspect of the opposition’s “No” campaign was that it concentrated on the
substance of the reforms, and was not focused on Chávez himself. Such a strategy proved less
threatening for Chávez supporters who could oppose the reform or abstain from voting and still
support Chávez as their President through 2012.
University students, which took the lead in the demonstrations against the government’s closure
of Radio Caracas Television ( RCTV) in May 2007, also played a major role in defeating the
constitutional reform by taking the lead in street protests. On November 7, 2007, some 80,000
thousand students marched to the Supreme Court calling on the judicial body to suspend the
referendum. Students also played a major role in the final demonstration of the “No” campaign,
which mobilized more than 100,000 people in Caracas on November 29, 2007. With their ability
to mobilize demonstrators, students emerged as perhaps the most prominent and visible
opponents of the constitutional reform effort, and some observers believe that the reform would
not have been defeated had it not been for the students. Historically, students in Venezuela have
often played an important role in political change, including most notably in the overthrow of
dictator Marcos Pérez Jiménez in 1958. The student movement that emerged in 2007 was not
discredited by the Chávez government despite attempts to portray them as spoiled children of the
The Catholic Church in Venezuela, which criticized the constitutional reform effort as
concentrating power in the hands of the President and favoring authoritarianism, also likely had
some influence on the vote. In October 2007, Venezuelan bishops issues a public statement on the
reforms, maintaining that the proposition of a Socialist State was contrary to the fundamental
principles of the existing constitution, and asserting that the reforms would restrict liberties and 41
represent a step backward in progress on human rights.
Venezuelan human rights groups also actively questioned and criticized the constitutional
reforms. Forum for Life, a coalition of Venezuelan nongovernmental human rights organizations,
“Advierte Líder Opositor Venezolano Que Reforma Profundizará Desabasto,” Agencia Mexicana de Noticias,
November 24, 2007.
41 Conferencia Episcopal Venezolana, “Exhortación de los obispos sobre la reforma constitucional,” October 19, 2007,
available at http://www.cev.org.ve/noticias_det.php?id=266
petitioned the Supreme Court in mid-November to declare the proposed reforms unconstitutional.
The coalition of human rights activists believed that the reforms represented a regression in the
protection of human rights recognized in the 1999 constitution. Among the various objections of
the Forum were concerns about proposed reforms to Article 337, which would eliminate the right
of information and essential elements of the right of due process from the list of rights that cannot
be suspended during a state of emergency. The Forum also opposed the reform to Article 338, 42
which would have removed the time limit on a state of exception or emergency.
The rejection of the constitutional reform could improve public confidence in the electoral
process. In the past, critics have often portrayed the National Electoral Council (CNE) as
dominated by the Chávez government and questioned the outcome of elections. In the aftermath
of the “No” win, some opposition politicians claimed that the reform was defeated by a much
larger margin. But opposition leaders, including Manuel Rosales of the UNT, agreed with the
CNE’s numbers, which are listed on the electoral body’s website down to the level of each voting 43
site and table. Such level of transparency should increase confidence that Venezuela can conduct
free and fair elections.
Nevertheless, while many observers lauded the CNE for the conduct of the vote on election day,
government critics still claim that during the electoral campaign the CNE sided with the
government on many decisions, and did nothing to stop the government from using its
considerable resources to fund the campaign in favor of the reform. For example, Caracas was
blanketed with propaganda in favor of the reform. The CNE was also widely criticized, including
by the non-governmental Venezuelan domestic election observer group Electoral Eye, for the
several hour delay in releasing the vote results, which contributed to increased tension across the
country until the vote was announced.
For opposition parties such as the center-left UNT and center-right Primero Justicia, the rejection
of the reform demonstrates that they can oppose the Chávez government at the ballot box and
win. Going forward, however, it is obvious that the margin was very slim, and that just a small
shift of votes – less than 60,000 for Block A and about 85,000 for Block B – would have reversed
the results. Observers assert that victory by such a close vote suggests that the opposition will
need to be unified and work with other former Chávez supporters such as Podemos to attract
more electoral support. The next electoral races will take place in November 2008 when state and
local elections will be held, and in December 2010 when national elections will be held for the
For President Chávez, while the referendum vote was his first electoral loss, he still wields
considerable power as President. While initially conciliatory in his remarks following the defeat
of the referendum, the President subsequently spoke disparagingly of those Chavistas who
abstained and vowed to continue efforts to get the constitutional reforms approved. Moreover,
observers point out that Chávez could enact a number of the reform proposals by decree or
through the regular legislative process since he still has the support of most of the National
“Foro por la Vida introduce acción de inconstitucionalidad de la propuesta de reforma ante el TSJ,” Comunicado de
Prensa, Foro por la Vida, Caracas, November 15, 2007, available at
43 The CNE’s website is available at http:www.cne.gov.ve/.
Assembly. Some of the more controversial proposals, however, including the elimination of
presidential term limits, can only be changed through the constitutional reform process spelled
out in the current constitution, which includes the avenue of using an elected Constituent
In January 2008, Chávez again floated the idea of another attempt at a constitutional reform
amendment in 2010 that would allow him to be re-elected again in December 2012, but such a
move would be controversial given the defeat of the government’s constitutional reform package
in December 2007. It would also have to be an initiative proposed by signatures of 15% of the 44
electorate that would be then subject to a referendum.
In 2008, the Venezuelan government has moved forward with nationalizations in key industries.
In March 2008, the government nationalized two food companies maintaining that the takeover
would improve production and distribution and help resolve food shortages. In early April 2008,
President Chávez announced the nationalizations of the cement industry – which involves taking
majority shares in Mexican, French, and Swiss companies operating in Venezuela, – and the
country’s largest steel maker, Sidor, an Argentine-controlled unit of the Luxembourg-based
company Ternium. Venezuelan officials maintain that the cement nationalizations were justified
because the companies were producing below capacity and exporting too much, while the steel
company had been bogged down in a labor dispute and criticized the company for exploiting 45
workers. Other observers have criticized the nationalizations as an attack on the private sector, 46
and as a attempt by the government to improve the President’s popularity.
In early June 2008, Chávez rescinded a decree that he had made days earlier overhauling the
country’s intelligence polices. Human rights groups and legal scholars had strongly criticized the
extensive decree, maintaining that it would force citizens to inform on one another in order to 47
avoid prison terms and would force judges to cooperate with intelligence services.
President Chávez’s popularity reportedly declined in the first quarter of 2008 with such problems
as high crime rates, food shortages, and inflation contributing to the decline. Some reports in 48
March 2008 maintained that support for his government had dropped to as low as 34%. Reports
later in the year, however, showed that Chávez, with popular support of about 50%, had regained 49
some of the support that he had lost earlier in the year.
Ian James, “Chávez Looks to New Vote,” Associated Press Newswires, January 13, 2008; “Chávez Reverts to
Indefinite Election,” Latinnews Daily, January 14, 2008.
45 “Venezuela Country Report,” Economist Intelligence Unit, April 2008; James Suggett, “Venezuelan Steel Company
to be Nationalized in Wake of Labor Conflict,” Venezuelanalysis.com, April 10, 2008.
46 “Venezuela Economy: Cement Grab,” EIU ViewsWire, April 8, 2008.
47 Simon Romero, “Chávez Suffers Military and Policy Setbacks,” New York Times, June 8, 2008, and “Chávez Decree
Tightens Hold on Intelligence,” New York Times, June 3, 2008.
48 “Crime, Inflation Erode Chávez Govt’s Popularity,” Reuters News, March 19, 2008; “Poll Shows Support for
Venezuelan Government Drops,” BBC Monitoring Americas, March 26, 2008.
49 Tyler Bridges, “Chávez Boosting His Loyalist Candidates,” Miami Herald, June 1, 2008; Frank Jack Daniel,
“Venezuela’s Opposition Weakened by Infighting,” Reuters News, August 12, 2008.
State and municipal elections are scheduled to be held on November 23, 2008, which will be a
significant test for the political strength of President Chávez and the opposition. Chávez has
moved to unite his supporters into a single party – the United Socialist Party of Venezuela
(PSUV) – which was inaugurated in January 2008, although several parties that had supported
Chávez in the past declined to join. The 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
vote also sparked protests in several states, with some PSUV members maintaining that the 50
candidacies were pre-determined. As the election approaches, there continues to be divisions
within the PSUV, and government candidates face opposition from former Chavistas who are 51
distancing themselves from the government.
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 reportedly had agreed on a unified candidate for 52
governorships in all but one Venezuelan state. The opposition includes newer parties such as
Justice First, Project Venezuela, and A New Era (Un Nuevo Tiempo, UNT); leftist parties that
defected from the Chavista coalition such as the Movement toward Socialism (MAS) and
Podemos; and the traditional political parties from the past such as Democratic Action (AD) and 53
the Social Christian Party (COPEI).
One of the major problems for the opposition is that the Venezuelan government’s comptroller
general disqualified 272 individuals (down from almost 400 originally disqualified) from running 54
for office, purportedly for cases involving the misuse of government funds. 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 up the disqualifications.
The Venezuelan government maintains that the majority of those disqualified are from the ranks 55
of the its own supporters, although the list includes several high-profile opposition candidates.
Among those excluded is Leopoldo López, the popular mayor of Chacao, who was seeking to run
for mayor of Caracas. (López filed a complaint with the Inter-American Commission on Human
In the lead-up to the election, the Chávez government has made a number of radical moves that
appear to be designed, at least in part, to have an effect on the elections. As noted above, Chávez
expelled the U.S. Ambassador and asserted that the United States was backing a coup and
assassination plot against him among Venezuelan military officers. His government also expelled
two members of Human Rights Watch, and moved to strengthen Venezuela’s military relations
with Russia. It is unclear whether these actions will result in success for the Chávez government
at the polls. Problems such as high crime, inflation, and food shortages could erode the
government’s electoral support. Moreover, a decree law announced in early August 2008 that
allows the President to appoint regional leaders with broad budgetary powers could erode
“Venezuela: Power Struggle,” Economist Intelligence Unit – Business Latin America, June 23, 2008.
51 “Venezuela Country Report,” Economist Intelligence Unit,” October 2008.
53 “Venezuela: Opposition Disarray Hurts Electoral Hopes,” Oxford Analytica, July 1, 2008.
54 “Inhabilitaciones a Políticos en Venezuela Se Reducen de 400 a 272,” Agence France-Presse, July 11, 2008.
55 Embassy of the Bolivarian Republic of Venezuela, “Fact Sheet, Myths and Realities of the Disqualifications from
Holding Public Office,” July 17, 2008.
government support in some states around the country who view the law as an attempt to reduce
the power of elected state officials.
At this juncture, the opposition appears to be gaining ground in a number of races and could win
a sizable number of state and municipal posts. Beyond this November, the next key political test
at the polls will be in 2010 when the National Assembly is up for election.
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 March 2008 human rights report stated
that Venezuela’s human rights situation continued to be characterized by “politicization of the 56
judiciary,” and “official harassment of the media and of the political opposition.”
