By Stansfield Smith, published in Dissident Voice, Aug 18, 2017 (with related readings on Venezuela further below)
As the class struggle heated up in Venezuela this year, fueled by interventionist threats by the pro-U.S. Organization of American States (OAS) bloc, many former supporters of the Bolivarian revolution have remained sitting on the fence. Fed up with these fair-weather friends and their critiques which recycle corporate news propaganda, some defenders of Venezuela such as Shamus Cooke, Greg Wilpert and Maria Paez Victor have written articles clarifying the stakes and calling the so-called “left” to account.
Among the disaffected is Venezuelan-American lawyer Eva Golinger, the author of The Chávez Code: Cracking U.S. Intervention in Venezuela and self-described friend and advisor to Hugo Chávez.
The day after Trump threatened to militarily intervene in Venezuela, Jeremy Scahill posted an interview with Eva Golinger on The Intercept, one reinforcing some corporate press distortions of Venezuela under President Maduro. Golinger hardly goes as far in this anti-Maduro campaign as Scahill, who more clearly fits what Shamus Cooke characterized as “the intellectually lazy ‘pox on both houses’ approach that has long-infected the U.S. left.” To her credit, Golinger does emphasize the real class issue ignored by “pox on both your houses” liberals like Scahill:
Washington’s and the Venezuelan right-wing’s goal is to crush the heart and backbone of the Chavista revolution, “the grassroots, the social movements, the workers, the community organizers, the people who are actually the ones trying, struggling to hold on to anything that’s left of this movement that they have been building and empowering themselves with now over the past fifteen years or so.”
And, counter to claims of Maduro “authoritarianism,” she correctly notes in her recent article:
Imagine if protestors were to use lethal weapons against security forces in the U.S., even killing some of them. In Venezuela, the anti-government protestors have even burned innocent bystanders to death because they suspected them of being ‘chavistas’. Were that to happen in the U.S., the repression and forceful action by the state would far exceed the leniency exercised by the Venezuelan government in the face of these deadly demonstrations.
Yet within her valuable analysis, and precisely because of her valuable analysis, both in the interview and in her article Golinger makes some statements that require correction.
(1) Golinger writes: “The demonstrations arose from the massive discontent throughout the country as food shortages, lack of access to medications, skyrocketing inflation and erosion of democratic institutions have intensified since Maduro won office by a slim margin in 2013.”
In fact, the violent demonstrations arose as part of a coordinated effort by OAS General Secretary Luis Almagro, the U.S. government, and the right wing MUD opposition to generate a chaos in the streets that demanded OAS “humanitarian intervention’ to restore order and displace the Maduro government. While there is massive discontent due to food and medication shortages and inflation, those most affected by this, the working classes and poor, are not the ones participating in the anti-government protests.
(2) Golinger defends Attorney General Luisa Ortega, [“the judicial maneuvering by the country’s highest court to silence critics should cease.”] who was eventually removed by unanimous vote of the Constituent Assembly after recommendation by the Supreme Court. The issue was not simply being a critic; Ortega had failed to prosecute violent protesters and their financial backers, and lied to the public.
(3) Golinger writes: “A growing number of Venezuelans who supported Hugo Chávez and his policies have distanced themselves from his successor, dismayed by the country’s turn from a once vibrant participatory democracy towards a closed one-party state, intolerant of critics.”
She, as with other fair-weather friends, sees a divide between the Maduro and Chavez eras, when, in fact, the fundamental problems of oil dependence, corruption, bureaucracy existed throughout this period, in part overshadowed by Chavez’ charisma and high oil prices.
That the majority of opposition MUD parties are participating in the coming October regional elections clearly proves Venezuela is not a “one-party state, intolerant of critics.”
(4) She writes: “President Maduro’s convening of a constituent assembly to rewrite the nation’s constitution has been vehemently rejected by the opposition and has caused severe internal rifts within his own movement.”
Events have shown “severe internal rifts” to be false. The July 30 vote was a major victory for the Chavistas and a major defeat for the right wing. Now the violence has mostly ended and opposition parties say they will participate in the upcoming elections.
