Nikolas Kozloff

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As the presidential election nears, Republicans are relying on their usual fear-mongering tactics by playing on supposed external threats such as Iran.  Already it seems such a strategy seems to have moved Obama to the right with the president going out of his way to issue stern warnings toward the Islamic Republic during his State of the Union address.  What is more, in a worrying development the Republicans are doing their utmost to link Iran with the Latin American populist left and Hugo Chávez of Venezuela, which could have undesirable and unforeseen consequences on U.S. foreign policy.

 

According to secret U.S. State Department cables recently released by whistle-blowing outfit WikiLeaks, American diplomats from Hillary Clinton on down have little evidence of a significant military alliance between Iran and Venezuela, yet that didn't stop surging Republican presidential candidate Rick Santorum from exaggerating the threat from this quarter in a recent debate.  Ileana Ros-Lehtinen, the Chair of the House Foreign Relations Committee, has meanwhile been holding hearings on the supposed Iranian-Latin American threat to the U.S.

 

Hopefully the Democrats will not seek to echo the Chávez-Ahmadinejad military angle which will only serve to further inflame the tattered state of U.S.-Venezuelan relations, yet it's no secret that the Obama administration, like its predecessor, would like to rid itself of the populist left current in Latin America.  Such combative posturing is not only regrettable but counter-productive.  Indeed, further cables released by WikiLeaks suggest that, with a little bit of effort, Washington might be able to mend fences with Chávez.  Whatever the Venezuelan leader may say in public about the U.S. and its wider objectives throughout the region, in private Chávez has been more than happy to search for common ground and extend an olive branch. 

 

Chávez's Charm Offensive

 

Judging from the cables Chávez was particularly amenable to friendly diplomacy prior to the April, 2002 coup which briefly toppled him from power.  Indeed, U.S. diplomats had numerous opportunities to build a constructive relationship with Chávez but squandered their chances.  In 1998, for example, political neophyte Chávez approached the U.S. Embassy in advance of Venezuela's upcoming election. 

 

Then a presidential candidate, Chávez had criticized U.S. free trade and neo-liberalism, yet in private discussions with the American ambassador in Caracas the firebrand politician was on his "best behavior" and stressed that his own political success depended "in good measure on his relationship with the U.S."  Buttering up the Americans, Chávez said he admired the U.S., "which he traced to his early love of baseball and his contact with U.S. military officers during his service in the armed forces." 

 

Six years earlier, while still a military officer, Chávez had launched an aborted coup against the pro-U.S. government of Carlos Andrés Pérez, and during his discussion with the ambassador Chávez regretted that his relationship with the U.S. had suffered as a result.  In hindsight, Chávez said, the 1992 coup attempt was "incorrect," and the aspiring candidate was careful to stress his commitment to democratic principles. 

 

U.S. Ambassador to Chávez: Don't Push Us

 

Unconvinced by Chávez's charm offensive, U.S. ambassador John Maisto bluntly informed the presidential aspirant that there was "palpable concern" in Washington about Venezuela's political and economic situation.  Foreign investment required clear and reliable rules, the ambassador added, and uncertainty about Chávez's fiery rhetoric had given severe pause to investors. 

 

The Americans were particularly concerned about Chávez's plans to convene a constitutional assembly if elected, which "would stop foreign investment cold" and leave Venezuela "without the foreign capital it needs for economic growth."  To be sure, the U.S. ambassador conceded, Venezuela's institutions were "tattered" but nevertheless ought to be preserved.  Chávez's rhetoric, on the other hand, was "provocative and confusing."  At times, the ambassador remarked, Chávez sounded as if he was "promoting not a constitutional assembly but a revolutionary junta."

 

Speaking with the Americans, Chávez voiced his support for a reform of the state, which in his view needed to be "re-legitimized" in the eyes of the people.  On the other hand, Chávez was quick to add, the new assembly would not be a revolutionary junta but rather an elected body with sharply defined responsibilities.  Hardly a strident economic nationalist in private, Chávez also told the ambassador that he was in favor of privatizing all state assets save Venezuelan oil company PdVSA.

 

In an effort to further mollify the U.S. the aspiring candidate added that he would respect all business commitments and international agreements while working to improve counternarcotics cooperation.  "My God," Chávez reportedly declared, "my government's success will depend on attracting investment."  In a further over the top remark, Chávez said "I hope God grants me the opportunity" to prove a commitment to democracy, economic reform and privatization. 

 

Going even further, the presidential candidate added that he was keenly aware that whoever he selected for his future cabinet would "send a strong signal to investors" about the tenor of his future government.  Hinting to the Americans that they had nothing to fear, Chávez said "you will be surprised.  I will pick a very good group."

 

Skeptical Clinton White House

 

The evidence suggests that, on balance, Chávez continued to seek good relations with the U.S.  Shortly after he was elected president in early 1999, Chávez wrote U.S. president Bill Clinton personally, expressing Venezuela's interest in "renewing and reforging" relations with Washington.  "We certainly share the desire for a solid and vibrant democracy," Chávez wrote, "the kind envisioned and practiced by men such as Abraham Lincoln and Simón Bolívar." 

 

Still eager to please, Chávez defended his constitutional assembly and was careful to point out that former U.S. president Jimmy Carter no less had praised Venezuela's "democratic revolution."  In the economic sphere meanwhile, Venezuela was "open to all types of U.S. private and public sector initiatives to advance our countries' mutual development."  On counter-narcotics, Chávez likewise reiterated his intention to fight drug trafficking and "all crimes related to that disease."

