The Iran-Venezuela Balance and Ice in Mexico

This is number 16/2006 and is the last publication for 2006. Voting for December's monthly survey will continue through the holidays until the first week of January. Our report on the FARC's international networks is complete. You may download it here. Please feel free to send in any comments or questions that may arise as you review the report.

In this edition:

Hugo Chavez has won another 6 years in power. It is likely he will remain Venezuela's ruler for much longer. And his cloak of democracy ensures continued protection from any unilateral efforts made by the United States to threaten his regime.

There are at least three triggers that would dramatically increase the threat that Chavez poses to the United States. The first two are well established: oil and nuclear weapons. If Chavez cuts off oil or develops a nuclear program, peaceful or otherwise, he will invoke Washington's ire.

The third trigger is a closer relationship with Iran. For now, this relationship appears to be balanced. But this may change if Iran chooses to pursue closer military ties with Chavez to deter America's efforts to undermine Iran's position in the Middle East.

Meanwhile, activity in Mexico indicates a strong government response to ever increasing drug trafficking operations in Mexico's southwestern states. In the middle of December, Mexican authorities seized some 20 tons of chemicals in Michoacan. Much of the chemicals were on their way to methamphetamine super labs in Michoacan that have risen since US government efforts to shut down meth labs in the United States. These efforts have resulted in a serious problem with meth addiction in Mexico. And in Michoacan organized crime has declared a war on anyone who produces, distributes or sells meth in Michoacan. In 2007, this state may become the center of a dramatic increase in violence.

Finally, as the year draws to a close, many journalists and analysts have tabled ideas for what to watch in 2007. Of the various items under consideration for close observation, I would consider Venezuela's relationship with Iran, the growth of Mara Salvatrucha street gangs, the Colombinazation of Guatemala, and Mexico's "cartel wars" to be the most important to regional security.

Lula's Meddling, Chavez's deals, and a Regional Military proposal on the way...

This is number 15/2006. Votes for October's monthly survey have been tallied. The top two topics voted were the Mara Salvatrucha street gangs, which came in second with 27% and the FARC's international network, which came in fist with 33%. Over the next two weeks, we will prepare a detailed report on the FARC's international networks, including interviews, maps, and other graphics. I will announce its publication on the website and via this newsletter. Next week, I will post the new topics for the November survey, including the Mara Salvatrucha street gang topic, as it came in second this month.

In this edition:

Brazilian president Luis Inacio Lula da Silva visited Venezuela the week of 13 November to sign some energy agreements and inaugurate a bridge between the two countries that has recently completed construction. Interestingly, Lula's implicit backing of Hugo Chavez weeks ahead of Venezuela’s presidential elections raised alarm in Brazil over Lula’s apparent "meddling" in Venezuelan affairs. Up until now, Chavez has been the only state leader denounced for meddling in another country's elections.

Lula's timing was planned. He would prefer to see Chavez remain as Venezuela's president, as he knows Chavez's leadership in Venezuela does not threaten Brazil. It also keeps the United State’s presence in South America off balance, another geopolitical factor that works in Lula's favor.

Meanwhile, US President George Bush has quietly waived a long-standing prohibition on International Military Education and Training Program for countries around the world, including numerous Latin American countries. Venezuelan and Chinese military influence in the region likely has Pentagon leaders worried. It will be interesting to see if the US uses these training programs to increase military-military ties in South America in a move to counter-act Chavez's regional military movements.

Brazil has also made an interesting announcement. On 15 November, Brazil's military advisory group, the Nucleus of Strategic Matters began drafting a proposal for the creation of a South American military force, using NATO as a model. Chavez, Morales, and Kirchner will likely sign on to such a proposal, which looks like a play by Brazil to get back on top of the regional geopolitical game. I expect Lula to focus more on seizing regional leadership now that he's past the elections and has washed his hands clean (well mostly) of past corruption scandals.

Meanwhile, Venezuela has signed a memorandum of understanding with Syria and Iran to build a refinery in Syria. Venezuela has also recently signed a bundle of new agreements with China, bringing the two countries closer together.

Finally, Brazil has announced it will resume construction on its Angra 3 nuclear reactor. We're still waiting to see how the international nuclear watch dog, the IAEA, reacts.

Ortega, Maras in Mexico, and Hezbollah in Venezuela

This is number 14/2006. Sandanista Daniel Ortega is likely to become the next president of Nicaragua. Mara gangs are footloose in Mexico. And some Spanish scholars are talking about Hezbollah in Venezuela.

In this edition:

As of 7 October, most major media outlets have recognized Daniel Ortega as the president of Nicaragua. Ortega, however, has remained silent, and his opponents are calling for every single ballot to be recounted. Democracy watchdog, President Jimmy Carter, said the process was cleaner than elections he's witnessed in the United States.

The possibility that Ortega will begin to orbit Venezuela, along with Bolivia, is very real. Chavez is happy to continue his offer of fertilizer, oil, and fuel, and there's little reason to believe Ortega would refuse. There's also little reason to believe Ortega would manipulate Nicaragua's FTA with the United States. Concern in DC over such a possibility is rooted in outdated beliefs of Ortega the Sandanista more than today's reality. Ortega's presidency will be more about himself and his followers than Nicaraguans or becoming another thorn for Washington. Ortega will certainly have a leftist slant, but it's unlikely his politics will hurt the US beyond the State Department's pride. Chavez called Ortega late on 6 November to congratulate him, and I suspect it is the first communication in what promises to be a close relationship between the two men.

Ortega's presidency adds more evidence to the argument that the US State Department simply has no footing in the Americas and will only lose influence and support in the Americas from today's midterm elections through the end of the current presidential term and beyond.

North of Nicaragua, in the Mexican state of Chiapas, Central America's Maras mix with illegal migration. But their influence does not stop in Chiapas. Maras apparently have built a pipeline for human and drug smuggling north from Chiapas, along Mexico's Pacific coast, to the US-Mexican border. Their presence is Mexico is "flotante" or not rooted down, but their influence is only growing. Testimonies from a racketeering case in Maryland have revealed a certain level of vertical, or what I call north-south, organization between Mara leaders in Central America and their lieutenants that run Mara gangs in US cities.

Meanwhile, two Spanish scholars have taken seriously the recently planted bombs in Caracas. They see the bombs as the first act of Venezuela's Hezbollah cell, acting alone and not part of the greater terrorist organization in the Middle East. They call the 23 October bomb attempt a "frustrated" action of Hezbollah in Venezuela. But they argue this group wants to create a South American Hezbollah movement that will build international recognition through bombings in Venezuela. Ultimately they raise the question. Does Hugo Chavez's leadership in Venezuela send the message to international jihadists that Venezuela will tolerate fund raising, recruitment, propaganda, and training for militant Islamic movements?

Busts, Spies, Polls, and Bombs in Bogota

This is number 13/2006. We are four days from the second-round of the Brazilian presidential elections, and Lula has a 22 point lead over Alckmin. People here in Brazil are already celebrating or crying. Daniel Ortegea, the former Sandanista leader in Nicaragua, will likely be the next president of that country. In Venezuela, polls report Hugo Chavez is 35 points ahead of his opponent Manuel Rosales.

In this edition:

The Brazilian National Intelligence Service (ABIN) has begun the internal selection process to send spies to Venezuela and Bolivia. A classified order made by the president initiated this process, and a daily here made it public. The ABIN office confirmed the news. Until now, Brazil had maintained ABIN agents in Washington, Key West, and Buenos Aires. The presence of Brazilian spies in Venezuela and Bolivia may be the first of a series of geopolitical moves made by Brazil to exert its influence over her neighbors.

As Chavez sprints the campaign trail, two unexploded bombs were found outside the US Embassy in Caracas on 23 October. A moto-taxi driver alerted local police after giving a ride to a guy with a large duffle bag. Inside the bag were Hezbollah pamphlets and a student ID card. Local authorities consider the suspect "demented". And that was that. It's unclear if the story was buried or just a non-starter. Once again flimsy evidence has surfaced that Hezbollah is operating in Venezuela. US Southern Command is convinced of the terrorist organization's presence on Margarita Island, just north of Venezuela, but concrete evidence has not yet surfaced in the public domain. Stay tuned...

