The empire behind the coup

February 26, 2019

Justin Akers Chacón, author of Radicals in the Barrio and No One is Illegal, documents the ties connecting Venezuela’s right-wing coup-makers, Latin American reactionaries and the bipartisan rulers of the world's most powerful government.

THE TRUMP administration has set into motion a two-decade-old goal of the U.S. ruling class to defeat a defiant opponent in Latin America.

The aim is to topple the government of Venezuela, bury the nationalist Bolivarian project and remake the region into one that is once again more economically subordinated to the prerogatives of U.S. capitalism.

Several factors are encouraging Trump at this moment. They include the electoral defeat of the left-wing “pink tide” governments, especially in Brazil and Argentina, Venezuela’s largest trading partners; the rise of far-right and authoritarian regimes, including Brazil and Colombia, which border Venezuela; and increasing political and economic instability inside Venezuela, driven in large part by declining revenues from oil exports which underwrote the reforms carried out by former President Hugo Chávez.

The Trump administration hopes to seize the moment to orchestrate a coup to promote a far-right faction in Venezuelan politics that has failed to win through the ballot box.

Left to right: coup leader Juan Guaidó, Colombian President Iván Duque and Vice President Mike Pence
Left to right: coup leader Juan Guaidó, Colombian President Iván Duque and Vice President Mike Pence

The so-called “war on terror” was a justification for the U.S. invasion of Iraq and to remake the Middle East, an ignominious debacle that has since unleashed two decades of incessant war, destruction and displacement.

In this “pivot” now to Latin America, the Trump administration is reviving imagery from the Cold War against the former USSR that preceded the “war on terror” — and recycling a host of veterans from the period who are prepared to restart the killing fields of the 1980s if necessary.

The current coup project against the government of President Nicolás Maduro follows a familiar script in U.S.-Latin American history.

To remove an undesirable government, U.S. administrations over the last century have leveraged disproportionate economic and military might to array and fund enemies, used control over trade and financial markets to generate instability, and employed a host of other tactics to grind down and push out opponents.

When these methods fail, covert military operations and direct invasion have followed.

Under the pressure of events, the Maduro government has departed more and more from the Bolivarian program associated with Chávez, even turning to repression against socialists and union activists. The government has contributed to the political and economic instability, which only makes it harder to resist the assault of the empire.

But U.S. claims to be concerned about the people of Venezuela are a lie.

Successive U.S. administrations have conducted economic warfare against the country; fostered, enabled and recognized successive right-wing coup regimes; ignored democratic elections and delegitimized leaders as “dictators”; and, most recently, cynically exploited the distribution of humanitarian aid as a provocation to justify further intervention and military build-up.

Restoring U.S. control over Venezuelan oil

A starting point for understanding the onset of U.S. aggression was the nationalization of oil.

John Bolton, Trump’s National Security Adviser, explicitly compared U.S. goals in Venezuela to Iraq: “I think we’re trying to get to the same end result here...It will make a big difference to the United States economically if we could have American oil companies really invest in and produce the oil capabilities in Venezuela.”

During the 1990s, before Chávez, Venezuela’s once nationally owned oil industry was opened up and sold off to multinational oil companies as part of neoliberal privatization projects arranged through the International Monetary Fund. These included the wholesale selloffs of state-owned oil production facilities, banking and finance, telecommunications, electricity, steel production and other sectors.

In this scramble, U.S. multinational corporations scooped up large shares of the Venezuelan economy, especially its oil. They paid little or no taxes and controlled oil extraction, processing, and distribution — only having to pay out a share to Venezuelan oligarchs.

Through their political parties, these rich, reactionary Venezuelans competed for managing control of the Venezuelan oil company, Petróleos de Venezuela, S.A. (PdVSA), which functioned as a junior partner to foreign capital.

Through control of PdVSA, they could access this cash and enrich themselves. They siphoned off the lion’s share of oil profits, which drained the national treasury. In an economy where oil sales account for 95 percent of Venezuela’s export earnings and 25 percent of gross domestic product, this fueled poverty and inequality.

When the Chávez government attempted to reorganize the oil sector, the Venezuelan ruling groups set out to oust him. Two coups were attempted between 2001 and 2003, both with direct U.S. support.

In late 2002, for instance, Venezuelan oligarchs launched an indefinite “bosses’ general strike” to topple Chávez. While it only gained support in the richest districts, it represented a serious threat, with corrupt PDVSA management, supported by U.S. oil and gas companies, ordering a halt to all production. The coup leaders in Venezuela’s Congress promoted the strike with the slogan “2002 without Christmas, 2003 without Chávez.”

Most oil production workers and some lower-level management ignored the strike, and continued operations until gradually regaining control of much of the industry. The strike collapsed by late January, and several hundreds of thousand people poured into the streets to celebrate. This pushed the Chávez government further to the left, which accelerated the process to establish control over the oil industry.

By 2007, the Chávez government had reorganized the PdSVA, paid off existing debts, severed all ties with the IMF and nationalized the oil sector. Chávez compelled six U.S. and European multinational oil corporations to either accept a subordinate role in the oil economy or face expropriation.