 

In Caracas, Maisto was apparently still unconvinced by Chávez's charm offensive.  Speaking to top Venezuelan officials, the U.S. ambassador declared tersely that Chávez must develop a "concrete agenda of agreements in areas of mutual interest," such as a bilateral investment treaty and expanded narcotics cooperation.  Moreover, Washington sought a "clear understanding" permitting U.S. aircraft to overfly Venezuela as part of a forward operating location agreement in Curacao and Aruba.  Ultimately, remarked the ever skeptical Maisto, "nice words are fine, but…the substance of the bilateral relationship will be determined by concrete cooperation."

 

Relations Take a Nosedive

 

If U.S.-Venezuelan relations were frosty during the Clinton era, they became downright combative in the Bush years.  WikiLeaks cables show that, far from seeking to repair tattered diplomatic ties, the Bush White House ratcheted up tensions.  In an effort to turn up the pressure on Chávez, Washington sent financial aid to the rightist opposition in Venezuela even as Chávez derided the U.S. drug war in Latin America and sought to exert greater control over his country's oil industry.  In April, 2002 a coup launched by rightists who had received U.S. financial assistance briefly unseated Chávez from power.

 

In the wake of the coup, U.S. diplomats were hardly apologetic for their meddling in Venezuelan affairs.  In Caracas, the American Chargé d'Affaires asked Venezuelan Vice President José Vicente Rangel how it would be possible for relations to improve in light of Chávez's anti-imperialist declarations.  Sarcastically turning the tables, the Chargé asked "how the government of Venezuela could characterize any of us as imperialist, when it was Venezuela, not the U.S. government, that owned refineries and gas stations in the U.S., when it was Venezuela that could say whether we could or couldn't use their air space for the…Forward Operation Location flights?" 

 

From there, the conversation degenerated with Rangel accusing the U.S. of plotting the 2002 coup.  When the Vice President added that Venezuela had hard proof of Bush administration complicity, the Chargé shot back that if Chávez had such proof it should publish it.  Furthermore, the American diplomat added, the U.S. government had itself already investigated Venezuela's allegations and come up with nothing.  Preposterously, the diplomat declared that "our recent investigations…into the WMD issue showed we could do an honest investigation."

 

Failure to "Reset"

 

With the election of Obama, Chávez seems to have hoped that relations might be set right.  In March, 2009 Chávez told U.S. legislators that he was hoping for a "reset" with Washington and reportedly even expressed interest in renewing counternarcotics cooperation.  The following month, Chávez met Obama during a Summit of the Americas summit in Port of Spain, Trinidad. 

 

Reportedly, Obama told the Venezuelan president that "we will have our differences but I will never get involved in things internal to Venezuela." Chávez claims to have responded, "Believe me that we want to talk but it has not been possible."  Chávez then added, in Spanish and English, "Look, I am going to repeat the same thing I said eight years ago to your predecessor, 'I want to be your friend.  We want to talk.'"

 

It seemed like a propitious start, yet Obama, like his predecessors, would squander opportunity by pursuing an aggressive foreign policy in the region.  Chávez was particularly irked by U.S. handling of the coup in Honduras and Washington's installation of seven military bases in Colombia.  During a TV interview, the Venezuelan remarked "Obama may end up being . . . a great frustration . . . he may end up being only a token used by the empire that continues acting against and attacking the world in a manner even more ferocious and aggressive than in the times of Bush, which is a lot to say."

 

From Clinton to Bush to Obama, the U.S. had numerous attempts to smooth over relations with Chávez but failed to do so.  The WikiLeaks cache ends in early 2010, but it's no secret that Chávez continues to feel frustrated by the course of U.S. foreign policy.  Will the Obama White House further ratchet up pressure in response to calls from the major Republican presidential candidates?  Adopting such a policy would be importunate at any time but particularly self defeating now as Chávez faces a tough reelection battle in October.  If he feels that Obama is determined to stamp out Venezuela's so-called "Bolivarian Revolution," Chávez will surely lash out and relations might be tarnished to an irreparable degree.

As the Venezuelan presidential election approaches in October, Washington is undoubtedly hoping that Hugo Chávez will go down to stinging electoral defeat and that the populist leader's geopolitical alliance will crumble and come to an ignominious end. Of particular concern to both the Bush and Obama administrations has been Nicaragua, a country which moved into Chávez's orbit when Daniel Ortega, a leader of the Sandinista Revolution, captured the presidency in 2006. According to secret cables recently released by whistle-blowing outfit WikiLeaks, the State Department has been furious with Ortega for conducting an independent foreign policy, and U.S. diplomats have resorted to threats and intimidation in order to head off the Venezuelan-Nicaraguan alliance.

 

American diplomats in Managua would have surely preferred to see a continuation of the Enrique Bolaños administration, which predated the Ortega regime and proved much more amenable to Washington's conservative agenda. In early 2006, prior to Ortega's election, the Nicaraguans told the U.S. ambassador that they would not back Venezuela for a non-permanent seat on the United Nations Security Council and would support Guatemala for the spot instead. In fact, Nicaragua went so far as to act as a kind of ringleader against Venezuela, rounding up Central American support for Guatemala in an effort to "forestall" Chávez's rising influence.

 

As the election neared, the Bush administration became increasingly concerned about what an Ortega win might mean at the regional level. In Managua, the American ambassador complained to the Nicaraguans about "the pattern of harassment directed by the Venezuelan government" against U.S. diplomats. The Nicaraguan Foreign Minister sympathized, adding that he was worried about "Chávez's interest in Sandinista (FSLN) leader Daniel Ortega's winning the November election." In a follow up meeting, the Americans told the Bolaños government that Washington was closely monitoring Chávez, who had proposed an oil deal with the Sandinistas.

