www.vheadline.com Posted: Friday, February 21, 2003 By: Gustavo Coronel

VHeadline.com commentarist Gustavo Coronel writes: I have recently received two letters on a similar subject ... both sent to VHeadline.com. One is from Keith Davis from the Bolivarian Fund. The other is from Paul Volgyesi, who writes frequent letters.  Mr. Davis' letter comments on my editorial "A Government that does not Govern" while Paul's letter comments on my "Corruption in the times of Chavez."

Keith Davis claims that the definition of a legitimate government sounds good and noble but is "not realistic," adding ... to prove his point ... that overwhelming consensus was not present in Bush's economic proposals.

Davis did not read my piece well since I talk about the need for overwhelming consensus on the legitimacy of the system, not on every policy followed by government.

What I said is that there is far from overwhelming consensus on the legitimacy of Chavez' government. In fact, there seems to be overwhelming consensus on its illegitimacy, after four years of disastrous performance and increasing contempt for democratic procedures.

Davis says that an effective bureaucracy can be "a blessing or a curse." Frankly, I will run that risk any time since I can not see how an effective bureaucracy can be a curse, while in the Venezuela of Chavez I clearly see how an ineffective bureaucracy is definitely a curse.

The example given by Davis about the PDVSA bureaucracy swelling with political patrons shows that he is not well-informed about this subject. Politicization of PDVSA is taking place now ... of the worst kind, since the people coming into the company now is a "lumpen" without the slightest idea of what a petroleum company is all about.

To claim, as Davis does, that the old PDVSA increased production to glut the world markets, shows considerable ignorance of the subject matter, since Venezuelan production lacks the punch to "glut" world markets.  When the oil price fell to $7 a barrel, all OPEC producers were overproducing.

Control over the military is a pre-requisite of a democracy. In April last year the military ousted Chavez and another military group put him back in. Today, the only support left to Chavez is that of a small group of the military which, however, concentrates most of the fire power. The Generals leading these groups are on Chavez's payroll but the arrangement is fragile. The important concept is that we can not have a civilized country when the President is the puppet of a small group of Generals.

The second section of the letter gets less easy to understand.

Mr. Davis feels that I should suggest replacements to the scoundrels who make up today's Chavez cabinet ... but, who am I to suggest such a thing?  Chavez has selected them, no others ... they are the ones Chavez likes.

What I said is that Venezuela has many distinguished men and women who could accompany a President in the tasks of government. But, I also said that Chavez is not interested in the best but in the most servile ... he despises the best, probably because he sees them as the type of people he can not hope to be.

Mr. Davis seems to believe that Chavez would pay attention to my suggestions for replacement of the gallery of horrors that he has built.  Who is being naive?

On the other hand, I have to say that no decent Venezuelan would accept a cabinet position in a Chavez' government. This, Mr. Davis, is a matter of principle.

Mr. Davis seems to believe that I shared government responsibilities in the past. I have never been a politician ... always a manager ... never had a political appointment, except for three months as Secretary of State in Carabobo, in a career of 35 years. The tragedies of mismanagement in Venezuela did not happened "on my watch," as you mention.

Two final observations.

One, Chavez has never attempted reconciliation. Second, my job today is that of a critic of this grotesque government. This is the way I feel I can best  serve my country. This is what I will continue to do. I am amazed at your offer to "finance half the cost of rebuilding the school system of Venezuela." You must have great financial power. But, you see, Mr. Davis: Education is not a matter of money but of values and manners. A bunch of gorillas with millions of dollars can only produce a society of more numerous gorillas. So, Thank you for your offer but, no thanks.

The letter from Paul Volgyesi is more compact and easier to read. It is also kinder although Mr. Davis's letter was not aggressive. He starts by saying that I am "a lonely voice of the decent opposition." Not true. The decent opposition runs into the thousands, dear friend. My activities, I would like to think, are an asset to my country, not to Chavez. I have dedicated years to fighting corruption, but I do not believe Chavez is interested in doing that. In four years he has not done it. It is theoretically true that I do not have to like Chavez to help Chavez to govern. But the problem is deeper than that. More than liking or disliking, this is an issue of values.  My values are different from Chavez's. How can I help him if this means betraying my values?

