Nikolas Kozloff

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As the presidential campaign heats up the media has failed to analyze John McCain’s ties to corporate America and in particular to the beer industry. Anheuser-Busch, the nation’s largest beer producer, has proven highly instrumental in McCain’s rise on the political stage. McCain’s wife Cindy was the daughter of a multimillionaire Anheuser-Busch distributor and her beer earnings have afforded the Arizona Senator a wealthy lifestyle including a private jet and vacation homes. In the early years of McCain’s Washington career, Anheuser-Busch’s political action committee was among the Senator’s donors. Though McCain’s fundraising base is now far broader than his family bank accounts and Anheuser-Busch, executives from the company have been important and longtime supporters.

Though Anheuser Busch is most known for its domestic beers such as Budweiser (which some ridiculously refer to as the “King of Beers”), the company has also become something of an international player. For example, Anheuser-Busch has a stake in Mexico’s largest brewer, Grupo Modelo, which makes Corona, Negra Modelo, and Pacífico. Since the mid-1980s, the company has had particular success in the United States with Corona, a light-tasting beer — often served with a wedge of fresh lime — that became popular with many young adults.

For Modelo, a strong incentive for entering the deal with Anheuser-Busch was the North American Free Trade Agreement or NAFTA: under the accord, U.S. import duties on Mexican beer were eliminated. As a Senator, McCain has been a big booster of economic globalization which has made consolidation of the beer industry possible. The Republican presidential hopeful supports NAFTA and has in fact assailed Barack Obama for his criticism of free trade. According to labor unions, NAFTA has cost the U.S. at least one million jobs, a fact of little apparent concern to the Arizona Senator. Though the agreement has led to a social and ecological disaster in Mexico, McCain does not support special provisions which would protect workers and the environment. In recognition of his efforts, the right wing Cato Institute gave McCain a 100% ranking when it came to promoting the free trade agenda.

McCain, IRI and Anheuser-Busch

On Capitol Hill, McCain has long opposed Third World governments which seek to contest corporate supremacy and free trade. Since 1993, McCain has chaired an outfit called the International Republican Institute (IRI). The group, funded by U.S. taxpayers and private money, bills itself as non-partisan and claims to promote democracy world-wide. On the surface at least, IRI seems to have a rather innocuous agenda including party building, media training, the organization of leadership trainings, dissemination of newsletters, and strengthening of civil society.

In reality however the IRI serves as an instrument to advance and promote the most far right Republican foreign policy agenda. More a cloak-and-dagger operation than a conventional research group, IRI has aligned itself with some of the most antidemocratic factions in the Third World. In Haiti, IRI helped to fund, equip, and lobby for the country’s two heavily conservative and White House-backed opposition parties, the Democratic Convergence and Group 184. The latter group, comprised of many of the island’s major business, church and professional figures, was at the vanguard of opposition to Jean Bertrand Aristide prior to the Haitian President’s forced ouster in 2004. In Venezuela, IRI generously funded civil society groups that were militantly opposed to the Chávez regime.

Significantly, Anheuser-Busch has donated tens of thousands of dollars to IRI. On a certain level the brewing company’s financial support is not very surprising. If it can avoid it, the company would undoubtedly like to turn back the tide of so-called Pink Tide regimes which have come to power in recent years. As I explain in my current book Revolution! South America and the Rise of the New Left (Palgrave-Macmillan 2008), nationalistic governments from Venezuela to Brazil to Argentina have opposed the creation of President Bush’s corporately-driven Free Trade Area of the Americas.

McCain, Anheuser Busch and CAFTA

Hoping to outflank hostile left wing regimes in the region, the Bush White House has been busy over the past few years hammering out free trade agreements with more conservative governments. In 2005, the U.S. Congress passed the Central American Free Trade Agreement or CAFTA, which cuts tariffs among the United States, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua.