 

Washington Loses a Key Ally

 

With the re-election of Ortega in late 2006, who had previously served as president of Nicaragua at the height of the U.S.-funded Contra War of the 1980s, the Bush administration's foremost fear had come to pass. Flying down to Managua, Assistant Secretary of State Thomas Shannon met with President elect Ortega in the conference room of the FSLN Secretariat. After Ortega announced that he would seek a trade agreement with Venezuela, Shannon remarked sternly that "President Chávez knows what he has to do to improve relations. He is the author of the present confrontation."

 

If that was not clear enough, U.S. diplomats later warned the incoming Ortega administration that Washington would respect Nicaraguan sovereignty, but "if the FSLN government were, for example, to recruit hundreds of Venezuelans to man its ministries, we would be concerned." The main purpose of such advisers, noted the U.S. ambassador to his superiors, would be "to indoctrinate Nicaraguans against the United States and democracy." It would be absolutely "essential," the ambassador noted, to convey a sense of U.S "red lines" toward the Ortega regime such as the need to follow the directives of large, international financial institutions.

 

If the Americans hoped that Nicaragua would distance itself from Chávez, however, they got a shot in the arm during the Ortega inaugural in early 2007. Singing the praises of his Bolivarian "twin" Hugo Chávez, the new Nicaraguan president proclaimed the failure of so-called "neo-liberal" economics. During the ceremony, Ortega pledged to bring Nicaragua into Venezuela's ALBA alliance and end privatizations of public companies. In another jab at the Bush administration, Ortega said he would like to "revisit" certain elements of the Central American Free Trade Agreement or CAFTA. Both Chávez and Bolivian leader Evo Morales were at the inaugural to proclaim the "death of imperialism."

 

Divide and Conquer in Latin America

 

With the alarm bells going off, U.S. ambassador to Nicaragua Paul Trivelli invited fellow Central American ambassadors over for breakfast and a discussion. During the get together, the conservative dignitaries said they were "startled by the populist rhetoric and procession of infamous guests surrounding the inauguration of President Daniel Ortega," and were "dismayed" by Ortega's accession to agreements with Venezuela. Perhaps, they opined, Nicaragua's neighbors could help to "offset the negative influence" of Chávez.

 

Not content to stop there, Trivelli then organized yet another breakfast, this time inviting the Spanish, Mexican, Chilean, Brazilian and Colombian ambassadors to Nicaragua, respectively. All the diplomats echoed the previous chorus of concern, declaring preoccupation over Chávez's "destabilizing" influence. The over the top pro-U.S. Colombian ambassador was particularly worried, declaring hyperbolically that Chávez could cause mischief in Central America and thus "open the door to drug trafficking and the movement of terrorists."

 

Ratcheting up International Pressure

 

The atmosphere became increasingly poisonous by March, 2007 with Trivelli going into overdrive in an effort to recruit international allies against the incipient Ortega-Chávez alliance. The campaign bore fruit as both Spain and Germany joined the fray and warned Ortega not to issue "contradictory statements and actions regarding foreign affairs, press freedom, and investment." Hosting yet another breakfast, Trivelli invited the Nicaraguan Foreign Minister, Economics Minister and Presidential Advisor as well as the Spanish and German ambassadors.

 

Trivelli quickly let the Nicaraguans know who was boss, opening the breakfast "by remarking that the administration's moves to centralize government, criticize the press, scapegoat international investors, and engage pariah regimes...raise questions about the new government's commitment to maintain an open democracy and friendly relations with all."

The breakfast, Trivelli wrote, served to put the Nicaraguans on notice. The U.S. ambassador intended to issue a warning to the government's more moderate faction that "we and other embassies are monitoring investor relations closely, a message they can use to push back against party radicals urging Ortega to strengthen alliances with Venezuela." Nervously, the Nicaraguans blamed the "sensationalist press" for distorting Ortega's record, adding that all new governments go through a "period of adjustment."

 

Push and Shove over Economic Policy

 

In an effort no doubt to mark a line in the sand or "red lines," Trivelli also met with the new Minister of Finance. In light of Ortega's recent actions, including the signing of important economic deals with the likes of Chávez, what kind of economic model was Nicaragua planning to pursue, Trivelli asked? The Finance Minister responded that his country's foremost concern was maintaining macroeconomic stability and holding talks with the likes of the IMF. Trivelli seemed skeptical of such claims, noting that "U.S. investors had begun questioning what sort of economic model the new government plans to pursue."

 

From there, the discussion got somewhat frosty with the ambassador pressing the Finance Minister about the need to resolve property claims stemming from expropriations that took place in the 1980s during the height of the Sandinista Revolution. Trivelli personally handed over a list of "high profile" expropriation cases. The Minister responded defensively that Ortega had no plans to expropriate property as in the 1980s, "nor do anything that will damage the favorable investment climate that currently exists."

 

Despite such assurances, Trivelli pressed on. Would Ortega limit foreign investment in sensitive sectors such as energy and coastal property, Trivelli asked? Seeking to placate the ambassador, the Finance Minister replied that "Nicaragua is not going to shut the door on anyone (nor) obstruct investment in any sector."  Unconvinced, Trivelli prodded Nicaragua's Central Bank President about Nicaraguan economic policy in a follow up meeting. Testily, Trivelli asked the Nicaraguan how a closer relationship with Venezuela would facilitate a sensible business climate. In a game of cat and mouse, the official responded that recent economic agreements with Chávez did not represent "a reflection of a political vision for Nicaragua, but rather an acknowledgment that Nicaragua depends upon [Venezuela's] largesse...for oil."  Still skeptical, Trivelli brought up Ortega's recent statements attacking "neo-liberalism" and calls to end "dependency" on the International Monetary Fund. Ortega's desire to review privatization of the telephone and power sectors was likewise a concern, and the ambassador prodded the Central Bank President as to the particulars of ALBA economic aid for Nicaragua.

