Oil Wars

Mary Anastasia O’Grady, the Wall Street Journal’s resident anti-Chavez hack was back at work this past week. She hadn’t actually written about Venezuela in a while. Maybe that means she was actually boning up on the subject and would be more on the money with observations this time around. Lets see:

Venezuela: A Young Mayor Dares To Defy the Chavistas

By Mary Anastasia O'Grady July 29, 2005

The name Henri Charriero was recently discovered on the voting rolls in the Caracas municipality of Chacao. What a find! The supposed escape of Charriero (formerly Charriere) from French Devil's Island prison to Venezuela was liberally fictionalized in the 1973 Steve McQueen-Dustin Hoffman movie "Papillon." But it's unlikely that Papillon is eligible to vote in Caracas today. He has been dead for more than 30 years.

The discovery of a long-dead ex-convict on the voter list underscores the doubts among democracy advocates that Venezuela's Aug. 7 municipal council elections will be honest. "Why is there such a big fear of undertaking an audit of the electoral register," asked Alejandro Plaz, the head of Súmate, Venezuela's largest nongovernmental election watchdog organization. Because it would expose fraud, is the implied answer.

Unfortunately we are not getting off to an auspicious start. “Why is there such a big fear of undertaking an audit of the electoral register?” That’s easy to answer. There isn’t. In fact, as has been previously reported on this blog the Venezuelan electoral registry IS being audited by international observers. Could Ms. O’Grady really not know that? Well, that is what happens when you depend on thoroughly dishonest organizations like Sumate as your source of information. Oh, and although they probably didn’t mention this to Ms. O’Grady, Sumate performed a full audit on the electoral registry before the Presidential referendum last year and found an error rate of less than one percent. So if Ms. O’Grady wants to find fraud somewhere she needs to look elsewhere (hint: check out Sumate’s very fishy exit polls).

Defenders of President Hugo Chávez, however, also use the Papillon find to make a point: This government didn't invent corruption or bureaucratic inefficiency. Both have been around for decades. The pro-Chavez crowd -- which includes not a few U.S. politicians and bureaucrats -- argues that today's abuses merely even the score for the underclass.

That's a bad alibi. In 1998 the Venezuelan electoral system worked well enough to allow voters to turn out corrupt career politicians and bring in the maverick Chávez. Now Chávez is not only governing badly but he is also closing the door on all electoral challenges to his power.

She gets one thing right here – if the Chavez government sometimes suffers from inefficiency, which it certainly does, how would you characterize the previous governments? After all, while the Chavez government has carried Papillon on their roles for six years the previous governments carried him for 25 years after he died without doing anything about it!

But then she goes on to say he is closing doors on all electoral challenges to his power. I have to say, I can’t imagine what she is talking about. For example, last August Chavez stood in a recall referendum which if he had lost he would have been obliged to leave office. Does the U.S. electorate even have the option of organizing a recall referendum against Bush if they so desire?

Further, the entire Venezuelan National Assembly is up for re-election this December and in 2006 Chavez himself has to stand for re-election. That will be the fourth time in 8 years that Venezuelan’s will have been able to vote on Chavez. O’Grady thinks there should be even more elections than that?

And as to Chavez governing badly – I could give lots of statistics to rebut that nonsense. But I will just give one. And that is that if after six years in office a president enjoys from 60% to 80% approval ratings they must be doing something right.

Despite the Chávez machinations, there is still enough of a sliver of democracy left to allow dissidents to challenge Chávez's ambitions to become the Venezuelan Fidel Castro. These newcomers know they have little chance of gaining power as long as Chávez can rig electronic voting as he did in the 2004 plebiscite that sought to remove him from office. Yet they may be able to build an effective opposition if they show they have something to offer.

Here Ms. O’Grady becomes completely unhinged. The 2004 Referendum was rigged? Sure could have fooled the Carter Center who closely monitored it and audited the results before pronouncing it clean. Could have fooled the O.A.S. who also monitored and audited the vote and, guess what, also found it to be clean. Or if in doubt she could have just asked any of the academics from Princeton, Johns Hopkins, Berkley, and Stanford who poured of the results and found them to not give any indication of fraud. Or she could just note that many people in Venezuela voted by paper ballot, not by computer, and they voted for Chavez in even higher numbers than those who voted by computer. Or she could just note that pre-election polls very closely matched the actual vote tally. Lastly, she could have seen that exit polls conducted on the day of the vote also showed Chavez winning with one notable exception – the exit poll carried out by Sumate. So here is a double hint Ms. O’Grady. If you’re interested in exposing fraud take a good look at Sumate.

Venezuela's pre-Chávez political elite was indeed high-handed and corrupt. The tragedy for Venezuelans is that Chávez is even worse. Corruption, fiscal profligacy and confiscation of private property are all on the rise. The state-owned oil company is now heavily politicized and is being run into the ground. The country is increasingly militarized.

The discredited traditional political parties cannot lead a credible opposition. Indeed, it could be argued that the democratic movement's failure to hold back Chávez's authoritarian grab is in some part connected to the fact that no alternative has yet caught the population's imagination. But a new generation of politicians who seem to have learned from the Chávez rise to power is emerging.

First things first. Ms. O’Grady really needn’t worry about the state oil company PDVSA. The people who were trying to run it into the ground (as a way of overthrowing Chavez) have long since been fired. PDVSA is very much alive and doing well. Surely Ms. O’Grady must realize that. After all where does she think all the money for the new social programs comes from.