Having reaped maximum gain from NAFTA, Anheuser-Busch is likely to benefit from an expansion of corporate-driven free trade in Central America. In Honduras, Anheuser-Busch introduced Budweiser in 2006. The following year, Heineken announced that it had reached an agreement with Anheuser-Busch to produce and market Budweiser in Panama. The production and bottling of Budweiser in the tiny Central American nation is a major achievement for the company, as it provides a starting point for expanding the brand to other markets in the region. What’s more, under CAFTA U.S. beers will be able to enter Central America duty free by 2015. The beer industry hopes that CAFTA will spur increased per capita consumption, particularly in countries like Guatemala, El Salvador, and Nicaragua, thus leading to greater profits.

McCain has been an important backer of CAFTA and voted for the agreement in the Senate despite the fact that the deal, modeled after NAFTA, does not contain adequate environmental or labor protections.

Not only does McCain support CAFTA but he also wants to expand free trade to other governments throughout the region. Despite Colombia’s status as a human rights and labor nightmare, the Senator backs a pending trade deal with the Andean nation. McCain’s lobbying on behalf of the Colombia deal stands to benefit his political benefactor Anheuser-Busch: in February, 2006 the company introduced Budweiser in the Andean nation.

Touting the virtues of mediocre Budweiser, Esteban Amoia, a regional marketing manager for Anheuser-Busch International, remarked that “Budweiser has exceeded expectations in Colombia…and there is a growing demand for the brand’s clean, crisp and refreshing taste." Encouraged by Budweiser’s success in Colombia, Anheuser-Busch is now marketing Bud Light. Amoia added that the beer could “become the brand of choice for young, fun-loving men and women who are on the move."

From his earliest days as a politician, McCain has eagerly enmeshed himself in an insidious political web with Anheuser-Busch. If it weren’t for Cindy McCain and her beer money, the Arizona Senator might not have achieved great political power in the Senate. In exchange for Anheuser-Busch’s support, McCain looks out for the beer company’s long-term interests abroad. Truly, it might be said that the Arizona Senator is the “King of Beers” in Latin America.

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Initially, it seemed as if Chavez was perfectly poised to capitalize on a wave of anti-American discontent felt throughout the hemisphere. But then, a series of dramatic reversals cast doubt on Chavez's ambitions to become a truly hemispheric leader and a lightning rod against U.S. influence.

 

Over the last few months, I had begun to doubt whether Venezuelan President Hugo Chavez would indeed have the kind of political staying power that I described in my book, Hugo Chavez: Oil, Politics, and the Challenge to the U.S. (recently released by St. Martin's Press).

Initially, it seemed as if Chavez was perfectly poised to capitalize on a wave of anti-American discontent felt throughout the hemisphere. Throughout South America, Chavez exchanged oil for political influence with newly emerging leftist regimes in Uruguay, Argentina, and Brazil; the election of Evo Morales in Bolivia, a key Chavez ally, seemed to underscore Venezuela's rising influence.

 

But then, a series of dramatic reversals cast doubt on Chavez's ambitions to become a truly hemispheric leader and a lightning rod against U.S. influence.

Chavez's Reversals, from Peru to the United Nations

 

In Peru, Chavez openly endorsed the nationalist candidate Ollanta Humala in the country's presidential election. But Chavez's strategy backfired when Humala's opponent, Alan Garcia, charged that the Venezuelan leader was interfering in Peru's internal politics. Garcia successfully exploited the issue to his advantage and went on to beat Humala in last April's election.

 

In Mexico, pro-business PAN candidate Felipe Calderon ran a negative campaign against his leftist challenger Andres Manuel Lopez Obrador. In his TV ads, Calderon linked Obrador to Hugo Chavez, proclaiming "Lopez Obrador is a danger to Mexico." Though Lopez Obrador cried fraud in Mexico's July presidential election, the Electoral Tribunal ruled that Calderon had won the election and rejected Obrador's allegations. Calderon is set to assume office in December.

 

The next set back for Chavez came in Ecuador, where the Venezuelan leader's would be protégé, Rafael Correa, went down in defeat in the first round of the country's presidential election last month. A Correa win would have added another oil-rich country to Chavez's anti-American alliance.

 

Correa, a leftist economics professor, denied that Chavez had funded his campaign and the Venezuelan leader, chastened by his defeats in Mexico and Peru, was uncharacteristically quiet about the Ecuador election.