Meanwhile, eight tons of cocaine were found off the Galapagos Islands in the Pacific Ocean off the Ecuadorian coast. Three Costa Ricans were arrested. This is the second cocaine bust involving Costa Ricans this month. On 9 October a Costa Rican vessel was intercepted with 3.5 tons of cocaine aboard. The eight-ton bust is the largest single seizure I am aware of in Latin America.

At the United Nations, Venezuela has announced it's willing to pass the baton to Bolivia, and Evo Morales has accepted. I don't think Bolivia has a very good chance of winning a non-permanent seat on the UN Security Council, but if it does, I imagine we will soon have more evidence of the deepening ties between Venezuela and Bolivia.

Finally, another bomb exploded in Bogota on 19 October. President Alvaro Uribe immediately blamed the FARC, but it is not clear if the FARC actually planted the bomb. Calling off hostage-exchange talks with the FARC, Uribe said the only way to free the hostages the FARC has been holding for years is with the Colombian military.

As a high-delegation of US officials hold meetings in Bogota today, 25 October, and tomorrow, Colombia's Foreign Minister is holding talks with Ecuador and Venezuela to share intelligence the Colombian government has that high-level FARC operatives are currently in the eastern jungles of Ecuador and the remote border lands between Venezuela and Colombia.

If Chavez remains in office, and Ecuadorian presidential candidate Rafael Correa - a known Chavez sympathizer - becomes Ecuador's next president, Colombia will have two neighbors that are tacit FARC supporters. The harder Uribe squeezes the FARC in Colombia, the more likely they are to displace their presence into Ecuador and Venezuela, not to mention Panama and Brazil.

Chavez's power on the downslide?

Responding to Andres Oppenheimer's recent article on Chavez's apparent downward spiral, I published the below comments on his blog.

They are recorded here:

Rosales has engineered a strong campaign, but he's still 13 points behind Chavez. I doubt Chavez will give up power easily, no matter what Venezuelans decide.

Outside Venezuela, his influence appears to have planed-out. But it's easy to arrive at this conclusion when you only ready major news papers. Talk to the people, visit the capitals, take a hard look at the realities of life down here, and you'll find there's still plenty of room for Chavez's influence to grow.

If he's an astute politician, and if he manages to get past the December elections without sparking a wave of violence in Caracas, Chavez needs to turn a corner to press what I consider to be an advantage in the region.

He needs to govern, to show some leadership, and to show some follow through. If chooses not to focus on the details of being a effective political leader, he runs the risk of wide spread disillusionment that follows in the wake of the hundreds of thousands of hopeful individuals - Latinos, Gringos, Europeos, quien sea - that are watching him, waiting for him to do more than put his money where his mouth is and make something happen. Venezuela is the first place to begin.

There's no reason to belive that Chavez can't work with Garcia, Uribe, Calderon, or other center-right leaders who have problems with poverty, hunger, sickness, etc.

But there's plenty of reason to belive that if Chavez doesn't do something soon, the disillusionment he creates will cause a fall out much worse than the most awful decisions made by the "Washington Consensus".

I'm not for or against Hugo. He has carved out a measure of regional influence for himself. It remains to be seen if he can do something with it.

"Colombianization" of Guatemala?

This is number 12/2006, and has arrived a little later than expected due to the elections here in Brazil. According to the latest polls published on 12 October, Lula is ahead by 11 points over Geraldo Alckmin. In other news, I heard back from many of you who had trouble purchasing The Reality of a Mexican Mega Cartel. The e-book is now available via my website (not Lulu.com). Also, I have installed a monthly survey on my website. The idea is to publish an e-book that reflects the interests of those who visit the website. Have a look, cast your vote, and check out the results. Finally, I will begin placing these newsletters on my blog. Please leave your comments there, thank you.

In this edition:

The first two weeks of October registered record cocaine busts in Central America. During a regional meeting of Defense Ministers in Managua, Nicaragua, authorities there seized 3.1 tones of cocaine off of Nicaragua's Pacific Coast. Days later Costa Rican authorities seized 3.5 tones of cocaine. Both seizures were record interdictions.

The Central American sub-region remains a transit zone. Larger seizures means larger amounts make it through the zone into target ports. The term "Colombianization" has been used to describe how the drug trade has begun to affect security and economy in Mexico. But some observers have begun to talk about the "Colmbianization" of Guatemala, an interesting concept.

Drug traffickers in Guatemala have planted millions of opium poppies in the country's western highlands. Guatemala is Central America's only source country. Colombia, Peru, and Bolivia are South America's source countries. Colombia has the added challenge of a decades' old civil war. Guatemala, however, has a growing problem with Mara Salvatrucha street gangs, which appear to on the road to increased organization and involvement in the drug trade.

Guatemalan president, Oscar Berger, just last week ordered hundreds of soldiers into the streets of Guatemala City to protect public buses. Strikes led by bus drivers, who were protesting the death of five of their colleagues, prompted this heavy-handed response. Street gangs extort bus divers, forcing them to pay a "war tax". Those who don't pay are shot. We're waiting to see what becomes of soldiers protecting bus drivers from street gangs. It seems to be a recipe for more violence.

Meanwhile, these gangs continue to move into the Mexican drug trade. There's little evidence to suggest they are actively linked with one of Mexico's drug smuggling organizations. I have learned, however, that the presence of Central American street gangs in Mexico has spurred a nation-wide copy cat situation. Mexican youths in cities across the country have begun to call themselves "maras", hoping to capitalize on the fear invoked by the term. Have the Mara Salvatrucha grown beyond a street gang into a brand name that represents extreme violence?

Organized Crime, Smuggling, and Operation Twin Oceans

Today's show covers organized crime in the Americas, smuggling in Colombia, Riots in Brazil, and our favorite leader, Hugo Chavez.

My plans to talk about Bolivia’s self-eradication program were put on hold as I got deeper and deeper into the world of smuggling and organized crime in Colombia and Panama. I am currently working on an eight-part series on smuggling in the Americas. The first piece on Buenaventura, Colombia has been published, and I expect to publish a piece on Panama City early next week.

Today I would like to share with you information about Operation Twin Oceans, a Colombian drug trafficker known as Don Pablo, Riots in Brazilian prisons, the arrest of a Tijuana Cartel boss, and a little tidbit about everyone’s favorite topic, Hugo Chavez.

Let’s get started.

Operation Twin Oceans is the tail end of a long series of operations inaugurated in late 2002. The U.S. Drug Enforcement Administration, also known as the DEA, jumped on board with this string of operations when it deemed the target, Pablo Rayo-Montano as a worthy target in October, 2005. Don Pablo was a Colombian drug trafficker who leveraged his land holdings in Panama and private navy to consolidate shipments of cocaine and move multiple tons of packaged cocaine from Colombia to Mexico and other destinations.

Don Pablo got started in Buenaventura, Colombia, the country’s busiest port city in terms of volume. Over time, Don Pablo won more clients for his consolidation and shipping business as the Colombian drug trade fractionalized from large organizations to dozens of baby cartels.

At the height of his business, Don Pablo moved up to 20 tons of cocaine a month, mostly to contacts with either the Sinaloa or Gulf Cartel in Mexico, that county’s two top drug smuggling organizations. Enter Operation Twin Oceans.

The DEA, working with partners in eleven countries, operated an intelligence gathering network that eventually led to Sao Paulo, Brazil. Don Pablo is believed to have fled to Brazil after a previous intelligence operation, dubbed Buenaventura No. 1 came close to dismantling his operation. Operation Buenaventura No. 1 focused on the smuggling links between Panama City and Buenaventura, Colombia. Invariably some members of Don Pablo’s organization were caught in the drag net.

It’s possible some of them gave up information that eventually led authorities to the Panamanian marina services company, Nautipesca, which was one of the country’s top marina services companies as well as Don Pablo’s principle front for a massive money laundering service that he offered to his clients. Call it an added value service.

