November 23, 2005
Hugo Chávez Enlists a Kennedy for Anti-U.S. Campaign
By Pedro
Mario Burelli
It might be
fair to say that without oil Hugo Chávez would have never
been elected president. By 1998, bountiful oil had made the task
of governing Venezuela seem like a simple – i.e. requiring
little talent – routine of distributing relatively easy
to exploit natural wealth. This flawed conception explains why
the two main political parties, AD and Copei, brazenly fielded
a former beauty queen and an untrained septuagenarian in the 1998
election. As a result, Chávez’s victory, feasible
in theory due to decreasing standards, was also effortless in
practice, and a surprise only to the winner who had started the
year with less than 3% in the polls.
We can also
state today that sans oil – and a desperately sought oil
price run up - Hugo Chávez would have never lasted in power
long enough to inflict the kind of permanent institutional damage
that will almost certainly be his deplorable legacy.
Therefore, it should come as no surprise to find oil, and its
main byproduct – oil money, in every nook and cranny of
Mr. Chávez’s ploy to buy consciences and meddle in
the internal affairs of other nations.
Just this
week, we saw an on-his’s-knee Nestor Kirchner from Patagonia,
Argentina pleading for more cash, and a member of the Kennedy
family from Boston, Massachusetts trying to sugar coat - as energy
charity - his long sought role of propaganda stooge for the Caracas
government.
On the latter
development, Sunday’s Boston Globe ran a front
page story (read below in full) under the triumphant title “Thousands
in Massachusetts to get cheaper oil”. The subheading states
that “[Congressman Willliam] Delahunt, Chávez help
broker deal”, and the story goes on to inform us that according
to Citizens Energy Corp, “the approximately $9 million deal
will bring nine million gallons of oil to [45,000] families and
three million gallons to institutions that serve the poor, such
as homeless shelters”.
Citizens
Energy Corporation is the non-profit company set up in 1980 by
Joseph P. Kennedy II, son of the late Robert F. Kennedy. According
to the Globe, CEC is expected to sign this deal with CITGO, PDVSA’s
wholly owned U.S. affiliate, today.
At the risk of appearing cold hearted, I will provide some of
the very relevant elements not covered by the Boston paper that
might put this self-serving and shamelessly political initiative
in the proper context.
First, this
is not a novel idea. Citizens got going in 1980 as a result of
Venezuela’s decision to grant a term crude contract to 26-year-old
Joe Kennedy who was then trying to prove that oil majors were
somehow delivering rather expensive heating oil to residents in
the northeastern United States. The idea was deemed worthy, and
given the go ahead by Humberto Calderon Berti, Venezuela’s
Oil Minister at the time (Calderon was also instrumental in the
signing of San Jose Accord through which Caribbean and Central
American nations were able to access favorable funding terms for
their oil purchase from Mexico and Venezuela). The difference
in those cases was that Venezuela’s government was not trying
to rub its good deed - which in the Citizens’ case consisted
in approving a small allocation of crude volume at officials prices
in a very tight market were contracts were commanding premiums
- in anyone’s face. As I remember, Calderon’s sole
request was that some of the profit that might result from the
not-for-profit scheme should be plowed back into energy conservation
initiatives in Central American and the Caribbean. The first years
of Citizen's cheap fuel program were stellar, and small scale
conservation projects were funded in Costa Rica, Jamaica and even
in Venezuela. After a few years, with the company making most
of its money as a plain vanilla oil trader, Joe Kennedy capitalized
his initial goodwill into a seat in the U.S. Congress (from were
he retired in 1998 after six terms).
Second, it
is important to remember that Venezuela, up to 1999, had always
been THE MOST reliable source of imported energy for the U.S.
During the 1973 Arab Oil Embargo it parted ways with its OPEC
brethren and agreed to increase production to compensate for the
shortages created by that retaliatory act. Since coming to office
in 1999, Hugo Chávez chose to obliterate that record of
reliability and pursue recklessly high prices instead of mutually
convenient production increases. He scuttled PDVSA’s 10-year
plan which would have Venezuela producing close to 5.5 million
today (versus barely 2.7 MM it produces today). Over the years,
the aspiring autocrat has repeatedly threatened to cut oil shipments
to the U.S. for all sorts of concocted reasons. Today, Venezuela
is considered to be a “highly unreliable source” of
imported energy and as a result the entire Western Hemisphere
has lost certain degree of energy independence and security.
Third, the
most noticeable consequence of this strategy of constraining production
has been higher prices for consumers all over the world. It is
estimated that the “Chávez” premium can be
anywhere between $7-10 per barrel. Venezuela is the most hawkish
–and unrepentant - of price hawks within OPEC. Chávez
frequently say that “the fair price of oil should be closer
to $100/barrel”. His threats to suspend shipments to the
U.S. are a welcome source of volatility - ergo profits - for speculators.