 

However, it's no secret that the two had a personal rapport. Correa in fact visited Chavez's home state of Barinas in August, where he met with the Venezuelan leader and spent the night with Chavez's parents. Correa, who opposes an extension of the U.S. lease at an air base in Manta, which serves as a staging ground for drug surveillance flights, has nothing but contempt for George Bush.

 

When he was recently asked about Chavez's "devil" diatribe against the U.S. president at the United Nations, Correa remarked amusingly, "Calling Bush the devil offends the devil. Bush is a tremendously dimwitted President who has done great damage to the world."

 

But Correa was shocked by a strong last minute showing by his challenger, pro-U.S. banana magnate Alvaro Noboa. Like Lopez Obrador, Correa has cried foul and declared that his campaign might have fallen victim to electronic fraud on the country's voting machines. He will face off with Noboa in another runoff election in November.

 

Then there was Venezuela's failed bid to secure a non permanent seat on the United Nations Security Council. When the United States proposed its own candidate, Guatemala, things turned ugly. Chavez characterized the race as a struggle against U.S. domination throughout Latin America; Venezuelan diplomats went so far as to describe Guatemala as a U.S. stooge.

But in the end, Venezuela failed to come up with the requisite votes. Chavez could take some satisfaction that Guatemala too failed to come up with the necessary votes at the United Nations, and had to withdraw in favor of Panama.

 

The reality, however, is that despite Chavez's frenetic shuttle diplomacy throughout Africa and calls for Third World solidarity, he could not muster more votes than a small Central American country with very little regional influence and an appalling human rights record.

It was hardly an impressive showing.

The Chavez-Ortega Alliance

 

Events in Nicaragua, however, suggest that it won't be so easy for the Bush administration to roll back Chavez's ambitions. It now seems as if the Sandinista candidate Daniel Ortega will cruise to victory in the country's presidential election and avoid a run off. As of Monday night, preliminary results show Ortega with about 40 percent of the vote, more than enough to avoid a future runoff.

 

For the White House, it's a nightmare that officials had long sought to avoid.

 

Though Ortega, who was president from 1985 to 1990 during the U.S.-fueled Contra War, is a pale shadow of his former self, having jettisoned his leftist rhetoric and hostility towards his northern neighbor, nevertheless Washington must now recognize that it has patently failed to isolate Chavez diplomatically. Nicaragua now seems poised to join the wave of left leaning regimes throughout the hemisphere inspired by Chavez.

 

When Ortega traveled to Venezuela for a meeting with Chavez last year, the friendship between the two began to bear fruit. During the meeting at Miraflores, the presidential palace, Ortega remarked that Latin American unity was necessary to confront globalization. He added that Chavez's electoral victory convinced him that revolutionary change could be achieved through the ballot box. "I thought that they were going to overthrow Chavez," Ortega remarked, "and that he would meet the same fate as Salvador Allende."

 

Ortega later alarmed Washington by remarking that if he won the election he would make sure that Nicaragua would join ALBA, Chavez's Bolivarian Alternative for The Americas. Chavez's trading plan, which is designed to sideline traditional corporate interests and Bush's Free Trade Agreement of The Americas (FTAA), is based on barter agreements between Latin American countries. Recently, to the chagrin of U.S. policymakers, Bolivia joined Venezuela and Cuba in ALBA.

 

Chavez, Ortega and ALBA

 

"Without a doubt," Ortega declared during a Cuban summit meeting with Morales, Castro and Chavez, "we have to look towards the south, we have to look towards integration, and ALBA is an open door, it is Latin American and Caribbean integration."

 

Ortega later added that he opposed U.S.-backed trade deals. "Central America's trading future lies not with the U.S. but with Venezuela, Brazil and Argentina," he said.

 

Ortega, smarting from three successive electoral defeats after the fall of the Sandinistas from power, added that he was "convinced after 16 years of neo liberal policies in Nicaragua that the conditions are ripe for the Sandinista Front to retake power, now via the ballot box."

In the Plaza de La Revolucion in Havana, Chavez approached Ortega and remarked, "Daniel, we are inviting you next year to come here as the president of Nicaragua."