While most acceded, Exxon and ConocoPhillips refused to submit. After losing in an international arbitration court, their operations were nationalized. Nationalizations occurred in other key industries as well.

Between 2006 and 2013, domestic oil consumption quadrupled from 200 million to 800 million barrels per year as the government increased national distribution and subsidized its purchase for the poor and working classes.

Through increased spending of oil revenues, Chávez used what had been the exorbitant profits of the multinationals and corrupt oligarchs to fund an array of national welfare projects called “Bolivarian missions.”

According to the Center for Economic Policy Research, unemployment dropped from 14.5 percent to 7.8 percent between 2003 and 2011. Poverty dropped by nearly 50 percent over this period, while extreme poverty dropped by over 70 percent. By 2012, public spending by the Venezuelan government as a percentage of GDP reached 51 percent, the highest in Latin America.

Making Venezuela’s economy scream

Many leftists in Venezuela who participated in the United Socialist Party of Venezuela founded by Chávez argue that corruption and top-down measures, particularly since Maduro became president, have contributed to the social crisis and deteriorating living conditions that Venezuelans suffer today.

But it is clear that that U.S. economic warfare is also directly responsible.

In 2014, the Obama administration, with bipartisan congressional support, began a war of attrition against the Venezuela’s main economic institutions.

This started with the Venezuela Defense of Human Rights and Civil Society Act of 2014, a bill introduced by New Jersey Democratic Sen. Bob Menendez and co-sponsored by Florida Republican Sen. Marco Rubio. The law set up the legal infrastructure to use targeted sanctions against members of the Venezuelan government associated with its key financial institutions, laying the groundwork for blacklisting the operations of those institutions in the U.S.

In activating the law through executive order, Obama characterized Venezuela as a “national security threat,” which, according to Reuters, established “Venezuela as the United States’ primary adversary in Latin America.”

This unilateral declaration occurred at a time when the U.S. was Venezuela’s largest export market, fourth-largest buyer of Venezuelan crude oil and provider of much of Venezuela’s consumer imports.

Furthermore, the declaration occurred as international oil prices were collapsing. Instead of cutting production, Saudi Arabia maintained production levels, bucking conventional wisdom and pushing global prices further down. The Venezuelan economy went into a severe tailspin.

U.S. capital followed suit. After Obama’s declaration against Maduro, large U.S. multinationals — including those providing a wide range of imported consumer goods — began to withdraw operations from Venezuela.

Dozens of major multinational distributors of consumer staples and goods, such as Proctor & Gamble, Pepsico, General Mills and Kimberly-Clark, either withdrew operations entirely while or began to significantly downsize operations.

This constellation of events was also timed to coincide with another right-wing offensive inside Venezuela to topple Maduro — which ultimately failed, but has since regrouped amid the deepening crisis.

Between 2014 and 2018, the total volume of trade between Venezuela and the U.S. dropped by more than 50 percent, which had a disproportionately detrimental impact on the much smaller Venezuelan economy.

The Trump offensive

Between 2017 and early 2019, Trump ramped up the war, pushing the Venezuelan economy to the brink through a series of executive orders.

The administration prohibited the Venezuelan government from borrowing money from any U.S. creditors, a common practice used to meet financial obligations. The U.S. also banned purchases and trades of new Venezuelan debt, further crippling the Venezuelan government’s ability to make interest payments on its existing national debt.

During this time, a U.S. federal judge granted an injunction to the Canadian multinational mining corporation Crystallex International, which aimed to block PdVSA from repatriating oil profits accrued from its subsidiary Citgo Petroleum, the oil refining and distribution company that provides Venezuelan oil to over 5,000 gas stations in the U.S.

Crystallex was previously in the process of fighting with PdVSA through North American courts to extract a $1.2 billion arbitration award against Venezuela over nationalizations that were carried out under Chávez.

The judge further allowed Crystallex to begin expropriation proceedings against Citgo to recoup its “potentially lost future earnings” resulting from the nationalization. This has been followed with pending cases filed on behalf of 43 other companies seeking compensation from nationalization.

Trump went further in prohibiting any U.S. business from conducting any financial transactions with any firm or company in which the Venezuelan government is more than a 50 percent shareholder.

In January, he froze all PdVSA assets in the U.S., including all proceeds of Citgo, and redirected them to the would-be coup leader Juan Guaidó. This is estimated to deprive the Venezuelan economy of $7 billion in assets and $11 billion in funds from exports over the next year.

For his part, Guiadó has pledged to reverse Chávez-era nationalizations and restore Venezuelan oil production to U.S. multinationals. He would likely bring the IMF back to manage the dismantling of the public sector.

The European Union’s mostly right-wing member countries also followed suit. The UK, Germany and France, for instance, recognized Guaidó as president in early February. This was followed by Theresa May’s UK government also freezing Venezuelan assets held in British banks at the behest of the U.S., including $1.2 billion in gold.

