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.

Pedro Mario Burelli

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