[Congressional Record (Bound Edition), Volume 163 (2017), Part 7]
[House]
[Pages 10194-10195]
[From the U.S. Government Publishing Office, www.gpo.gov]




               THE LAST BATTLE FOR DEMOCRACY IN VENEZUELA

  (Mr. FASO asked and was given permission to address the House for 1 
minute and to revise and extend his remarks.)
  Mr. FASO. Mr. Speaker, as we plan to celebrate Independence Day on 
the Fourth of July, it is important for us also to recognize a human 
rights tragedy and an abomination of democracy as totalitarian rulers 
of Venezuela are suppressing their people in our southern hemisphere.
  To call attention to this tragic situation where thousands of people 
are being suppressed, where armed mobs are running around the streets 
intimidating people, and where Venezuelans cannot achieve the basic 
necessities of life, I include in the Record an article that recently 
appeared in The Wall Street Journal, ``The Last Battle for Democracy in 
Venezuela,'' and to call attention to the human rights tragedy which is 
occurring in South America.

             [From The Wall Street Journal, June 23, 2017]

               The Last Battle for Democracy in Venezuela

  Under Nicolas Maduro, a county that had been one of Latin America's 
 wealthiest is having its democratic institutions shredded amid rising 
                         poverty and corruption

                 (By David Luhnow and Jose de Cordoba)