At the same time, however, a majority of Venezuelans, almost 60%, express satisfaction with how
democracy in their country is working, according to a 2007 poll by Latinobarómetro, a far greater 57
percentage than in most Latin American countries. The defeat of President Chávez’s
constitutional reform amendments in December 2007 by a close margin in a largely free and fair
process demonstrated the legitimacy of the voting process in many observers eyes.
In March 2007, the Inter-American Commission on Human Rights (IACHR) issued a statement
expressing concern about the human rights situation in Venezuela and appealing to the
government to allow an IACHR representative to visit the country. The Commission stated that in
the last years it “has observed a gradual deterioration of the constitutional order that has
compromised the full enjoyment of human rights” and expressed concern about freedom of 58
expression in the country. In its 2007 annual report, the Inter-American Commission on Human
Rights highlights the difficulties that human rights defenders face in Venezuela, including attacks 59
and threats on their life, and other obstacles such as public discrediting by state officials.
Some observers are concerned that Chávez is using his political strength to push toward
authoritarian rule. Human Rights Watch maintains that the Chávez government dealt a severe
blow to judicial independence by packing the Supreme Court with his supporters under a new law
that expanded the court from 20 to 32 justices. Since 2004, according to Human Rights Watch,
the packed Court has fired hundreds of provisional judges and granted to permanent judgeships to 60
about 1,000 others. The Chávez government enacted a broadcast media law in December 2004
that could allow the government to restrict news coverage that is critical of the government, while
in March 2005 it amended Venezuela’s criminal code to broaden laws that punish “disrespect for
government authorities.” The IACHR and human rights groups such as the Committee to Protect
Journalists, Reporters Without Borders, and the Inter-American Press Association maintain that
See the full report at http://www.state.gov/g/drl/rls/hrrpt/2007/100657.htm.
57 “The Latinobarómetro Poll, A Warning for Reformers,” The Economist, November 15, 2007
58 Inter-American Commission on Human Rights, “The Inter-American Commission on Human Rights Appeals To Be
Allowed To Visit Venezuela,” Press Release, March 9, 2007.
59 Organization of American States, “Annual Report of the Inter-American Commission on Human Rights 2007,”
December 29, 2007.
60 Human Rights Watch, World Report 2008.
these measures have restricted freedom of expression, with newspapers and broadcasters
practicing self-censorship. (Also see “RCTV Closure and Public Reaction” above.)
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 61
in each of these areas in order to promote a more inclusive democracy.
In an immediate 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 62
Latin America. 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
In the lead-up to the November 23, 2008 state and municipal elections, human rights groups have
called attention to recent attacks against media and journalists who have been critical of the
Chávez government. These have included the shooting of a journalist in Ciudad Bolívar on
September 27, and a tear-gas attack at Globovisión television headquarters in Caracas on 63
In October 2008, the steep decline in oil prices precipitated by the global financial crisis
prompted the Venezuelan government to announce that it would be making budget cuts, including 64
the reduction of high salaries for some officials.
Venezuela had been on the State Department’s Tier 3 list for trafficking in persons from 2004
through 2007, which meant that the government was categorized as one that has failed to make
significant efforts to bring itself into compliance with the minium standards for the elimination of
trafficking in persons. In the State Department’s June 2008 Trafficking in Persons (TIP) Report,
however, Venezuela was upgraded to the Tier 2 Watch List category because the government was
judged to be making significant efforts to combat trafficking in persons. According to the TIP
report, Venezuela is a source, transit, and destination country for men, women, and children
trafficked for sexual exploitation and forced labor. The report noted that the government showed
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/.
62 Phil Gunson, “Rights Groups Decry Monitors’ Ouster,” Miami Herald, September 20, 2008.
63 Casto Ocando, “Violence on Venezuelan Media Rises,” Miami Herald, October 2, 2008.
64 Castro Ocando, “Venezuela Begins to Reign in Spending,” Miami Herald, October 10, 2008.
greater resolved to address trafficking through law enforcement and prevention measures.
According to the report, Venezuela was placed on the Tier 2 Watch List because it failed to 65
provide evidence of increasing efforts to protect and assist trafficking victims. (Also see CRS
Report RL33200, Trafficking in Persons in Latin America and the Caribbean, by Clare Ribando
Venezuela’s major economic sector is petroleum, which accounts for one-third of its gross
domestic product and 80% of exports. The country is classified by the World Bank as an upper
middle income developing country because of its relatively high per capita income of $6,070
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 66
2000. In 2002-2003, the country’s political instability and polarization between the government
and the opposition contributed to a poor investment climate, capital flight, and declines in GDP.
The national strike orchestrated by the opposition from late 2002 to early 2003 contributed to a
contraction of the national economy by almost 9% in 2002 and 7.7% in 2003.
Since 2004, however, the economy has rebounded, with a growth rate over 18% in 2004 and
slowed to 8.4%, and is forecast to be 5.4% in 2008 and 2.7% in 2009. Strong economic growth
has allowed the Chávez government 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 this year announced the nationalization
of 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 missions. As a result of the booming economy and increased social spending, poverty
rates in Venezuela have declined, from 48.6% in 2002 to 30.2% in 2006, with extreme poverty 68
falling from 22.2% to 9.9% over the same period.
Despite the country’s economic growth and progress in reducing poverty, Venezuela’s economy
has experienced significant problems, such as shortages of basic food staples and high levels of
U.S. Department of State, “Trafficking in Persons Report,” June 4, 2008. See the report at http://www.state.gov/g/tip/
66 World Bank, “Venezuela Country Brief,” August 2004.
67 “Venezuela Country Report,” Economist Intelligence Unit, October 2008.
68 U.N. Economic Commission for Latin America and the Caribbean, Social Panorama of Latin America, 2007,
inflation that are eroding purchasing power. In 2007, the inflation rate at year’s end reached 69
22.5%, the highest in Latin America, while the forecast for 2008 is almost 36%. 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
inflation has continued to increase monthly. Shortages of basic staples such as milk, sugar, and
eggs worsened in 2007 as a result of price controls that stifled local production. In response, the
government has 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 have reportedly worked to help ease shortages for some staples, 70
but not all.
As noted above, Venezuela is using windfall oil profits to boost social spending and programs to
fight poverty. Beginning in 2003, the Chávez government began implementing an array of social
programs and services known as misiones, or missions.
The popularity of the missions was instrumental to President Chávez’s reelection in December
2006 and has been a major factor in the President’s support among the poor. A key characteristic
of the missions is that they are generally deinstitutionalized, functioning primarily through a
parallel system that is not a part of the bureaucratic apparatus of the state. The missions have been
funded through the government’s central budget and allocations by PdVSA. Some observers
contend that the work of the missions should be integrated into existing ministries and institutions 72
of the Venezuelan government in order to improve administration and oversight.
There are currently some 20 social missions in Venezuela, covering a wide array of services in the
fields of education, health, nutrition, the environment, sports, culture, housing, and targeted 73
programs for indigenous rights and services for street children and adolescents.
In the education field, the Misión Robinson constitutes a national literacy campaign, with the
government reporting that over 1.5 million Venezuelans have learned to read and write since the 74
program began in 2003. The Misión Robinson 2 focuses on adults in need of primary school
education, particularly those who have just learned how to read and write through the Misión
Robinson. According to government figures, between 2003 and 2006, over 1.2 million people 75
were enrolled in the mission’s primary school education program. The Misión Ribas provides
adult Venezuelans who never finished high school the opportunity to obtain a secondary
education. The Misión Sucre has established state-run university villages in order to provide
“Venezuela Country Report,” Economist Intelligence Unit, October 2008, p. 7.
70 “A Funny Way to Beat Inflation – Venezuela’s Economy,” The Economist, June 21, 2008.
71 This section was originally written by Nelson Olhero, a Research Associate in the CRS Foreign Affairs, Defense, and
Trade Division in 2007.
72 “Venezuela Country Profile 2007,” Economist Intelligence Unit, p. 18.
73 For background on the various missions, see the Venezuelan government’s website at
74 See the government’s website on the Misión Robinson at http://www.misionesbolivarianas.gob.ve/misiones/mision-
75 See the government’s website on the Misión Robinson 2 at http://www.misionebolivarianas.gob.ve/misiones/mision-
opportunities to attend university to those who were previously excluded from the higher
educational system. These universities are especially geared to those students who completed
their secondary education through the Misión Ribas.
In the health field, the 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. The medical personnel live in the barrios and make home
visits to those who are too ill to visit the community health clinics. The government intends to
gradually replace many of the Cuban doctors with Venezuelan doctors. Although there were more
than 20,000 Cuban medical personnel serving in Venezuela supporting the mission, over the past
year thousands reportedly have left, leaving about 15,000; as a result, a number of the clinics 76
reportedly have closed. A July 2006 report published by the Pan American Health Organization
showed that the mission has had a positive impact on the health of Venezuela’s poor. The report
maintains that there has been a reduction in child mortality from diarrhea and pneumonia since
the mission began operating and that medical consultations performed by the mission in 2004 and 77
provides free eye care clinics and eye surgery.
In the area of nutrition, Misión Mercal attempts to ensure that poor Venezuelans obtain staple
foodstuffs. The key component of the mission is the state-run Mercal supermarket and grocery
store chain, where prices are subsidized by the government up to 40% less expensive than 78
elsewhere. This mission also includes soup kitchens that provide daily free meals and a service
by which foodstuffs and meals are delivered to the homes of those living in extreme poverty. The
government claims that the mission has been successful by pointing to the fact that over 47% of 79
Venezuelans shop at Mercal and that over nine and a half million people have benefitted from 80
the Mercal Mission in some way.
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. Some critics question the sustainability of the missions since they are funded
primarily from oil revenues. They argue that the missions will likely disappear or be cut back 81
significantly if oil revenue declined.
Phil Gunson, “Venezuela Struggles with Doctor Shortage,” Miami Herald, February 12, 2007.
77 “Mission Barrio Adentro: The Right to Health and Social Inclusion in Venezuela,” Pan American Health
Organization, July 2006, pp. 82 and 107-112.
78 Indira A.R. Lakshmanan, “Critics Slam Venezuelan Oil Windfall Spending,” Boston Globe, August 13, 2006.
79 “Chávez Reaches Out with Bolivarian Missions,” NPR, Weekend Edition, December 3, 2006.
80 See the government’s website on the Misión Mercal at http://www.misionesbolivarianas.gob.ve/misiones/mision-
81 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,
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
government. 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.
Over the past 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, and
its efforts to export its brand of populism to other Latin American countries. 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. In the aftermath of Colombia’s
March 1, 2008 bombing of a FARC camp in Ecuador that killed the terrorist group’s second in
command, captured laptops contained files potentially linking the Venezuelan government with
efforts to support the FARC. In a turn of events, on June 8, 2008, President Chávez publicly urged
the FARC to end its armed struggle, and release all hostages.
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 appears to
have changed since 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.
Today, U.S. policy toward Venezuela appears 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 while at the same time being open to constructive cooperation with Venezuela on
issues of mutual concern. 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 82
would like to explore this diplomatic opening.”
By September 2008, however, U.S. relations with Venezuela took a significant turn for the worse
when Venezuela expelled U.S. Ambassador Patrick Duddy. Also in September, U.S. officials
criticized Venezuela’s efforts against drug trafficking, and President Bush determined, for the
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
fourth year in a row, that Venezuela had failed demonstrably to adhere to its obligations under
international narcotics control agreements. U.S. Treasury Department officials also 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.
