Oil Wars

As if it isn't enough that the U.S. is tapping peoples phones, intercepting their e-mails, and, it now turns out, monitoring their financial transactions, it is also closely monitoring Iran's and Venezuela's growing commercial relationships:

CIUDAD BOLIVAR, Venezuela — The VenIran low-rise tractor factory in remote eastern Venezuela is one of the signs of Iran's growing presence in Venezuela, which is being monitored by a U.S. government on alert for any evidence that Iran may be exporting terrorism.

Such evidence would come in handy to the United States, which is engaged in a pull-out-the-stops campaign to prevent Venezuela from securing the rotating Latin American seat on the United Nations Security Council. The vote is scheduled for October.

The United States has said Venezuela would be a "disruptive" and "non-consensus-seeking" force on the Security Council. As evidence, officials point to Venezuela's refusal, along with North Korea's, to support the U.N. International Atomic Energy Agency board of governors' resolution in March criticizing Iran's nuclear-material development program.

That same month, the first bright-red tractors rolled out of the factory in this sprawling industrial town on the massive Orinoco River. Now producing 40 tractors a week, the plant will be followed by a bus factory and a cement plant involving joint Iranian-Venezuelan ventures.

Venezuelan officials say it is merely an extension of the friendship between the two members of the Organization of the Petroleum Exporting Countries, and that the host country has a lot to learn from Iran's formation of its many socialist cooperatives, a central part of the new economic model being followed by President Hugo Chavez.

The tractor factory is a so-called Nucleus of Endogenous Development, the term for the state-sponsored job-creation program that Chavez is pushing to lure workers away from overcrowded, traffic-choked cities such as Caracas and Maracaibo. Iran has formed dozens of hybrid worker-state companies such as VenIran, said a Venezuelan government official.

U.S. government officials say they are monitoring the Iranian presence and watching for nefarious activities.

There may be much to monitor before long. On a visit to Venezuela this month, an Iranian industry vice minister said his country planned to invest $9 billion in 125 projects here. Among them is the cement factory under construction in Monagas state, along with 2,500 nearby housing units for workers.

As for the tractor factory, U.S. officials joke about what it is really producing — an example of the mistrust and rancor permeating United States-Venezuela relations in recent years.

Chavez has railed against U.S. "imperium," whereas top American officials paint Chavez as sympathetic to terrorists, namely the biggest Colombian rebel group, known by its Spanish initials FARC and officially branded as a terrorist group by the U.S. State Department.

U.S. officials suspect that Chavez affords guerrilla groups rest-and-recreation space along his country's border with Colombia. A Venezuelan cattlemen's association in western Venezuela this week said that the FARC was rustling significant numbers of cattle while the Venezuelan military looked the other way.

Chavez has strenuously denied giving aid to Colombian leftist guerrillas.

U.S. officials acknowledge that there is no evidence of Chavez engaging directly in terrorism. They dismissed as unfounded a rumor that Venezuela was or soon would be selling uranium to Iran. Venezuela is known to have uranium deposits in Amazon state but the mineral is not being mined, they said.

The tractor factory is in an industrial park in underpopulated Bolivar state, of which Ciudad Bolivar is the capital. About 70 Venezuelan workers are on the payroll here, with eight Iranian managers. The building sat abandoned for 30 years after another state-sponsored job-creation program, also to build tractors, collapsed months after the factory opened in the mid-1970s, local officials said.

Despite low-key projects such as this one, Western diplomats in the region are clearly uneasy about Iran establishing a commercial beachhead in Venezuela, fearing the Islamic Republic's designs in the region may not be strictly business. Some have said that Iran's increasing links with Venezuela already have helped make the South American country a center of intrigue.

Although it has no proof that Hezbollah, a Lebanese militant organization, has set up operations in Venezuela, U.S. government sources note that Iranian embassies have funded, accommodated and, in some cases, housed Hezbollah operations. The group, labeled a terrorist organization by the U.S. and Israel, is suspected of involvement in the 1994 bombing of a Jewish community center in Buenos Aires.

"It would be an unfortunate thing if the Iran-Venezuelan alliance were to create a base of operations closer to the shores of the United States," a U.S. official said. "Iranian embassies and Hezbollah seem to go together."

U.S. officials are also worried about whether Iran will share its know-how on jury-rigging U.S.-made jets, which it has been doing since the U.S. hostage crisis in 1979 when U.S. diplomatic relations and military aid were cut off, leaving Iran with numerous U.S. military aircraft to maintain.

The U.S. has refused to give Chavez spare parts for the 24 F-16 fighters his country acquired in 1982, and is worried that Tehran may show him how to keep them flying without them, as Iran's military seems to be doing with its fleet of F-111s, F-14s and F-5 fighter jets purchased when the shah was in power.

The BBC reported this week that, according to a U.S. diplomatic note it had obtained called "Defeating Venezuela in the 2006 non-permanent seat on the U.N. Security Council," the United States fears that Venezuela would use the seat for "ideological grandstanding."

The Bush administration is campaigning for Guatemala to get the open seat and is putting pressure on other Latin American nations to support it as well, U.N. sources told The Times this week.

Venezuelan Foreign Minister Ali Rodriguez said that Venezuela's would be an independent voice on the council and that it would not automatically vote against the U.S. on issues of international importance.

"We will use our position there to support peace in the world and refuse all kinds of attacks on peaceful countries," Rodriguez said.

U.S. Ambassador to the U.N. John R. Bolton has criticized Venezuela's campaign for a seat, saying it would not contribute to the effective operations of the Security Council.

"I think we're making our position very clear, very persuasively too," Bolton said when asked Wednesday whether the U.S. was encouraging other countries not to support Venezuela.

Given the recent discussion regarding foriegn investment in Venezuela Iran's plans to invest $9 billion in Venezuela certainly sounds good. In fact, while the opposition often jumps all over any investments Venezuela makes in other countries they completely ignore these multi-billion dollar investments. One has to wonder why they view trade and cross border investment good except when it involves countries like Venezuela, Iran, China, Argentina, and Brazil.

And the tractor factory sure sounds like a good idea. Agricultural equipment is an important part of land reform. One of the problems with previous land reform efforts in Venezuela was that the farmers were given land, but nothing else. This time around the government is determined to avoid that mistake and ensure that the farmers have what they need to successfully raise crops and bring them to market. Truth be told, thats probably what the tractor factory is all about - not giving terrorists a foothold in the Americas.
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