Tensions Rise Between U.S., Venezuela after Rice Remarks
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JEFFREY BROWN: Margaret, glad to have you with us from Caracas.
MARGARET WARNER: Hi, Jeff.
JEFFREY BROWN: I gather there’s been a lot of talk down there about a comment Secretary of State Rice made this week about President Hugo Chavez. Let’s hear part of that.
CONDOLEEZZA RICE, U.S. Secretary of State: I do believe that the president of Venezuela is really destroying his own country, economically, politically, and this is a place with which we’ve had traditionally very good relations.
The Catholic Church is under attack in Venezuela. We have discussions with the church about that. And so we’re going to continue to press the case. We’re going to continue to fund organizations that are trying to resist. But I think we want to make this about American defense of democracy, not a rhetorical contest with the president of Venezuela.
Reaction to Rice
JEFFREY BROWN: So, Margaret, those words didn't get a lot of attention here. How did it go over down there?
MARGARET WARNER: Well, as you said, Jeff, they were a huge story down here, as it is any time anyone in the Bush administration says anything about Hugo Chavez or Venezuela.
We were actually in Maracaibo, which is the second-largest city on the coast, the head of where the oil industry is really located. And we've been out on the oil rigs. And we were in having lunch with some officials from the state oil company, called PDVSA.
And the top of the news came on in the afternoon, and suddenly Secretary Rice appeared at the top of the news. And the buffet line just froze, as everybody watched. When we got back here to Caracas, it was very big on the evening news, the late-night news, and the same in the morning. It was one of the top stories.
And in every -- almost every characterization, it was described as a deep insult to President Chavez, and to Venezuelan democracy, with certainly sympathizers of the government saying that Secretary Rice was simply ignorant.
JEFFREY BROWN: And what about official reaction from the government itself?
MARGARET WARNER: Well, that's curious, because the American embassy was braced for what they referred to as an explosion from President Chavez or the usual explosion. But he has not said anything publicly in the two days since.
His foreign minister, Maduro, yesterday did criticize it, saying that the representative from the "empire," as he described Secretary Rice, had no right to characterize Venezuelan democracy. President Chavez is tonight having his first public event since her comments, very close to our hotel here, and is expected to perhaps say something.
There was another institution, however, as your clip suggested, that was drawn into this, and that was the Catholic Church. As you played, Secretary Rice commented about U.S. concern about the Catholic Church here and its situation. And so we've been having talks with the church.
That was huge news down here. And, in fact, it is still a front-page story today, because the head of -- the archbishop here, Luckert, said yesterday that he'd had absolutely no talks with the American government, and that, "Eso es mentira," he said. "That is a lie."
Now, this is a man, the head the church, who's been at total loggerheads with Chavez. But even the most anti-Chavez forces here flinch whenever the Bush administration says anything in their defense against the Chavez government. And they say, you know, it only strengthens President Chavez with his base of support here, because it makes it appear as if he's standing up to the U.S. bully.
President Bush's South America trip
JEFFREY BROWN: Now, just yesterday, the White House said that President Bush would be making an official visit to some of Venezuela's neighbors, Brazil, Colombia, Uruguay. How would that visit play into the U.S.-Venezuela relationship?
MARGARET WARNER: I think it plays -- it's really at the heart or it speaks to the tension that exists right now between Caracas and Washington, at least one source of tension. And that is that, as Washington and as U.S. diplomats here see it, Chavez is trying to position himself as head of an heir to Fidel Castro and being head of an anti-U.S. leftist alliance or club within Latin America.
And as we know, he has helped with his money and resources elect new leftist presidents in Bolivia, in Ecuador, and now in Nicaragua. He's using his oil money to prop them up. He's also using his oil money to help the Castro regime in Cuba.
What the U.S. government doesn't want to have happen is for other larger, richer, more strategically important countries, particularly Brazil and Argentina, to fall into the Venezuela orbit, either. And there might be a danger, because both of those countries are headed -- let me just do that again.
What the U.S. doesn't want to have happen is for a couple of particularly larger, even more strategically important countries, Brazil and Argentina, which are headed by left-leaning leaders, to also fall into the Venezuela orbit. And so President Bush's trip, I think, is part of, as Secretary Rice said two days ago, you know, we are working with our friends in the region, be they on the right or on the left, and that there is no doubt that there is an effort by the U.S. government to not leave a vacuum down here for Chavez and his anti-American line.
The Chavez economy
JEFFREY BROWN: And, of course, another source of tension is over Chavez's government nationalizing parts of the economy, private companies, including American companies. What's the latest on that front?
MARGARET WARNER: Well, first, as you said, Jeff, it's actually related, because what Chavez is trying to promote down here is a socialist model, in which a lot of strategic industries are state-owned.
So, as you said, last night, the largest private electricity company in Venezuela, the Electricidad de Caracas, which is owned by a Washington-area firm, actually, AES, concluded an agreement with the Venezuelan government for the Venezuelan government to essentially buy them out. And those assets will soon be transferred to the state energy company, PDVSA.
Now, most of electricity is already owned or furnished by the government. But this will pretty much complete it. And it is part of what Chavez has made clear is his plan to nationalize all of the what he calls "strategic sectors."
So the largest private phone company is also a target, he's made that clear, CANTV. That is 30 percent owned by Verizon. Verizon had been trying to sell it to a Mexican investor, who very wisely now has said he's not interested in buying. So Verizon is going to have to take whatever price the Chavez government is willing to settle for.
And, as well, Chavez has said that he plans to pull the plug on one of the largest private broadcasters, RCTV in Venezuela, and distribute those, the bandwidth, to "independent," quote, unquote, broadcasters. So, really, I would say that, at this point, the Chavez government shows no sign of backing down.
The industry that everyone's watching is the oil industry. The oil sector here is mostly controlled by the government already, through this PDVSA, state oil company. But there are several private ventures, exploration ventures, in a particularly promising new area with big American firms, Exxon-Mobil, Shell, Chevron, as well as Total.
And the Chavez government has said, if they don't agree to give the government 60 percent stake in those by May 1st, Chavez is just going to take them over. So that is probably the next major shoe to drop on that front.
Yes, I have, Jeff, not in person yet. I'm going to see him tonight at a big crowd event, where already just hundreds, even thousands, of red-shirted Chavistas are massing, right near our hotel.
But we spent a day in the barrio, one of the barrios here, one of the poor, poor neighborhoods. And the depth of support for President Chavez is really quite extraordinary. People feel that he has given them respect.
They admire and are appreciative of the fact that he has established medical clinics in the barrios, manned actually by Cuban doctors, that he set up state-owned grocery stores where people can buy subsidized food. And there's a real kind of emotional bond, it seems to me, talking to people, in the way these people feel about President Chavez.
Of course, he also arouses equally powerful, almost visceral feelings of dislike and antagonism among people opposed to him. So I think it's fair to say that he is a very polarizing figure here, but a man who won the last election with 63 percent of the vote, just last December.
JEFFREY BROWN: All right, Margaret. Well, we'll look forward to your report from there next week. Margaret Warner in Venezuela, thanks a lot.
MARGARET WARNER: Thanks, Jeff.