With enough information to arrest Don Pablo, the DEA came knocking on the door of the Brazilian Federal Police in mid-May this past year. As many of you probably know, the second week of May was not a pleasant time for the Brazilian Federal Police. There were in the middle of a nearly two-week long siege on over 100 prisons. Riots had broken out on May 14 setting ablaze a series of riots in prisons across the state of Sao Paulo. On the streets, members of the First Capital Command, a Brazilian prison gang, were targeting cops at will, killing them on sight. As the mess dragged on into the week, cops retaliated killing dozens of suspects members of the First Capital Command. For Don Pablo, it would have been the perfect environment to hide out and maintain a low profile until things blew over in Panama.

Again, enter Operation Twin Oceans. With information in hand, the DEA made its case to the Brazilian Federal Police. Soon after Brazilian officers braved the extremely dangerous situation on the streets of Sao Paulo to serve an arrest warrant on Don Pablo, who was probably pretty surprised to find the DEA and Brazilian Federal Police knocking on his door in the middle of the prison riots.

Such mega-operations make me think of the DEA’s operations and efforts to take down Colombia’s first mega-drug trafficking organization. The Medellin Cartel, run by Pablo Escobar, feel apart after Escobar took multiple bullets in the chest, but the truth is his power over Colombian drug trafficking had begun to fade long before Escobar’s death.

A group of men who called themselves People Persecuted by Pablo Escobar, or Los Pepes, were secretly helping the DEA and Colombian authorities pull apart Escobar’s network by fighting fire with fire. Los Pepes broke the law. They set off bombs, murdered people, and – generally speaking – used the same terror tactics on Escobar that he used on his enemies. Two members of Los Pepes went on to form the Cali Cartel, another, known as Adolfo Paz, went on to become a notorious paramilitary chieftain, known as one of the first Colombian drug traffickers fully integrate with the country’s paramilitary forces.

The absence of the Medellin Cartel made way for the grand entrance of the Cali Cartel, an organization run by men who learned from Escobar’s mistakes. In a similar fashion, the recent arrest of Javier Arellano-Felix, a ranking member of Mexico’s Tijuana Cartel, may eventually lead to the dismantling of this Mexican drug smuggling dynasty.

But maybe not. Javier was a younger brother of a brood of Arellano-Felix siblings that have run the Tijuana Cartel since the early 80s. At one point, the Tijuana Cartel was the top dog in Mexico with complete control over smuggling routes into California, a principle market for cocaine in the 1980s.

By March, 2002, the tide had turned. Benjamin Arellano Felix, Javier’s older brother entered prison. Another brother, Ramon, was killed that year. Leadership is belived to have fallen into the hands of younger brother Eduardo and sister, Enedina – the former a doctor, the ladder an accountant. Under their leadership, the Tijuana Cartel has become more of a business, not as ruthless as it’s past antics would lead you to belive. Meanwhile, the Gulf and Sinaloa Cartels have increased their size and power significantly. The arrest of Javier Arellano-Felix puts a dent in the Tijuana Cartel’s enforcement arena, and his arraignment on US soil means he’s just as dead as his brother Ramon. It’s highly likely Javier will serve multiple life sentences once the courts and a jury of his peers have had a chance to sift through all the evidence the US Dept of Justice has on that guy.

Which leads me to my point here. The Tijuana Cartel’s days are numbered. Sooner or later the Gulf or Sinaloa Cartel will take over Tijuana. It is a border crossing that is second only to Nuevo Laredo in terms of volume of daily trade. When that happens, the group that holds both Nuevo Laredo or Tijuana, and it could be either the Sinaloa or Gulf Cartel at this point, will have consolidated smuggling operations into the United States from California to eastern Texas – it’s a business that generates tens of billions a year in tax-free dollars. Quite possibly as much as twice what the Mexican government earns from annual oil revenues.

Speaking of oil, let me finish by making mention of Hugo Chavez. As he would have it, the word Chavez has remained constantly in international headlines for weeks. It seems the media can’t get enough of this guy. Venezuelan presidential elections will be held in December, but already there is much activity in Venezuela.

Most importantly, it appears the once fractionalized opposition has managed to rally around one man, Manuel Rosales. He is the former governor of the state of Zulia, and has resolved to beat Chavez at his own game: appeal to the poor.

Many casual observers of Chavez’s Movement for 21 Century Socilialism fail to realize that the socialist movement is rotting at the core. Chavez’s most ardent supporters in 1998 are not asking why he is spending more money on regional and international programs while bridges fall and people remain jobless at home.

Rosales is playing on this growing sentiment to gain a portion of the chavista vote, while hoping he can attract to voting booths the millions of Venezuelans who have continued to abstain from voting in silent protest. It’s certain that in a year of many presidential elections, the Venezuelan election will be the most passionate. The outcome could range from peaceful and cheerful even to downright bloody and a welcome mat to civil war. I guess if that happens, the region’s drug smugglers will have one more option for places to keep a low profile. Don Pablo has certainly learned that Brazil is not an option.

Chavez and His Buddies: Kirchner and Morales

Good afternoon and welcome to Security in South America. I am your host, Sam Logan. For this week’s show, I had planned on sharing information about Operation Twin Oceans, a multi-national sting operation that brought down one of Colombia’s most successful drug trafficking enterprises. Unfortunately, I could not get the US Drug Enforcement Agency to agree to an on the record interview for this podcast.

I did, however, have a very interesting conversation with a colleague in Argentina, parts of which I would like to share with you today.

Julio Cirino is an Argentine journalist and International Analyst that from time to time comments for CNN en espanol. He hosts a radio show in Argentina and writes regularly on politics, security, economy, and energy in South America.

Our conversation covered many topics all over the region, but I’d like to focus on two. First, Venezuelan president Hugo Chavez, a man Julio refers to as “huguito” or “chavito” as is common in the region, has aligned himself closely with Argentine president Nestor Kirchner. But what, if anything do the two men have in common? Julio provides some interesting insight.

Second, what is Chavez doing to spread his military doctrine through the reigon? It is clear that he would like to be in command of a region-wide army, especially after his speech at the last MercoSur summit, held in Cordoba, Argentina, when he said that MercoSur should be a foundation for a region-wide economic union, like the European Union, as well as a region-wide military to oppose any would-be invaders from imperialist countries.

Julio talks about Chavez’s influence in Bolivia, and how he may have brought the Russians to Argentina’s door.

So let’s begin.

Two things that Hugo Chavez and Nestor Kirchner have in common is power. Both men have consolidated power over their country’s legislative and judicial branches, and both rule by decree. Both men also enjoy a deeply divided opposition that, at times, argues more with itself than the man in power. How do these two men compare? When I put this question to Julio, he had a clever answer: Chavez es Peron con Petroleo. That is, Chavez is much like Kirchner, only he has money, while Kirchner does not.

It is clear that Kirchner depends more and more on Chavez, but what about other leaders in the region? Many would argue that Bolivian president Evo Morales is very close to Chavez. I would argue that he puts Bolivia first, and what ever plans Chavez might have for the region second. But an interesting thing occurred last May. Chavez and his defense minister Raul Baudel visited Bolivia where they met with Evo and the leaders of the Bolivian armed forces. Might they have talked about Chavez’s vision for a regional military? Could the recent sacking of some Bolivian military leaders have been a decision Evo and Chavez made together? If Evo does take advice from Chavez, the military realm is one place Evo is most likely to give Chavez his ear. After all, Evo is a farmer, Chavez is the one with a military background.

When I put this question to Julio, he had some interesting comments, included was his concern that Chavez may have brought the Russians to Argentina.

The Brazilian military is indeed worried. Already discussions about Chavez and his military machine are circling in Brazil’s halls of military leadership in Brasilia and Rio de Janeiro. The likelihood of Venezuela’s armed forces joining that of Bolivia is slim, but the implications such a possibility has for regional security are very worrying.