       Almost two decades after Venezuela's late president, Hugo 
     Chavez, came to power in an electoral landslide, his 
     country's transformation seems to be taking an ominous new 
     turn. A country that was once one of one America's wealthiest 
     is seeing its democratic institutions collapse, leading to 
     levels of disease, hunger and dysfunction more often seen in 
     war-torn nations than oil-rich ones.
       Mr. Chavez's successor, President Nicolas Maduro, has 
     called for a National Constitutional Assembly to be elected 
     on July 30 to draft a new constitution, in which ill-defined 
     communal councils will take the place of Venezuela's 
     traditional governing institutions, such as state governments 
     and the opposition-dominated Congress. The new assembly 
     appears to be rigged to heavily represent groups that back 
     the government.
       The Maduro government says that the new assembly will find 
     a peaceful way forward for a country enduring an economic 
     depression and standing on the brink of civil conflict. The 
     government says it is building on the legacy of Mr. Chavez, a 
     military man who vowed to fight corruption, dismantle the 
     venal old political establishment and be a voice for millions 
     of poor Venezuelans. But the opposition, which is boycotting 
     the assembly vote, calls it a naked attempt to end democracy 
     and turn the country into a Cuba-style communist autocracy. 
     The government's own attorney general calls the vote illegal.
       The 545-member assembly, a modern-day soviet, would hold 
     unlimited power while it writes a new governing charter, 
     which could take years. Meantime, the assembly is widely 
     expected to scrap next year's presidential elections.
       ``This is the last battle for democracy in Venezuela,'' 
     says David Smilde, a Venezuela expert at Tulane University.
       For the U.S., the prospect of a new Cuba sitting atop 
     trillions of dollars of oil reserves is profoundly 
     unpleasant. For the past decade, Venezuela has aligned itself 
     with Russia, China, Iran and Syria. Whether it thrives or 
     implodes, Mr. Maduro's petrostate could cause far greater 
     headaches to the U.S. and Latin America than isolated Cuba. 
     An implosion could mean bigger shipments of cocaine to 
     Central America and the U.S., as well as a massive increase 
     in the current flow of tens of thousands of refugees already 
     fleeing the country for the U.S., Colombia, Brazil and 
     elsewhere. And a consolidation of power could let Mr. Maduro 
     deepen his partnership with U.S. adversaries.
       The Trump administration has criticized Mr. Maduro's plans 
     to change the constitution, urging ``respect for democratic 
     norms and processes.'' The U.S. has called for Venezuela to 
     free political prisoners, respect the opposition-controlled 
     congress and ``hold free and democratic elections.''
       Mr. Maduro's move has aggravated Venezuela's political 
     crisis. The opposition, sensing a do-or-die moment, plans to 
     ramp up daily street protests. Some 80 people have died in 
     such demonstrations in the past three months, and the 
     president is unlikely to ease off on the tear gas, rubber 
     bullets and water cannons. ``Maduro's ultimate aim is to turn 
     Venezuela into Cuba. And we will not accept being put in that 
     cage,'' says Julio Borges, the head of the opposition-
     dominated National Assembly.
       Venezuela's momentous new step isn't taking place amid the 
     kind of revolutionary euphoria that Mr. Chavez may have 
     imagined before he died of cancer in 2013. Rather, it is 
     being pushed by an unpopular government trying to keep power 
     amid an economic implosion.
       By year's end, Venezuela's economy will have shrunk by 
     nearly a third in the past four years--a plunge similar to 
     Cuba's after the fall of the Soviet Union, and one rarely 
     seen outside of conflict zones. In a nation estimated to be 
     sitting on as much oil as Saudi Arabia, it is common to see 
     poor families rummaging through garbage for food, even as the 
     wealthy pack nearby gourmet restaurants.
       Inflation was estimated by the International Monetary Fund 
     at 720% this year; it is expected to surpass 2,000% next 
     year. Shortages are so acute that three out of four 
     Venezuelans lost an average of 18 pounds last year, according 
     to a survey by Venezuelan universities. Diseases not seen 
     there in decades, such as malaria, are back.
       ``The government is desperate because they know the next 
     presidential election will be their last,'' says Cesar Miguel 
     Rondon, a popular radio host. When the host recently tried to 
     leave Venezuela on a business trip to Miami with his family, 
     he had his passport seized. ``I'm a hostage in my own 
     country,'' he said.
       Amid the economic crisis and protests, the government has 
     headed down an increasingly authoritarian path. It has raised 
     the number of political prisoners over the past year to 391, 
     according to the Venezuelan human-rights group Foro Penal--
     nearly four times the total from a year ago. Most are being 
     tried in military courts. And the government is seeking to 
     remove its rebellious attorney general through a case in the 
     supreme court. The government didn't answer requests for 
     comment.
       The so-called Bolivarian revolution has become less about 
     ideology and more about money. Venezuelans often call it a 
     ``robolucion'' rather than a ``revolucion,'' using the 
     Spanish word for robbery. If Cuba is an ideologically 
     motivated communist dictatorship, Venezuela is something 
     different; as oil-rich as Saudi Arabia, as authoritarian as 
     Russia and as corrupt as Nigeria.
       Spectacular accusations of drug trafficking and corruption 
     have sullied Mr. Maduro's own family. Two nephews of 
     Venezuela's first lady, Cilia Flores, are awaiting sentencing 
     in New York after being found guilty last year of conspiring 
     to import 800 kilos of cocaine to the U.S. through Honduras. 
     They pleaded not guilty.
       The interior minister, Gen. Nestor Reverol, has been 
     indicted in the U.S. for drug trafficking; Vice President 
     Tareck El Aissami is on the U.S. Treasury Department's 
     kingpin list for allegedly protecting drug traffickers; and 
     the head of Venezuela's supreme court is on another Treasury 
     blacklist far gutting the country's democratic institutions. 
     They all say that they are innocent and accuse the U.S. of 
     trying to destabilize Venezuela.
       In some ways, analysts say, the extent of these accusations 
     has made a negotiated solution to Venezuela's crisis more 
     difficult. ``The regime's connection to crime and drugs is 
     what makes it difficult for them to give up power,'' says 
     Harold Trinkunas, an expert on Venezuela at Stanford 
     University. ``Many have to be worried that if they step down, 
     they will be put on a plane to the U.S.''
       In Cuba, the Castro dynasty has kept power despite decades 
     of disastrous economic policies due to devotion to the 
     charismatic Fidel, popular achievements such as universal 
     free health care, ideological loyalty to Marxism, discipline 
     enforced by security forces, and the nationalist frisson of 
     facing off against the U.S. In Venezuela, aside from a 
     similar devotion to Mr. Chavez, the glue that has held the 
     regime together is simpler; oil-soaked corruption on an epic 
     scale.
       Former planning minister Jorge Giordani, one of Mr. 
     Chavez's closest confidantes, said in 2015 that of an 
     estimated $1 trillion in oil revenue received during the 
     Chavez years, two-thirds had been distributed to workers 
     through subsidies and cash transfers. The rest, more than 
     $300 billion, had ``fallen through the cracks,'' he said. Mr. 
     Giordani quit Mr. Maduro's government in disgust in 2014 and 
     now lives in a quiet neighborhood of Caracas.
       This year, the U.S. Treasury Department put Samark Lopez, a 
     Venezuelan businessman, on a blacklist, accusing him of being 
     a