 

Game of Cat and Mouse

 

U.S. Embassy staff continued to press the Nicaraguans, hoping to identify moderate factions within the government which could help to reel in Ortega's pro-Chávez leanings. By speaking with Magda Enríquez, a high level official at the Ministry of Foreign Affairs, the Americans hoped to make their case. Within the Sandinista hierarchy, Enríquez appeared to be "aligned with the FSLN moderates, recognizes the value of positive engagement with the United States, and probably lends a voice of reason to balance the more extreme views of the Sandinista hardliners."

 

When the Americans complained that Ortega's discourse regarding the U.S. had become "increasingly belligerent and unconstructive," Enríquez nodded in agreement and promised to urge the president to dial back his rhetoric. Hoping to calm tempers at the U.S. Embassy, Enríquez added that while Ortega saw Chávez as his "friend and ally," Nicaragua did not see eye to eye with Venezuela on all issues.

 

Nicaragua's Business Community vs. Ortega and Chávez

 

Having made overtures towards other foreign powers as well as moderates within the Sandinista government, the Americans proceeded to court the Nicaraguan business sector. At an economic roundtable, Trivelli hosted heavy hitters linked to international investment such as Alberto Chamorro of the Bank of Central America, which was almost 50% owned by GE Financial and Joaquim de Magalhaes of Esso Nicaragua. Speaking with the Americans, the businessmen complained about Ortega, who in their view was intent on regaining his standing as a Latin American revolutionary by praising Chávez.

 

Venezuelan oil diplomacy surely did not go over well amongst the ambassador's guests. According to them, Venezuelan petroleum shipments to the Ortega government were arriving faster than Nicaraguan state oil company Petronic could handle them, and this in turn was creating difficulties for local fuel distributors. Even worse, Ortega had undertaken a nationalistic energy policy by seizing fuel storage tanks owned by Exxon. Overall, the guests believed that the Ortega regime saw Petronic and Venezuelan oil as a "giant ATM" from which it could withdraw cash at any time.

 

Investors grew even more jittery when the board of the Millennium Challenge Corporation cancelled more than $60 million in U.S. economic assistance to Nicaragua as a result of alleged election fraud marring the November, 2008 municipal contests. As Ortega railed against the U.S., arguing that Washington was unduly interfering with Nicaragua's own sovereignty, local businessmen lamented the cutoff in aid.

 

Obama Era: Tensions Continue

 

If the Americans, however, hoped that such punitive measures would dissuade Ortega from cozying up to Venezuela, they would be sorely mistaken. Indeed, if anything the cutoff encouraged Nicaragua to look for alternative funding, and by 2008 Ortega had already received more than $1 billion from Venezuela in the form of loans, grants, and foreign direct investment. According to the U.S. Embassy, the FSLN used part of the assistance to invest in party building and propaganda. To add insult to injury, Ortega also lambasted the Bush administration, claiming that the Americans had conspired to assassinate Chávez.

WikiLeaks cables hint at the further deterioration of U.S.-Nicaraguan relations during the Obama era, and underscore Ortega's growing ties with Venezuela and ALBA members such as Cuba. Joining with his left allies in Latin America, Ortega called for the development of a new regional organization which would exclude the U.S. and resist the political influence of "the Empire." Speaking on Cuban television, Ortega criticized Obama for maintaining Bush era policies such as freezing of the Millennium Challenge Account for Nicaragua.

 

In private meanwhile, Sandinista officials told the Americans they were becoming frustrated with the Obama administration and would deepen joint projects within the ALBA alliance, thus leading the U.S. Embassy to further lose patience with Ortega and his clique, which displayed a "skewed" world view "claiming a moral right to demand more resources, without conditions, while at the same time denouncing the very countries that provide such aid."

 

The WikiLeaks cache ends in early 2010, so we don't know the inside story of U.S. diplomacy in the region during the recent past. Yet, it's no secret that the Obama administration, like the Bush White House before it, views the Latin populist left as an irritant and would like to be rid of Chávez and his allies. If the cables are any indication, American diplomats in Managua most likely continued to pursue their earlier approach of cultivating support within the Nicaraguan business elite, peeling off Sandinista moderates and drumming up conservative support in the wider region against Ortega.

 

Unfortunately for the State Department, such tactics have not yielded concrete results. Indeed, it would appear that Ortega has now consolidated his political grip on Nicaragua following the Sandinista's recent reelection to a third presidential term. Yet, 2012 will be a momentous year in the region, as Chávez too risks everything on his own reelection bid. If Chávez should go down in defeat, Nicaragua would be deprived of a key political and economic benefactor and suggest further problems for the populist left in Latin America.

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For some time, I have been writing about revelations stemming from correspondence between the State Department in Washington and various U.S. embassies based around Latin America.  Leaked WikiLeaks documents have revealed growing U.S. concern over the left tide in the wider region and crucial strategies to derail progressive change.  More surprisingly, perhaps, the cables also hint at key fissures within the South American left --- tensions which the U.S. has been all too willing to exploit.

 

Divide and rule tactics may work to a degree with Ecuador, Venezuela or Bolivia, but the U.S. will have a tougher time managing Brazil.  Indeed, what struck me most as I poured through the documents was the marked difference in tone between U.S. embassy cables emanating from Quito, La Paz and Caracas on the one hand, and Brasilia on the other. 

 

It's clear from just a superficial read that American diplomats are much more cautious and level-headed with the Brazilians than elsewhere in the Andes, where U.S. officials tend to be much more direct and confrontational.  For Washington, Brazil promises to be the chief geopolitical worry in the decades to come, not Venezuela.

 

An exporting dynamo and powerhouse with a growing middle class, Brazil is using its newfound economic clout to venture into world politics like never before.  Unlike the Andean region, which has been plagued by chronic volatility, Brazil's political institutions look relatively stable.  Provided that Brazil's economic fortunes continue to soar, the South American juggernaut will surely be a force to be reckoned with in future. 