Next week I hope to focus on Bolivia and a manual eradication program there that seems to be taking off. This eradication program is unique because the coca farmers themselves are pulling the plants, not the military or hired citizens. What’s behind this program and it’s chances for wider success outside Bolivia will be discussed.

The full podcast with Julio's comments may be found here.

Dreams of Influence in Nicaragua

Washington remembers the days of the CIA-backed counterinsurgency organized to remove Nicaragua’s Sandinistas from power. Since the end of the Cold War, the region’s political climate has changed. Washington’s desire for influence has not. It is no longer a fight against communism, but against the sway of Venezuelan President Hugo Chavez and what his political presence in Central America means for the eroding authority of the US in Latin America.

In the 1980s, the Sandinista National Liberation Front (FSLN) was a source of pride for many Nicaraguans. Those old enough to remember the Somoza family point out it was the Sandinistas who ended 43 years of its brutal dictatorship in 1979. This US-backed string of dictators began with Anastasio Somoza in 1936; it continued as power was passed from father to son to brother. Nicaragua entered into a new political arena with Daniel Ortega, Herty Lewites and others who took back Nicaragua for the people, staying in power until democracy finally won out in 1990.

Since then, Daniel Ortega has unsuccessfully run for president three times. On 5 November, Ortega will have his fourth chance for victory. To avoid a run-off, he must win 35 percent of the vote, with a 5 percent margin between him and the second-place candidate. The possibility of an Ortega first-round win has significantly increased since the death of former Sandinista and presidential candidate Herty Lewites.

Lewites died of a heart attack on 2 July. At the time, his candidacy split the Sandinista vote, considerably weakening Ortega’s position. With Lewites no longer in the race, many observers believe Ortega could very well be the next president of Nicaragua.

Chavez has made no attempts to hide his support for Ortega and the Sandinistas. In April, Chavez reached an agreement with the FSLN to supply oil at a reduced price to areas of strong Sandinista support. Perhaps more valuable to Nicaraguan farmers is fertilizer. Some 20,000 tonnes, shipped from Venezuela to Nicaragua, are stored and sold by an organization close to the FSLN, according to the Miami Herald. One 110-pound sack costs Nicaraguan farmers US$16, some 20 percent below market prices.

Meanwhile, US Assistant Secretary of State for Western Hemisphere Affairs, Tom Shannon, visited Nicaragua in the first week of July. He made no attempt to hide his support for Ortega’s competition, Harvard-trained technocrat Eduardo Montealegre, formerly the Nicaraguan foreign minister. It is likely that Shannon discussed with Montealegre the future of USAID in Nicaragua as well as continued US support.

Shannon knows that Nicaragua under the Sandinistas remained impoverished. Repression and war reigned, with Ortega on one side and the US government on the other. If Ortega wins, Shannon will work with him, but he will not have as warm a welcome. His message of US-backed policies would not have a happy home.

Beyond personal relationships, there are other items at stake. Nicaragua currently recognizes Taiwan as an independent nation, and is one of the remaining countries that has held fast against the consolidation of China’s presence in the region. The US would like for Nicaragua to maintain its support of Taiwan. Yet under Ortega, Nicaragua may recognize Taiwan as part of China. It would be a small gain for China in terms of practical use, but a win nonetheless in China’s long struggle as the leading Asian influence in the Americas. It would also be a win for Chavez, who tirelessly works to reduce US influence in the region.

Regional support for the installation of another US-military base in Honduras is also at stake. According to the Associated Press, the base would be installed in the northeastern region of Gracias a Dios, near the Nicaraguan border. Both US and Honduran strategists believe this region is currently wide open for the passage of illicit products moving between Colombia and Mexico. The US wants to count on Nicaraguan support.

General Romeo Vasquez told the Honduran daily La Prensa that the area was a “zone where there is conflict and problems,” referring to the narco-trafficking in the region. Over 100 tonnes of cocaine are smuggled through Honduras, according to the US embassy in Guatemala, on its way from Colombia to the US. The base in Honduras is likely the first in a string of outposts the US would like to see from Panama to Honduras. However, Nicaragua under Ortega would likely not play party to a US-led effort to put more boots on the ground in Central America.

The stakes are still low since the election is still months away. Nicaraguan pollsters are on the streets assessing how Lewites’ death has affected the Nicaraguan voting public. In the latest poll released by Nicaraguan marketing firm Borge and Associates, Ortega led the pack with 30.1 percent of the intended vote. Montealegre trailed by just under six points.

The poll, conducted from 20 June to the day of Lewites’ death, 2 July, gave Lewites 17.2 percent of the intended vote. This is the margin that both Montealegre and Ortega seek to gain. Because Lewites is known to be a former Sandinista, most of his votes are likely to migrate to Ortega. If even half of the 17 percent decides to vote for Ortega, the Sandinista would move from 30.1 percent to 38.6 percent - enough to win if Montealegre does not come within five percentage points.

Chavez’s horse, Ortega, is on his fourth run for president, and he has never been closer to winning. Perhaps that is why elections in Nicaragua, usually an event that comes and goes without an international headline, have attracted such attention. In the end, however, Washington and Caracas will have little more than bragging rights. After all, Nicaragua is still a small, poor nation that needs all the help it can get to improve the lives of the people who live there, not stroke the ego of its leaders or those who run the nations that support them.

As usual, you can listen to the podcast here.

Colombia's FARC Moves to Consolidate Control

One of the largest mass-kidnappings in Colombian history turned out to be an exaggeration. The governor of Colombia’s Choco department, claimed the Revolutionary Armed Forces of Colombia, also known as the FARC, had kidnapped 170 rural workers on 13 July. Ten more were reported killed. Colombian president Alvaro Uribe deployed a mobile battalion of the Colombian military, whose commander immediately refuted the reports, claiming that no more than 35 rural workers actually had been kidnapped.

The exaggeration of a very real event may reveal the level of desperation some Colombian governors feel as they await their share of the promised deployment of 40,000 rural police officers. Such an incident in one of Colombia’s most isolated outposts also verifies that security gaps are growing all over Colombia. Slow implementation of political promises and the very real absence of the paramilitaries widen these gaps every day. But that is to be expected.

The FARC has not captured all areas left available by the paramilitaries, but it has moved to take over strategically important areas. Choco is at the top of the list.

The department of Choco has been of strategic importance to both the FARC and the paramilitaries as long as both groups have been involved in the drug trade. Colombia shares some 266 kilometers of a border with Panama, all of which is in the Choco department. This area is also the shortest distance from the Pacific to the Caribbean and is replete with river systems that facilitate transport.

Riosucio is a small town on the Truando River, part of a fluvial system that stretches from the mountains in north-central Choco to the Caribbean. This area is in the center of the current conflict between the 57th FARC Front and a paramilitary unit due to disarm at any time, according to Colombian reports.

The FARC is already moving in. They have taken hostages and even killed those who they thought were paramilitary sympathizers. The events of 13 July point out that the FARC is moving in to take over as much of the northern portion of the Choco department as possible, despite any plans the Colombian government has for increased rural security.

Over the duration of his first administration, President Uribe went on the offensive, seeking out conflict with the FARC. Since 2003, Uribe has installed 84 new rural police substations. He oversaw the development of seven new military brigades and 54 mobile squadrons. He started the so-called “public forces,” empowering citizens to join a sweeping intelligence network. His capstone offensive, called “Plan Patriota,” continues to take the fight to the FARC strongholds in southern Colombia.

Uribe’s next move, his promised 40,000 rural police, will be even more invasive into FARC satellite territory. His government will install 400 new substations, according to the Colombian daily El Tiempo. Half of the rural police, some 20,000 in number, will be agents with anti-guerrilla training. A total of 15 anti-terrorist special forces will be deployed in Colombian cities.

Yet for all the muscle, Uribe has put into his so-called Democratic Security program, the FARC continues to thrive, all but securing a corridor to Ecuador by controlling the departments of Putamayo and Narino. Through this corridor the FARC receives supplies and its members escape into Ecuadorian territory when chased by the Colombian military.