[[Page 10195]]

     frontman for Vice President El Aissami, an alleged drug 
     trafficker. Announcing the seizure, Treasury Secretary Steven 
     Mnuchin said that the U.S. had frozen assets worth ``tens of 
     millions'' of dollars when it seized a slew of properties and 
     firms owned or controlled by Mr. Lopez in the U.S., the U.K. 
     and elsewhere. In a statement, Mr. Lopez denied any 
     wrongdoing and called the accusations ``politically 
     motivated.''
       The government didn't respond to requests for comment, but 
     in the past, Mr. Maduro and other officials have dismissed 
     accusations of corruption, economic mismanagement and 
     repression as part of an ``economic war'' being waged by 
     Venezuela's private sector, in cahoots with the U.S., to 
     destabilize and overthrow the socialist government.
       As in many petrostates, oil accounts for 95% of Venezuela's 
     foreign-currency earnings. Since the government administers 
     the oil, one sure way to get ahead is not by creating a new 
     business but by getting close to the government to secure 
     access to oil rents. Venezuelans call the enterprising class 
     following this model ``los enchufados''--the plugged-in ones.
       The path to power in Venezuela is often said to run through 
     the army and oil. Once in power, the populist Mr. Chavez went 
     after the oil, eventually firing 19,000 employees of the 
     state-run oil firm Petroleos de Venezuela to stack the 
     company with his yes-men. After a brief and unsuccessful coup 
     against him in 2002, he also cleaned out the barracks, 
     handing over indoctrination and training to his Cuban allies.
       In the following years, oil prices rose sharply, and Mr. 
     Chavez spent lavishly. He saved none of the windfall, ran 
     large budget deficits even at peak-oil prices, raided the 
     country's rainy-day oil fund, and borrowed heavily, first 
     from Wall Street and then from the Chinese and the Russians. 
     He handed out billions of dollars worth of cut-rate oil to 
     Cuba, Nicaragua and even Boston and London to show off 
     Venezuela's growing energy clout.
       The number of government employees doubled, to five 
     million, and spending skyrocketed. Printing so much money 
     caused inflation, so the government set prices, sometimes 
     below the cost of production. Companies that refused to sell 
     at a loss were seized, aggravating shortages. Less local 
     production made the country ever more reliant on imports.
       But once the price of oil began to drop in 2014, Venezuela 
     could no longer afford the imports, which have fallen from 
     $66 billion in 2012 to about $15.5 billion this year. And 
     there is little domestic industry left to pick up the slack.
       ``It is classic Latin American populism on steroids, and 
     now we have the worst hangover in history,'' said Juan Nagel, 
     a Venezuelan economist living in Chile.
       Beyond some new public housing, little was built. Mr. 
     Chavez left Venezuela littered with the bones of ambitious, 
     half-finished public-works projects. Among them was a $20 
     billion scheme to build a train network, which now lies 
     abandoned. In Caracas, a new subway line ended up being just 
     one additional stop on an existing line, prompting local wags 
     to call it the Centi Metro (centimeter) rather than just a 
     plain Metro.
       Unperturbed, the flamboyant leader focused on projects like 
     changing Venezuela's time zone by half an hour. He renamed 
     the country the Bolivarian Republic of Venezuela. And to mark 
     the shift in Venezuela's political course, he changed the 
     direction of a wild stallion on the country's coat of arms, 
     making the horse gallop left instead of right.
       Mr. Chavez's revolution attacked the old elites, sending 
     nearly two million Venezuelans--and billions of dollars--
     packing in the past 10 years. But in their stead rose a new 
     elite: the so-called Boliburgueses, or Bolivarian 
     bourgeoisie, who enjoyed a life of premium wines, Scotches 
     and cars as poverty levels rose.
       ``You don't see that in Cuba or Vietnam. But here, you see 
     Hummers, private jets and obscene new mansions,'' says Miguel 
     Pizarro, an opposition leader whose father was a Marxist 
     guerrilla in Venezuela and whose mother served in Mr. 
     Chavez's first political party in the mid-1990s. ``These guys 
     literally bought the homes where Venezuela's elite lived, 
     tore them down and built even bigger ones.''
       Few enjoyed la dolce vita of Caracas more than Wilmer 
     Ruperti, a businessman who earned Mr. Chavez's loyalty in 
