www.boston.com Government, foes defy courts By Mike Ceaser, Globe Correspondent, 1/12/2003

CARACAS - The government says a disguised coup is taking place. The opposition accuses the government of imposing dictatorship. But the real victim, observers say, is the rule of law.

The detention of a high-ranking national guard officer in defiance of a judge's order, and the opposition's call not to pay taxes, are the latest examples of how both sides in the struggle over President Hugo Chavez's rule have flouted Venezuela's never-strong legal structure during the six-week strike. Some observers warn that the disdain for the law could push this nation of 24 million over the edge and prompt widespread violence or even civil war.

''There are large sectors of society which don't accept the arbiters we have,'' said Carlos Correa of the Caracas human-rights organization Provea. ''This could advance into a situation in which there is no authority which anybody respects.''

On Dec. 30, a dissident National Guard general, Carlos Alfonzo Martinez, was arrested without a court order and has been held without charges or access to attorneys, even though a judge ordered him released. His freedom was a key demand behind an opposition march Jan. 3, in which demonstrators clashed with government supporters, leaving two people dead and dozens injured.

For its part, the opposition is calling on its supporters not to pay taxes as an additional pressure tactic to force Chavez to resign or agree to early elections.

Carlos Ortega, leader of the opposition Venezuelan Workers Confederation, told supporters early this month that the tax money ''could be used in a way contrary to the nation's values.''

Both sides also have interpreted the law according to their own convenience. On Dec. 15, the opposition protested furiously after Chavez declared that military officers need not obey judicial orders. Nevertheless, when the Supreme Tribunal of Justice ordered striking petroleum workers back to work a few days later, the opposition ignored the ruling. Chavez justified his instruction to the generals by saying that the president's authority superseded that of the courts.

The disregard of courts and laws occurs against a backdrop of calls for the military to step in and oust Chavez, as a group of officers did during a short-lived April coup. Many of Chavez's opponents justify rebellion based on Article 350 of the nation's Constitution, which says Venezuelans do not have to recognize any government that contradicts democratic values or infringes on human rights. The officers cited Article 350 during their April coup, and during the past weeks Chavez's opponents have said it justifies the petroleum and tax strikes.

Janet Kelly, an American political scientist based in Caracas, said invoking the article sets a dangerous precedent.

''The opposition says, `This government is so unjust we won't obey anything,''' she said. ''You're questioning the legitimacy of the government to rule.''

Indeed, the discourse of many Chavez opponents has become increasingly incendiary in recent weeks.

''We're fighting to install the rule of law,'' says constitutional attorney Luis Betancourt, who compares Venezuela under Chavez to Panama under Manuel Noriega and even Germany under the Nazis. ''In a battle, you can't respect the same rules as in a democracy.''

Neither Chavez nor his opposition can boast clean democratic credentials. During the two days in April while the opposition held power, its businessman-president dissolved Parliament, annulled the Constitution, and conducted arbitrary searches and arrests of Chavez supporters.

Chavez himself led a bloody but unsuccessful 1992 coup attempt. His government also supports ''Bolivarian circles,'' activist organizations accused of employing violence and intimidation.

The opposition accuses Chavez of using the popularity that carried him to landslide election victories in 1998 and 2000 to place his allies in all branches of government, eliminating checks and balances.

As evidence, they point to two dozen court cases that have been filed against Chavez, accusing him of everything from corruption to crimes against humanity for some of the 19 street marchers fatally shot before the April coup attempt. Nearly all those cases are in judicial limbo, neither accepted nor rejected by the Supreme Tribunal of Justice.

Mohamad Merhi, leader of a group of victims of the April violence and their relatives, said their case was recently rejected by the tribunal and sent to the attorney general's office, even though the attorney general is accused of complicity in the killings.

''We have no confidence in any investigation by the attorney general,'' said Merhi, whose son, Jesus, was killed April 11.

The opposition accuses Chavez of using a similar tactic on a nonbinding referendum on the president's rule. Although the National Electoral Court set a referendum for Feb. 2, Chavez has said that the action is illegal and that the government will not finance it. The issue is now before the Supreme Tribunal.