Administration officials voiced increasing concern about President Chávez in 2005, and tensions
increased in U.S.-Venezuelan relations, with elevated rhetoric on both sides. In both March and
September 2005, State Department officials testified to Congress that President Chávez’s “efforts
to concentrate power at home, his suspect relationship with destabilizing forces in the region, and
his plans for arms purchases are causes of major concern.” They asserted that the United States
“will support democratic elements in Venezuela so they can fill the political space to which they 83
are entitled.” Then Secretary of Defense Donald Rumsfeld expressed concerns in March about
Venezuela’s plan to buy 10 military helicopters and 100,000 AK-47 rifles from Russia and 84
questioned why Venezuela needs the weapons. U.S. officials have also expressed concerns
about Venezuela’s plans to buy patrol boats and military transport aircraft from Spain as well as a
decision by Venezuela in April 2005 to cancel a U.S.-Venezuelan bilateral military exchange
On May 31, 2005, President Bush met with Maria Corina Machado, the founder of Súmate, a
Venezuelan civic group that was involved in the signature drive for the August 2004 recall
referendum. The meeting exacerbated the already tense U.S.-Venezuelan bilateral relations.
Machado is facing charges in Venezuela for conspiring against the government by accepting U.S.
funding from the National Endowment for Democracy for Súmate’s activities leading up to the
recall referendum. U.S. officials and some Members of Congress have strongly defended the
NED’s activities in Venezuela and have criticized the Venezuelan government’s efforts to
intimidate the leaders of Súmate. (See “U.S. Funding for Democracy Projects” below.)
In early August 2005, Venezuela suspended its cooperation with the U.S. Drug Enforcement
Administration (DEA) because it alleged that DEA agents were spying on Venezuela. U.S.
officials asserted that the accusations were “baseless and outrageous” but also indicated that the
United States would like to improve U.S. relations with Venezuela and reverse the negative trend 85
in relations over the past few months.
While traveling in South America in August 2005, then Secretary of State Donald Rumsfeld
asserted that “there certainly is evidence that both Cuba and Venezuela have been involved in the 86
situation in Bolivia in unhelpful ways.” Some Members of Congress, such as Senator Arlen 87
Specter, reportedly called for the Secretary to tone down his rhetoric. Specter met with President
House International Relations Committee, Subcommittee on the Western Hemisphere, Hearing on “The State of
Democracy in Latin America,” Testimony of Roger F. Noriega, Assistant Secretary of State for Western Hemisphere
Affairs, March 9, 2005; Hearing on “Keeping Democracy on Track: Hotspots in Latin America,” Testimony of Charles
A. Shapiro, Principal Deputy Assistant Secretary of State, September 28, 2005.
84 Todd Benson, “Rumsfeld in Brazil, Criticizes Venezuela on Assault Rifles,” New York Times, March 24, 2005.
85 Lauren Monsen, “United States Hopes for Improved Cooperation,” Washington File, U.S. Department of State,
August 19, 2005.
86 Josh White, “Rumsfeld in Latin America, Voices Democracy Concerns,” Washington Post, August 17, 2005.
87 Holly Yeager, “Senator Takes Rumsfeld to Task Over Chávez Criticism,” Financial Times, August 20, 2005.
Chávez and Venezuelan ministers in mid-August 2005 to discuss cooperation on drug
interdiction. Subsequently, on September 15, 2005, President Bush designated Venezuela as a
country that has “failed demonstrably during the previous 12 months to adhere to their obligations
under international counternarcotics agreements.” At the same time, the President waived
economic sanctions that would have curtailed U.S. assistance for democracy programs in
Venezuela. (Also see “Counternarcotics Cooperation” below.)
On August 22, 2005, the comments of TV evangelist Pat Robertson that the United States should
“assassinate” Chávez evoked a strong response from Venezuelan officials and from many U.S.
policymakers. The State Department responded by labeling Robertson’s comments as 88
“inappropriate.” (For further information on the U.S. prohibition against assassination, see CRS
Report RS21037, Assassination Ban and E.O. 12333: A Brief Summary, by Elizabeth B. Bazan.)
In testifying to Congress on November 17, 2005, the new Assistant Secretary of State for Western
Hemisphere Affairs Thomas Shannon asserted that there is “a growing hemispheric and
international consensus that democracy in Venezuela is in grave peril.” He stated that the United
States was working multilaterally and bilaterally with Latin American and European nations to
support Venezuelan civil society, speak out against abuses of democracy, and hold Venezuela
accountable to its commitments under the Inter-American Democratic Charter. He described U.S.
funding for democracy projects in Venezuela as “working to preserve political and civic space for 89
increasingly at-risk groups.” Reflecting an escalation of the Venezuelan President’s harsh
rhetoric, Chávez responded to Shannon’s comments by calling President Bush a “crazy, genocidal 90
U.S. reaction to the Venezuelan elections on December 5, 2005, was restrained, with a State
Department spokesman indicating that United States would wait until the OAS and EU observers
make their reports. Nevertheless, the State Department did point to the high voter abstention rate
in the election and maintained that it reflected “a broad lack of confidence in the impartiality and 91
transparency of the electoral process.” (There was a 75% abstention rate in the December
legislative election, compared to an abstention rate of 44% in the last legislative election in July
U.S.-Venezuelan relations continued to be tense in 2006, with several incidents and rhetoric
exacerbating the poor state of relations. On February 2, 2006, then Secretary of Defense Donald
Rumsfeld compared President Chávez to Adolf Hitler in terms of someone who was elected 93
legally and then consolidated power. Chávez responded by referring to President Bush as Hitler
and as a madman, with plans to invade Venezuela. On February 2, 2006, President Chávez
U.S. Department of State, Daily Press Briefing, August 23, 2005.
89 House International Relations Committee, Subcommittee on the Western Hemisphere, Hearing on Democracy in
Venezuela, Statement by Asst. Sec. of State Thomas A. Shannon, November 17, 2005.
90 “Venezuela: Chávez Responds to Shannon’s Criticism,” Latinnews Daily, November 18, 2005.
91 U.S. Department of State, Daily Press Briefing, December 5, 2005.
92 “State Department Holds Fire on Election Result,” Latinnews Daily, December 6, 2005.
93 “Donald H. Rumsfeld Delivers Remarks at the National Press Club,” CQ Transcriptions, February 2, 2006.
announced that his government would expel a U.S. naval attache for spying, which U.S. officials
strongly denied. In response, the United States expelled a Venezuelan diplomat based in
Administration testimony before Congress in February 2006 highlighted U.S. concern about
Venezuela’s foreign relations. In February 16, 2006 congressional testimony, Secretary of State
Condoleezza Rice stated that one of the biggest problems for the United States in Latin America
was Venezuela, which she characterized as “attempting to influence its neighbors away from
democratic processes.” Secretary Rice also expressed concerns about Venezuela’s relationship
with Cuba, describing it as “a particular danger to the region,” and also referred to both countries
as Iran’s “sidekicks” in reference to those countries’ votes in the International Atomic Energy
Agency against reporting Iran to the U.N. Security Council over its uranium enrichment 94
program. Also in February 2006 congressional testimony, Director of National Intelligence John
Negroponte expressed concern that President Chávez “is seeking closer economic, military, and 95
diplomatic ties with Iran and North Korea.”
In April 2006, the State Department issued its annual Country Reports on Terrorism, which
asserted that “Venezuela virtually ceased its cooperation in the global war on terror, tolerating
terrorists in its territory and seeking closer relations with Cuba and Iran, both state sponsors of
terrorism.” This was followed up in mid-May 2006, with a State Department announcement that,
pursuant to Section 40A of the Arms Export Control Act, it was prohibiting the sale or license of
defense articles and services to Venezuela because of its lack of cooperation on antiterrorism
efforts. The State Department asserted that the determination was based on Venezuela’s near lack
of antiterrorism cooperation over the last 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. In July 13, 2006, congressional testimony, the State Department’s Principal
Deputy Coordinator for Counterterrorism, Frank Urbancic, asserted that Venezuelan travel and
identification documents are easy to obtain for persons not entitled to them, including non-
Venezuelans, and maintained that the United States was detaining increasing numbers of third-96
country aliens at its borders carrying falsified or fraudulently issued Venezuelan documents.
On August 18, 2006, U.S. Director of National Intelligence John Negroponte announced the
establishment of the position of Mission Manager for Cuba and Venezuela responsible for
integrating collection and analysis on the two countries across the Intelligence Community.
Venezuelan officials responded that they would reconsider signing an anti-drug cooperation
agreement negotiated between the two countries. Press reports in June and July had indicated that
the two countries were on the verge of signing such an agreement.
In speaking before the U.N. General Assembly on September 20, 2006, President Chávez strongly
criticized U.S. foreign policy and spoke pejoratively of President Bush. President Chávez
House International Relations Committee, Hearing on the Fiscal Year 2007 International Affairs Budget, Testimony
of Secretary of State Condoleezza Rice, February 16, 2006.
95 Senate Select Intelligence Committee, Hearing on World Wide Threats, Testimony of Director of National
Intelligence John Negroponte, February 2, 2006.
96 House International Relations Committee, Subcommittee on International Terrorism and Nonproliferation, Hearing
on “Venezuela: Terrorism Hub of South America?,” July 13, 2006.
repeatedly referred to President Bush as the “Devil” and asserted that “the hegemonic pretension 97
of U.S. imperialism ... puts at risk the very survival of the human species.”
In response to President Chávez’s comments, Secretary of State Condoleezza Rice maintained his
remarks “were not becoming of a head of state,” while then U.S. Ambassador to the United
Nations John Bolton said that the Administration would “not address this sort of comic-strip 98
approach to international affairs.” State Department spokesman Tony Casey said that he would
“leave it to the Venezuelan people to determine whether President Chávez represented them and 99
presented them in a way they would have liked to have seen.” President Chávez’s remarks at the
U.N. were not the first time that the Venezuelan president has spoken disparagingly of President
Bush or other U.S. officials or criticized U.S. policy. He routinely refers to President Bush as a 100
“donkey,” “Mr. Danger,” or other pejorative terms. U.S. officials appear largely to have
refrained from responding to such personal charges or criticisms leveled by President Chávez and
instead have focused on the negative aspects of his policies, such as the status of democracy and
human rights under his government, the extent of Venezuela’s military purchases, or President
Chávez’s efforts to influence political events in other Latin American countries. Several Members
of Congress criticized President Chávez for his anti-American rhetoric and introduced resolutions
condemning his statements, including S.Res. 607 approved by the Senate on December 6, 2006.
In response to President Chávez’s reelection on December 3, 2006, State Department officials
initially emphasized that the United States was looking forward to working with the Venezuelan 101
government on issues of mutual concern. Subsequently, Assistant Secretary of State for
Western Hemisphere Affairs Thomas Shannon stated that the election was positive in that there 102
was a clear winner and that the opposition accepted the results.