 

According to Ortega, Chavez followed up on his promising words by offering to help Nicaragua join in ALBA. Speaking before hundreds of workers in Managua, Ortega said that Chavez and the president of the Venezuelan Economic and Social Development Bank (known by its Spanish acronym Bandes) had pledged to help open a development bank in Nicaragua. "Venezuela is willing to provide support so that this bank will become a reality and campesinos will have credits and a secure market," Ortega told supporters.  According to Ortega the Venezuelan aid formed part of ALBA.

Chavez, Ortega and CAFTA

 

In seeking to recruit Ortega for his ALBA scheme, Chavez found a willing ally in Ortega. Indeed, Nicaragua's experiment in "neo-liberal" economics since the fall of the Sandinistas in 1990 has not been a very happy one. Like Venezuela, which experienced political unrest as a result of neo liberal policies pushed by Washington, Nicaragua has been buffeted by "savage capitalism," as Ortega has put it.

 

Today, Nicaragua is a bleak place. Per capita income is a paltry $700 and more than 70% of the population lives on less than $2 a day. Successive governments have failed to restore Managua from a 1972 earthquake. Within yards of the presidential palace lie slums and empty buildings; beggars and barefoot children splash around in the gutters of Managua instead of heading to class.

 

Like Chavez, Ortega has spent a lot of time over the past years criticizing U.S.-led free trade deals. For example, the Sandinista led the charge against CAFTA, the Central American Free Trade Agreement. Ortega pledged to pull Nicaragua out of CAFTA and "end savage capitalism when we win." CAFTA, Ortega argued, was an effort by the U.S. to exploit poor countries in a rush to the bottom and cheap labor.

 

"Bush is taking up CAFTA," Ortega remarked in an interview with the Christian Science Monitor, "because it is his way of keeping Central America from looking south." Ortega furthermore suggested that Washington was seeking to splinter Nicaragua's solidarity with the Left in Latin America such as Chavez's regime.

 

CAFTA was pushed ruthlessly by U.S. trade representative Robert Zoellick over the objections of labor, environmentalists and human rights groups [for more on Zoellick, see my profile of the diplomat in my book].

 

"CAFTA is the opportunity of a lifetime," Zoellick remarked in an address given at the Heritage Foundation. "If we retreat into isolationism, Daniel Ortega, Hugo Chavez and others like them, leftist autocratswill advance."

 

Zoellick's efforts to link Ortega and Chavez in order to ram through CAFTA were echoed by paranoid, red baiting Republicans in the House and Senate. Oklahoma Republican James Inhofe warned his fellow Senators: "These Communists, these enemies of the United States, Chavez, Ortega, and Castro, are all in opposition to CAFTA. If you want to be on their side, you would vote against CAFTA."

 

In the House, Republican Rep. Mike Kirk of Illinois took the fear mongering prize by arguing that Chavez was "Venezuela's Mussolini." Chavez, claimed Kirk, was purchasing weapons in order to fight a new war in Central America. "Let us enact a free trade agreement with Central America to lock in democratic growth and stability," Kirk exclaimed, "and let us make sure that President Hugo Chavez's Venezuelan agents find no fertile ground in America's back yard."

 

In the end CAFTA passed narrowly in Congress. In Nicaragua, CAFTA was opposed by the Sandinistas in the National Assembly as well as key figures in civil society, including the president of the country's largest agricultural organization, who warned that the agreement would give rise to greater poverty in the countryside.

 

According to experts, CAFTA stood to encourage the growth of more maquiladora assembly plants, but any positive benefit would be offset by the loss in farm jobs as a result of the influx of cheap U.S. agricultural goods. Despite domestic opposition, Nicaragua passed CAFTA in October 2005.

Efforts to Demonize Ortega and Chavez

 

Despite its CAFTA public relations victory, the Bush administration was clearly still worried and kept up the pressure on Ortega during the run up to the presidential election. Paul Trivelli, the U.S. Ambassador to Nicaragua, warned that Ortega's victory would signify "the introduction of a Chavez model" in Nicaragua.