 

Behind Mercosur's Façade

 

Speaking with the Americans, leading members of the Brazilian political establishment remarked that their country should serve as "the natural leader of Latin America, or at least of South America."  Leading, however, is obviously a very different concept from standing shoulder to shoulder with smaller nations, and for those who view South America as essentially marching relentlessly toward regional integration along leftist lines, WikiLeaks cables can serve as quite a corrective.  Indeed, Brazilian conservatives were reportedly very unhappy with their government's "overly acquiescent approach to Bolivia, Ecuador, and Venezuela." 

 

As one reads the cables, a more complex and nuanced picture emerges of Brazil, a country torn by many conflicting impulses and agendas.  To be sure, Brazil is a member of trading bloc Mercosur which has helped to politically align sympathetic leftist regimes in South America.  Yet, if the diplomatic cables can be believed, many influential Brazilians view Mercosur with a healthy degree of skepticism and during the era of former president Luiz Inácio "Lula" da Silva, "most parts" of the Brazilian government were opposed to the trade bloc, seeing little benefit to their country from such integration. 

 

Lula, who himself came up from the ranks of organized labor, favored Mercosur but recalcitrant elements including the Ministries of Finance and Development saw matters differently.  Chafing under Mercosur's yoke, these technocrats complained that Brazil provided too much money toward the trade bloc's infrastructure fund, while other countries donated much less.  In particular, the influential industrial lobby complained that Mercosur was "selling out" commercial interests for the mere sake of preserving the trade bloc's unity.  Like the U.S., then, where Republicans routinely complain about multilateralism, the United Nations and doling out foreign aid to needy countries, Brazilian officials too "complained that underdeveloped areas in Brazil's northeast will get short shrift compared to needy areas" elsewhere in South America. 

 

As Brazil starts to accrue more power, the country may run into an image problem.  Like the U.S., which has been criticized for its sorry environmental record on climate change, Brazil too could find itself politically isolated from its more radical neighbors.  According to one WikiLeaks cable, environmental subjects within Mercosur are "very messy" with "no cooperation of note."  Reportedly, Argentine officials believed that Brazil was "focused on its position as a major player with China and India, not as part of Latin America, while Venezuela, Ecuador, Cuba, and Bolivia form a separate block with their own interests."

 

The Cocaine Connection

 

Brazilian skittishness was also evident toward its radical neighbor Bolivia.  Publicly, Lula and the Brazilian left proclaimed their solidarity with Chávez protégé Evo Morales, a radical indigenous coca grower.  But cables reveal Brazilian concern over political stability and the drug trade.  As early as 2004, prior to Morales' election as president, the Brazilians viewed instability in Bolivia with "grave concern," including the "disturbing convergence of an energized indigenous movement with the drug problem."

 

In some ways, then, the Brazilian relationship to Bolivia echoes U.S. ties to Mexico, a country which has also been convulsed by the drug trade.  For years, high level officials at Lula's GSI or Institutional Security Cabinet had viewed Brazil as essentially a corridor country for outbound narcotics to other nations, but "the brutal reality of violent, drug-driven crime in Brazil's cities has shattered that outlook…and huge quantities of cocaine and other drugs appear in large and small Brazilian communities throughout the country."    

 

The GSI, as well as the police were concerned "about the potential for increased cocaine flows into Brazil from Bolivia in the event of a Morales victory."  "We are clearly the target," remarked one GSI official, "for the low-grade coca based narcotics produced in Bolivia, which are flooding Brazilian cities, with devastating social consequences."  Feeling increasingly frustrated, the Brazilians had sought to convey their concerns to La Paz, via "indirect channels" and even through policy suggestions.  When Brasilia suggested that its Andean neighbor should substitute alternative crops for coca leaf, however, Bolivia balked and "fell back on the traditional crop argument," thus "shutting down further discussion." 

 

Brazil's Voracious Energy Needs

 

Like Mexico, which supplies oil to the U.S., Bolivia is an energy supplier to Brazil and provides natural gas.  In 2005, the Brazilian Minister of Mines and Energy said his country was "worried" about the reliability of its natural gas supply emanating from Bolivia.  If the gas supply decreased or prices skyrocketed, the official conceded, Brazil would "face a serious problem."

 

So concerned was Brazilian intelligence that high level officials developed contingency plans.  At the GSI, analysts sought to evaluate what the likely impact of an energy shortfall might be.  In the midst of Bolivia's presidential election season, Lula hoped that any new regime would "not allow radical new government policies or general instability to damage Brazilian energy industries."  If need be, Lula would reportedly take the same tone with Bolivia that "a parent would take when firmly disciplining an errant child."

 

Brazil to Chávez: We Run Things Here

 

Publicly, Brazil has demonstrated solidarity with Hugo Chávez and his protégé in Bolivia, Evo Morales.  However, WikiLeaks cables suggest that Brazil is ambivalent about the volatile Andean region and skeptical about Venezuelan leadership.  In 2007, for example, Brazil was reportedly skittish about Chávez's moves to establish a so-called "Bank of the South" which would counteract the International Monetary Fund.  Brazil already had its own development bank known as BNDES, and would "need to be convinced" of the efficacy of further institutions.  In the effort to foster its own regional agenda, Brazil has promoted BNDES, which finances infrastructure development through the trans-Andean highway. 

 

Whatever his own interest in BNDES, Lula was reportedly willing to go along with Bank of the South as long as Brazil was given a prominent place at the table.  In a snub, however, Chávez reportedly went behind Lula's back and negotiated with Argentina, causing the Brazilians to become "absolutely livid."  Perhaps, these types of developments made Brazil even more skeptical of Chávez and determined to assert its own independent leadership in the wider region.