U.S. officials continued to speak out about threats to democracy in Venezuela, its military
buildup, and other concerns in 2007. In January 11, 2007, testimony before the Senate Select
Committee on Intelligence, then Director of National Intelligence John Negroponte stated that
President Chávez “is among the most stridently anti-American leaders anywhere in the world, and
will continue to try to undercut U.S. influence in Venezuela, in the rest of Latin America, and
elsewhere internationally.” Negroponte also expressed concern that the Venezuelan leader’s
military purchases and moves toward developing his own weapons production capability are
increasingly worrisome to his neighbors and could fuel an arms race in the region.
“Venezuela’s Chávez Says World Faces Choice Between U.S. Hegemony and Survival,” Venezuelanalysis.com,
September 20, 2006 [includes transcript of President Chávez’s speech before the U.N. General Assembly].
98 U.S. Department of State, Secretary of State Condoleezza Rice, “Remarks After the United Nations Security Council
Meeting on the Middle East Process,” September 21, 2006; Pablo Bachelet, “Chávez Bashes Bush on U.N. Stage,”
Miami Herald, September 21, 2006.
99 U.S. Department of State, Daily Press Briefing, September 20, 2006.
100 For example, see “President Hugo Chávez Travels the World,” Voice of America News, September 15, 2006;
“Danger, Danger George Bush,” Washington Post, August 6, 2006; Christopher Toothaker, “U.S. Ambassador Urges
Venezuela to Consider Dialogue, Leave Insults Aside,” Associated Press, March 30, 2006; “Venezuela’s Chávez Calls
Bush ‘Coward’ Over Iraq,” BBC Worldwide Monitoring, March 20, 2006; “Hugo Chávez to Condi Rice: Don’t Mess
with Me, Girl,” Agence France Presse, February 19, 2006.
101 “U.S. Gives Tepid Response to Reelection of Chávez,” Miami Herald, December 5, 2006.
102 “Election Result in Venezuela Positive,” Agence France Presse, December 14, 2006; State Department Briefing,
Press Roundtable with Thomas Shannon, December 13, 2006.
In February 7, 2007, testimony before the House Foreign Affairs Committee, Secretary of State
Condoleezza Rice stated that she believes “there’s an assault on democracy in Venezuela” and
that “the president of Venezuela is really destroying his own country economically, politically.”
Venezuelan Foreign Minister Nicolas Maduro responded by saying that “no U.S. official has the 103
morality to qualify Venezuelan democracy or the democratic leadership of President Chávez.”
President Chávez continued his tough rhetoric against the United States and President Bush.
During the U.S. President’s visit to Latin America in March 2007, Chávez led a rally in Argentina
in which he denounced President Bush and U.S. policy in Latin America. U.S. officials
maintained that they do not want to get into a rhetorical contest with Chávez, but want to focus on
a positive agenda of U.S. engagement in Latin America. Many observers contend that President
Bush’s March trip to the region was at least in part an attempt to counter the growing influence of
President Chávez in Latin America.
As noted above, in the aftermath of the closing of the Venezuelan government’s closing of RCTV
in late May 2007, the State Department issued a statement calling on Venezuela to reverse its 104
policies that limit freedom of expression. Secretary of State Condoleezza Rice raised the issue
on June 4, 2007, at the OAS General Assembly Meeting in Panama, and called on the OAS to
address the issue. Ultimately, the OAS did not specifically criticize Venezuela for its action, but
adopted a resolution calling upon members states to respect freedom of expression.
In the aftermath of the rejection of President Chávez’s proposed constitutional changes in
December 2007, President Bush said that the “Venezuelan people rejected one-man rule,” and 105
“voted for democracy.” Under Secretary of State for Political Affairs Nicholas Burns said that 106
the vote was a “victory for the people of Venezuela.”
In testimony before the Senate Select Committee on Intelligence on February 5, 2008, Director of
National Intelligence Michael McConnell maintained that the defeat of the constitutional
referendum in December 2007 may slow President Chávez’s movement toward authoritarian rule
and implementation of socialism in Venezuela, although McConnell stated that Chávez would not
abandon his goal of sweeping change in Venezuela. McConnell testified that Chávez will
continue to attempt to unite Latin America under his leadership behind an anti-U.S. and radical
leftist agenda, but that his leadership ambitions are likely to encounter growing opposition as time
passes. McConnell also noted Venezuela’s increasing relations with Iran, expressed concerns
about more than $3 billion in arms purchases from Russia over the past two years, and noted
growing anxiety among Venezuela’s neighbors because of this arms build-up.
On February 10, 2008, President Chávez once again threatened to stop oil exports to the United
States, this time if ExxonMobil was successful in freezing billions in Venezuela oil assets in a
Liza Figueroa-Clark, “Venezuelan Foreign Minister, Bishop, Slam Rice over Comments on Venezuela.”
Venezuelanalysis.com, February 10, 2007.
104 U.S. Department of State, “Statement on Closing of Venezuela’s Only Independent Television Network with
Nationwide Broadcast Coverage,” Daily Press Briefing, May 29, 2007.
105 White House, Press Conference by the President, December 4, 2007.
106 U.S. Department of State, R. Nicholas Burns, Under Secretary for Political Affairs, “Media Roundtable in
Singapore,” December 3, 2007.
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 107
In light of information found on documents from laptops captured by Colombian forces during a
March 1, 2008 raid on a camp of the FARC in Ecuador, some observers, including some
Members of Congress, have called on the Bush Administration to designate Venezuela as a state
sponsor of acts of international terrorism. The Bush Administration began an inquiry on the
matter of designating Venezuela as a state sponsor. According to press reports, the computer files
appear to link the Venezuelan government with efforts to secure arms for the FARC, and
Colombian officials maintain that the documents for the computers show that the Venezuelan
government may have channeled some $300 million to the FARC. President Hugo Chávez and 108
other Venezuelan officials strongly deny the accusations.
In June and July 2008, President Chávez reversed policy directions in several areas. In early June,
he called for the FARC to disarm, and in early July, in a meeting with U.S. Ambassador to
Venezuela Patrick Duddy, he called for cooperation with the United States on drug trafficking and
other issues. This was noted by Assistant Secretary of State for Western Hemisphere Affairs Tom
Shannon in congressional testimony on July 17, 2008 before the House Western Hemisphere
Subcommittee. Shannon stated 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 maintained that “we have told Venezuela that we would like to explore this
By September 2008, however, U.S. relations with Venezuela took a significant turn for the worse
when Venezuela expelled U.S. Ambassador Patrick Duddy, and alleged that the Venezuelan
government had foiled a U.S.-backed conspiracy to assassinate him. In expelling the U.S.
Ambassador, Chávez expressed solidarity with Bolivia, which had just expelled the U.S.
Ambassador to Bolivia who had met with opposition leaders in that country. At the time that
Chávez announced the expulsion of Ambassador Duddy, he also announced that he was recalling
the Venezuelan Ambassador to the United States, Bernardo Alvarez. On September 12, the United
States declared Ambassador Alvarez persona non grata. President Chávez announced that he
would receive a new U.S. Ambassador as soon as the United States has a new Administration.
Also on September 12, the U.S. Treasury Department froze the assets of two senior Venezuelan
intelligence officials and the former interior minister for allegedly helping the FARC with
weapons and drug trafficking. Just days later, on September 16, 2008, President Bush determined,
for the fourth consecutive year, that Venezuela had failed demonstrably to adhere to its
obligations under international narcotics control agreements.
The United States has funded democracy-related projects in Venezuela for a number of years
through a variety of programs funded by the State Department, the U.S. Agency for International
Development (USAID), and the National Endowment for Democracy (NED).
Benedict Mander, “U.S. Shrugs Off Chávez Threat Over Oil,” Financial Times, February 12, 2008.
108 Simon Romero, “Files Released by Colombia Point to Venezuelan Bid to Arm Rebels,” New York Times, March 30,
2008; and Alexei Barrionuevo, “U.S. Studies Rebels’ Data for Chávez Link,” New York Times, March 14, 2008.
USAID, through its Office of Transition Initiatives, has funded democracy projects in Venezuela
since 2002, with the goals of strengthening democratic institutions, promoting space for dialogue,
and encouraging citizens’ participation in democratic processes. Transitions Initiatives (TI)
funding in recent years was $5 million in FY2005, $3.7 million in FY2006, $3 million in
FY2007, and an estimated $4 million in FY2008. According to USAID, 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 109
the Pan-American Development Foundation, which provides support to civil society.
The State Department has supported democracy projects in Venezuela through Economic Support
Funds (ESF). In FY2004, $1.497 million was provided (including $1 million in reprogrammed
funds to support political reconciliation), and in FY2005, $2.4 million in ESF was provided. For
FY2006, although the Administration requested $500,000 in ESF for such projects, it did not
allocate any ESF for Venezuela. For FY2007, the Administration allocated $1.6 million in ESF
for Venezuela democracy initiatives. For FY2008, the Administration did not request any ESF for
Venezuela for FY2008, but it requested $3 million in Development Assistance “to help ensure
civil society groups continued serving as one of the last checks on an increasingly authoritarian 110
Venezuelan government.” Ultimately for FY2008, however, according to the State
Department’s FY2009 Congressional Budget Justification for Foreign Operations, the
Administration allocated an estimated $1.5 million in Development Assistance and almost $3
million in ESF to support civil society in Venezuela. The Administration’s FY2009 request is for
$5 million in ESF to support civil society.
NED has funded democracy projects in Venezuela since 1992, but the level of funding has
increased under the Chávez government. In FY2003, NED funded 15 Venezuela projects with
$1.05 million. In FY2004, it funded 13 projects with about $874,000. In FY2005, NED funded 16
democracy projects with $902,000. For FY2006, the FY2006 Foreign Operations appropriations
measure (P.L. 109-102) provided $2 million in Democracy Funds for NED for democracy
programs in Venezuela. During FY2006, NED funded 18 democracy projects in Venezuela and 5
regional democracy projects that included components in Venezuela. For FY2007, NED funded
The Venezuelan government and some other critics have criticized NED’s funding of opposition 111
groups. They maintain that the NED has funded groups 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 argue that Súmate led the
signature drive for the recall referendum, and question whether the NED should have funded such
U.S. officials and some Members of Congress strongly defended the NED’s activities in
Venezuela and have criticized the Venezuelan government’s efforts to intimidate the leaders of
U.S. Agency for International Development, USAID/OTI Venezuela Annual Summary Report, October 2006-
110 U.S. Department of State, FY2008 Congressional Budget Justification for Foreign Operations, p. 1204.
111 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.
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 112
society for exercising their democratic rights.”
According to the NED, its program in Venezuela “focuses on promoting citizen participation in
the political process, civil and political rights, freedom of expression and professional journalism,
and conflict mediation.” The NED asserts that all of the Venezuelan programs that it funds
operate on a non-partisan basis. It maintains that Súmate, which received a grant of $53,400 in
September 2003, mobilized a citizen campaign to monitor the signature collection process and
that the money was used “in developing materials to educate citizens about the constitutional 113
referendum process and to encourage citizens to participate.” NED officials also assert that
they did not fund the Democratic Coordinator for the development of its July 2004 consensus
platform. The NED points out that it did fund a consensus building project in 2002 for one of the
NED’s core institutions, the Center for International Private Enterprise (CIPE). For the project,
CIPE partnered with a Venezuelan group, the Center for the Dissemination of Economic
Information (CEDICE) to work with several Venezuelan nongovernmental organizations and the 114
business sector for the development of a broad-based consensus. In early September 2005, the
board of the NED approved a new $107,000 grant to Súmate for a program to train thousands of 115
people on their electoral rights.