     2002 when he helped break an oil strike. Mr. Ruperti was a 
     familiar sight in Caracas, riding in an armored Jaguar 
     accompanied by two North Korean bodyguards. The magnate 
     cemented his friendship with Mr. Chavez by buying a pair of 
     Simon Bolivar's pistols for $1.7 million in a New York 
     auction and presenting them to the Venezuelan leader.
       Last year, Mr. Ruperti paid the multimillion-dollar legal 
     fees for the criminal defense of Mr. Maduro's nephews. At the 
     same time, Mr. Ruperti's firm won a $138 million contract 
     from the state oil company. Mr. Ruperti said it was his 
     patriotic duty to pay the nephews' legal fees as a way of 
     relieving the pressures on Mr. Maduro. He denied any link 
     between the payment of the fees and the state oil-firm 
     contract.
       Corruption helps the government maintain political control. 
     And no tool has been more effective than exchange controls, 
     initially adopted by Mr. Chavez in 2002 during a national 
     strike to control capital flight. Fifteen years later, they 
     have reshaped Venezuela's economy and given the government 
     enormous power to pick who gets dollars from the country's 
     oil wealth--often at absurdly low rates.
       For instance, firms and others who import food get dollars 
     at the official rate of 10 bolivars. But they can turn around 
     and sell those dollars on the black market for 8,300 
     bolivars.
       Venezuela's army recently got the rights to set up its own 
     mining and oil companies, and the armed forces are in charge 
     of most critical imports. In 2016, 18 generals and admirals 
     were tasked with importing key foods and sanitary items. One 
     brigadier general was put in command of acquiring black 
     beans; another was charged with acquiring toilet paper, 
     feminine napkins and diapers. Logically, an admiral was 
     placed in charge of acquiring fish.
       No one knows how much money has been lost. Mr. Giordani 
     estimated that a third of the $59 billion that the government 
     handed out to companies to bring imports into the country in 
     2012 might have ended up in fraudulent schemes.
       ``It's a terrible economic model, but it's great for 
     politics and power,'' says Asdrubal Oliveros, a prominent 
     Venezuelan economist.
       The opposition and the regional governments don't know how 
     to turn the tide. An Organization of American States 
     resolution this week urging Venezuela to return to democracy 
     was supported by every major country in the hemisphere but 
     blocked by Venezuelan allies like Nicaragua and a handful of 
     statelets like St. Kitts and Nevis.
       Many in Venezuela hope that parts of the army haven't been 
     tempted by money and will want to honor the country's 
     democratic past. Ibsen Martinez, who helped write some of the 
     country's most beloved soap operas, says that hope is likely 
     in vain.
       ``The army is now a criminal organization,'' he said in an 
     interview from Bogota, where he now lives in exile. ``But in 
     every culture, there are mythical creatures. In Venezuela, it 
     is the idea of an institutional military man, who will come 
     out like Captain America to resolve everything.'' That 
     instinct, he added, led to Mr. Chavez in the first place.
       His revolution's mournful impact can be seen everywhere. 
     Venezuela's national baseball league now plays to empty 
     stadiums and is considering suspending this year's season. 
     The Teresa Carreno theater, an architectural masterpiece in 
     Caracas, used to produce some of the region's best operas and 
     dramas; it now mostly hosts government rallies. In the nearby 
     Caracas Museum of Contemporary Art, water drips into buckets 
     near paintings by Picasso and Mondrian. The museum is so 
     empty that a thief replaced a Matisse portrait with a fake 
     without anyone noticing for several years.
       Alberto Barrera, the author of a biography of Mr. Chavez 
     who now lives in Mexico City, thinks that the time is fast 
     approaching when he and the opposition may need to say 
     goodbye to their hopes. ``I wonder when I will wake up and 
     realize, `They beat us.' That it's all over and the county I 
     knew is gone,'' he said.

  Mr. FASO. Mr. Speaker, it is vitally important that we stand up on 
this Fourth of July, not just for democracy here in the United States, 
but for democracy in other parts of the world as people are struggling.
  Mr. Speaker, I thank my colleagues, and Happy Fourth of July to all 
of our countrymen around the United States of America.

                          ____________________