The FARC is currently consolidating control of Aruca, a Colombian department that shares a border with Venezuela. Many analysts believe control of this area will open a significant corridor for export of cocaine through Venezuela, one facilitated by the Venezuelan National Guard.

The Dog’s Head area, where the Colombian department of Vaupes meets the Brazilian Amazon, has been a long-time FARC strong hold. Neither Brazilian nor Colombian authorities have managed to stymie the number of clandestine airstrips in this area, nor the flow of trade between Brazilian organized crime, based in Rio de Janeiro, and the FARC. The packages used to transport 250 kilograms of pure cocaine, interdicted outside Rio de Janeiro, Brazil in mid-July, bore the distinct FARC signature. This bust indicates that the old alliance between the Brazilian Fernando Beira-Mar and the FARC, propagated by transport routes used in the Amazons, is alive and well.

Colombia’s Black River eventually joins with the Amazon River’s upstream network in Brazil. It flows south through the Colombian department of Amazonas to the town of Leticia, into Tabatinga, Brazil. Tabatinga is a known meeting place where FARC operatives hand over cocaine, and Brazilian criminals deliver weapons and ammunition.

By most counts, it appears that Uribe’s security initiatives have worked well to secure the center of Colombia, the core areas where Colombians live and work, yet the rest of the country, the perimeter, in particular, remains ungoverned. Uribe may have succeeded in delivering security to many Colombians, but he has done very little to actually put a dent in the FARC’s wide spectrum of illicit activity.

It is quite possible that in the next year the FARC will have taken complete control of trafficking corridors through Panama, Ecuador, Venezuela and Brazil. If the United Self-Defense Forces of Colombia (AUC) continue to disarm, as planned, there will be relatively little resistance, by way of irregular security units, in Colombia’s perimeter areas.

The recent incident in Choco is just one more bullet point on a long list of upcoming conflicts.

Uribe’s plan to install another 40,000 rural police around the country is a great idea. It has raised the hopes of governors. But one, in particular, seems to have become a bit more nervous. His outcry of 170 kidnap victims got the world’s attention. Yet there was little anyone could do. The FARC made its presence known, and the addition of one rural police substation in Riosucio would not have made a difference...

You will find the audio link here.

Sam Logan is an investigative journalist who has reported on security, energy, politics, economics, organized crime, terrorism, and black markets in Latin America since 1999. He is currently completing his work on “Nice Guys Die First,” a forthcoming non-fiction narrative about organized crime in Brazil.

Post-World Cup Regional Roundup

As always, you may listen to this podcast here.

For today’s show I would like to share with you a basket of developments around the region from Mexico to Argentina, starting north and working my way south.

We are into the second week after Mexico’s July 2 elections and still presidential candidate Andres Manuel Lopez Obrador contests the results. He trailed Mexican president-elect Felipe Calderon by one-half point in the first count of votes. Obredor has stated publicly that Mexicans will take to the streets unless he’s satisfied with a recount.

Today, the 12^th of July, Mexicans have already taken to the streets, focusing on Mexico City’s central square. It could be the beginning of a nation-wide protest. And still I wonder, why are Mexican politicians not paying closer attention to the power of organized crime there?

Further to the south, in Nicaragua, one presidential candidate has died, which is likely to hand votes to former president and Sandista leader, Daniel Ortega. If Ortega wins, expect Nicaragua to take a sharp turn from a pro-United States posture. Venezuelan president, Hugo Chavez has been sowing seeds of support in both Nicaragua and Mexico. As president of Nicaragua, Ortega would likely begin to close ties between the Central American country and Venezuela, starting with more oil.

Meanwhile, Colombia and Venezuela started construction on a gas pipeline between the two countries on the 9^th of July. This is the first segment of a gas pipeline Chavez would like to extend to Panama.

With a terminal for Venezuelan gas in Panama, Chavez would likely begin selling more to China and his Central American counterparts. China, by the way, has upped their crude oil purchases from Venezuela from 168,000 barrels a day to 300,000 – a 45 percent increase. Between now and 2012, PDVSA expects to increase output by two million barrels a day. There are indications that much of this oil would go to China, but the East coast of the United States remains Venezuela’s top destination of oil products.

In Bolivia, president Evo Morales has realized the limitations of his power. The results of the vote to elect members to Bolivia’s upcoming Constituent Assembly did not give Morales’ political party the majority needed to enshrine its ideology into Bolivia’s new constitution. Morales’ party, MAS, won some 53% percent of the vote, while Jorge Quiroga’s party, Podemos, won some 23%. This means Morales will need to negotiate with Quiroga to reach consensus. This fact stifles any opportunity Morales may think he has to enact sweeping change in Bolivia.

Next door in Brazil, we are coming close to elections, scheduled for October, 6. Brazilian president Luis Inacio da Silva, better known as simply Lula, still holds the lead in polls over Alckmin. In the latest poll released, on Tuesday, the 12^th of July, the race has tightened. Lula’s lead has slipped from 22.4 percentage points to 16.9 points. Still, if the election were held today, Lula would win with 44.1% percent of the vote, while his top competition, Geraldo Alckmin, Sao Paulo’s former governor, would take some 27.2 percent of the vote. Yet 50% of Brazilian voters are still undecided.

A factor that may hurt Alckmin in the future is the continued violence in his home state of Sao Paulo. When Alckmin began campaigning some months ago, he stood on two pillars – increased security and economic improvement. Under Alckmin, Sao Paulo saw both. He claims he can do the same for the nation. Yet as many of you probably know, Sao Paulo has had some trouble with prison riots, gang members attacking police stations, and cops retaliating with brutal force, sometimes excessive if you ask human rights advocates.

On the 11t^h of July, a third round of attacks, 38 in all, targeted police stations, buses, and empty banks. These attacks, organized by the First Capital Command, known as PCC in Portuguese continue to erode away at Alckmin’s security record. I have to wonder if that will translate to votes. If Lula wins what can he do to improve security in Sao Paulo? Not much.

As we’ve seen today, Lula has again offered federal help, but that help must be accepted by the governor of Sao Paulo. So far is hasn’t, and as long as the governor of Sao Paulo does not support the president, there will be a power struggle. The same is true for the state of Rio de Janeiro. I wonder if this is part of the reason why both of these states have a serious problem with organized crime.

In the Southern Cone, Argentina has seen a rise in crack use. It has doubled between 2001 and 2005. One dose of one gram costs one peso, or 32 cents. It’s hard to think of something that’s as cheap as 32 cents. You can’t even buy one can of coke for that amount anymore. The development that has led to this rise in crack use is cocaine cooking in Argentina. Argentine drug dealers years ago began to purchase coca paste from Bolivian connections so they could cook the cocaine in houses closer to the major market in Buenos Aires.

Cooking the cocaine yourself removes a handful of middle men. Past is less risky to transport, and once the cocaine is cooked, high purity levels ensure good sales. The side effect, of course, is also a constant supply of crack. To my knowledge, Argentine president Nestor Kirchner has not made a public statement concerning his country’s security challenges or rise in drug use.

Elections and leadership in Peru, Brazil, Venezuela, and Argentina

Today’s show presents an interview with Michael Shifter, who is vice-president for policy with the Inter-American dialogue, a Washington, DC-based policy analysis think tank for Western Hemisphere affairs. Mr. Shifter is also a professor of Latin American politics with Georgetown University in Washington. He has lived in Lima, Peru and Santiago, Chile.

Following up on Mr. Shifter’s recent interview with Peruvian president-elect, Alan Garcia, I began our interview by asking about Garcia’s plans for Peru. We also touched on issues of Peruvian relations with Brazil, Chavez’s strategy for the upcoming presidential elections in Venezuela, and the possibility of former Argentine economic minister Roberto Lavagna.

You can find the MP3 here.

The Kalashnikov Threat in Venezuela

Only the MP3 version includes extra comments and analysis. If you want to listen to this post, please download the file here. Otherwise, please keep reading...