 

Further cables underscore this subtle geopolitical shift.  In August, 2009 Lula traveled to Bolivia's coca growing region of Chapare.  There, the Brazilian met with Morales in a stadium "amid a festive atmosphere" of 10,000 cheering coca leaf growers.  Publicly, the two praised each other but beneath the surface lurked tensions.  Speaking to U.S. officials, Brazilian diplomats said they had grown quite frustrated with Bolivia on counter-narcotics and economic policy, adding that they wanted to "provide Morales with alternatives to the radical advice he is receiving from Venezuela and Cuba." 

 

Are Brazilians the New Gringos? 

 

It would be an overstatement to claim that Bolivia is a Brazilian satellite, but some WikiLeaks documents suggest that the small Andean nation could be quietly moving away from Venezuela in the hopes of gaining a new benefactor.  As far back as 2008, Brazilian legislators claimed that Bolivia was "tired of the Bolivarian idea."  According to Brazil's Chairman of the National Defense Committee and Senate Foreign Relations, the Bolivian ambassador in Brasilia "apologized…for some disagreements between presidents Lula and Morales a couple of years ago and agreed…that the two countries need to continue their tradition of friendly relations."

 

The WikiLeaks cache ends in early 2010, so we don't know much about the further ins and outs of this diplomatic game.  What's clear though is that Brazil's footprint has only increased in its own "near abroad," leading to new political frictions.  Today, the Bolivian left and indigenous peoples are probably just as prone to attack Brazilian imperialism as Washington's dictates.  At issue once again is BNDES, an institution which is fast outstripping the World Bank.  When BNDES announced it would support road construction through remote indigenous territory in Bolivia, the effort sparked protest from local Indians who accused Evo Morales of being a foreign lackey.  

 

BNDES, which seeks to create strong Brazilian multinationals via below-market loans, could fall under greater criticism in the years ahead.  With support from BNDES, companies like oil giant Petrobras, iron flagship Vale, and steel maker Gerdau have been conducting a big push into neighboring countries.  The Brazilian wave however has been met with wariness and resistance from Paraguay to Guyana to Peru to Ecuador, where local residents have protested large boondoggle projects. 

 

Big Power Rivalry in the Southern Cone?

 

As BNDES extends its influence, and Brazil ramps up diplomatic and political ties to Peru and even Colombia, Chávez's Venezuela has become eclipsed.  Such developments have not escaped the attention of Argentina, Brazil's historic rival for dominance in the Southern Cone.  If WikiLeaks cables are any indication, Buenos Aires has become increasingly alarmed by the unpredictable nature of Brazilian foreign policy, and even fears that its South American neighbor may be tempted to back up its interests through military means.   

 

My interest was particularly piqued by one cable dated to 2009, in which Argentine nuclear non-proliferation officials complained to U.S. diplomats "about the direction of Brazilian security policy in the final years of the Lula Government."  The Argentines were concerned about "yellow lights," such as Lula's outreach to Iran and North Korea.  Moreover, Argentine officials were worried about "the pace of Brazilian military purchases," and had even pondered what Buenos Aires might do in the event that Brasilia chose to develop a nuclear weapon.

 

The Argentines were particularly looking forward to Brazil's presidential transition in 2011, because Lula's "unmatched popularity and his late-in-the-term detachment from political considerations had allowed him to become a risk-taker in foreign and defense policy."  Any successor, the Argentines hoped, "would shy away from such controversial policies in his or her first years, perhaps retrenching on the Iran relationship and becoming more cooperative on new nuclear confidence-building instruments."

 

While it's true that Brazil has become somewhat less of a "risk-taker" under Lula's successor, Dilma Rousseff, the South American giant will certainly be a huge force to be reckoned with in the years to come.  How Brazil's rise reconfigures South American politics, particularly in regard to Argentina, could be interesting to watch.  What is most importantly reinforced from the WikiLeaks documents, however, is the notion that the U.S. may now face a real competitor in the region.

As tensions ratchet up in the Middle East and the Straits of Hormuz, the U.S. has grown increasingly concerned about what Iran might try next.  Perhaps, the Obama White House miscalculated when it moved to strengthen the sanctions regime against the Islamic Republic, not anticipating that Iran might lash out and raise the stakes.  If Iran does move to block the Straits of Hormuz in retaliation against sanctions, world oil prices could skyrocket which in turn could have severe political repercussions in the U.S.  While the odds are unlikely that Iran would resort to such desperate measures, the embattled and isolated Ahmadinejad leadership may calculate that it can shore up crucial domestic political support by challenging the western powers.

 

In a further destabilizing move, Ahmadinejad has opted to conduct a four nation tour of Latin America designed to showcase Iran's budding relationship with the region's populist left.  In recent years, Hugo Chávez of Venezuela and members of his so-called ALBA alliance have done much to rehabilitate the despotic and increasingly repressive Ahmadinejad.  Prior to the Iranian leader's arrival in Caracas, Chávez rejected calls by the U.S. for nations to insist that Iran stop defying international efforts to evaluate the Islamic Republic's nuclear program.  While the U.S. and its western friends accuse Iran of trying to develop nuclear weapons under the guise of a civilian nuclear energy program, Venezuela and its ALBA allies have backed Iran in the dispute.

 

In the unfolding diplomatic crisis in the Middle East, it's difficult to know who the more egregious and reprehensible party might be.  To be sure, Iran could be innocent of charges that it is seeking to develop nuclear weapons, but the Ahmadinejad leadership is detestable for all kinds of other reasons.  The U.S. and its allies, meanwhile, are dangerously escalating tensions and needless to say they already have nuclear weapons.  Now that Ahmadinejad is traveling to Latin America, however, tensions have taken on an entirely new wrinkle.  Leaders of the ALBA bloc would claim that they are simply trying their best to avert a dangerous war in the Middle East against the imperialist machinations of the U.S.  Perhaps, but Chávez and his allies have gone much further than that, embracing Iran and thus tarnishing the left and much of their own political brand in the process.