So, while 45,000 families in the Boston area might be getting
a “three week” reprieve thanks to Mr. Chávez’s
largesse, EVERY family in the U.S. is paying much more EVERYDAY
for gasoline, diesel, heating oil, lubricants, electricity and
so on, because of Hugo Chávez recklessness. U.S. consumers
in turn are funding most of Chávez subversive schemes in
the Hemisphere (keep in mind that the U.S. buys 70% of Venezuelas
oil exports at full price, while Venezuelan consumers and many
countries in Latin America get huge politically driven discounts).
Fourth, Citizens
Energy owns no terminal, does not own a fleet of trucks and is
not capable of qualifying low income families as eligible recipients
of this “cheap oil”. The latter task is performed
by Community Action Programs. In 1980, CITGO was not yet part
of PDVSA, and an intermediary was appropriate (the CEC scheme
was also a lot more complex involving cut rate third party refining
and transportion). But given CITGO’s significant presence
in the Northeast, this “assistance” could have been
arranged directly with the Commonwealth and through the CAPs.
So what is Citizen’s and Joe Kennedy’s role in all
this? What about Bill Delahunt? I do not know for sure. To me,
they are allowing themselves to be used by an uncouth tormentor
of Human Rights, who is hell-bent not only on making life difficult
for the U.S. Administration, but is also on record (on multiple
occasions) rejecting everything the U.S. stands for. While trying
to earn some political capital by “doing good” in
their home turf cannot be considered a felony, doing so by becoming
accessories to a self declared enemy of the U.S. falls well short
of conscientious citizenship.
Fifth, Joe
Kennedy feels that he has covered his back against the above charge
by haplessly stating the following ''You start parsing which countries'
politics we're going to feel comfortable with, and only buying
oil from them, then there are going to be a lot of people not
driving their cars and not staying warm this winter…There
are a lot of countries that have much worse records than Venezuela.
At the end of the day it's not our business to go choosing other
peoples' leaders, particularly when they are duly-elected democratic
leaders." What he seems to forget is that no other government
is trying to hoodwink the U.S. public into thinking that they
are direct descendants of Robin Hood. The other, maybe equally
undesirable, governments simply sell their oil to whoever is willing
to pay for it, and at times, have been precluded from even doing
that by Democrats in the White House. In a recent Op-Ed Senator
John Kerry was much more on target when he actually criticized
President Bush for allowing “thugs like Hugo Chávez
and Fidel Castro to distort and propagandize the interest and
actions of the U.S., isolating the U.S. from millions with whom
we share a common heritage and innumerable interests”. (Since
this moral short circuit involves liberal democrats from Massachusetts,
I will leave it to them, and Teddy Kennedy, to sort it out in
the dining room table).
Sixth, by
stating that he is only dealing with “the duly-elected democratic”
leader of Venezuela, Joe Kennedy conveniently brushes aside the
fact on September 11, 2001, all the democratic nations of the
Hemisphere (including the U.S and Venezuela) signed a Democratic
Charter that defines democracy in much more exacting terms than
simply being the natural and hence acceptable outcome of “democratic
elections”. While this might be a comprehensible oversight
for a private sector executive, it is a huge failing for the scion
of a family that prides itself on its rigorous approach to freedom,
democracy and Human Rights around the world. I am convinced that
a number of individuals who are risking all to highlight and reverse
Venezuela’s current state of affairs would qualify for the
Robert F. Kennedy Human Rights Award. Somehow I am certain Hugo
Chávez, fraudulent largesse and all, will never be an RFK
laureate.
Seventh,
over the last few years it has been maddening to observe Representative
Delahunt acting as Hugo Chávez main cheerleader/apologist
in the U.S. Congress. No matter how evident Mr. Chávez’s
anti-U.S. designs and rhetoric have become, Delahunt was there
ready to explain, to dump dirt on the Venezuelan opposition and
to take pot shots at the Bush Administration. Just last week,
after a hearing on Democracy in Venezuela in the House of Representatives
a number of congressional staffers wondered aloud as to Delahunt’s
REAL motivation. Now we all have the answer, and it is clearly
partisan, self serving and therefore debased.
And finally,
in a recent conversation I had with Joe Kennedy on this same subject
he screamed at me that his only interest was to “help the
poor folks in Boston”. I googled all these good intentions
and found a story in the Boston Herald that stated that “entities
related to his Citizens Energy Corp. paid him [Joe Kennedy] more
than $400,000 in 2003, the last year for which records are available.”
Not bad for a non-profit executive willing to lend his name to
a $9 million foreign disinformation campaign.
Pedro Mario Burelli is the
Founder and Managing Director of B+V Consulting. Mr. Burelli was
an Executive Board Member of Petróleos de Venezuela until
November of 1998.