As a result of the controversy, the conference report to the FY2005 Consolidated Appropriations
Act (Division B of P.L. 108-447, H.Rept. 108-792) required a comprehensive report on NED’s
activities in Venezuela since FY2001, and reaffirmed NED’s duty to ensure that all sponsored
activities adhere to core NED principles. The reporting requirement had first been included in the
report to the House version of the FY2005 Commerce, Justice, and State Appropriations bill
(H.R. 4754, H.Rept. 108-576).
Since Venezuela is a major supplier of foreign oil to the United States (the fourth major foreign
supplier in 2007, after Canada, Mexico, and Saudi Arabia), providing about 11.5% of U.S. crude
oil imports, a key U.S. interest has been ensuring the continued flow of oil exports. Some 68% of
Venezuela’s oil exports are destined for the United States, highlighting the dependency of
Venezuela on the U.S. market, and oil exports account for the overwhelming majority of
Venezuela’s exports to the United States. In 2007, Venezuela’s total exports destined for the
United States amounted to $39.9 billion, with oil products accounting for almost 96% of the 116
total. The December 2002 strike orchestrated by the opposition reduced Venezuela’s oil
exports, but by May 2003, Venezuelan officials maintained that overall oil production returned to
the pre-strike level. Venezuela’s state-run oil company, PdVSA, owns CITGO, which operates
“United States Rejects Venezuelan Decision to Try Civic Group,” Department of State, Washington File, July 8,
113 National Endowment for Democracy, “NED Venezuela Programs FAQ,” available online at http://www.ned.org/
114 Telephone conversation with NED official July 15, 2004; also see Andres Oppenheimer, U.S. Group’s Funds Aid
Democracy, Miami Herald, July 15, 2004.
115 Pablo Bachelet, “Citizens Group to Get U.S. Funds,” Miami Herald, September 13, 2005.
116 Department of Commerce statistics, as presented by World Trade Atlas.
three crude oil refineries and a network of some 14,000 retail gasoline stations in the United
The Chávez government has benefitted from the rise in world oil prices, which has increased
government revenues and sparked an economic boom. As a result, Chávez has been 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 117
companies 50% when crude oil is $70 a barrel, and 60% when oil exceeds $100 a barrel.
Under President Chávez, the Venezuelan government has 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.-
based ConocoPhillips, Chevron, and ExxonMobil, Norway’s Statoil-Hydro, Britain’s BP, and
In the conversion to Venezuelan government majority ownership, Chevron and BP maintained
their previous investments, Total and Statoil-Hydro reduced their holdings, while ConocoPhillips 118
and ExxonMobil chose to leave the projects. However, Statoil-Hydro, Total, and Italy’s Eni
subsequently signed agreements that could result in additional investments in the Orinoco Belt 119
projects. 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.
ExxonMobil has been in a high-profile dispute with the Venezuelan government over
compensation to be paid by Venezuela for its oil investments in the country. The company filed a
request in 2007 for arbitration with the World Bank-affiliated International Center for Settlement
of Investment Disputes. ExxonMobil initially won a UK court order in January 2008 freezing as
much as $12 billion in Venezuelan oil sector assets, but this was overturned by a UK High Court 120
order on March 18, 2008. ExxonMobil, however, also previously had won court orders in the
Netherlands and Netherlands Antilles freezing up to $12 billion in Venezuelan assets, and in
February 2008, a U.S. federal court in New York upheld a freeze of $300 million in PdVSA 121
According to some critics, majority state ownership in the oil sector has reportedly 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 122
maintenance and repairs. PdVSA announced in early April 2008 that it would raise output to
3.5 million barrels a day (mbd), up from 3.15 mbd in 2007, but other sources, including the
“Venezuela Passes Tax on Oil Companies,” New York Times, April 16, 2008.
118 U.S. Energy Information Administration, “Country Analysis Briefs: Venezuela,” October 2007.
119 Benedict Mander “Venezuela’s Oil Belt Reopens to Private Groups,” Financial Times, March 11, 2008.
120 Robert Perkins, “UK Court Overturns Asset Freeze on PdVSA,” Platts Oilgram News, March 19, 2008.
121 “U.S. Court Upholds Freeze of Venezuelan Oil Firm’s Assets,” EFE News Service, February 13, 2008.
122 Danna Harman, “Venezuela’s Oil Model: Is Production Rising or Falling?,” Christian Science Monitor, May 31,
International Energy Agency, put 2007 production at far less, just 2.4 million mbd.123 Some oil
analysts also question whether PdVSA is prepared to take over operation of the heavy oil fields in 124
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
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 125
will not get Venezuelan oil.” In April 2006, he warned that his government would blow up its 126
oil fields if the United States ever were to attack. 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 127
Venezuela’s response against aggression initiated by the U.S. government. Once again in
February 2008, President Chávez once again threatened to stop oil exports to the United States,
this time if ExxonMobil was successful in freezing billions in Venezuela oil assets in a dispute
over compensation for its Orinoco oil investments. State Department officials played down the 128
threat, pointing out that Chávez has made the same threat in the past, but has never cut oil. A
week later, on February 17, Chávez said that he would only stop sending oil if the United States 129
Because of these comments, however, some observers have raised questions about the security of
Venezuela as a major supplier of foreign oil. 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 June 2006, the Government Accountability
Office (GAO) issued a report, requested by Senate Foreign Relations Committee Chairman
Richard Lugar, on the issue of potential Venezuelan oil supply disruption. 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.
It also concluded that if Venezuela does not maintain or expand its current level of oil production,
“Worldwide Look at Reserves and Production,” Oil & Gas Journal, December 24, 2007; Jack Chang and Kevin G.
Hall, “Falling Oil Production a Challenge for Chávez,” Miami Herald, March 22, 2008; “Venezuela: PdVSA-
ExxonMobil Tensions Continue,” Oxford Analytica, April 9, 2008.
124 Juan Forero, “Venezuela Set to Assume Control of Its Oil Fields,” Washington Post, May 1, 2007.
125 “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.
126 “Chávez Says He’ll Blow up Oil Fields If U.S. Attacks,” Miami Herald, April 20, 2006.
127 Andy Webb-Vidal, “Venezuela Will Not Cut Off Oil Despite Hostile U.S. Attitude,” Financial Times, August 1,
128 Benedict Mander, “U.S. Shrugs Off Chávez Threat Over Oil,” Financial Times, February 12, 2008.
129 “Venezuela: Chávez Dials Back Threat to Halt Oil,” Los Angeles Times, February 18, 2008.
then the world oil market may become even tighter than it is now, putting pressures on both the 130
level and volatility of energy prices.
For additional information see CRS Report RL33693, Latin America: Energy Supply, Political
Developments, and U.S. Policy Approaches, by Mark P. Sullivan, Clare Ribando Seelke, and
Rebecca G. Rush.
Because of Venezuela’s extensive 1,370-mile border with Colombia, it is a major transit route for
cocaine and heroin destined for the United States. As noted above, Venezuela suspended its
cooperation with the U.S. Drug Enforcement Administration in early August 2005 because it
alleged that DEA agents were spying on Venezuela. U.S. officials maintained that the charges
were baseless. Since 2005, President Bush has 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, although he waived economic sanctions that would
have curtailed U.S. assistance for democracy programs in Venezuela. Venezuelan officials
maintain that President Bush’s decision to designate Venezuela was purely political because of 131
the overall state of U.S.-Venezuelan relations.
Press reports in June and July 2006 indicated that 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 132
place. In August 2006, Venezuelan officials said that they were reconsidering signing the
agreement in response to the announcement by U.S. Director of National Intelligence John
Negroponte on 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 Venezuela remains in limbo since the host country refuses to sign a
memorandum of understanding authorizing” a DEA presence “even after successfully concluding 133
a lengthy process of negotiation with U.S. officials.” On July 26, 2006, the House approved
H.Con.Res. 400 (Burton), which, among other provisions, condemned Venezuela’s failures to
stem the flow of narcotics through its territory and calls for, among other measures, steps to
restore cooperation between Venezuela and the DEA.
The Department of State, in its February 2008 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
U.S. Government Accountability Office, “Energy Security: Issues Related to Potential Reductions in Venezuelan
Oil Production,” GAO-06-668, June 2006.
131Ian James, “Venezuela Says U.S. Move to Call Country Uncooperative on Drugs is Pure Politics,” Associated Press,
September 16, 2005.
132 “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.
133 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.
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 towards 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, Venezuela reported that 28 metric tons of cocaine were
seized in 2007 (down from 38.9 metric tons in 2006), but the report noted that a large portion of
these seizures were made by other countries in international waters and then returned to
According to the State Department report, the government of Venezuela has minimized all
counternarcotics related cooperation contact with the U.S. government, including, despite
repeated U.S. requests, 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. In terms of progress, the State Department report maintained that
Venezuela 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) working with the United States to make the CIF
operational. Additional bilateral cooperation beyond these initial steps would be the development
of a drug intelligence fusion and analysis center, and the initiation of riverine interdiction
operations on the Orinoco River.
In 2008, the Venezuela government appeared to be taking more action on antidrug measures. It
began a program aimed at destroying clandestine airstrip used by Colombian drug traffickers and
at tracking drug smuggling planes. By early September 2008, Venezuelan officials claimed to 134
have destroyed more than 200 illegal landing strips. Venezuelan officials 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. In early July 2008, President Chávez met briefly with U.S.
Ambassador Patrick Duddy and expressed a desire to reopen cooperation with the United States
on drug trafficking and other issues.
To date, however, anti-drug cooperation continues to be stymied. 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
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.
figure would be higher in 2008.135 On September 16, 2008, for the fourth year in a row, President
Bush determined that Venezuela had failed demonstrably to adhere to its obligations under
international narcotics control agreements, but he waived sanctions to allow the continuation of
U.S. foreign assistance to support civil society programs and community development programs.
According to the State Department, the amount of drugs bound for the United States and Europe
continues to grow, despite Venezuelan assurances that seizures have increased. The State
Department again noted Venezuela’s refusal to renew counternarcotics cooperation agreements 136
with the Untied States.
From FY2002-FY2007, Venezuela received small amounts of U.S. assistance under the
Administration’s Andean Counterdrug Initiative (ACI) focusing on counternarcotics cooperation
and judicial reform support. Some $5 million was provided in FY2002; $2.075 million in
FY2003; $5 million in FY2004; almost $3 million in FY2005; $2.229 million in FY2006; and $1
million in FY2007. For FY2008 and FY2009, the Administration did not request any funding for
Venezuela under the newly named Andean Counterdrug Program (ACP).
For several years, the Bush Administration has expressed concerns about Venezuela’s purchases
of military equipment. Defense Intelligence Agency (DIA) Director Lt. Gen. Michael Maples
expressed concern in February 2006 congressional testimony about Venezuela’s arms purchases,
maintaining that Venezuela was seeking to increase their capability for their own defense and to 137
operate elsewhere in the region.