 

Ahmadinejad and Chávez: A Perverse Relationship

 

Venezuela and Iran have little in common except oil and an axe to grind against Washington, but that hasn't stopped the two countries from cultivating unprecedented relations.  Fellow OPEC member states, both nations recently reached an agreement to invest more than $700 million in each other's oil fields and to develop a joint petrochemical plant.  The fruits of Chávez's diplomacy have been nothing short of remarkable: milk processing plants constructed with the help of Iranian technology out in the Venezuelan heartland; a joint development bank with Iran worth $200 million, and Iranian manufacturing plants which produce bicycles, tractors, cement and cars for Venezuelans.  If Chávez himself had to pick a car, it would be Iranian and not a Toyota or Ford.  According to the Venezuelan leader, a new car model called the Centauro is better than other vehicles.  The car is produced by Venirauto, a company set up with help from Iranian capital.

 

More significantly perhaps, Chávez has extended military cooperation with his Middle Eastern ally.  Iran reportedly provides training and support for the Venezuelan military as well as an ammunition factory.   Hardly amused by such developments, the U.S. has slapped sanctions on Venezuelan state oil company PdVSA for shipping fuel to Iran as well as an Iranian-owned bank in Caracas.  American officials also accuse Iran of using its new business relationships and energy deals in Latin America as "cover" for more illicit activities such as training of Hizbollah militants and developing nuclear weapons. 

 

WikiLeaks and Venezuelan-Iranian Defense Ties

 

Compared to the Soviet Union or European nations before it, both of which meddled in Latin American affairs but never seriously enough to threaten Washington's hegemony, Iran is essentially a middle-weight power and it is doubtful whether Mahmoud Ahmadinejad could ever seriously disrupt U.S. interests in the hemisphere.  Nevertheless, U.S. State Department cables recently released by whistle-blowing outfit WikiLeaks reveal that Washington has been closely monitoring the Islamic Republic.  In 2007, for example, U.S. diplomats spoke with the Israeli Ministry of Foreign Affairs, which reported that Ahmadinejad had begun to build alliances with Latin American leaders.  In Teheran, the Iranians hosted a conference aimed at comparing the Latin American and Iranian revolutions, and invited the daughter of Che Guevara no less to participate. 

 

Two years later, a befuddled new Secretary of State Hillary Clinton sought more information about Iran's wider goals.  Ahmadinejad, Clinton noted, appeared to be "the driving force" behind Iran's new push into Latin America, which sought to end the Islamic Republic's diplomatic isolation while recruiting sympathetic and anti-U.S. allies.  While Clinton noted that populist governments such as Ecuador and Nicaragua had cultivated greater ties to Iran, it was Venezuela which intrigued her most, and the new Secretary of State worried that "Hizbollah-linked" individuals might see Hugo Chávez's Bolivarian republic as a safe haven from which to raise funds.  Peppering her diplomatic staff for more information, Clinton asked about Iran's agreement with Venezuela to overhaul Chávez's F-5 aircraft engines and construct munitions plants.  Not stopping there, Clinton also inquired as to Venezuelan efforts to procure Iranian unmanned aerial vehicles and light Iranian aircraft.

 

From reading the cables, it's difficult to ascertain whether Venezuela took its defense ties with Iran very seriously.  The documents suggest that Clinton was somewhat clueless when it came to assessing Iranian intentions.  Did the new Secretary of State have access to intelligence from other agencies, for example the military, or was there little collaboration?  Honing in on defense related issues, Clinton wanted to know if Venezuela was satisfied regarding the quality of Iranian military goods and training; whether planes belonging to Venezuelan state-run oil company PdVSA were being used to transport arms from Teheran to Damascus, or whether Chávez and the Iranian Republic were pursuing joint nuclear cooperation.  Were Venezuelan flights between Caracas and Teheran being used for purposes of terrorism, Clinton asked?

 

A Growing Defense Footprint For Ahmadinejad?

 

Though Clinton's interest in Iran's ties to South America is certainly intriguing, it wasn't the first time that the U.S. had expressed concern.  In 2006, for instance, the U.S. Embassy in Caracas informed Washington that Venezuela had a Muslim population of approximately 250,000 including tens of thousands of Shia'.  Though Venezuelans were "unfamiliar with Muslims and are unable to distinguish Iranians from Arabs or from other Muslims," and Venezuelan and Iranian societies had "little more in common than their despotic leaders' antipathy toward the United States," nevertheless Ahmadinejad was steadily building up a diplomatic presence in Caracas and nine Iranians posted to the Islamic Republic's Embassy represented "a small but growing number of their citizens working in Venezuela in both the formal and informal sectors."

 

The Americans had become worried about a number of issues, noting for example how Chávez was "favoring Iran with petroleum deals and other contracts that appear to make little commercial sense."  The U.S. ambassador in Caracas also sounded the alarm bell about growing defense ties, noting that "an army official is scheduled to replace the current Iranian Ambassador to Venezuela."  It's sometimes difficult to assess the veracity of U.S. Embassy reports in Latin America, which occasionally relied upon so-called "sensitive reporting."  In Caracas, the Americans had apparently cultivated such high level sources as they sought to ascertain Teheran's precise intentions. 