...Venezuelan President Hugo Chavez announced on 30 May that the first shipment of 30,000 AK-103 assault rifles would arrive in Venezuela by the end of June. On the same day, Alexander Badistan, spokesman for the Russian arms manufacturer Rosoboronexport, said the company would grant Venezuela a license to manufacture AK-103 rifles. Chavez’s statement confirmed that claim. “The Russians are going to install a Kalashnikov rifle plant and a munitions factory so we can defend every street, every hill, every corner,” he said.

The 30,000 rifles that are due to arrive in Venezuela are part of a larger arms build-up that has caught the attention of US and South American leaders. Yet for all the media coverage of new fighter jets and submarines from Russia, patrol boats from Spain, and the specter of ballistic missiles from North Korea, a threat that has been overlooked has become more serious.

The Venezuelan military does not employ strict control over its stockpile of small arms and light weapons and ammunition for those weapons. According to the Federation of American Scientists (FAS), 400 of the 9,380 rifles seized from illegal groups in Colombia from 1995 to 2000 bear the symbol of the Venezuelan Armed Forces.

The US-based RAND Corporation think tank claims that there were at least 21 known arms trafficking routes between Venezuela and Colombia in 2003. Reports from Jane’s Information Group claim that members of the Venezuelan Armed Forces continue to smuggle into Colombia small numbers of Venezuela’s old FAL rifles.

An AK-103 rifle factory based in Venezuela could add hundreds of thousands of guns to Venezuela’s poorly controlled weapons stockpile.

Meanwhile, Transparency International ranked Venezuela in its 2005 Corruption Perceptions Index as the third most corrupt nation in Latin America, more “honest” than Paraguay and Haiti.

Rampant corruption, combined with strong ties between some Venezuelan security officials and leftist rebels from the Revolutionary Armed Forces of Colombia (FARC), creates a scenario that places Venezuela in the center of a region-wide black market. Adding hundreds of thousands of assault rifles creates a temptation for Venezuelan criminals to sell those weapons on the black market, creating a region-wide security threat.

Central America has traditionally served as a reliable source of black market weapons for the FARC. Paraguay and Brazil are also known resources for weapons, ammunition, and other materials. Venezuela has been seen as a major transit country, and not high on the list of source countries for arms flowing into Colombia. A new weapons factory there may change that fact.
Corruption helps create and maintain all sources of black market weapons. And as governance becomes less a priority in Venezuela, impunity and corruption develop into norms.

Billions of dollars, dog eared for government programs, have simply disappeared, most likely siphoned-off by corrupt officials, according to Gustavo Coronel, a former member of PDVSA state-owned energy giant's board of directors who now monitors corruption in the Chavez government. Coronel claims that social programs such as Plan Bolivar 2000, and its replacement program, The Centralized Social Fund, are defunct and run by military officers who have little to no oversight.

It has become clear that leaders of Venezuela’s military, as long as they remain loyal to Chavez, receive no oversight from Caracas. Venezuela cannot offer any reasonable assurances that AK rifles purchased from Russia or manufactured in Venezuela will not leak into the hands of the FARC or other extra-legal groups in the region.

In the meantime, Chavez continues to spend billions on planes, boats, submarines, and helicopters, claiming the Venezuelan military needs a facelift. While this may be true, the more important matter lies with Chavez’s new batch of AK-103 rifles, and those that follow. Fighter jets, submarines, and patrol boats are all part of a conventional army, quickly rendered useless by an opponent's missiles. Considering Chavez’s adherence to guerilla warfare and the success asymmetrical warfare has had in the recent past, AK rifles are much more of a threat than any attack helicopter or fighter jet.

True Power Behind Organized Crime in Brazil

(Note, this piece has been modified from its original form, first published by the Power and Interest News Report.)

Only the MP3 version includes extra comments and analysis. If you want to listen to this post, please download the file here. Otherwise, please keep reading...

...The violence that paralyzed Sao Paulo from May 12 until May 20 revealed the raw power of the First Capital Command (P.C.C. in Portuguese), considered one of the most powerful organized criminal factions in Brazil. Prison riots that erupted in nearly 100 prisons led to over 150 murders, destroyed city buses, and terrorized millions of citizens, propelling Brazil onto the world stage. Yet a more deeply-rooted system run by the P.C.C. reveals how powerful this gang has become.

On May 10, just two days before the riots began, two members of the Sao Paulo Department of Investigation of Organized Crime, Missers Bittencourt and Ferraz, testified before the Brazilian Government Inquiry Commission on the Traffic of Illegal Weapons about their understanding of the true power of the P.C.C.

Bittencourt and Ferraz testified that the P.C.C. is a very serious problem that is only growing. They blamed Sao Paulo authorities for separating and sending to other Brazilian states various leaders of the P.C.C. by pointing out that because of this separation, the P.C.C. now has a strong presence on a national level in Matto Grosso do Sul, Paraná, Bahia, Rio Grande do Sul, and Brasilia.

According to Bittencourt and Ferraz, the P.C.C. controls over 140,000 prisoners in the state of Sao Paulo alone. Another 500,000 individuals support the organization outside the prison system. This group helps enforce some 100 cases of extortion organized by the P.C.C. on a daily basis, representing some 70 percent of kidnapping cases in Brazil's financial capital of Sao Paulo.

Apart from a proven ability to organize simultaneous, widespread prison riots and destabilize public security, the organization has constructed a network of informants, lawyers, blue collar workers, gun and drug dealers, and bankers to do its bidding. This network is held together by a criminal financial system that finances education, facilitates crime and engages in killings. Bittencourt was quoted as saying, "to be [associated] with the P.C.C. is good business."

Membership fees are the bread and butter of the P.C.C. For prisoners, a fee of 25 dollars is charged every month. Individuals on the outside pay a fee of 225 dollars Given these fees and the high membership numbers both inside and outside the prison system, it is possible that the P.C.C. organization earns millions of dollars a month from fees alone.

Criminal finance is another revenue stream. If a group needs $10,000 to mount a bank robbery, they can go to the P.C.C. In this case, the P.C.C. acts as a black market bank to finance and facilitate criminal activities.

To distribute weapons, the P.C.C. uses Sedex, a Brazilian courier system known for reliability and timely delivery. Weapons as large as assault rifles have allegedly been delivered by Sedex to the waiting hands of criminals.

The P.C.C.'s weakest link is its legal team. Currently 18 lawyers serve the P.C.C. leadership, according to Bittencourt. They oversee dozens of legal cases against P.C.C. members and make regular visits to P.C.C. leaders imprisoned around the country. Brazilian law protects the lawyer-client relationship to extremes. Prison authorities are not allowed to search lawyers when they enter the prison to visit their clients. Many believe that the lawyers bring cell phones, two-way radios, laptops, and other critical tools the P.C.C. needs to keep its criminal system running.

Reaching beyond its current legal team, the P.C.C. supports law students, paying full tuition in exchange for services once they have a law degree. The P.C.C.'s educational funding extends to future politicians and other individuals who indicate an interest in entering Brazil's political world. The group also facilitates the path for students who want to enter public security. These efforts and more act as a well-planned insurance policy to ensure the continued existence of the P.C.C. through the manipulation of Brazil's judicial, political, and security systems.

It was the manipulation of Brazil's political system that led to the purchase of the testimony Bittencourt and Ferraz prepared for their audience. For some $100, the PCC purchased the testimony from an employee of a company contracted to record and transcribe congressional hearings. The material was allegedly purchased by a P.C.C. lawyer, who delivered the information to the P.C.C. leadership.

Also documented in this material was Bittencourt's decision to move on May 12 P.C.C. leaders to more secure prisons to prevent what they had learned would be widespread prison rioting on May 14. The P.C.C. once again proved their superior intelligence networks when they began the riots two days early, leading to a week long struggle to bring peace and rule of law back to Sao Paulo.

As a criminal enterprise, the P.C.C. took life inside a Sao Paulo prison in 1993 when prisoners grouped together to force the improvement of their living conditions. Since then, many prisoners, their family members, and other poor Brazilians idolize the P.C.C. as an armed faction of Brazil's extreme left political flank, working to improve the rights and lives of impoverished Brazilians. For this reason, the P.C.C. draws many of its young recruits from the shantytowns surrounding Sao Paulo.

