VZCZCXRO2706
RR RUEHAO
DE RUEHCV #3231/01 3001728
ZNR UUUUU ZZH
R 271728Z OCT 06
FM AMEMBASSY CARACAS
TO RUEHC/SECSTATE WASHDC 6793
INFO RUEHBO/AMEMBASSY BOGOTA 7081
RUEHBR/AMEMBASSY BRASILIA 5796
RUEHBU/AMEMBASSY BUENOS AIRES 1496
RUEHLP/AMEMBASSY LA PAZ 2381
RUEHPE/AMEMBASSY LIMA 0633
RUEHSG/AMEMBASSY SANTIAGO 3803
RUEHAO/AMCONSUL CURACAO 1045
RUEHGL/AMCONSUL GUAYAQUIL 0696
RUMIAAA/HQ USSOUTHCOM MIAMI FL
RHEHNSC/NSC WASHDC
RUEHUB/USINT HAVANA 0986

UNCLAS SECTION 01 OF 03 CARACAS 003231 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
HQSOUTHCOM ALSO FOR POLAD 
DEPT PASS TO AID/OTI RPORTER 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON VE
SUBJECT: AMBASSADOR VISITS ANZOATEGUI STATE 
 
REF: A. CARACAS 65 
 
     ¶B. CARACAS 190 
     ¶C. CARACAS 341 
     ¶D. CARACAS 1445 
     ¶E. CARACAS 2667 
     ¶F. CARACAS 3131 
 
¶1. SUMMARY: (U) With an eye to highlight USG-related 
activities and institutions in eastern Venezuela, Ambassador 
Brownfield visited the state of Anzoategui on October 19-20, 
¶2006.  When BRV meddling prohibited visits to U.S. business 
plants in the Jose industrial complex, he met with Exxon 
Mobil (XM) representatives in their office, he met a local 
opposition mayor, visited the American Corner and held a 
well-attended press conference, conducted a town hall meeting 
with the local American community, breakfasted with members 
of the Venezuelan American Chamber of Commerce (VENAMCHAM) 
and participated in the now-annual Fundamigos event for cleft 
palate surgery.  The trip received significant positive press 
coverage.  END SUMMARY. 
 
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OIL WELLS PUMPING, BUT INCREASINGLY UNDER PRESSURE 
--------------------------------------------- ----- 
 
¶2. (SBU) The Ambassador planned to visit two sites at the 
refining-petrochemical complex in Jose, near the city of 
Barcelona in Anzoategui state during his visit there on 
October 19-20.  Meetings and site visits were arranged for 
the Fertinitro ammonia and urea plant (which is operated and 
35 percent owned by U.S.-based Koch Industries) and the Cerro 
Negro upgrader site (operated by XM and partially owned along 
with PDVSA and BP) that processes extra heavy crude pumped up 
from the Orinoco Belt.  Post received a fax October 16 from 
the managing director of Fertinitro canceling the visit and 
stating that post had to submit all visit requests through 
the Ministry of External Relations (MRE).  (Note: We believe 
the order came from Pequiven higher ups, as local management 
seemed enthused about the visit.  End note.)  XM was informed 
concurrently that the head of security for the PDVSA-managed 
Jose complex had issued orders to prevent the American 
Ambassador from entering the entire complex.  (Comment:  The 
Ambassador has previously visited both the Cerro Negro and 
Hamaca upgrader facilities in the Jose complex.  It is 
difficult to tell whether the actions taken last week to keep 
him out are part of a concerted national effort to prevent 
his outreach activities, are related to the upcoming 
elections, or simply the result of an overzealous PDVSA or 
BRV official.  Post intends to follow up with the MRE via 
dipnote and will report our findings via septel.  Clearly, it 
is reasonable to suggest that the denial by the BRV of access 
by the U.S. Ambassador to U.S. facilities would have 
reciprocal implications for the BRV Ambassador in the United 
States.  End Comment.) 
 
¶3. (SBU)  As an alternative to the site visit, the Ambassador 
participated in a lunch with XM employees at a local 
conference center where he was briefed on current operations 
at the Cerro Negro field and upgrader.  The assembled 
engineers and executives were upbeat, noting for example that 
they had completed a full overhaul with only 27 days downtime 
(instead of the scheduled 30 or the 60 it took a local 
competitor) and that they expected the upgrader to now run 
for 5 years without significant maintenance.  Tim Cutt, the 
President of XM Venezuela, noted that Venezuelan employees 
are highly regarded by XM and that there are a number of them 
now working abroad.  At the same time, there remains much 
uncertainty as to the future of this enterprise.  PDVSA and 
XM are currently negotiating the proposed conversion of their 
investment into a joint venture (see reftels) and XM is being 
required to negotiate a single collective bargaining contract 
for all of its employees.  As a result, they fear that labor 
costs may go up as much as 100 percent.  There is also talk 
of moving to "social needs" employment practices, where 
potential employees would be hired based on social need, 
rather than qualifications. 
 
¶4. (SBU) XM also highlighted its community service projects, 
 
CARACAS 00003231  002 OF 003 
 
 
including "Abriendo Caminos," which provides vocational 
training for over 300 people a year and the Padre Salinero 
school, which has 1500 students and constitutes a USD 3 
million investment by the company.  The Ambassador underlined 
the importance of corporate responsibility and that in the 
current political environment it was important for companies 
to be pro-active or risk having social program contributions 
forced upon them with no input or control. 
 