But in a polarized society, almost no judge is above suspicion these days. The weakening of the legal system, compounded by an ongoing battle between Chavez and the mayor of Caracas for control of the capital's police force, translates into a climate of increasing criminal impunity, said Provea's Correa.

''With the [legal] institutions deteriorated, the politicization of the police force only makes things worse,'' Correa said. ''When you have judges who act not as judges but as politicians, you experience a decomposition of society.''

This story ran on page A12 of the Boston Globe on 1/12/2003.

europe.cnn.com Sunday, January 12, 2003 Posted: 0906 GMT

CARACAS, Venezuela (Reuters) -- Venezuelan President Hugo Chavez, already fighting to restart an oil sector crippled by an opposition strike, Saturday threatened to take over banks which joined the six-week shutdown.

In two national broadcasts Saturday, leftist Chavez lashed out at foes he branded "terrorists" and hardened a stance that seemed certain to further inflame the political conflict over his rule in world's No. 5 oil exporter.

"They will not defeat us on any battlefield," said Chavez, his face flushed as he lambasted foes in a speech peppered with revolutionary rhetoric and threats.

The opposition strike, started on December 2, has stoked tensions between Chavez and opponents, who are demanding that he resign and call immediate elections. Chavez, who survived a brief coup in April, has rejected their demands for an early vote.

Striking oil workers have joined bankers, some teachers and many private businesses in the shutdown that has caused fuel shortages, food supply disruptions and long lines outside banks which are open only limited hours. Bank worker unions earlier this week went on full strike, but just for 48 hours.

Chavez, who has already sent troops to take over oil installations, warned that the government could fire or even jail striking teachers and take over banks joining the strike. He said he could withhold funding against closed universities.

"They say they want to shut the banks, well, we'll apply the law ... and if they resist we will remove their directors or we will intervene," the president bellowed.

Chavez, elected in 1998 on a populist platform of social reform, portrays himself as a champion of the poor abandoned by corrupt elites. Most Venezuelans still live in poverty in spite of their nation's huge oil wealth.

But his opposition say Chavez, rather than live up to his election promises to ease poverty, has driven Venezuela toward economic and political chaos through mismanagement corruption and dictatorial rule.

Opposition leaders, an alliance of political parties, unions and business groups, Saturday sought to shore up international support for their campaign. They welcomed U.S. backing for a proposal that would involve other nations in efforts to break the tense stalemate.

Chavez

International concern sharpened after the strike helped push oil prices to two-year highs of over $30 a barrel at a time when the United States is preparing for a possible attack on Iraq. Venezuela usually supplies more than 13 percent of U.S. oil imports.

Opposition negotiator Timoteo Zambrano and union boss Carlos Ortega, a bitter Chavez foe, planned to travel to the United States Saturday for meetings with United Nations Secretary-General Kofi Annan and the U.S. State Department.

"This is to explain the Venezuelan conflict, to intensify our international actions, and to make sure there is more attention to the Venezuelan problem from the international community," Zambrano told Reuters by telephone from Caracas airport before leaving.

The United States said Friday it supports forming a group of key regional nations who could nudge both sides to an electoral solution to end their bitter impasse. U.S. officials said they hoped to bolster talks brokered by the Organization of American States that have so far failed to reach an accord.

Chavez said he had also spoken with the U.N. chief to explain he was fighting against "coup mongers and fascists."

The opposition wants Chavez to accept elections within the next three months and agree to a nonbinding referendum on his rule in February. But the combative president refuses and has challenged the poll in the supreme court. He says the constitution only allows a binding referendum in August.

"If we want to go to the vote, it's because we want to fight the poverty and misery that this regime forces us to live with," said anti-Chavez business leader Carlos Fernandez.

Fernandez urged opposition sympathizers to take to the streets Sunday for a march in Caracas near the capital's military headquarters. Two people were killed and dozens wounded by gunfire in a similar march earlier this month during clashes involving rival protesters, police and troops.

The strike has now become a war over the oil industry, which provides for about half of the government's revenues.

Crude and product exports have fallen to less than a fifth of the 2.7 million barrels per day sold before the shutdown and production has dropped to about 450,000 bpd from 3.1 million bpd in November, officials said.