Dear Paul, I wish I could tell Chavez that his place in history depends on the zeal with which he engaged in a fight against corruption ... and I wish he listened. The problem is that he does not listen. The problem is that he has used his time pursuing other objectives. The problem is that he is not the man to put this country right.

I appreciate the way you treat me in your letter, with velvet gloves. This is encouraging to me as it means that you believe in my sincerity even if you do not agree with my opinions.

This is not always the case. I can assure you that I want a true democracy for Venezuela, one in which the President will be a President for all, without hate in his heart. I want to see independent institutions ... honest and courageous political leaders. I want to see education as the cornerstone of the fight against poverty, rather than handouts. I want to see a concerted action among members of society to minimize the tragedy of street children.

But, most of all, I very badly miss the country we had before Chavez ... a country in which we could all smile to each other.

• I do not say that that country did not have to be put right.

I am saying that to put that country right, we did not have to include hate and resentment and distrust into our social equation.

Gustavo Coronel is the founder and president of Agrupacion Pro Calidad de Vida (The Pro-Quality of Life Alliance), a Caracas-based organization devoted to fighting corruption and the promotion of civic education in Latin America, primarily Venezuela. A member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), following nationalization of Venezuela's oil industry, Coronel has worked in the oil industry for 28 years in the United States, Holland, Indonesia, Algiers and in Venezuela. He is a Distinguished alumnus of the University of Tulsa (USA) where he was a Trustee from 1987 to 1999. Coronel led the Hydrocarbons Division of the Inter-American Development Bank (IADB) in Washington DC for 5 years. The author of three books and many articles on Venezuela ("Curbing Corruption in Venezuela." Journal of Democracy, Vol. 7, No. 3, July, 1996, pp. 157-163), he is a fellow of Harvard University and a member of the Harvard faculty from 1981 to 1983.  In 1998, he was presidential election campaign manager for Henrique Salas Romer and now lives in retirement on the Caribbean island of Margarita where he runs a leading Hotel-Resort.  You may contact Gustavo Coronel at email ppcvicep@telcel.net.ve

www.vheadline.com Posted: Friday, February 21, 2003 By: Robert Rudnicki

US investors are believed to be growing increasingly concerned about the situation in Venezuela following the arrest of Venezuelan Federation of Chamber of Commerce & Industry (Fedecamaras) president Carlos Fernandez. Reuters quoted MFS Investment portfolio manager Mark Dow as saying "Chavez has won and it appears he is consolidating his hold on power."

Dow went on to question recently imposed foreign exchange controls and the current weak fiscal position, speculating that the government may be setting the stage to print money to cover public sector borrowing requirements, a move which could drastically effect inflation.  He says "it is almost impossible that Chavez' economic policies will work, so the non-oil economy will continue to deteriorate."

www.vheadline.com Posted: Friday, February 21, 2003 By: Robert Rudnicki

President Hugo Chavez Frias says he is very pleased with the arrest of Venezuelan Federation of Chambers of Commerce & Industry (Fedecamaras) president Carlos Fernandez the DISIP security police has carried out and is calling for other magistrates to issue similar arrest orders against other leaders of the two month work stoppage that began on December 2 before being called off in all sectors except the petroleum industry, with thousands of Petroleos de Venezuela (PDVSA) workers still striking, although most of whom have now been fired.

• "One of the coup-plotters was arrested last night, it was about time, and see how the others are now running to hide!"

The President then called for similar arrests, telling magistrates "don't be afraid to issue arrest warrants against other coup-plotters."

As for the Fernandez' arrest, the President said that when he heard the news late in the evening "I went to bed with a smile."

www.vheadline.com Posted: Friday, February 21, 2003 By: Robert Rudnicki

VHeadline.com Business Editor Robert Rudnicki writes: Although the detention of Venezuelan Federation of Chambers of Commerce & Industry (Fedecamaras) president Carlos Fernandez has obviously shocked most people in Venezuela and many overseas observers, is it really such a surprise?