(5) Scahill dishonestly claimed the July 30 vote for the Constituent Assembly “was held after an order issued by Maduro. Why that was necessary was baffling even to former supporters of Chavez, as the Bolivarian movement has often celebrated its constitution as a revolutionary and meticulous document. For many seasoned observers, the whole affair reeked of an effort to consolidate power.”
Scahill’s “seasoned observers” is a euphemism for “professional corporate media propagandists.”
To clarify, Venezuela’s constitution Article 348 states:
The initiative for calling a National Constituent Assembly may emanate from the President of the Republic sitting with the Cabinet of Ministers; from the National Assembly by a two-thirds vote of its members; from the Municipal Councils in open session, by a two-thirds vote of their members; and from 15% of the voters registered with the Civil and Electoral Registry.
In other words, rather than being an act that violated the constitution, a little fact-checking would show Maduro’s action followed the constitution to the letter.
(6) Scahill claims: “The vote for the assembly was boycotted by many Venezuelans and when the official results were announced, it was clear that the tally had been tampered with.”
Like the claims of “no doubt” Russia interfered with the U.S. election, Scahill’s “it was clear” comes with no evidence attached.
Golinger, who is not as hostile as Scahill, still says: “There’s a lot of indication that it wasn’t a free and fair vote — that the tallies are not accurate.” But she likewise gives no evidence for this “indication”.
In fact, international election observers have vouched for the validity of the vote, and the agreement of opposition parties to run in the upcoming regional elections implies they accept the integrity of the National Electoral Council.
(7) Golinger says the government chose the candidates for the Constituent Assembly, so it would have won regardless of how many voted. In fact, people were free to nominate anyone, and in the end, there were 6120 candidates for 545 seats. She does not mention that Chavista candidates won for the simple reason that the opposition boycotted the Assembly election, having planned to have overthrown Maduro by then.
(8) Scahill asserts: “Maduro’s forces have also conducted raids to arrest opposition figures and both government forces and opposition forces have been involved in lethal actions during protests. It must be pointed out that Maduro controls the country’s military and intelligence forces and those far outgun all of the combined masses of government opponents.”
Is he actually surprised that a country has armed forces that can outgun the civilian population? Scahill does not mention that army and police members have also been charged with killing opposition protesters.
(9) Golinger makes a series of misleading statements comparing the present Constituent Assembly process to the one that took place under Chavez. The Chavez one, she says, “was put to a vote after he was elected as to whether or not people actually wanted to proceed. More than 70 per cent of those participating said ‘yes’. Then they elected the members. Then it was done in this extremely open, transparent way. You know, there were drafts of the constitution passed around and discussed in communities. And then it was put to another vote to actually ratify it by the people on a national level. So I mean, we’re missing almost all of those steps this time around and it lasted four months, it had a mandate of four months. And it wasn’t all-supreme, that it could be a legislator and an executor and an enforcer, which is what we’re seeing now.”
No mention that the Chavez era turnout to convoke an Assembly brought out 37.8 per cent of the population (92 per cent voted yes, not 70 per cent). This July 30, voter turnout was higher, at 41.5 per cent. No mention that now, just as before, proposed changes to the constitution must be made public, discussed and voted on by national referendum. No mention that the present Assembly is all-supreme — even over Maduro — unlike the previous Assembly, because this is what the present constitution states, not the case before.
The President of the Republic shall not have the power to object to the new Constitution. The existing constituted authorities shall not be permitted to obstruct the Constituent Assembly in any way.
It is hard to believe Eva Golinger does not know this. She claims the present process is a “major rupture” from the Chavez era, when, in fact, the government and Constituent Assembly are simply following the Chavez 1999 constitution.
(10) She says: “I wish that they hadn’t moved forward with this rewriting of the constitution and creating this sort of supra-government, because it does make it more difficult to find a solution to the crisis.”
We see that the opposite is the case. The vote for the Constituent Assembly has made it easier to find a solution.
Maduro did not act in an authoritarian manner. He did not quell the violent protests by declaring a national emergency and resorting to police and military repression. He did not use death squads, or torture, jail and exile the opposition. Instead he called for a Constituent Assembly, and with the mass show of support in the election, the violence has died down, and most of the opposition has returned to the electoral field.