Chavez has fired more than 2,000 workers at state oil firm PDVSA and started to restructuring the company to try and break the strike. But strike leaders say returning operations to normal would take months.

www.zwire.com By: DEANNA SHEFFIELD, Citizen staff January 12, 2003

Lyondell Chemical officials have remained tight-lipped about Standard & Poor's recent decision to place the company under a credit watch.

Standard & Poor's red-tagged Lyondell Chemical's rating status because of concerns the company may not be able to acquire adequate supplies of Venezuelan crude for its refinery. The ratings agency remains concerned cash distributions to Lyondell Chemical may decrease well below expectations.

The designation could prove damaging for the chemical company, which at this point has retained their BB corporate credit rating. If the watch remains, Lyondell could have a difficult time securing low interest rates, assuming they still have interested lenders.

Lyondell-Citgo has already reportedly reduced its production of crude by as much as half because of the crude strike in Venezuela.

Lyondell-Equistar spokesman David Harpole declined to confirm or deny decreased production, noting only that the company "had not yet made an announcement."

Equistar Chemicals, a partner of both Lyondell and Millennium Chemical, has retained their BB corporate credit rating because Millennium provides the group with a measure of security.

During the watch period, Standard & Poor's officials will begin assessing other risk factors that may affect the company's rating.

Reported production cuts have increased concern the company may begin laying off employees. Approximately 1,000 people work at Lyondell-Citgo's refinery.

Lyondell owns 60 percent of the company. Citgo owns the remaining 40 percent, which is serviced by Venezuela's state oil company.

However, other crude refineries, including Shell in Deer Park, have not felt the crunch because they secure crude from Mexico, not Venezuela.

"I know Lyondell is having problems, but we're in good shape," said Shell spokesman Dave McKinney. "Our refineries are running normally; we're virtually unaffected by that."

www.miami.com Posted on Sun, Jan. 12, 2003 BY CHRISTINA HOAG choag@herald.com

A political deadlock has all but strangled Venezuela's oil flow, the fourth-largest in the world. The looming U.S. invasion of Iraq would dam another river of petroleum.

That double whammy means the global oil market could face a shortfall of four million barrels a day of the vital stuff that keeps economic engines humming. Who's George W. Bush gonna call?

Try Saudi Arabia.

Like it or not, the world's biggest oil consumer is still hostage to the vast desert kingdom despite diminishing its reliance on Saudi oil in the decade since the Gulf War.

The reason is not so much the staggering amount of petroleum that the Saudis produce every day -- more than eight million barrels. It's the fact that they can churn out even more while other major U.S. suppliers, such as Canada, Mexico and the United Kingdom, are pumping all they can.

''There is virtually no excess capacity anywhere else in the world,'' said Edward S. Walker, a former U.S. ambassador to Israel, Egypt and the United Arab Emirates who now presides the Middle East Institute in Washington.

STRAINED TIES

The House of Saud has traditionally been one of Washington's strongest allies in the volatile Persian Gulf, with oil the linchpin of the relationship. But ties between the two nations have been seriously strained since Sept. 11, 2001.

Fifteen of the 19 Arab terrorists who rammed commercial airliners in the World Trade Center and the Pentagon and crashed another into a rural field turned out to be Saudis.

Since then, U.S. investigators have discovered that Saudi money has been financing radical Muslim groups around the world.

Americans have also been taking more note of the restricted civil liberties in the closed, archly conservative society, which run counter to democratic values actively promoted by Washington elsewhere in the world.

This chill in the previously warm U.S.-Saudi relationship has sparked calls for the United States to lessen reliance on the kingdom's crude, which was the second-biggest foreign supply to the United States in 2002.

To some extent, Washington had already done that since the Gulf War, when similar calls to seek supplies away from the tinderbox Middle East were heeded.

In 1991, Saudi Arabia supplied almost a quarter, 23.6 percent, of U.S. imports. Last year, it provided about 13.5 percent, according to the American Petroleum Institute.

''There has been some diversification, with more imports coming from the Western Hemisphere,'' said Ron Planting, institute economist. ``Middle Eastern oil has been going to Asia, where demand has been growing fastest.''