President Hugo Chavez Frias has been threatening to take action against the strike leaders for many many weeks, so it is probably only surprising that it has taken this long to materialize.

When Fernandez and Confederation of Trade Unions (CTV) president Carlos Ortega called for Venezuelans not to pay their taxes not long after their work stoppage commenced on December 2 they were both obviously feeling as if they were in control and safe in the assumption that they would soon be victorious in their quest to oust the President, so confident they obviously failed to get legal advice.

• It now seems this confidence was misguided as the strike failed in all but the petroleum sector and even that is slowly but surely recovering.

Since then the President has consolidated power, brought oil production to somewhere approaching two million barrels per day, sacked over 12,000 Petroleos de Venezuela (PDVSA) workers and launched action against the opposition media, so surely now was as good a time as any to have the two Carloses arrested.

Although the arrest was not carried out in the most conventional manner, the circumstances are hardly the most conventional eother. Initial claims were made surrounding the lack of a warrant, which have already proved to be completely false.

What we now need to focus on is whether or not the two men have done anything illegal. As OAS secretary general Cesar Gaviria said in his statement on the subject, an independent hearing needs to be achieved to decide if the two men have a case to answer, if they do then they should not be above the law ... if they don't they they should be freed.

www.timesleader.com Posted on Fri, Feb. 21, 2003 JAMES ANDERSON Associated Press

CARACAS, Venezuela - President Hugo Chavez demanded 20-year prison terms Friday for two prominent opponents who directed a nationwide strike that devastated Venezuela's oil-based economy.

Carlos Fernandez, head of Venezuela's largest business chamber, and Carlos Ortega, leader of its biggest labor confederation, are charged with treason and other crimes for the two-month strike, which cost more than $4 billion.

Fernandez was arrested by secret police Wednesday and hauled into court Friday. Ortega went into hiding when a judge issued an arrest warrant.

"These oligarchs believed that they were untouchable. There are no untouchables in Venezuela. A criminal is a criminal," Chavez thundered during a ceremony handing land titles to peasants in Trujillo state.

He demanded a 20-year term for Fernandez, president of Fedecamaras, and for Ortega, of the Venezuelan Workers Confederation, for allegedly sabotaging the oil industry, inciting civil disobedience "and trampling the human rights of the Venezuelan people."

The treason charge carries a 20- to 26-year prison term.

Oil is Venezuela's strategic industry, and its exports were the fifth-largest in the world before the strike began Dec. 2. The strike ended Feb. 4, but Chavez's government is battling a continuing walkout in the oil industry.

Citing nationwide hardship caused by gasoline shortages, Chavez condemned Fernandez and Ortega as "terrorists" who failed to topple his government - both during a brief April coup and this winter.

The tempestuous president also had a message for foreign critics. The United States, Organization of American States and other entities voiced concern that Venezuela's crisis is escalating.

"I want to remind all the governments of the world that Venezuela is a sovereign country! We are nobody's colony!" Chavez shouted.

Fernandez's arrest fueled speculation Chavez has begun a crackdown on his opponents.

Chavez won't allow strikers access to U.S. dollars under a new foreign exchange system, and he has threatened to shut down broadcast media for inciting rebellion. He also has warned he will seize private businesses and property to deliver gasoline, food and other basics.

Ruling party leader Willian Lara told the state Venpres news agency that the hundreds of strike organizers should be prosecuted "for crimes against the republic."

The labor confederation, meanwhile, said it wasn't planning another strike to protest Fernandez's arrest.

The OAS, the United Nations and the Carter Center, run by former President Jimmy Carter, have sponsored three months of talks to seek an electoral solution to Venezuela's crisis. The future of those talks was in doubt after Fernandez's arrest.

Venezuela's opposition wants early elections and collected more than 4 million signatures to back its demand. The government dismisses the petition drive; Venezuela's elections authority is in shambles.

Chavez is a former paratrooper who was elected in 1998 and re-elected in 2000 to a six-year term. He vows to distribute Venezuela's oil riches to the poor. Critics accuse him of imposing an authoritarian state and driving the economy into the ground.