 

Meanwhile the conservative press flew into a tirade against Ortega, with the Washington Times remarking that "Ortega will take Nicaragua out of CAFTA and into Mr. Chavez's Bolivarian Alternative for the Americas, and almost synonymous with this is a move to nationalize industry, much like Evo Morales did in Bolivia."

 

The Washington Post was similarly hostile, remarking in an editorial that Ortega "is about to return to power and increase the alliance with non-democratic countries [such as] Venezuela." The Post, interestingly criticized the Bush administration for reacting too slow to the Chavez and Ortega threat.

 

On the pages of National Review, Otto Reich, a former State Department official who dealt with Venezuelan opposition conspirators in the run up to the coup against Chavez in 2002, remarked that "The emerging axis of subversion forming between Cuba and Venezuela must be confronted before it can undermine democracy in Nicaragua."

 

As per the case in Peru, the Nicaraguan right sought to link its Sandinista opposition to Chavez in an effort to instill fear in voters. Presidential candidate Jose Rizo remarked that Chavez and Ortega were "a threat to regional and hemispheric stability," and claimed that the Venezuelan leader was financing Ortega's campaign [both Venezuela and Ortega deny the accusation]. "Ortega will become Chavez's lieutenant in Central America and the Caribbean in the same way that he represented the extinct and failed Soviet Bloc," Rizo added.

Ortega Unlikely to Radicalize

 

Unlike Peru however the opposition's strategy of trying to scare Nicaraguan voters proved unsuccessful and at long last Ortega has prevailed in his drive to reach the presidency. Despite the hyperbolic claims by the U.S. and conservative politicians in Nicaragua however, Ortega is hardly in a position to become Chavez's steward overnight. Unlike Venezuela, Nicaragua is poor and foreign investment and aid accounts for 35 percent of the budget. That money could disappear if Ortega started to radicalize the country and expropriate industry.

 

In an effort to appease jittery investors, Ortega recently signed a pro-business pact in which he pledged to promote the private sector. Though he has spoken about the need to renegotiate aspects of CAFTA, Ortega now says he will build on free trade agreements. Ortega will have to tread lightly: the U.S. is Nicaragua's largest trading partner and accounts for about one fifth of the country's imports and approximately a third of its exports. About 25 wholly or partially owned subsidiaries of U.S. corporations operate in Nicaragua.

 

With so much at stake, Ortega has predictably moderated his rhetoric by stating that he would work with the International Monetary Fund, the World Bank, and Inter American Development Bank.

 

Carlos Fernando Chamorro, son of former president Violeta Chamorro and editor of the weekly Confidencial newspaper, is not too concerned about a radical Ortega agenda. He argues that Ortega is a pragmatist and will try to appease the United States. Observers believe that the right wing Liberal Constitutionalist Party (known by its Spanish acronym PLC), the main opposition to the Sandinistas, will hold onto its many seats in the National Assembly following this election, which would further complicate any radical agenda.

 

But, Chavez's Oil Diplomacy in Central America Could Be a Factor

 

Nevertheless, Chavez seems to be trying hard to bring Nicaragua into its political orbit. Chavez has enhanced his stature in South America by trading oil for other goods, and seems to be pursuing a similar strategy in Nicaragua. Venezuela has in fact already provided cheap fuel to Nicaragua through Sandinista mayors. Speaking on his television and radio program Alo, Presidente!, Chavez told Ortega that Nicaragua could pay for Venezuelan oil with meat, milk, cheese and other goods.

 

Ortega and Chavez have held personal discussions about setting up a mixed Venezuelan-Nicaraguan company that would import the cheap oil. Chavez is apparently willing to invest in Nicaragua to set up necessary oil infrastructure. Best of all, Chavez's offer could prove politically beneficial to Ortega since restive students have protested any move to raise transportation costs. Farmers meanwhile would not have to increase their production costs.

What does it all add up to? Despite some setbacks, Chavez stands to at least gain some diplomatic and political leverage in Central America. Ortega will be hampered in bringing about radical change, but will at least look upon Venezuela as an important regional ally and friend. Try as it might, the Bush administration has not been able to isolate Chavez. To the contrary, the U.S., through its efforts to demonize both Chavez and Ortega, has unwittingly brought them together.