We should call this for what it is: a humanitarian example for other governments when faced with social unrest.
With the July 30 Assembly vote, the U.S., the OAS Almagro bloc, and the opposition MUD have suffered a serious defeat, as even the hostile New York Times has noted. This gives the progressive forces an opening to resolve the serious problems the country faces. The extent it will make use of this opportunity to break out of the unresolved social, political and economic conflicts of the last few years remains to be seen.
Stansfield Smith is a member of Chicago ALBA Solidarity. He is the editor of the ‘Venezuela and ALBA Weekly Bulletin’. Current and past issues of the bulletin can be found on the ‘Venezuela Solidarity’ page of the website of the Alliance for Global Justice.
The following two articles from mainstream news outlets provide insight into the vulnerability of the Venezuelan government and economy from a hostile U.S. government.–A Socialist In Canada
Bank jitters over Venezuela stall oil delivery to U.S. refiner
By Marianna Parraga, Reuters, Aug 17, 2017 (full text follows)
MEXICO CITY – A tanker carrying a cargo of about one million barrels of Venezuelan heavy crude has been stranded for more than a month off the coast of Louisiana for lack of a bank letter of credit to discharge, three sources have told Reuters.
The cargo’s fate adds to state-run oil company PDVSA’s precarious financial position. Revenue from the company’s oil sales, which have suffered because of low prices and declining production, account for more than 90 per cent of Venezuela’s exports.
Major banks are cutting exposure to Venezuela as a result of political upheaval in the South American country. Some have closed accounts linked to officials of the OPEC member who have had sanctions leveled against them by the U.S. government and have refused to provide correspondent bank services or trade in government bonds.
Credit Suisse this month barred operations involving certain Venezuelan bonds and is now requiring that business with President Nicolas Maduro’s government and related entities undergo a reputation risk review.
The United States is considering further economic sanctions that would dry up the country’s access to Wall Street.
PDVSA and its joint ventures exported 638,325 barrels per day (bpd) to the United States in July, 22 per cent less than the same month of 2016, according to Thomson Reuters Trade Flows data.
The tanker Karvounis carrying Venezuelan oil is anchored at South West Pass off the coast of Louisiana, according to Reuters vessel tracking data. PBF Energy Inc, the intended buyer of the cargo, has been trying unsuccessfully to find a bank willing to provide a letter of credit to discharge the oil, according to two trading and shipping sources.
Crude sellers typically request letters of credit from customers that guarantee payment within 30 days after a cargo is delivered. The documents must be issued by a bank and received before the parties agree to discharge. It was not immediately clear which banks have denied letters of credit or if other U.S. refiners are affected.
PBF Energy spokesman Michael Karlovich would not confirm any details about the cargo, saying: “We treat commercial and logistics arrangements as business confidential information.” PDVSA did not reply to a request for comment.
The tanker loaded in late June at the Caribbean island of St. Eustatius where PDVSA rents storage tanks, and has been waiting for authorization to discharge since early July, according to four trading sources and Reuters data.
PDVSA’s cash flow has shrunk in recent years due to extended deals to barter its oil for refined products, services and loans. Chinese and Russian entities currently take about 40 per cent of all PDVSA’s exports as repayment for over $60 billion in loans to Venezuela and the company in the last decade, according to a Reuters analysis of its sales. This has left U.S. refiners among the few remaining cash buyers.
Some banks have continued working with Venezuela. In May, Goldman Sachs purchased $2.8 billion of Venezuelan debt bonds at steep discount, a move criticized by the Venezuelan opposition and other banks. But as more banks look to reduce their exposure to Venezuela, the situation is affecting PDVSA’s payments to bondholders and its routine oil sales and purchases, according to bank and trade sources.
The Karvounis was chartered by Trafigura [TRAFG.UL], the Reuters data shows. Since last year, the trading firm has been marketing an increasing volume of Venezuelan oil received from companies such as Russia’s Rosneft, which lift and then resell PDVSA’s barrels to monetize credits extended to Venezuela, according to traders and PDVSA’s internal documents. Some barrels get sold on the open market, others are supplied to typical PDVSA’s customers including U.S Gulf Coast refiners. PBF and PDVSA have a long-term supply agreement for Venezuelan oil signed in 2015 when PBF bought the 189,00-bpd Chalmette refinery from PDVSA and ExxonMobil Corp.
