VZCZCXRO9586
RR RUEHAO
DE RUEHCV #2624/01 2422059
ZNR UUUUU ZZH
R 302059Z AUG 06
FM AMEMBASSY CARACAS
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INFO RUEHBO/AMEMBASSY BOGOTA 6962
RUEHBR/AMEMBASSY BRASILIA 5750
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RUEHSO/AMCONSUL SAO PAULO 0050
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RUCPDOC/DEPT OF COMMERCE
RUMIAAA/HQ USSOUTHCOM MIAMI FL
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RUCNDT/USMISSION USUN NEW YORK 0483

UNCLAS SECTION 01 OF 02 CARACAS 002624 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON PGOV VE
SUBJECT: PAR FOR THE COURSE: MAYOR OF CARACAS EXPROPRIATES 
LOCAL GOLF COURSES 
 
 
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Summary 
------- 
 
¶1.  (SBU)  During an open session of the Metropolitan Council 
of Planning and Public Policy held in Caracas on August 22, 
Mayor Juan Barreto announced that he was going to issue 
expropriation decrees for all three golf courses in the 
Caracas metropolitan area and use the terrain to build 25,000 
family homes.  In that session, he also publicly and 
personally insulted the two opposition mayors (septel).  Two 
days later he issued expropriation decrees for the Valle 
Arriba Golf Club and the Caracas Country Club.  The La 
Lagunita Golf Club was also targeted by Barreto but no decree 
has been published yet.  National Guard elements were spotted 
in front of Valle Arriba Golf Club on August 29, although it 
was open for business.  The measure is largely a political 
play to Barreto's lower-class voting base, and is not viewed, 
even by the Minister of Housing, as a viable alternative to 
deal with the housing shortage.  On August 30, Vice-President 
Rangel issued a press release disagreeing with the decrees. 
End Summary. 
 
----------------- 
Why golf courses? 
----------------- 
 
¶2. (SBU)  The reason behind the expropriations, as outlined 
by the director of the Metropolitan Urbanization Institute 
(MUI) and Barreto himself, is to construct 25,000 homes for 
homeless Venezuelans.  Juan Vadell, attorney general for the 
metropolitan district, said that "we are guarantors of 
private property, but these courses allow us to resolve a 
collective problem."  (Note: Venezuela faces a 1.68 million 
unit housing shortage, felt most acutely in Caracas.  In 2006 
alone, Barreto has issued expropriation decrees for an 
estimated 195 residential buildings, and is looking to enact 
blanket expropriations for properties meeting certain 
criteria (such as having the same tenant for 20-plus years, 
etc).  End Note.)  The three golf courses targeted are 
located on prime Caracas real estate. 
 
¶3. (SBU)  Valle Arriba Golf Club has reportedly already begun 
clearing out its pro shop in fear of confiscations, although 
play was proceeding as usual the morning of August 30. 
National Guard troops were posted in front of the property on 
the night of August 29.  In La Lagunita, National Guard 
elements have reportedly secured the golf course, and two 
Chavistas on motorcycles were seen eyeing the land.  The 
owner of Caracas Country Club commented to the press on 
August 29 that he hadn't received any official notification 
from the Mayor. 
 
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The irony 
--------- 
 
¶4.  (SBU) Despite Barreto having targeted La Lagunita Golf 
Club specifically in his August 22 tirade, the expropriation 
decree for this property was not published alongside the 
others.  There is anecdotal evidence that wealthy 
pro-government individuals (Chavistas "light") have bought 
property around the golf course, and some speculate that they 
pressured Barreto to delay or stop the measure.  In the past 
year, members of the BRV have often mentioned using Caracas 
metropolitan properties the government already owns - such as 
Fort Tiuna or La Carlota airstrip - to build homes, but those 
efforts have fallen flat.  Expropriating golf courses may be 
more a political statement than an actual housing solution. 
On August 26, the Minister of Housing, Ramon Carrizalez, 
declared that national housing plans do not include 
construction on La Lagunita, and that there are more 
appropriate lots to build on. 
 
CARACAS 00002624  002 OF 002 
 
 
 
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What next 
--------- 
 
¶5. (SBU)  According to the 2002 Expropriation Law, owners 
have 30 days after the property is declared "of public 
utility" (i.e. an expropriation decree is issued) to contact 
the expropriating entity and begin negotiations.  An 
inspector must then value the property, and the National 
Guard or police can temporarily occupy it for a period of six 
months.  If the owner chooses not to settle, he can fight the 
proceedings in court.  Construction on or occupation of the 
property (by tenants) cannot legally occur until the process 
is finalized.  However, in nearly all prior cases of Caracas 
expropriations by Barreto, occupants have flooded in, often 
with complicity of authorities. 
 
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Comment 
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¶6. (SBU)  The fact that Barreto announced the expropriations 
while hurling insults at two opposition mayors shows the 
political motivation to target the upper (and middle) classes 
and play to his lower-class voter base (after all, golf is an 
"elite" sport).  The housing plans for these properties are 
precarious - La Lagunita is zoned as a "recreational area" 
and it would be illegal to build residential homes without 
re-zoning, a process that normally takes up to two years. 
It's also hard to imagine how 25,000 families will fit on 58 
acres, with buildings limited to maximum of six stories, and 
still leave room for parks and green areas (as per the 
Metropolitan Urbanization Institute's plan).  The cost of the 
expropriations alone would be well above the municipality's 
budget.  Both Capriles and Lopez said that Barreto is doing 
this to distract voters away from mismanagement in his own 
municipality (except for Chacao and Baruta, all other 
Chavista-run municipalities are unkempt and broken down). 
 
¶7. (SBU)  As has happenned with Barreto's pushes for 
expropriation in the past, a high-level BRV member has come 
out publicly against the measures when reactions turn sour 
(in this case Rangel, in the January 2006 wave of 
expropriations, it was Attorney General Isaias Rodriguez). 
Barreto seems more and more like a BRV litmus test to feel 
out public opinion on contentious issues - and if there is a 
backlash, the BRV can localize the issue and use Barreto as a 
scapegoat.  Given that only 13.6 percent of Venezuelans in a 
recent Datanalisis poll said that expropriation should be the 
means to providing social benefits, Barreto may be alienating 
those very voters he is trying to court.  End Comment. 
 
 
WHITAKER