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RUMIAAA/HQ USSOUTHCOM MIAMI FL

UNCLAS SECTION 01 OF 04 CARACAS 000434 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
HQSOUTHCOM ALSO FOR POLAD 
DEPT PASS TO AID/OTI RPORTER 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON VE
SUBJECT: CODEL JACKSON LEE VISITS CARACAS 
 
 
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SUMMARY 
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¶1. (SBU) Congresswoman Sheila Jackson Lee visited Caracas 
February 19-22.  During her visit, she met with 
representatives of civil society, visited an Embassy 
supported orphanage, met with union leaders, U.S. businesses, 
U.S. oil company executives, representatives of the Foreign 
Ministry, National Assembly, PDVSA, and the press.  The 
Congresswoman promoted engagement between Washington and the 
Bolivarian Republic of Venezuela.  Venezuelan government 
officials barred Embassy officers from most of the meetings 
with BRV representatives.  END SUMMARY. 
 
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CIVIL SOCIETY 
------------- 
 
¶2. (SBU) The Congresswoman attended a luncheon with 
representatives of human rights NGOs at the Ambassador's 
Residence.  These representatives detailed their activities 
in Venezuela to monitor and prevent abuses against 
journalists and in trying to coordinate the education, 
prevention and treatment of HIV/AIDS.  They also described 
the difficult political climate in Venezuela, where the 
government's hyper sensitivity often results in attacks on 
the whistle blowers rather than the problems they expose. 
 
¶3. (SBU) After the luncheon, the Congresswoman traveled with 
the Ambassador to an orphanage supported by the Embassy 
community's "Helping Hands" group.  Helping Hands promotes 
community involvement in charitable activities in the Caracas 
metropolitan area.  The orphanage of 30 children is run by a 
nun and has been sponsored by the Embassy since October of 
¶2003.  The Congresswoman toured the facility, met with some 
of the workers, and spoke with the children about their 
aspirations. 
 
¶4. (SBU) The BRV organized a meeting with representatives of 
Venezuela's Afro-Caribbean community to discuss issues 
particular to their community, including developmental 
projects sponsored by the BRV.  The group was very positive 
about Chavez' efforts to include new segments of society in 
the political process and looked forward to future 
interaction with the Congresswoman and the Embassy. 
 
¶5. (SBU) The president of Venezuelan Electoral NGO Sumate 
described for the Congresswoman the current political 
environment in Venezuela and the Venezuelan electoral 
process, including the 2004 recall referendum and the most 
recent Presidential election in December 2006.  He detailed 
the proposal for a new NGO law, which like legislation 
recently passed in Russia, would require NGOs to register 
with the government and would also require all foreign 
funding to go through a central, government controlled 
account.  He also detailed the on-going judicial proceedings 
against Sumate and its leadership for accepting a grant from 
the National Endowment for Democracy (NED) to promote grass 
roots democratic efforts.  The Congresswoman was concerned by 
the demonization of NED and noted that it was set up 
precisely to avoid these types of conflicts caused by being 
associated with U.S. foreign policy. 
 
--------------- 
LABOR RELATIONS 
--------------- 
 
¶6. (SBU) Representatives of some of Venezuela's largest 
public sector unions representing federal employees, 
including specifically educators, health care workers and the 
Ministry of Labor, gave the Congresswoman an overview of 
union activities in Venezuela.  They described the 
difficulties they face, including declining membership and 
BRV inattention.  They asserted that various ministries have 
refused to negotiate collective bargaining agreements for the 
past few years.  In addition, Chavez-supported unions are 
eating into their base, and attempts to work with these 
unions or reconcile their differences have been unsuccessful. 
 The Congresswoman stated she would work to engage the U.S. 
labor movement to help their Venezuelan colleagues and 
invited them to the United States for meetings and to learn 
more about the labor movement there. 
 
---------------- 
VENECONOMICS 101 
---------------- 
 
CARACAS 00000434  002 OF 004 
 
 
 
¶7. (SBU) Congresswoman Jackson Lee received an overview of 
the current economic environment from two of Venezuela's most 
prominent economic commentators, Robert Bottome and Orlando 
Ochoa, during a February 20 lunch hosted by the DCM.  Jackson 
Lee noted that while she was in Venezuela to learn, her sense 
was that Chavez had done a lot for the poor.  She was also 
interested in how sustainable were Chavez, economic 
measures.  Both economists were very clear that the 
oil-windfall had allowed Chavez to fund his economic and 
political initiatives (many of which had been tried in the 
past by other governments) but that the situation was not 
sustainable.  Both noted that while a large section of the 
poor had benefited from BRV transfer payments, little in the 
way of job creation or foreign direct investment was taking 
place given the anti-private enterprise policies being 
adopted by the BRV. 
 
