Cablegate: Ambassador Visits Anzoategui State

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
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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
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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.)

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AMERICAN TOWN HALL MEETING
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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.

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VENEZUELAN, AMERICAN BUSINESSMEN
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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.

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AMBASSADOR ONE-UPs CHAVEZ AT HOSPITAL RAZETTI
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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.)

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COMMENT
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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

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