The U.S. refiner received three cargoes for a total of 1.58 million barrels last month, the lowest figure since February. Other U.S. refineries such as Phillips 66 did not receive any cargo. In early August, PBF’s Chalmette refinery received 514,000 barrels of Venezuelan DCO on tanker Ridgebury Sally B, the Reuters data say. A second delivery got stuck on tanker Karvounis.
Venezuela’s Citgo turns to Canada for oil as crisis deepens
By Lucia Kassai and Robert Tuttle, Bloomberg News, Aug 11, 2017 (full text follows)
Venezuela’s oil-supply woes are so dire that its U.S. refineries are turning to Canada for help.
Citgo Petroleum Corp., the largest U.S. importer of Venezuelan oil and a unit of state-owned Petroleos de Venezuela SA, has started to make quiet inquiries to buy Canadian crude for its refineries in Texas and Louisiana, according to people familiar with the situation. The imports would be used to replace dwindling shipments from Venezuela, where output dropped to a 14-year low in July.
Venezuela, the country with the world’s largest crude reserves, is shipping less to Citgo as it redirects more of its shrinking supply to China and India to repay loans. Canadian crude, equally heavy and high in sulfur as Venezuelan oil, is a natural replacement, said Dinara Millington, vice president of research at the Canadian Energy Research Institute in Calgary.
“Canada would be in the best position because that volume would be more or less guaranteed,” Millington said.
This would be the first time Citgo imports Canadian oil for its Lake Charles, Louisiana, and Corpus Christi, Texas, refineries in more than two years. Although Canada is the largest supplier of oil to the U.S., more than half of that is absorbed by plants in the Midwest. Limited pipeline connections and expensive rail make it hard for Canadian oil to reach buyers along the U.S. Gulf Coast, home to the world’s largest cluster of refineries.
Last week, U.S. imports from Venezuela fell to 507,000 barrels a day, the lowest level in five months, according to data from the U.S. Energy Information Administration. The latest monthly data show that Citgo’s Gulf refineries took 176,000 barrels a day from Venezuela in May, the least since December.
Spokesmen at PDVSA and Citgo didn’t return emails seeking comment.
Citgo’s not the only company looking north. U.S. refiners have also been on the hunt for alternative supplies amid concern that U.S. sanctions, currently aimed at Venezuelan nationals, may expand and target oil imports from the South American country. One Gulf refiner has started to test fuel oil from Russia and the Middle East and diluted bitumen from Canada as potential replacements, according to a person familiar with the matter.
Citgo is starting to feel the effects of falling oil output in Venezuela, exacerbated by 20 years of cash-for-oil deals signed with China, Japan, India and, most recently, Russia. Rosneft PJSC, which signed two long-term oil and oil product supply agreements, said it has made total prepayments for future oil supplies of about $6 billion. That leaves less oil to be processed by the refineries controlled by PDVSA.
The Venezuelan crisis isn’t only affecting the Citgo refineries. Venezuelan refineries are operating at less than half of their capacity. In Curacao, PDVSA’s Isla refinery has been importing light U.S. oil since last year to make up for lower domestic production of light grades.
While Venezuela hurts, Canadian producers seem to be finally out to catch a break. A reduction in Venezuelan imports may bolster the case for the Keystone XL pipeline, which would carry western Canadian crude directly to the Gulf of Mexico, Millington said.
Heavy crudes from Canada, Mexico and elsewhere have increased in value after OPEC and other producers capped output, reducing primarily supplies of less-expensive heavy crude. Western Canadian Select was $10.05 a barrel below benchmark U.S. West Texas Intermediate on Thursday, from a $16.15 discount at the end of 2016, according to data compiled by Bloomberg.
Higher prices for Canadian heavy crude would come at a welcome time for the industry, said Trevor McLeod, director of the Natural Resources Centre at the Canada West Foundation.
“The energy sector in Alberta is struggling a bit right now,” McLeod said in an interview. “They’d absolutely welcome a price increase.”