--------------- 
CHAVEZ' ADVISOR 
--------------- 
 
¶8. (SBU) The Venezuelan Embassy in Washington arranged for 
the Congresswoman to meet with Alex Main, one of Chavez' 
international advisors.  Main, an American citizen who has 
worked for Chavez for the past five years, appeared 
uncomfortable with the Ambassador's presence at the meeting. 
The Ambassador excused himself, after which Main also 
requested that PolCouns and Econoff be excluded from the 
meeting, which lasted for an hour and a half. 
 
------------------------------------ 
U.S. INVESTMENT AND NATIONALIZATIONS 
------------------------------------ 
 
¶9. (SBU) Jackson Lee met with Julian Nebreda, general manager 
of the U.S. energy firm AES for Latin America, over a 
February 21 breakfast hosted by the DCM.  The purpose was to 
discuss the BRV,s nationalization of Electricidad de Caracas 
(EDC), of which AES owns an 82 percent share.   Nebreda said 
that the negotiations were professional (a U.S. law firm 
represented the BRV) but that the nationalization had been 
unexpected, as EDC had always been a privately held utility. 
He suggested that he thought the price AES was offered was 
fair.  Nebreda also offered that in the specific case of EDC, 
he did not think the BRV had purposely gone after the company 
because it was U.S. based. 
 
¶10. (SBU) Bernardo Bur, an operations manager at the oil 
services firm Baker Hughes, met with the Congresswoman on the 
morning of February 20.  Bur confirmed that Baker Hughes does 
business in Venezuela in all of its divisions, although 
drilling services dominate the portfolio here.  The company 
has a permanent presence in Venezuela, with two plants in 
country that produce oil field equipment sold in Venezuela 
and throughout Latin America.  Mr. Bur said Baker Hughes' 
business was overwhelmingly with PDVSA.  He added that 
business was booming in Venezuela for Baker Hughes and that 
Venezuela remained the capital of the oil business in Latin 
America.  While Bur realized that many IOC,s were now under 
some pressure from the BRV, and some were reconsidering their 
business strategy in Venezuela, Baker Hughes had no 
complaints, as contracts were growing and PDVSA was paying. 
 
¶11. (SBU) The Congresswoman met with ExxonMobil Venezuela 
President Tim Cutt on February 21.  Cutt reviewed the current 
state of negotiations between his company and the BRV for the 
migration of the Cerro Negro strategic association to a PDVSA 
controlled joint venture.  He said ExxonMobil was concerned 
about compensation for lost value as well as governance 
issues in the new joint venture.  Cutt also stated ExxonMobil 
was waiting for approval on its development plan for the La 
Ceiba field. 
 
¶12. (SBU) In addition, Representative Jackson Lee had lunch 
with Chevron Latin America President Ali Moshiri.  He stated 
Chevron was open to selling its portion of the Hamaca 
Strategic Association to the BRV if that was the most 
profitable route for the company.  Though, he made clear that 
Chevron was committed to staying in Venezuela. 
 
---------------- 
PRESS CONFERENCE 
---------------- 
 
¶13. (SBU) Approximately 15 members of local and international 
press corps attended a press conference with the 
 
CARACAS 00000434  003 OF 004 
 
 
Congresswoman at the Embassy.  After noting the importance of 
re-establishing the U.S.-Venezuelan relationship and saying 
that "Venezuela has many friends in this new Congress," the 
Congresswoman described the importance of transparency in the 
nationalization process, and hoped that the government would 
allow sufficient time for the negotiations.  She also said 
she would urge Congress to "reconsider sanctions on the 
F-16s," referring to the decision to halt arms sales to 
Venezuela, as required by U.S. statute, following its failure 
to fully cooperate on counterterrorism matters. 
 
------------ 
BRV MEETINGS 
------------ 
 
¶14. (SBU) At the Ministry of Foreign Relations (MRE), the 
Congresswoman met with the Vice Foreign Minister (VFM) for 
North America Jorge Valero as well as the VFM for Africa 
Reinaldo Jose Bolivar.  The Ambassador, Polcouns, and Econoff 
attended the meeting with Valero.  Polcouns and Econoff also 
attended the meeting with Bolivar despite strong suggestions 
from MRE officials that they should not join.  The 
Congresswoman opened by thanking VFM Valero for CITGO's 
generosity in helping Gulf Coast residents after Hurricane 
Katrina, and noting that she was visiting Venezuela looking 
for "opportunity and friendship."  She noted that the United 
States and Venezuela could try to work together on certain 
issues, including combating drug trafficking and improving 
trade ties.  The importance of negotiating transparently with 
companies threatened with nationalization was a common theme 
during the Congresswoman's visit, and was mentioned here as 
well.  She hoped that cultural exchanges between the two 
countries would increase and favorably commented on 
Venezuela's plans to purchase 4000 tons annually of coca leaf 
from Bolivia. 
 