 

Referring to anonymous sources, the Americans claimed that Chávez desired lethal armament from Iran such as rockets and other explosive materiel. The Bush administration had denied Chávez vital spare parts to service his U.S.-made fighter aircraft, but in the long run such a policy seems to have proven counter-productive.  According to reports, Chávez became frustrated with Washington and simply turned to Iran for the spare parts.  In a further worrying turn, Venezuela had reportedly sought help from Ahmadinejad in establishing its own military reserve force.  A commander of the Iranian Basij visited Venezuela and a colonel from Iran's revolutionary guard corps was "probably on permanent assignment" in the country.  A retired military officer, meanwhile, told the Americans that "Iran had a small number of soldiers in Venezuela training the reserves."

 

Iran and Venezuela: A "Radioactive" Relationship?

 

While the U.S. mainstream media is bound to make sensationalist hay out of Ahmadinejad's trip to South America, the WikiLeaks cables are hardly conclusive about the so-called Iranian-Venezuelan "threat" to the U.S.  What concerned the U.S. Embassy in Caracas above all else was the possibility that Venezuela and Iran might pursue a nuclear partnership, though the evidence at hand was hardly "radioactive."  Ambassador William Brownfield conceded that there was a lot of speculation swirling around such alleged collaboration.  The diplomat argued, however, that "we should not dismiss the uranium rumors."  Relying on press reports and "embassy contacts," Brownfield claimed that Chávez was trying to exploit Venezuelan uranium deposits with Iranian assistance.  According to the ambassador, Iran needed foreign sources of uranium to maintain its nuclear program.

 

Apparently, the Americans weren't overly shy when it came to communicating their concerns to the Chávez government.  In 2007, they went directly to the Ministry of Foreign Affairs in Caracas to discuss UN Security Council Resolution 1737 regarding Iran's nuclear and missile programs.  If Chávez was interested in supplying Iran with uranium, however, the cable makes no mention and indeed correspondence suggests that the Venezuelans were also somewhat circumspect about Ahmadinejad.  "Uncharacteristically," the U.S. Embassy noted, the authorities in Caracas viewed Iran's nuclear energy program "as a very grave matter." 

 

Perhaps, the Americans were unconvinced by such displays.  In another report, the U.S. Embassy noted that Chávez had already signed a memorandum of understanding with Iran to create a "National Geoscience Database" containing a survey of mineral deposits throughout Venezuela. The Americans feared that creating such a "basic geological map" could be the logical first step toward restarting a uranium program in Venezuela, and they reported that the Iranians might have been active within Chávez's Institute of Geology and Mines.  "At the very least," Brownfield wrote, "it appears clear Venezuela plans to prospect for uranium with the intention of starting a nuclear program."  In the event that the program turned out not to be peaceful, the initiative would merit further scrutiny. 

 

From Perverse to Outlandish

 

If the Chávez-Ahmadinejad alliance is perverse, Iran's diplomacy toward Ecuador is even stranger.  Ahmadinejad has promised Ecuador that it will invest in the country's energy and petrochemical industry, and in a visit to Teheran Ecuadoran President Rafael Correa signed more than 25 bilateral accords with his counterpart.  Oddly, Correa has even sought to promote an ecological partnership with oil producing Iran through Ecuador's novel Yasuní initiative in the Amazon rainforest. Iran would seem an odd partner for Ecuador's Correa: the Islamic Republic has been blamed for oil spills in the Persian Gulf resulting in the deaths of whales and dolphins.  WikiLeaks cables suggest that when it comes to Ecuador, the U.S. is just as clueless about Ahmadinejad's intentions as the Venezuelan case. 

 

There's no real smoking gun in the secret documents, but much evidence of U.S. paranoia.  The United States, Clinton told diplomats, had information that Ahmadinejad planned to open a branch of Iran's Export Development Bank in Ecuador.  The bank, she wrote, provided "financial services to multiple subordinate entities of Iran's Ministry of Defense and Armed Forces Logistics that permit these entities to advance Iran's WMD programs."  U.S. Treasury officials had met with staff at the Ecuadoran Embassy in Washington to express concerns, but Clinton urged American diplomats to follow up with further discussions in Quito.  Somewhat cryptically, Clinton sought to "warn Ecuador of the risks involved in facilitating financial transactions with Iran."

 

WikiLeaks: Raising More Questions than Answers

 

For a middle-weight power, Iran has surely beefed up ties to many Latin American nations.  On the other hand, I suspect that this "marriage of convenience" between Latin America and Iran will not prove very enduring.  If the Arab Spring should pick up steam and spread to Iran, then more moderate elements might take power.  Mir-Hossein Moussavi, Ahmadinejad's rival in Iran's previously marred presidential election, said that Ahmadinejad's foreign policy moves had "isolated" and "disgraced" Iranians in the international arena.  "Instead of investing in Iran's neighboring countries, the government has fixed eyes and poured money into Latin American states," Mousavi quipped.  "The President has obviously failed to get his priorities right."  Even if Ahmadinejad and his hardliners should prevail, it's by no means clear that South American societies will continue to approve of increasingly close Iranian ties.  The many contradictions and fissures in the friendship have become more and more evident and threaten to cause ruptures between the region's many social and political constituencies and local leftist leaders. 

 

Nevertheless, as Ahmadinejad continues his tour throughout Latin America, we can probably expect the usual saber rattling from U.S. officials and the mainstream media making the case that Iran represents a true threat to the hemisphere.  The bottom line, however, is this: though U.S. diplomats would like to make alarmist claims about Iran's military presence, the evidence is pretty thin thus far [unless, of course, the Americans turned up additional information in recent years, as the WikiLeaks cache ends in early 2010].  What the increasingly desperate Ahmadinejad truly hopes to accomplish in the region is difficult to fathom, and while the WikiLeaks cables provide some limited clues, the documents ultimately lead to more questions than answers.

I'm back writing for al-Jazeera, which is probably wondering why its activities are being monitored by the U.S. State Department in Venezuela. To read the article, click here.