Many of the people in these communities believe the P.C.C. speaks for them when it fights against what they perceive as a deeply corrupt political organization, beleaguered by broken judicial and penitentiary systems that support an oppressive security structure.

A great irony is many Brazilians believe the P.C.C. fights for them against a government that they consider the true oppressor. At the same time, the P.C.C. has demonstrated a level of power that can only be achieved by taking advantage of the loopholes and cracks in various democratic institutions that today in Brazil appear to facilitate organized crime more than protect and serve Brazilian citizens. What happened in the second week of May 2006 is a minor showing of the true power the P.C.C. holds. It is a level of sophistication and organization that the international media have not been able to elucidate and that people in Brazil would rather not talk about.

Sam Logan (www.samuellogan.com) is an investigative journalist who has reported on security, energy, politics, economics, organized crime, terrorism, and black markets in Latin America since 1999. He is currently completing his work on Nice Guys Die First, a forthcoming non-fiction narrative about organized crime in Brazil.

Morales Sides with Chavez, Takes On Brazil with Energy Nationalization

(Note: This piece has been modified from its original form, first published by the Power and Interest News Report.)

Only the MP3 version includes extra comments and analysis. If you want to this post, please download the file here. Otherwise, please keep reading...

...Evo Morales propelled Bolivia into South America's geopolitical spotlight when he announced on May 1 the nationalization of Bolivia's energy assets. The timing of his announcement did not come as a surprise. Morales displayed a flair of authority by announcing nationalization by presidential decree and using the Bolivian military to implement his long-time promise. His first significant geopolitical move as president of Bolivia left regional leaders concerned about the future of their gas supply.

Evo Morales spent the last weekend of April in Havana. The following Monday, he nationalized Bolivian energy assets, timing that led many to believe Morales has made his choice to position Bolivia into an axis of political power, trade preferences, and energy integration led by Hugo Chavez. Chavez met with Morales on May 3, and arrived at the May 4 summit arm-in-arm with Morales to discuss matters of energy supply that in truth had little to do with Venezuela.

Brazilian President Luiz Inacio Lula da Silva immediately called for a summit to be held just three days after Morales' announcement to exercise his regional leadership role and provide a diplomatic arena for private discussion and a public display of solidarity with Bolivia. Yet, by the morning of May 2, Lula was already feeling the pressure from members of his own party that argued Morales' move underlined a weakness in Lula's diplomatic efforts to keep Bolivia close and protect Brazil's supply of natural gas.

Argentine President Nestor Kirchner, like Lula, is worried about an increase in prices. Kirchner's government subsidizes gas sold to the domestic market in Argentina. An increase in price would force Kirchner to further subsidize the price of gas, meaning a sharp reduction in funds available for federal spending leading up to his reelection bid. Kirchner could also raise the price of gas, but this policy would run against his populist momentum, leaving him vulnerable to political opponents looking for another reason to demystify Argentina's popular president before elections. Kirchner attended the mini-summit to table a plea for low prices.

Chavez's presence at the meeting was no accident. He provided political muscle in support of Morales' announcement. Lula likely took an opportunity to share words with Chavez about what many Brazilian politicians consider two-faced diplomacy. On one hand, Chavez has been promoting a transnational pipeline that would penetrate Bolivia's two gas markets. On the other hand, Chavez has put heavy rhetorical support behind Morales' nationalization moves, putting Brazil's energy future at risk. Chavez's astute diplomacy put Lula in a bind and helped buoy Morales' popular support at home.

At current production and export levels, Bolivia has 70 years' worth of natural gas reserves, according to the Cambridge Energy Research Associates (SERA). SERA research reveals that at year-end 2004, Bolivia's proven gas reserves stood at 26.7 trillion cubic feet (Tcf); proven and probable reserves increase that number to 48.7 Tcf. Bolivia exported 735 million cubic feet of gas (MMcf) per day to Brazil in 2004. In 2006, Bolivia is expected to export some 1,200 million cubic feet of gas per day to Brazil, possibly up to 1,350 million cubic feet of gas per day in 2008 if current pipeline networks are expanded.

In the wake of Morales' May 1 announcement, this may change. Petrobras president, José Sérgio Gabrielli announced on May 3 that Petrobras would freeze all investments in Bolivia, including the expansion of the pipeline that moves gas from Bolivia to Brazilian markets. Gabrielli stated that Petrobras would not accept an increase in prices, citing a contract good through 2019. If prices are increased for Petrobras, the company will seek international arbitrage, he said.

Gabrielli knows he is in a well-leveraged position. Petrobras has invested more than a billion dollars in Bolivia in the last decade. The company's Bolivian subsidiary, Petrobras Bolivia, started operations in 1996. In less than ten years, the company has become responsible for 57 percent of overall natural gas production; it is responsible for 98 percent of the refinement of Bolivia's natural gas, corresponding to some 25 percent of the production of combustibles and some 63 percent of lubricants. These products are sold through a network of 100 Petrobras gas stations, one fourth of all gas stations in the country.

Additionally, Petrobras Bolivia is the largest company in Bolivia, responsible for 20 percent of Bolivian G.D.P. It employs over 850 Bolivians and represented some US$563 million of state revenue in 2005.

Revenue generated from hydrocarbon exports to Brazil and Argentina, Bolivia's two major export markets, represented some 38 percent of total export income in 2004. Losing companies such as Petrobras and Repsol YPF would be damaging to Bolivia's economy. Additionally, Morales knows he needs foreign investment to maintain and improve upon the country's gas export infrastructure. New pumping stations, pipeline networks, and development of other gas-based products are essential to take advantage of Bolivia's energy assets still underground.

A day before the May 4 mini-summit, Lula stated that Brazil has become overly dependent on Bolivian gas. He also said he accepted Morales' announcement and thinks that it is a fair play for Bolivians, despite the losses it may mean for Petrobras Bolivia. Upon the conclusion of the summit, it was clear that the negotiation of prices had not even begun. Morales did state gas exports to Argentina and Brazil would not be interrupted. Gabrielli noted that with the mini-summit out of the way, the table was set for more technical discussions concerning prices and what Bolivia's nationalization of its energy assets really means for energy companies in Bolivia.

Beyond the ramifications of private-sector interests, a regional shift of alliances has begun to form, revealing to all that Bolivia, under Morales, has gravitated toward Venezuela's more nationalist policies, away from Brazil, which under Lula is considered the region's center of geopolitical gravity.

This may be a blow to Lula as a regional leader, but not to Brazil as a consumer of natural gas. Brazil imports some 40 percent of its natural gas supply, mostly from Bolivia. Yet Petrobras has already begun making the necessary investments in development and pipeline infrastructure to reduce this dependency. For Argentina, Kirchner's only worry is price, yet he is already working on other sources of natural gas, mainly through increased deep water production efforts.

Despite who wins the October presidential elections in Brazil, Brasilia will move toward securing its natural gas resources. There is talk of re-gasification plants, which would receive liquid natural gas from Trinidad and Tobago. Nuclear energy, hydroplants, and even bio-energy will continue to meet Brazil's energy needs, placing downward pressure on the demand for natural gas.

If Morales is moving closer to Chavez, he would do well to develop Venezuela as an export market. Any pipeline from Bolivia to Venezuela, however, would need to involve another country. To the west, Bolivia may look to Chile. Many believe that Morales and Chilean President Michelle Bachelet have been talking about a gas-for-Pacific deal for over a year.

Chile's need for natural gas will only grow as Argentina struggles with Bolivia's price increases and national demand that paces ahead of domestic supply. A pipeline that opens Bolivian natural gas to a Pacific port would be mutually beneficial to both Bolivia and Chile, yet historical tension and petty politics may scuttle economic prudence. Chile will likely rely more on a planned liquid natural gas port.