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 138
such an alternative was not economically feasible and the deal was cancelled. 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 interested in purchasing at least a dozen light-attack aircraft, 139
manufactured by Embrarer, that contain U.S. technology.
In May 2006, as discussed below (“Venezuela and U.S. Anti-Terrorism Sanctions”), the State
Department determined (pursuant to Section 40A of the Arms Export Control Act) that Venezuela
Costa Ocando and Gerardo Reyes, “Drug Flights Operate Out of Venezuela,” Miami Herald, September 14, 2008.
136 U.S. Department of State, “Remarks on Release of the Annual Report on the Major Illict Drug Producing Countries
for Fiscal Year 2008,” David T. Johnson, Asst. Secretary of State for International Narcotics and Law Enforcement
Affairs, September 16, 2008.
137 Senate Armed Services Committee, Hearing on Worldwide Threats to U.S. National Security, Testimony of Lt. Gen.
Michael D. Maples, Direction, DIA, February 28, 2006.
138 Renwick McLean, “U.S. Objections Lead Spain to End Venezuela Deal,” New York Times, October 19, 2006.
139 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.
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. The State Department made the
same determination in May 2007 and May 2008.
In January 11, 2007 testimony before the Senate Select Committee on Intelligence, Director of
National Intelligence (DNI) John Negroponte expressed concern that the 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 Senate Select Committee on Intelligence, current DNI
Michael McConnell expressed concerns about more than $3 billion in arms purchases from
Russia over the past two years, and noted growing anxiety among Venezuela’s neighbors because
of this arms build-up. McConnell testified at a February 27, 2008 Senate Armed Services
Committee hearing that Venezuela’s military build-up is probably 3 to 4 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.” (For additional developments, see “Allegations
from Captured FARC Computers” below.)
President Chávez has vowed to continue with his nation’s military purchases, asserting that he
was acquiring the minimum equipment for Venezuela to defend itself from the United States.
Venezuela is buying significant amounts of military equipment from Russia. This includes
contracts to buy 24 Sukhoi Su-30 fighter jets, 50 military helicopters, 100,000 Kalashnikov
assault rifles, a license to build a factory to produce Kalashnikov rifles in Venezuela, and several 140
submarines. 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. Some press reports indicate that future additional military
purchases from Russia could include transport planes, tanks, additional submarines, and an air 141
defense missile system. During a trip to Russia in late September 2008, Russia announced that 142
it would loan $1 billion to Venezuela for arms purchases and military development.
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. DNI
Michael McConnell testified in February 5, 2008 testimony before the Senate Select Committee
on Intelligence, 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.
Neil Buckley and Andy Webb-Vidal, “Chávez Seeks to Link Putin with Anti-U.S. Alliance,” Financial Times, July
26, 2006; Simon Romero, “Venezuela Spending on Arms Soars to World’s Top Ranks,” New York Times, February 25,
141 “Russian S-300 Missiles ‘Would Ensure Venezuela’s Oil Security,” RIA Novosti, July 24, 2008; “Venezuela’s
Chávez Shopping for Russian Weapons,” Miami Herald, July 21, 2008.
142 Megan K. Stack, ““Venezuela Signs Deals with Russia,” Los Angeles Times, September 27, 2008.
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 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. 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 nations of Dominica joined in January, while Honduras joined in late August.
President Chávez’s proposal in January 2008 that ALBA should establish a joint defense council
was only supported by Nicaragua, while Bolivia’s Evo Morales appeared to distance himself from 143
In December 2007, Venezuela and six other South American countries – Argentina, Bolivian,
Brazil, Ecuador, Paraguay, and Uruguay – joined to sign 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. The bank reportedly will have a start-up capital of
some $7 billion, largely from Brazil and Venezuela, but it remains unclear what the lending 144
conditions of the bank will be.
Venezuela joined the Southern Common Market (Mercosur) in 2006, but its application for full
membership has run into problems because of President Chávez’s decision not to renew the
broadcast license of RCTV in 2007, an action that could be construed as contradictory to
Mercosur’s democratic clause. (For additional information, see CRS Report RL33620, Mercosur:
Evolution and Implications for U.S. Trade Policy, by J. F. Hornbeck.)
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
Trinidad and Tobago. Cuba, a major beneficiary, receives some 90,000 barrels per day (bpd) of oil
under the program. In Central America, Nicaragua and Honduras joined PetroCaribe in 2007,
Guatemala joined in July 2008, and Costa Rica has applied to become a member. PetroCaribe
“Chávez’s Belligerent Rhetoric Loses Him Support in the Andes,” Latin American Regional Report, Andean Group,
144 “South Americans Will Start Bank,” Wall Street Journal, December 10, 2007; Alexei Barrionuevo, “Chávez’s Plan
for Development Bank Moves Ahead,” New York Times, October 22, 2007.
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 initiating a gas pipeline project that
would initially supply gas to Venezuela from northern Colombia, and then reverse the flow once
Venezuela develops its own natural gas reserves. Argentina and Venezuela also announced an
alliance in July 2006 involving cooperation on hydrocarbon exploration and development in both
countries. In Cuba, PdVSA helped refurbish an oil refinery in Cienfuegos, and has signed an 145
exploration and production agreement with Cupet, Cuba’s state-oil company.
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. All four 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 146
the Vice President and the Intelligence and Preventative Services Directorate (DISIP). Three of
the four defendants pled guilty, but the trial of Franklin Duran began in September 2008.
In August 2007, Colombian President Alvaro Uribe authorized President Chávez and Colombian
Senator Piedad Cordoba to play a role in negotiations with the FARC to release some 45 high-
profile hostages. This included efforts to release three American defense contractors – Marc
Gonsalves, Keith Stansell, and Thomas Howes – held since February 2003, when their plane
crashed in FARC-controlled territory. In late November 2007, however, Uribe withdrew his
support of these efforts because Chávez reportedly broke protocol by having direct contact with
the top commander of the Colombian army. Nevertheless, Chávez continued to play a key role in
the effort to release the hostages. On January 10, 2008, the FARC ultimately released to
Venezuelan officials two prominent Colombians that had been hostage for several years. A day
after the two hostages’ release, Chávez’s calls for the international community to no longer label
the FARC and the National Liberation Army (ELN) as terrorist groups prompted widespread
condemnation. Nevertheless, his role in the release of hostages continued. On February 27, 2008,
the FARC released four former members of the Colombian Congress to Venezuelan officials in
“Venezuela: Oil Revenues Boost International Influence,” Oxford Analytica, July 19, 2006.
146 United States District Court, Southern District of Florida, Case No. 1:07-cr-20999-JAL, Document 24, December
Colombian territory. On March 7, 2008, the Venezuelan government received from the FARC
“proofs of life” for 10 Colombian soldiers held by the FARC.
In the aftermath of the Ecuador-Colombia border crisis (discussed below), Chávez’s role in future
hostage releases became unclear. Moreover, on July 2, 2008, the Colombian military rescued the
three American hostages along with former Colombian presidential candidate Ingrid Betancourt
and 11 other hostages. Over 700 hostages are still being held by the FARC.
Venezuela initially played a significant role in stoking regional tensions in the aftermath of
Colombia’s March 1, 2008 bombing of a FARC camp in Ecuador that killed Raúl Reyes, the
FARC’s second highest commander. President Chávez warned Colombian President Uribe not to 147
do anything similar in Venezuelan territory “because it would be a cause for war.” Venezuela,
along with Ecuador, announced that it would mobilize troops along its border with Colombia, and
Chávez threatened to send its Russian fighter jets to attack Colombia if President Uribe attempted
a similar operation against the FARC rebels on the Venezuelan side of the border. He ordered 10
battalions to the Colombian border, including tank units, closed the Venezuela Embassy in
Bogotá, and expelled Colombia’s Ambassador from Venezuela.
Few analysts took Chávez’s order to send tanks and fighter jets to the border as a serious threat of
war, maintaining that Venezuela’s active military of 115,000 troops pales in comparison to
Colombia’s 254,000 troops that have seen active combat against insurgent groups for many 148
years. Moreover, some maintain that Venezuela’s troop movements were delayed for several 149
days, and may have been far less than Chávez led everyone to believe.
Just days after the Colombian incursion, President Chávez reportedly played an important role at
the successful Rio Group summit that helped resolve the crisis. OAS Secretary General Insulza
maintained that Chávez’s role was “decisive and tremendously constructive” in sorting out the 150
crisis at the Santo Domingo meeting. After six hours of contentious exchanges, Chávez
reportedly called for reflection and cooling off, and paved the way for Dominican President 151
Leonel Fernández to urge the parties to end the meeting with a cordial embrace. He maintained
that the conflict cannot be solved militarily, and must be resolved by a negotiated settlement. By
March 10, Venezuela announced that it was fully establishing diplomatic and commercial ties
with Colombia, and pulled its troops back.
Sibylla Brodzinsky, “Colombia’s Cross-Border Strike on FARC Irks Neighbors,” Christian Science Monitor, March
148 Benedict Mander and Anastasia Moloney, “Venezuelan Forces Fall Short of Chávez’s Bellicose Bluster, Financial
Times, March 4, 2008; and Toby Muse, “Troops Deployed as Tensions Rise,” South Florida Sun-Sentinel, March 5,
2008, citing statistics from the International Institute for Strategic Studies.
149 “Special Focus, Region: Peering Through the Fog of the War That Wasn’t,” Latin American Security & Strategic
Review, March 2008.
150 “Chávez Hailed as Peacemaker with Colombia,” Latinnews Daily, March 10, 2008.
151 “How Diplomacy Silenced the Drums of War in Less Than a Week,” Latin American Security & Strategic Review,
U.S. officials have expressed concerns over the past several years about Venezuela’s lack of
cooperation on antiterrorism efforts, its relations with Cuba and Iran, and President Chávez’s
sympathetic statements for Colombian terrorist groups. 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-
which ended all U.S. commercial arms sales and re-transfers to Venezuela. When the State
Department issued its first determination in 2006, it 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. The determination was renewed in May 2007 and again in May 2008.
According to the State Department’s Country Reports on Terrorism 2007 report, issued at the end
of April 2008, President Chávez continued his public criticism of U.S. counterterrorism efforts
and deepened Venezuelan relationships with Iran and Cuba, while his ideological sympathy for
two Colombian insurgencies (the FARC and the National Liberation Army) and high levels of
corruption among Venezuelan officials, have limited Venezuelan cooperation with Colombia in
combating terrorism. In addition, according to the report, Venezuelan citizenship, identity, and
travel documents remained easy to obtain, making the country a potentially attractive way-station
for terrorists. In July 2006, congressional testimony, the State Department’s Principal Deputy
Coordinator for Counterterrorism, Frank Urbancic, had asserted that the United States was
detaining increasing numbers of third-country aliens at its borders carrying falsified or 152
fraudulently issued Venezuelan documents.