Venezuelan debt bonds and PdSVA-issued bonds rallied in January on the news of an imminent U.S.-backed coup, with investment groups such as Goldman Sachs, T. Rowe Price, and BlackRock giddy at the prospects of making significant gains on their investments.

A new “coalition of the willing”

When the Bush administration couldn’t get the United Nations to endorse its invasion of Iraq in 2003, it coerced or bribed a group of 30 nations to sign up for its apocryphal “coalition of the willing.” This time around, Trump has followed a similar strategy in rallying a network of Latin American allies to support a coup in Venezuela.

The Lima Group, as it is known, is an ad-hoc sub-group of 12 governments (out of 33 member nations) within the Organization of American States. These right-wing governments splintered out of the larger body in 2017 and united behind the U.S. and Canada when the OAS refused to reach consensus in supporting the overthrow of Maduro.

Ironically, while the Lima group denounces Venezuela as a “dictatorship,” its membership includes the most corrupt, violent and politically repressive regimes in the world.

While the Lima group claims to want to resolve the humanitarian crisis associated with the exodus of 3 million Venezuelan migrants, their membership includes countries with far higher rate of displaced and migrant populations, whose condition they are doing nothing to relieve.

Colombia has one of the largest populations of displaced people in the world. Some 7.3 million people, or 15 percent of the total population, are internally displaced due to war, repression and violence; and over 2 million political and economic refugees and emigrants have fled to the U.S., Venezuela, Spain, Ecuador and other nations in recent years.

Over 3.4 million economic and political refugees from Central America, primarily from Lima Group members Honduras and Guatemala, now live in the U.S. and Mexico. Many are currently being denied access into the U.S. and are being repressed at the border or held in U.S. detention camps.

Meanwhile, more than 1 million U.S. citizens have also emigrated, primarily to Mexico, to avoid falling into poverty. An estimated 90 percent of them live without official authorization.

Recycling Cold Warriors

In the event that economic warfare fails, the U.S. is arranging the personnel and preparing the groundwork for a military solution.

In March 2018, Trump appointed notorious warmonger John Bolton as his National Security Advisor. Bolton has a long history as a Cold Warrior and steadfast opponent of arms restrictions, human rights conventions and international law that restrains military power.

In various positions under the last four Republican administrations, Bolton has never met a potential war he didn’t love.

He was a driving force for the invasion of Iraq, openly advocated for war in North Korea and Iran, and most recently identified Venezuela, Cuba and Nicaragua as the “troika of tyranny” — a facile reframing of George W. Bush’s war proclamation in 2002 against Iraq, Iran and North Korea as the “axis of evil.”

In late January, Trump also appointed Elliott Abrams as Assistant Secretary of State for Inter-American Affairs to oversee U.S. operations in Venezuela. Abrams is an unreconstructed anti-communist and convicted war criminal who held this same improvised position under the Reagan administration in the 1980s.

Abrams was used then as a liaison to fund, orchestrate and oversee the operations of military dictatorships and terrorist groups as they carried out mass and systematic murder of farmers, workers, political activists, aid workers, human rights advocates and children in the U.S.-sponsored dirty wars in Guatemala, Nicaragua and El Salvador in the 1980s.

He later said the genocidal bloodshed was worth it to stop “communism.”

U.S. military build-up in the region

War hawks in the U.S. military are also moving the Cold War justification into place.

In mid-February, the head of U.S. Southern Military Command, Navy Admiral Craig Faller, claimed that Cubans, Russians and Chinese forces have been intervening in Venezuelan affairs, likening it to a form of external subversion that justified the Cold War interventions of the 1980s.

In late February, Faller met with the head of the Colombian military, Luis Fernando Navarro Jiménez, to discuss military measures in Venezuela. Faller also met with his military counterparts in Brazil and Curaçao to discuss “regional security cooperation” in the lead-up to increased interventionist activity in Venezuela.

Concurrently, Secretary of the Navy Richard Spencer also met with his Colombian counterpart to discuss preparations for war.

The U.S. has given nearly a quarter billion dollars in mostly military “assistance” to Colombia this year alone, through an ongoing military pact began under Plan Colombia. The U.S. also maintains seven military bases across the Colombia, including one recently established near the Venezuelan border.

In August, joint military operations between U.S. and Colombian forces were conducted near the border of Venezuela, while successive U.S. administrations have repeatedly moved Naval forces from the U.S. Fourth Fleet near Venezuelan territorial waters. The Air Force has also begun to move military equipment into various parts of Colombia, allegedly to support humanitarian efforts conducted by USAID.

Trump’s Secretary of State Mike Pompeo summed up the justification for intervention by invoking the age-old “Monroe Doctrine,” asserting U.S. primacy in Latin America in a late February NBC interview: “This is in our region. We don’t want this to be a Cuban puppet state in Venezuela. So there are many American interests.”

So far, the attempts to mobilize sufficient internal forces to overthrow Maduro have failed. Whether they can succeed, or if the U.S. feels it can turn to the military option, will depend on how anti-intervention movements continue to resist in Venezuela — and if they can take shape in the United States.

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