TOP SUPPLIER

Canada's Alberta province is now the top foreign supplier to the United States, advancing from 13.6 percent of imports in 1991 to about 17 percent last year.

And until a national strike cut off its oil exports in December, Venezuela was the No. 3 supplier with about 13.8 percent of the market, about the same as in 1991. Mexico, the fourth-largest supplier, has moved up from 10.6 percent to about 13 percent last year, also.

Trouble is, when production drops at one of these main suppliers -- as is the case with Venezuela, where oil exports remain all but paralyzed -- all eyes turn to Saudi Arabia to make up the shortfall and keep prices from going through the roof.

'They are the `swing' producers,'' said John Lichtblau, chairman of the Petroleum Industry Research Foundation in New York. ``They have about two million barrels a day of spare capacity.''

The oil market is especially jittery because another war with Baghdad appears likely -- and could happen within the next 60 days. An invasion would shut down Iraqi oil fields, taking another two million barrels of oil a day off the trading floor.

Although the United States has sharply curtailed purchases of Iraqi oil over the past few months -- it was the seventh-biggest supplier to the United States until October when it dropped off the top 10 list -- a shutdown of the Iraqi industry would raise prices.

And even if Venezuela's strike ends before war breaks out in the Middle East, it could take several months before the industry ramps up production to where it was before the strike, around 2.5 million barrels a day.

Washington has been preparing for a tighter oil supply by gradually increasing the nation's Strategic Petroleum Reserve to about 600 million barrels. If both Venezuela and Iraq are out of the picture, the Department of Energy will likely start putting that oil on the market to keep prices down.

''We're not facing a crude shortage,'' Lichtblau said. ``We can release several million barrels a day for three, four, five months, which is enough time for Iraq and Venezuela to get back on line.''

INCREASED OUTPUT

OPEC is also doing its part. In a special meeting today, the oil producers' club is expected to authorize a Saudi-led move to increase production by one million to 1.5 million barrels a day, which will alleviate the current shortage resulting from the Venezuelan crisis.

''That has a significant effect on calming prices,'' said John Kilduff, analyst at Fimat USA. ``But it points up how difficult it is to replace Venezuelan crude.''

With growth in oil demand expected to continue, Washington has also been seeking new sources of crude oil as well as refined products.

The Caspian Basin, Western Africa, and South and Central America are all seen as potential providers, but none of those places will reach significant production levels until 2025, according to the U.S. Department of Energy.

Analysts say it will take years for those undeveloped regions to net the billions of dollars in private investment needed to build infrastructure, as well as sort out often turbulent political environments. In some places, tough geographical terrain requires developing new technology to drill and transport hard-to-get-at oil.

In the meantime, the Saudis, whose crude is easy to access, export and refine, will continue as the world's oil heavyweight. ''Saudi Arabia still sits in the catbird seat,'' said Walker of the Middle East Institute.

www.nytimes.com By ADAM COHEN

AVANA — Cuba's oddest tourist attraction may well be the Rincón de los Cretinos, or Corner of Cretins. Tucked into a dim hallway of the Museum of the Revolution, it features life-size caricatures of Ronald Reagan and George H. W. Bush. The plaque beside Mr. Reagan reads, "Thanks you cretin for helping us to strengthen the revolution." The first President Bush is thanked for helping to "consolidate" the revolution.

It is great Communist kitsch, but also dead-on political commentary. America's hard-line Cuba policy, particularly our embargo on trade and tourism, is cruel to 11 million Cubans, who live in poverty as a result of the embargo. And it makes us look loutish to the world community, which has denounced the embargo in the United Nations for the last 11 years, most recently by a vote of 173 to 3.

The embargo is also inane strategically because it does just the opposite of what its supporters intend. By insulating Cuba from American economic influence, and most actual Americans, conservatives have indeed "strengthened" and "consolidated" Cuban Communism in the name of trying to pull it down.

Momentum is building fast to bring an end to Washington's benighted policies. Cuba watchers have long said that relations will not change until Fidel Castro, who is 76, departs. But now we may be on the brink of transformation. Members of Congress, Republicans as well as Democrats, are vowing to undo the embargo, and they are taking aim at its cornerstone: the ban on tourism.