As in past years, the State Department terrorism report covering 2007 stated that “it remained
unclear to what extent the Venezuelan government provided support to Colombian terrorist
organizations.” It noted that limited amounts of weapons and ammunition from official Venezuela
stocks and facilities turned up in the hands of Colombian terrorist organizations. The report also
noted that Venezuela did not systematically police its 1,400 mile border with Colombia in order to
prevent the movement of terrorists or to interdict arms or the flow of narcotics. Information on
captured computer files from Colombia’s March 2008 raid of a FARC camp in Ecuador raised
further 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 a welcome turn of events on June 8, 2008, President Chávez called for the FARC to release all
hostages unconditionally and to cease military operations, maintaining that guerrilla warfare “has
Testimony of Frank Urbanic, State Department Principal Deputy Coordinator for Counterterrorism before a July 13,
2006 hearing of the House International Relations Committee, Subcommittee on International Terrorism and
passed into history.”153 Assistant Secretary of State for Western Hemisphere Affairs Tom Shannon
noted the importance of Chávez’s words, and expressed hope that they would be “backed up by
actions designed to prevent the use of Venezuela’s frontier with Colombia for the movement of 154
On September 12, 2008, the U.S. 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 155
Forces of Colombia (FARC) with weapons and drug trafficking.
In light of the captured FARC documents cited above, some observers, including some Members
of Congress, called on the Bush Administration 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, North Korea,
Sudan, and Syria. The Bush Administration began an initial inquiry into designating Venezuela as
a state sponsor in March. In the House, H.Res. 1049 (Mack), introduced in March 2008, would
urge the Administration to designate Venezuela as such.
In terms of economic sanctions associated with being on the terrorism list, the EAA requires a
validated license for the export of goods and technology to a country if the Secretary of State
determines that the government of such a country “has repeatedly provided support for acts of
international terrorism” and if the export of such goods and technology could make a significant
contribution to the country’s military potential or could enhance its ability to support acts of
international terrorism. Beyond the EAA, several provisions of law impose additional sanctions
on countries on the state sponsors of terrorism list, such as: a ban on arms-related exports and
sales; various restrictions and prohibitions on foreign assistance; denial of duty-free treatment of
goods exported to the United States under the Generalized System of Preferences (GSP); denying
companies and individuals tax credits for income earned in the terrorist-listed countries; and
authority to prohibit any U.S. citizen from engaging in a financial transaction with a terrorist-list
government without a Treasury Department license.
The sanctions associated with being on the terrorism list would likely have an effect on U.S.-
Venezuelan economic relations. A substantial portion of U.S. exports to Venezuela, particularly
for the oil sector, would likely require validated licenses for so-called dual-use exports and
technology. The termination of the tax credit that prevents double taxation would increase the cost
of U.S. companies operating in Venezuela, and could be a disincentive for some U.S. companies
operating there. The stock of U.S. foreign investment in Venezuela is estimated at $11.6 billion, 156
concentrated in the manufacturing and mining sector. The state sponsor of terrorism
designation also potentially could complicate U.S. oil imports from Venezuela, in part because
“Analysis: Chávez Reverses FARC Stance, Domestic Moves Ahead of Elections,” Open Source Center, June 19,
154 U.S. Department of State, Thomas A. Shannon, Jr. Assistant Secretary of State for Western Hemisphere Affairs,
“U.S. Diplomacy in the Americas,,” June 10, 2008.
155 Phil Gunson, “U.S. Slams Venezuelan Hugo Chávez Top Intelligence Men, Miami Herald, September 13, 2008;
Federal Register, September 19, 2009, pp. 54453-54454.
156 United States Trade Representative, 2008 National Trade Estimate on Foreign Trade Barriers, March 28, 2008.
PdVSA owns Citgo, based in Houston Texas, which operates three oil refineries and two asphalt
refineries in the United States and has some 14,000 branded retail outlets selling gasoline across 157
the United States. PdVSA also has a 50% interest in a large refinery in the U.S. Virgin Islands.
According to the Venezuelan government, PdVSA and Citgo annually purchase more than $2 158
billion in goods and services from 800 U.S. companies.
The designation of Venezuela as a state sponsor of terrorism also could have increased popular
support for President Chávez at a time when Venezuela is preparing for state and local elections
in November 2008. Some Venezuelan opposition figures maintain that such a designation would
only be helpful to the Chávez government, which would portray itself as a victim. Short of
designating Venezuela as a state sponsor of terrorism, some observers have suggested the
consideration of “smart” or targeted sanctions aimed at Venezuelan officials or particular 159
activities in order to demonstrate U.S. concern with their alleged actions supporting the FARC.
Suggestions for such sanctions generally include denying entry into the United States of
designated individuals or freezing assets of named individuals or entities, such as occurred on
September 12, 2008, when the Treasury Department froze the assets of three high-ranking
Venezuelan officials for their support for the FARC (noted above).
Venezuela’s relations with Iran have been longstanding because they were both founding
members of OPEC. Nevertheless, as their relations have intensified over the past several years,
U.S. officials and some Members of Congress have expressed concerns. In November 2007, the
House approved H.Res. 435 (Klein), expressing concern about Iran’s efforts to expand its
influence in Latin America, and noting Venezuela’s increasing cooperation with Iran.
Iranian President Mahmoud Ahmadinejad has visited Caracas on three occasions since 2006, and
President Chávez has visited Iran several times. The two nations have signed a variety of
agreements in agriculture, petrochemicals, oil exploration in the Orinoco region of Venezuela,
and the manufacturing of tractors, bicycles, and automobiles. Weekly flights between the two
countries began last year. In February 5, 2008 testimony before the Senate Select Intelligence
Committee, Director of National Intelligence 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
A major rationale for Iran’s recent overtures toward Venezuela is to show that it is not isolated
diplomatically. Moreover, some observers maintain that Ahmadinejad’s increased interest in
Venezuela since he came to power in 2005 has been to cause political angst for the United States
in its own neighborhood. According to one observer, once Ahmadinejad is gone, the bilateral
U.S. Energy Information Administration, “Venezuela: Country Analysis Brief,” October 2007.
158 Bolivarian Government of Venezuela, Embassy in the United States of America,
“Terrorism and Trade: Assessing the Impacts,” March 2008.
159 For example, see Ray Walser, “The FARC Files, Colombia, and International Terrorism,” Heritage Foundation,
Web Memo #1872, March 28, 2008; and “Hard Drive Diplomacy,” Washington Post, editorial, May 18, 2008.
relationship will likely be reduced to the level of past years that was based largely on their OPEC 160
Assistant Secretary of State for Western Hemisphere Affairs Tom Shannon has said that one of the
concerns about Iran’s increasing interest in Latin America is its ties to the radical Lebanon-based
Islamic group Hezbollah. According to Shannon, “What worries us is Iran’s history of activities in
the region and especially its links to Hezbollah and the terrorist attack that took place in Buenos 161
Aires [in 1994].” 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 162
Venezuela requested the extradition of three of its citizens from the United States in two
controversial terrorism cases. In early 2004, the Chávez government requested the extradition of
two former Venezuelan National Guard lieutenants, José Antonio Colina and German Rodolfo
Varela, charged with the February 2003 bombings of the Spanish Embassy and the Colombian
Consulate in Caracas. Both applied for political asylum because they claimed that they would be
executed or tortured if returned to Venezuela. They were held from December 2003 until April
immigration judge denied them asylum because of “serious reasons for believing” that they were
involved in the bombings but prohibited the United States from deporting them to Venezuela 163
because of the likelihood of being tortured. The Department of Homeland Security (DHS)
asked an immigration appeals court to deport the two Venezuelans, arguing that they would not be
tortured if returned home. As evidence, they cite the treatment of a former general arrested in 164
Venezuela for the same case.
In late December 2005, Colina and Varela—on a hunger strike for a month in protest of being
held by U.S. immigration—were transferred from Florida to Houston for medical treatment. They
ended their 33-day hunger strike in early January 2006. In April 2006, ICE reversed its stance on
the deportation case and joined with the attorneys for Colina and Varela in filing a joint motion
asking the immigration appeals court to dismiss the case, whereupon they were released. Lawyers
for the two former officers maintain that the State Department’s March 2006 human rights report 165
on Venezuela played a role in ICE’s decision to abandon its efforts to deport Colina and Varela.
The report cited accusations that a military general imprisoned in Venezuela for alleged
involvement in the bombings had been subject to sensory deprivation and psychological torture.
Farideh Farhi, Public Policy Scholar, Woodrow Wilson Center, comments at conference on “Iran and Latin
America: Threat or Axis of Annoyance?” Woodrow Wilson International Center for Scholars, Washington D.C. July
161 Andres Oppenheimer, “Beware Iran in Latin America,” Miami Herald, September 30, 2007.
162 “Treasury Targets Hizballah in Venezuela,” States News Service, June 18, 2008.
163 Gerardo Reyes and Alfonso Chardy, “Wanted Chávez Foes Flee to South Florida,” Miami Herald, April 5, 2005.
164 Alfonso Chardy, “Deport Venezuelan Bombing Suspects, U.S. Urges Court,” Miami Herald, March 25, 2005.
165 Alfonso Chardy, “2 Officers Won’t Be Sent Home,” Miami Herald, April 12, 2006.
The Venezuelan government condemned the release of Colina and Varela, maintaining that the 166
United States had become a “sanctuary for terrorists.”
In another controversial case, Venezuela has requested the extradition of anti-Castro activist Luis
Posada Carriles for his alleged role in the 1976 bombing of a Cuban airliner that killed 73 167
people. 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 168
persecution” for his opposition to Fidel Castro. Posada had been imprisoned in Venezuela for
the bombing of the Cuban airliner but reportedly was allowed to “escape” from prison in 1985 169
after his supporters paid a bribe to the prison warden. He had been acquitted for the bombing
but remained in prison pending a prosecutorial appeal. Posada also reportedly admitted, but later
denied, involvement in a string of bombings in Havana in 1997, one of which killed an Italian 170
tourist. More recently, Posada was imprisoned for several years in Panama for his involvement
in an alleged plot in November 2000 to kill Fidel Castro. He was convicted on weapons charges
in the case and sentenced to eight years in prison, but ultimately was pardoned by outgoing
President Mireya Moscoso in August 2004.
ICE arrested Posada on May 17, 2005, and subsequently charged him with illegally entering the
United States. A DHS press release indicated that ICE does not generally deport people to Cuba 171
or countries believed to be acting on Cuba’s behalf. Venezuela has pledged that it would not
hand Posada over to Cuba, but on September 26, 2005, a U.S. immigration judge ruled that 172
Posada could not be deported to Venezuela because he could be tortured. ICE reviewed the case
and determined on March 22, 2006, that Posada would not be freed from a federal immigration 173
facility in El Paso, Texas.
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 country jail in New Mexico near the
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 174
mistranslated testimony from Posada and manipulated evidence. On June 5, 2007, Justice th
Department prosecutors filed a notice of appeal with the 5 U.S. Circuit Court of Appeals in New
Christopher Toothaker, “Venezuela’s Chávez Says Bush ‘Demolishing’ U.S. Democracy, Threatening Peace,”
Associated Press, May 24, 2006.
167Also see CRS Report RL32730, Cuba: Issues for the 109th Congress, by Mark P. Sullivan.