¶15. (SBU) VFM Valero responded that there were areas where 
the BRV was prepared to work with the U.S., so long as the 
U.S. respected Venezuela's sovereignty.  He claimed that the 
problem with U.S.-Venezuelan relations was that the United 
States had supported "un-democratic" opposition groups 
against Chavez, including during the 2002 coup.  VFM Valero 
said that he hoped for a dialogue with the United States 
based on the Brownfield-Maduro in December 2006.  They also 
discussed the discounted heating oil that CITGO provides to 
neighborhoods in New York and Massachusetts.  The 
Congresswoman recommended that the BRV expand this project 
and also seek to work with small and medium minority-owned 
businesses.  The Congresswoman assured Valero that she would 
take his message back to Congress, and noted that she hoped 
her meeting would serve as an ice breaker and lead to future 
dialogue. 
 
¶16. (SBU) During her meeting with the VFM for Africa, 
Reinaldo Jose Bolivar, the VFM began by noting the cultural 
relationships between Venezuela's Afro-Caribbean community 
and the African American community in the United States. 
According to him, due to many Venezuelans' African heritage, 
Chavez has increased Venezuela's activity in Africa.  Bolivar 
noted that in 2005, when his office was created, Venezuela 
lacked diplomatic relationships with 20 African countries, 
whereas today there are only four countries with which it 
needs to initiate relations.  Venezuela has signed 30 
cooperation accords with African nations, and is now an 
observer at the African Union.  Bolivar believes that 
institutions like the Bank of the South, the University of 
the South, the news channel TeleSur, and the discounted oil 
program PetroSur will help Africa as well.  The Congresswoman 
responded that the United States desires to work together 
with Venezuela on African issues and that the 43 members of 
the Congressional Black Caucus were very involved with 
Africa.  She applauded the BRV's efforts to combat poverty, 
disease and lack of education in Africa and hoped that 
Venezuela would work with the United States to try and stop 
the "horror occurring in Darfur." 
 
¶17. (SBU) During her meeting with the First Vice President of 
the National Assembly (AN) Desiree Santos Amaral, the 
Congresswoman discussed the possibility of restarting a 
dialogue between the U.S. Congress and Venezuelan National 
Assembly.  The meeting included deputies Calixto Ortega, 
Francisco Torrealba, and Aurora Morales.  Ortega and Santos 
were involved in the "Boston Group," which was a bipartisan 
group of deputies that first met in Boston to dialogue and 
resolve differences.  Torrealba is the new president of the 
U.S.-Venezuela parliamentary "friendship group."  The 
Congresswoman extended an invitation to AN President Cilia 
 
CARACAS 00000434  004 OF 004 
 
 
Flores to visit the United States.  The assembled deputies 
repeated their desire to work with the U.S. Congress through 
the friendship group or an inter-parliamentary exchange.  All 
were pointed in their deference to Chavez, noting that in 
Venezuela only the executive conducts foreign policy.  They 
also discussed the prevalence of women in high positions in 
the BRV, including the new President of the Supreme Court, 
two of five leaders in the AN, and three of the five members 
of National Electoral Council (CNE). 
 
¶18. (SBU) The VP ended the discussion noting that she had 
worked as a journalist for 33 years (for the populist tabloid 
"Ultimas Noticias") and that the Venezuelan people were 
completely with Chavez, despite "lies" by the opposition. 
All deputies gave the Congresswoman blank stares when asked 
about the infamous Tascon list (a list compiled by one of 
their colleagues of the names of millions of Venezuelans who 
signed a recall petition against Chavez that is used to 
blacklist Venezuelans from government jobs and contracts, 
from obtaining passports and from many other public and 
private services). 
 
¶19. (SBU) The Congresswoman met with PDVSA VP Luis Vierma and 
discussed energy issues.  PDVSA officials did not allow 
econoffs to attend the meeting.  According to the 
Congresswoman, they made a presentation about PDVSA's 
activities and discussed the 
importance of transparency in the nationalization process. 
 
-------------------- 
FREEDOM OF THE PRESS 
-------------------- 
 
¶20. (SBU) To cap off her visit to Venezuela, Jackson Lee 
dined with representatives of Venezuela's private media, 
including television station managers, newspaper editors and 
lawyers.  (Notable in this group was Marcel Granier, 
president of the embattled RCTV television station, which the 
BRV has promised to close because of its anti-government 
stance.)  This group detailed the tightening noose around the 
private sector media and the political attacks against their 
members by Chavez and the BRV, including the planned closure 
of Venezuela's largest and oldest television station, RCTV. 
The Congresswoman promised to follow up and the Embassy will 
forward information on these politically-motivated attacks to 
her office. 
 
¶21. (SBU) Representative Jackson Lee did not have an 
opportunity to clear this cable before departing. 
 
BROWNFIELD