In the short-term, Morales may have put himself and Bolivia in an excellent position. However, his abrupt move to nationalize Bolivia's energy assets by decree and with military force has further convinced Bolivia's two export markets, Brazil and Argentina, that they must become more independent. This trend may reduce Argentine and Brazilian dependence on Bolivian gas in the mid- to long-term. Morales has taken a step in the direction of political assertion and Bolivian self-fulfillment as a regional player. What remains now is the follow-through necessary to secure Bolivia's nationalization of energy assets without isolating the country from her only natural gas customers.

Invasion or War for Venezuela?

Only the MP3 version includes extra comments and analysis. If you want to listen to this post, please download the file here. Otherwise, please keep reading...

...For years, Venezuelan President Hugo Chavez has claimed to be protecting his people from the corrupt and greedy Venezuelan elite class, represented by the Venezuelan political opposition. Now he is protecting them from an external foe, the US, which he has accused of intending to invade Venezuela. Riding on the rhetoric of an eventual US invasion, Chavez is building up a massive civilian militia answerable directly, and only, to him. That militia, however, is more likely intended to deter a military coup than a US invasion.

After the 2002 attempt to overthrow his government, Chavez changed tactics, taking on a larger role as protector of his people from the US. As such, he must continue to claim that the US will someday invade Venezuela and that they only thing that will keep the Yankees at bay is two million trained civilians.

The formation of a civilian militia gives physical presence and weight to Chavez's rhetoric that the US will one day invade. Considering the many rumors of a palace coup and the shuffling of military commanders in Chavez’s top brass, however, the formation of a civilian militia looks more like another bulwark intended to protect himself against a military-led coup d’etat.
The only conventional army likely to threaten Chavez is Venezuela’s own military forces, the FAN. In the event of a successful FAN-orchestrated coup, two million hardcore supporters with military training could be ordered to drag the country into a civil war. Given the world’s dependence on Venezuelan oil, such a possibility would have serious international repercussions.

Chavez-controlled Militia

The first week of March saw the beginning of a two million-strong reservists’ program, which Chavez has been talking about for years and officially announced on 14 April last year.
Lieutenant Colonel Antonio Benavides is in charge of training the instructors, who will in turn train the reservists. He has emphasized the art of guerrilla warfare. In an interview with the BBC, Benavides lined up a group of civilians to demonstrate the art of surprise in guerrilla warfare. “On the surface they look like ordinary people on the street. But if you look underneath their jackets, you will see they are hiding knives, catapults, and pistols,” the BBC quoted him as saying to an audience at the training grounds.

Taking lessons from the Viet Cong and the Cuban Revolution, Benavides will train officers to teach a volunteer militia how to conduct urban guerrilla warfare. The civilian militia adheres to the doctrine of asymmetrical warfare.

Harnessing a large force of militarily trained civilians to a doctrine of guerrilla warfare has many of Venezuela’s older generals confused because it is a doctrine not espoused by the FAN, nor is it a doctrine Chavez himself was trained when rising through the ranks of the Venezuelan military.
In training and military doctrine, the civilian militia will be completely separate from Venezuela’s traditional military rank and file. Additionally, the militia is not part of the traditional chain of command. Its leaders report directly to Chavez and no one else.

Since Chavez has made public his plans for a civilian militia that he controls, some of his loyalists in the military have expressed concern at this circumvention of the traditional chain of command. Perhaps knowing that his civilian militia announcement would provoke ire, Chavez made some command structure changes to protect his back with hardcore supporters.

Colonel Cliver Antonio Alcala Cordones, for one, would not hesitate to carry out presidential orders to use lethal force against military rebels or civilian dissidents, argue analysts with the US-based private intelligence company StratFor. Alcala is currently the commander of the elite presidential honor guard, tasked with protecting Chavez’s life.

Another hardcore Chavez supporter, Major General Ali de Jesus Uzcategui Duque, has been given command over the country’s internal defense strategy, called Plan Republica, according to StratFor. This plan has a Caracas metropolitan area element called Plan Avila. In the event of a military rebellion or civilian uprising, Plan Avila would be initiated to protect the palace, prominent public services buildings, and the oil infrastructure. General Uzcategui also has the authority to impede any military orders or actions the president finds disagreeable.

Analysts argue that by placing these men in their current positions, Chavez is working to defend himself from the possibility of an assassination attempt by a close personal aide or a military rebellion led by an officer in command of the country’s best-trained soldiers.

Rumors of a coup attempt

When Chavez talks about territorial invasion, he implies that an outside aggressor would invade Venezuela to capture control of the country’s energy assets. Since the coup in 2002, Chavez has focused his rhetoric on the eventual invasion of US military forces. He has repeated his belief that the US would invade so often that US ambassador to Venezuela, William Brownfield, said in April last year that “the United States has never invaded, is not invading at this moment, and will never invade Venezuela”.

But Chavez doubts the sincerity.

A string of events that points to plans to overthrow Chavez contribute to his paranoia.
When Chavez announced in April last year that the planned civilian militia force would be under his direct control, reports at the time indicated that FAN ranking commander General Raul Baudel strongly objected to the unilateral decision to control what would become a considerable force of trained and armed Chavez supporters.

Chavez made his announcement during a ceremony to commemorate the second anniversary of a failed attempt to overthrow his government. The message to his enemies was quite clear.
Almost two months after the announcement, Venezuelan Vice President Jose Vicente Rangel announced that the government suspected the political opposition was planning a military coup. Two days prior to that announcement, Venezuelan Defense Minister General Jorge Garcia Carneiro said that pamphlets urging a military revolt against Chavez had been circulated in various military installations around the country.

Not a month later, opposition leader Andres Velasquez, announced that Chavez had decided to postpone a military parade because he believed it would be the stage for an attempt on his life. FAN Commander General Baudel said there was no intelligence to back up such claims. However, Chavez claimed he had intelligence that pointed to an assassination attempt on 24 June, the day of the parade.

The day before the parade, General Melvin Lopez Hidalgo, a member of Venezuela’s National Defense Council, confirmed that an officer had been arrested at Fort Tiuna at the FAN’s Third Army Division base in Caracas. It remains unclear if the arrested officer was connected to the alleged assassination attempts or the anonymous pamphlets.

Audio tapes that allegedly contained details of a planned military coup surfaced in early December. Nicolas Maduro, chairman of Venezuela’s National Assembly and member of the Fifth Republic Movement party, presented the tapes to the National Assembly on 8 December. They allegedly contain a conversation among retired army officers, who were plotting to overthrow Chavez’s government by blowing up oil infrastructure before taking over military headquarters.

Asymmetrical warfare

What military analysts call asymmetrical warfare, also referred to as fourth-generation warfare, is characterized by war between a nation-state and a non-state actor. Latin America’s history is riddled with examples of how asymmetrical warfare has been used to overthrow a government, such as the Cuban Revolution, or used to prolong a struggle, such as the Revolutionary Armed Forces of Colombia (FARC).

In some cases, these non-state actors have been integrated into politics, such as the FLMN in El Salvador. Chavez is in a position to take advantage of this history to promote his ideology of a region-wide resistance against US imperialism. It is convenient rhetoric that veils what many believe are his intentions to deter a military coup.

By the end of 2007, it is quite possible that a total of two million Chavez supporters will have been trained and reinserted back into their normal lives, ready to resist at a moment’s notice. It is highly unlikely that this militia will be called to protect Venezuela from an outside invader.
Rather, they could be called on to protect Chavez’s regime from a cadre of military officers and others who want to remove him from office. If Chavez manages to survive such a coup attempt, he may go quietly or he may seek to embody the spirit of Cuba’s Fidel Castro and regional revolutionary hero Ernesto “Che” Guevarra by leading his faithful into a civil war.

The FAN is believed to have at least 80,000 professional soldiers, who could be forced to face two-million urban guerrillas.

A civil war in Venezuela would be intense, extremely destructive, and spell doom for the future of Venezuela’s economy, society, and oil output. Due to the nature of asymmetrical warfare, it would be nearly impossible to completely eradicate a group of dedicated and trained Chavez supporters.

Sam Logan (www.samuellogan.com) is an investigative journalist who has studied security, energy, politics, economics, organized crime, terrorism, and black markets in Latin America since 1999.