Now, she is indeed correct that the pre-Chavez political elite was indeed high handed and corrupt. Actually, that is an understatement. It was EXTREMELY corrupt. Yet she is concerned that the opposition to Chavez has yet to come up with an alternative political program that can win over most Venezuelans. I am being generous with the hints today so here is another one – guess who largely makes up the opposition? Yes indeed, the old “high-handed and corrupt” pre-Chavez political elite.

One can be found in the very same Chacao municipality where Papillon turned up. A 34-year-old mayor named Leopoldo López from a young party called Justice First is gaining notice. Class warriors may easily dismiss Mr. López because of his privileged background and the elite neighborhood he governs. But he is producing results. "I believe ideas matter," Mr. López told me in an interview in New York last week, "and we demonstrate that our politics are backed up by ideas."

Mr. López's governance style runs contrary to Venezuela's traditional populism. Instead, he has adopted Reaganite pro-growth fiscal policies, Giuliani crime fighting principles and a healthy dose of Dubya-like compassionate conservatism.

With a residential population of about 150,000 and another 400,000 commuters, Chacao is an important Caracas business district. Mr. López says that by simplifying the tax code and lowering taxes on 80% of businesses, the municipality achieved an average 8.4% annual real increase in tax revenues over the past three years. When belt tightening was in order in 2003, he reduced the salaries of the 150 highest paid employees in his government and cut lower-priority programs.

Nice, so he has increase tax revenues by over 8% annually the last three years. That would be good – if we were talking about Peru maybe. But in Venezuela, where under Chavez tax authorities now have clout and the necessary tools to collect taxes, revenues have been up 15% to 20% per year. So maybe Mr. Lopez should fire his tax department and just bring in Chavez’s tax collectors.

The InterAmerican Development Bank reported in 2003 that Caracas had the third-highest murder rate in the Americas. But between 2000 and 2004, Mr. López claims his government has reduced the murder rate by 37% and overall crime by 56%. "We organized our police force into precincts. We started to keep and post statistics weekly. We made use of technology, we created incentives for the police officers and we instituted weekly 6 a.m. meetings which I attend." His government has also devised a uniquely modern plan to try to get the homeless off the streets and employed.

One interesting result: He says a number of mayors -- across the political spectrum -- have approached him asking for advice in crime fighting. Another sign of success: The Chávez government now wants to dissolve all local police forces.

Mr. Lopez’s crime reduction numbers sound impressive. And they probably were up until this year. But then Juan Barreto, a Chavez supporter, was elected mayor of greater Caracas succeeding Alfredo Pena who was a die hard Chavez opponent. In just his first six months in office he has reduced murders by about 25% and overall crime 50%. In other words, what Mr. Lopez took 4 years to accomplish in the posh areas of eastern Caracas, is almost being equaled by Mr. Barreto in some of Caracas’s toughest areas in half a year!! So Ms. O’Grady was right to invite a mayor from Caracas to New York to tout his success. She just invited the wrong one.

Mr. López believes that a good number of lower-income Venezuelans reject chavismo, but have not been offered clear alternatives. To that end Justice First is canvassing poor neighborhoods, a dangerous political environment where armed Chávez enforcers roam. But offering ideas to the poor is what too many Chávez challengers neglect. Referring to his party's campaign efforts, Mr. López says, "We want to cease being just the opposition and become a real alternative."

Mr. Lopez believes a good numbers of lower income Venezuelan’s reject chavismo?!?! Hmmm. I guess he missed Keller and Associates putting Chavez’s popularity at 61%, Datanalisis putting it at 71% and Sejias putting it at 80%.

Of course if Chávez converts the country fully to a police state there eventually will be no chance at all for Mr. López or Justice First. The outlook is worsening. Súmate maintains that Venezuela's National Electoral Council (CNE) will set a precedent in next week's elections for congressional elections in December and the presidential vote in 2006. The voting registry has been found to list not only the dead Papillon but two very much alive and notorious guerrilla leaders from neighboring Colombia. Without an audit of the rolls called for by law, an audit of the software and hardware in the voting machines, guarantees for the secrecy of the vote, an audit of paper ballots against machine tallies and qualified (meaning not Jimmy Carter) international observers, its hard to see how the process can even qualify as an election.

"The decrease in transparency is huge. If we accept this, how are we going to reject the same conditions in the future," says Súmate's Maria Corina Machado.

Lets see. In spite of what O’Grady says the registry is being audited. In spite of what O’Grady says the software and hardware is being audited (today in fact). In spite of what O’Grady says the vote is secret. In spite of what O’Grady says there is a paper trail for all the votes and they do get audited. In spite of what O’Grady says the Carter Center is full of qualified electoral observers. But in case they weren’t, doesn’t the O.A.S. suffice? Or are they incompetent too? So it looks like the Venezuelan vote qualifies as an election, much more than some other places (to the north of Venezuela) where the computers leave no paper trail and where there are no audits of the voter rolls.

And hearing Maria Corina Machado talk about transparency sure is good for comic relief. Sumate certainly wasn’t very transparent about their sources of funding until a resourceful U.S. lawyer outed them. And I still think someone needs to look into that very un-transparent exit poll they carried out last August.

What is left is for Venezuelans to stand up and resist. Maybe that's where the likes of Mr. López will come in. When Venezuelans begin mobilizing in favor of something and not only against chavismo, the odds of retrieving democracy will go up.

Ms. O’Grady, I think Venezuelans are doing just fine. Their economy is booming, their standard of living is going up and their democracy could give a lot of lessons to the country you reside in.

Now on to the real question. What can the average reader of the Wall Street Journal do to increase the intellectual level and veracity of what appears on its Op-Ed page? I haven’t figured that one out yet but I’ll be sure to let you know when I do.
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