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LECHERIA A BASTION OF OPPOSITION, GOOD GOVERNANCE 
--------------------------------------------- ---- 
 
¶5. (SBU) The Ambassador met with the Mayor of Lecheria (and 
member of opposition party Primero Justicia (PJ)), Gustavo 
Marcano, before visiting the American Corner in his city. 
They discussed the current political climate in Venezuela, 
with the Mayor noting that 80 percent of the population 
considers security its prime concern.  He and the Ambassador 
discussed the potential for training assistance for the 
police force and the International Visitor program.  The 
Mayor said that there was not much political pressure at the 
moment from the BRV or MVR and that his city had contact with 
the state and national governments.  Marcano noted that 
Chavez's party, Movimiento Quinta Republica (MVR), is 
divided, and Marcano seemed fairly confident that consensus 
opposition candidate Manuel Rosales would run a good campaign 
leading up to the December 3 elections.  In fact, Rosales 
billboards and posters were visible in the area -- a change 
from the time of an EmbOff's visit two weeks before. 
 
¶6. (SBU) The American Corner in Lecheria was inaugurated by 
the Ambassador during his visit to the region in 2005.  When 
the control officer visited the day prior, the center was 
hosting English language lessons for children and appears to 
be a vibrant part of the Lecheria community.  The Ambassador 
visited the facility with the Mayor, chatted about English 
lessons with assembled students, and took questions from the 
press.  There were approximately 50 attendees, about half 
from the community and half from the press corps.  (Comment: 
The town of Lecheria (population 21,000) is sandwiched 
between Barcelona and Puerto La Cruz (combined population 
near 700,000).  It is a middle and upper class enclave with 
streets in good repair, a competent police force, and street 
signs prevalent.  There were many posters for opposition 
candidate Rosales, though Mayor Marcano noted that those he 
put up outside the city limits tended to disappear.  End 
Comment.) 
 
-------------------------- 
AMERICAN TOWN HALL MEETING 
-------------------------- 
 
¶7. (SBU) On the evening of October 19, the Ambassador visited 
the local American school, Colegio Internacional de Puerto La 
Cruz, for a town hall meeting with the American community. 
About 50 American citizens attended to hear the Ambassador 
explain the current state of U.S.-Venezuelan relations.  The 
Ambassador expounded on the pillars of the American community 
(the consular warden, the Embassy, the American Chamber of 
Commerce and the American school.  The assembled group asked 
about the potential for violence surrounding the December 
elections, the threat to private schools posed by the new 
education law, the UNSC vote, government spending by the BRV 
and the Ambassador's relationship with Hugo Chavez. 
 
-------------------------------- 
VENEZUELAN, AMERICAN BUSINESSMEN 
-------------------------------- 
 
¶8.  (SBU) The local VENAMCHAM chapter hosted the Ambassador 
for breakfast on October 20.  The 25 assembled business 
leaders represented a variety of industries (commerce, 
construction, finance, health, media, real estate, 
telecommunications and transportation).  The tone of the 
meeting was upbeat, though the business community was worried 
by the increasing pressure placed on it by government 
regulations and the decreasing quality of government 
 
CARACAS 00003231  003 OF 003 
 
 
services.  The members had a variety of plans and requests, 
including arbitrage courts for real estate, mandated and 
guaranteed bank lending for housing, hospital investment and 
park construction.  One member noted the increasing 
competitiveness of China and wondered if the government was 
playing favorites.  The Ambassador encouraged them to come up 
with concrete plans and to promote corporate responsibility 
as a way of giving back to the community and demonstrating 
their commitment to Venezuelan society. 
 
 
--------------------------------------------- 
AMBASSADOR ONE-UPs CHAVEZ AT HOSPITAL RAZETTI 
--------------------------------------------- 
 
¶9. (SBU) The Ambassador's last visit in Anzoategui was to 
Hospital Razetti.  The hospital is the main hospital for the 
region and hosted the Ambassador last year when he 
inaugurated the visit of American doctors, who work with 
local NGO Fundamigos to provide free cleft palate surgery to 
hundreds of Venezuelan children annually via a USD 15,000 
USAID grant.  The Ambassador participated in unveiling a new 
plaque commemorating his visit,  then proceeded (with 30 or 
so members of the press corps in tow) to hold a small press 
conference and to visit children and families awaiting the 
operation, as well as the operating rooms.  The context of 
the visit was very positive -- American and Venezuelan 
doctors working together to help children -- and provided the 
Ambassador the chance to highlight deep U.S. ties and 
contributions to Venezuela.  Coincidentally, Chavez visited 
the same hospital a few weeks prior.  (Note: Both the 
Hospital event and the press conference at the American 
Corner presented prime opportunities to unveil our new 
t-shirt commemorating the friendship between George 
Washington and Venezuelan Independence hero Francisco de 
Miranda.  End Note.) 
 
------- 
COMMENT 
------- 
 
¶10. (SBU) The Ambassador was well-received in Anzoategui. 
Apart from the last-minute cancellations noted above, there 
were no other examples of BRV interference.  RSO received 
support from both local and state police and there were no 
demonstrations or other impediments to the Ambassador's 
plans.  As usual, the Ambassador requested meetings with the 
governor, the mayors of Puerto La Cruz and Barcelona and the 
regional military commander, and as usual the BRV never 
responded.  Press coverage was heavy and positive. 
BROWNFIELD