168 Alfonso Chardy and Nancy San Martin, “Lawyer Expects Posada to Show Soon,” Miami Herald, April 14, 2005.
169 Ann Louise Bardach, “Our Man’s in Miami. Patriot or Terrorist?,” Washington Post, April 17, 2005.
170 Oscar Corral and Alfonso Chardy, “Victim’s Kin Oppose Posada Bid for Asylum,” Miami Herald, May 7, 2005.
171 Department of Homeland Security, Office of Public Affairs, Statement, May 17, 2005.
172 Alicia Caldwell, “Judge Says Cuban Militant Can’t Be Deported to Venezuela,” Associated Press, September 28,
173 Oscar Corral, “Cuban Exile Militant Luis Posada Denied Release,” Miami Herald, March 22, 2006.
174 Carol J. Williams, “Pressure Grows to Prosecute Cuban Exile,” Los Angeles Times, May 10, 2007.
Orleans and on November 6, 2007, federal prosecutors field a brief requesting that the court 175
reverse the lower court’s decision. 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. Another grand jury in New 176
Jersey is reportedly examining Posada’s alleged role in the 1997 bombings in Cuba.
On November 15, 2007, the House Subcommittee on International Organizations, Human Rights,
and Oversight of the Committee on Foreign Affairs held a hearing focusing on the Posada case.
In the 110th Congress, congressional concerns regarding Venezuela focus on the state of
democracy and human rights, energy issues, terrorism issues, and the overall status of bilateral
relations and U.S. policy.
On May 24, 2007, the Senate approved S.Res. 211 (Lugar) expressing profound concerns
regarding freedom of expression and Venezuela’s decision not to renew the license of RCTV.
On June 21, 2007, the House approved by voice vote H.Amdt. 358 (Mack) to H.R. 2764, the
FY2008 State Department and Foreign Operations appropriations bill, which would have directed
$10 million in international broadcasting operations funding for targeted broadcasting for
Venezuela. The House subsequently approved H.R. 2764 on June 22, 2007. The Senate version of
the bill, approved September 6, 2007, did not include such a provision. The final enacted
measure, the Consolidated Appropriations Act for FY2008 (P.L. 110-161, Division J), does not
specify such funding, but the joint explanatory statement on the bill expresses support for
restoring shortwave and medium wave transmission to Venezuela. The Administration’s FY2008
foreign aid budget request also included $3 million in Development Assistance (DA) to support to
Venezuelan civil society and $50,000 in International Military Education and Training (IMET).
(Ultimately an estimated $1.5 million in DA and an estimated $3 million in Economic Support
Funds was provided for support to Venezuelan civil society in FY2008, according to the
Administration’s FY2009 Congressional Budget Presentation for Foreign Operations, while an
estimated $47,000 was for IMET.)
On November 5, 2007, the House approved by voice vote H.Res. 435 (Klein), which “expresses
concern over the emerging national security implications of the Iranian regime’s efforts to expand
its influence in Latin America.” Among other provisions, the resolution noted Venezuela’s support
for Iran in the International Atomic Energy Agency, plans for a $2 million Iranian-Venezuelan
fund for investments in third countries, and the establishment of direct civilian airline flights from
Iran to Venezuela.
The federal prosecutors’ brief is available at http://media.miamiherald.com/smedia/2007/11/06/20/Posada_5CA_07-
176 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.
On July 23, 2008, the House passed H.R. 6545 (Cazayouz) by a vote of 414-0, 2 present, which
would require a national intelligence assessment on national and energy security issues. This
would include an assessment of “the implications of the potential use of energy resources as
leverage against the United States by Venezuela, Iran, or other potential adversaries of the United
States as a result of increased energy prices.”
Additional resolutions introduced in the House include H.Con.Res. 50 (Fortuño), introduced
January 31, 2007, which would call on the Venezuelan government to uphold the human rights
and civil liberties of its people; H.Con.Res. 77 (Weller), introduced March 1, 2007, which would
call on the Venezuelan government to respect a free and independent media and to avoid all acts
of censorship against the media and free expression; H.Res. 560 (Barton), introduced July 19,
2007, which would express concern about the Venezuelan government taking control of the
majority stakes of the operations of six major oil companies and stripping these companies of all
operational control of their energy development projects in Venezuela; H.Res. 965 (Issa),
introduced February 7, 2008, which, among other provisions, would call upon the Chávez
government to take action to deny Venezuelan territory and weapons from being used by terrorist
organizations; H.Res. 1049 (Mack), introduced March 13, 2008, which, among other provisions,
urges the Administration to designate Venezuela a state sponsor of terrorism; and H.Res. 1483
(Burton), expressing outrage over the expulsion of U.S. Ambassadors to Venezuelan and Bolivia,
and calling for these countries to resume full counternarcotics cooperation with the United States.
Two Senate bills would increase hemispheric cooperation on energy issues: S. 193 (Lugar), the
Energy Diplomacy and Security Act of 2007, introduced January 4, 2007, and reported by the
Senate Foreign Relations Committee April 12, 2007 (S.Rept. 110-54); and S. 1007 (Lugar), the
United States-Brazil Energy Cooperation Pact of 2007, introduced March 28, 2007, and reported
by the Senate Foreign Relations Committee on September 23, 2008..
In the 109th Congress, there was legislative action on several initiatives on Venezuela and
oversight hearings were held in both houses. The FY2006 Foreign Operations appropriations
measure (P.L. 109-102, H.R. 3057, H.Rept. 109-265) appropriated $2 million in Democracy
Funds for the NED for democracy programs in Venezuela and $2.252 million in funding under
the Andean Counterdrug Initiative (ACI), although slightly less was provided because of a 1%
across-the-board rescission in the Defense Department appropriations measure (P.L. 109-148) that
affected Foreign Operations funding. The Administration also had requested $500,000 in
Economic Support Funds (ESF) for Venezuela, although no specific earmark was provided in the
conference report to P.L. 109-102, and the Administration ultimately did not allocate the
For FY2007, the Administration requested $1 million in ACI funding, $1.5 million in ESF for
democracy initiatives, and $45,000 for International Military Education and Training (IMET).
The House-passed version of the FY2007 foreign operations appropriation bill, H.R. 5522, would
have provided no ACI funding for Venezuela. The Senate Appropriations Committee report to the
bill recommended fully funding the Administration’s $1 million ACI and ESF requests for
Venezuela. Final action on FY2007 foreign aid appropriations was not completed by the end of th
the year, leaving the 110 Congress to complete action in 2007.
Two resolutions on Venezuela were also approved in the 109th Congress. With regard to
counternarcotics cooperation, the House approved H.Con.Res. 400 (Burton), by voice vote on
July 26, 2006, which expressed the sense of Congress that Venezuela should actively support
strategies for ensuring secure airport facilities that meet international certifications to prevent
trafficking of controlled substances, narcotics, and laundered money. The resolution also
condemned Venezuela’s failures to stem the flow of narcotics through its territory and called for,
among other measures, steps to restore cooperation between Venezuela and the DEA. S.Res. 607
(Bunning), approved by unanimous consent on December 6, 2006, condemned President
Chávez’s anti-American rhetoric during his September 20, 2006, speech before the U.N. General
Assembly and “the undemocratic actions of President Chávez.”
In other action, the House-passed version of H.R. 2601 (H.Rept. 109-168), the FY2006 and
FY2007 Foreign Relations Authorization Act, had a provision (Section 1025) that would have
authorized $9 million in Economic Support Funds for each of FY2006 and FY2007 “to fund
activities which support political parties, the rule of law, civil society, an independent media, and
otherwise promote democratic, accountable governance in Venezuela.” H.R. 2601 also had a
provision, in Section 106(5), that would have authorized funds for the “Broadcasting Board of
Governors to carry out broadcasting to Venezuela for at least 30 minutes per day of balanced,
objective, and comprehensive television news programming, radio news programming, or both.” th
Final action on H.R. 2601 was not completed by the end of the 109 Congress.
Other legislative initiatives not completed before the end of the 109th Congress included
H.Con.Res. 224 (Fortuño), which would have called on the Venezuelan government to uphold
human rights and civil liberties; H.Con.Res. 328 (Mack), which would have condemned President
Chávez’s anti-democratic actions; S. 2435 (Lugar), which would have increased hemispheric
cooperation on energy issues, including cooperation among the governments of Brazil, Canada,
Mexico, the United States, and Venezuela; H.Res. 1033 (Graves), which would have condemned
President Chávez’s anti-American rhetoric at the United Nations; and S.Res. 587 (Santorum),
which would have condemned the anti-democratic actions and statements of the leaders of Iran,
Cuba, and Venezuela and expressed concern about the national security implications of the
relationships between those leaders.
Several oversight hearings were held in the 109th Congress dealing with Venezuela policy issues.
On November 17, 2005, the House International Relations Committee, Subcommittee on the
Western Hemisphere, held a hearing on the status of democracy in Venezuela. Earlier in the year,
the subcommittee held hearings on March 9 and September 28, 2005, regarding the state of
democracy in the Latin America, both of which touched on Venezuela. In 2006, the full House
International Relations Committee held a June 21 hearing on the status of democracy in Latin
America that covered Venezuela, while the House Subcommittee on International Terrorism and
Nonproliferation held a July 13, 2006, hearing specifically on Venezuela and terrorism issues. In
terms of energy security in the Western Hemisphere, the House Subcommittee on the Western
Hemisphere held a hearing on March 2, 2006, while the Senate Foreign Relations Committee held
a hearing on June 22, 2006.
In the 108th Congress, Members of Congress had expressed concerns about the political situation
in Venezuela. The Senate Foreign Relations Committee held hearing in June 2004 on the status of 177
democracy in Venezuela and the August recall referendum. As noted above (U.S. Funding for
Senate Foreign Relations Committee, Subcommittee on Western Hemisphere, Peace Corps, and Narcotics Affairs,
Democracy Projects), the conference report to the FY2005 Consolidated Appropriations Act
(Division B of P.L. 108-447, H.Rept. 108-792) required a comprehensive report on NED’s
activities in Venezuela since FY2001 and reaffirmed NED’s duty to ensure that all sponsored
activities adhere to core NED principles.
Also in the 108th Congress, two resolutions were introduced in the House, but no action was taken
on these measures. H.Res. 716, introduced by Representative Elton Gallegly on July 14, 2004,
would, among other provisions, have encouraged Venezuelans to participate in a constitutional,
peaceful, democratic, and electoral solution to the political crisis in Venezuela, and appealed to
the Venezuelan government and the opposition to support a free, fair, and transparent recall
referendum in accordance with the Venezuelan constitution. H.Res. 867, introduced by
Representative Tom Lantos on November 20, 2004, would have expressed support for the
National Endowment for Democracy in Venezuela. The resolution would have expressed the view
that charges against Súmate were politically motivated. As noted above, Súmate is a Venezuelan
civic organization involved in voter education and electoral observation that received funding
from the National Endowment of Democracy. The resolution also would have welcomed the
dropping of charges by the Venezuelan government against Súmate. Earlier in the year, in a July
12, 2004, letter to President Chávez, the House International Relations Committee expressed
serious concern about the treatment of the leaders of Súmate.
“The State of Democracy in Venezuela,” Hearing, June 24, 2004.
Figure 1. Map of Venezuela
Source: Map Resources. Adapted by CRS.
Mark P. Sullivan
Specialist in Latin American Affairs