Cuba is a hot tourist spot these days — for Europeans and for 200,000 Americans a year, who go legally, under exceptions to the ban, and illegally. It has many of the usual tropical charms: enjoying moonlight and mojitas at the Hotel Nacional, chasing Hemingway's ghost around Old Havana. But what sets it apart is that in a world grown homogenous, it still delivers a frisson of exoticism, just 90 miles off the coast of Florida.

The revolution, and the four decades of embargo that followed, locked Cuba into a late-50's freeze-frame. Many of the cars careering down Havana's streets are, famously, '57 Chevys. Few buildings are newer than the Riviera, the Miami Beach-style hotel where Rat Packers once roamed and Meyer Lansky ran the casino.

The embargo's most striking visual impact is that it has spared Cuba the detritus of American capitalism. Havana's quaint Parquo Central has no golden arches or Starbucks. The Malecón, Havana's charming seafront boulevard — lined on one side by crumbling architectural gems, on the other by crashing waves — is billboard-free. It has as much Old World romance as any spot a traveler is likely to come upon.

To visit Cuba is to be a student of history, with a new set of lessons. Cubans see their engagement with the United States as part of a centuries-long struggle to throw off the colonial yoke — first Spain's, then ours. For us, Teddy Roosevelt's fabled charge up San Juan Hill evokes victory in the Spanish-American War and the New World's liberation. For the Cubans, it meant substituting American control for Spanish colonialism.

Cubans view Castro's revolution, which deposed the American-backed dictator, Fulgencio Batista, as less about Marxism than about finally winning self-determination. And they see the embargo, like the Bay of Pigs invasion and the C.I.A.'s many attempts on Castro's life, as a fit of pique by a superpower that hasn't forgiven the little island that slipped from its grasp.

For an administration that seeks "moral clarity" in foreign policy, the embargo offers anything but. Cuba is oppressive — it lacks freedom of speech and real elections — but is not much different than China and other nations that trade with the United States. In a world of shadowy terror cells and madmen developing nuclear bombs, the notion that Cuba is a leading security threat is laughable — as is the fact that Americans who cannot travel to Cuba are free under U.S. law to ship off for North Korea.

The embargo is especially wrongheaded in these complicated times. It hands more ammunition to critics who accuse the U.S. of flouting world opinion. And it particularly sets us back in Latin America, where two strategically vital nations — Venezuela and Brazil — now have leaders who see Castro as a compañero.

The embargo — and above all the travel ban — also frays our own democratic principles. It makes no sense to protest Cubans' lack of freedom by depriving American citizens of theirs.

It is Miami's Cubans, of course, who are driving all this. The community is not as uniformly hard-line as it once was; young Cuban-Americans, in particular, are starting to speak out for normalization. But President Bush still owes his win in Florida, and his presidency, to the Hands-Off-Elián-González crowd.

Things are different, however, in Congress. The bipartisan Cuba Working Group is pushing hard to end the embargo because it is the right thing to do, and because its members' constituents — farmers, factory hands, dockworkers — pay the price.

Congress eased the embargo in 2000, authorizing sales of food and medicine, on a cash basis only. Jeff Flake, a conservative Arizona Republican who opposes the embargo, expects the travel ban to unravel in the next year. "We're getting dangerously close to veto-proof majorities," he said.

The embargo's end will improve the lives of ordinary Cubans. It could even topple the current regime by unleashing the power of capitalism on a country that has long been protected from it. But these changes will come at the cost of an onslaught of American culture, lobbed from 90 miles away. Cubans will listen to less trova music and watch more of "The Bachelor," and American multinationals will descend on it. A T-shirt being sold in Miami's Cuban community not long ago showed the Malecón lined with U.S. fast-food restaurants.

Which means that in these crazy times, when it's difficult to see even one step into the future in many parts of the world, in Cuba it is possible to see two: the end of the embargo and — just as inevitably — embargo nostalgia.

THREATS AND RESPONSES: GUANTÁNAMO BAY; Beijing Says Chinese Muslims Are Among Detainees in Cuba