Venezuela's
president Hugo Chávez claims he is a bramble bush. Mess with
him and you'll get scratched-that's what he told President Vicente
Fox of Mexico, who urged hemispheric leaders to quit blaming other
countries for their troubles at the America's Summit held earlier
this November. This was an oblique reference to Chávez, who
calls George W. Bush a Nazi and U.S. allies lapdogs.
Now Chávez
is using his country's oil to stick a thorn in the side of the Bush
Administration. That thorn is Representative Bill Delahunt
(D-MA)-an upbeat Chávez promoter who says that the fiery
autocrat is not as bad as some may think. Claiming he doesn't work
for Secretary of State Condoleezza Rice, Delahunt recently
negotiated with Chávez to arrange the sale of heating oil at
below market prices to Massachusetts-based Citizens Energy
Corporation.
Apologizing for
bad actors is nothing new. During the 1980s, congressional liberals
fawned over Nicaraguan revolutionaries who went on to lose a free
election and steal between $100 million to $300 million in state
funds and property. A decade later, several liberal lawmakers
backed Haitian despot Jean-Bertrand Aristide, who ruled through
street mobs, also stole millions, and resigned in disgrace.
Making deals for
affordable home heating oil isn't novel either. Former
Representative Joseph P. Kennedy II actually launched a successful
political career in 1979 by forming Citizens Energy to aid needy
citizens at a time of rising fuel costs. Venezuela's then-public
oil company, Petroleos de Venezuela (PDVSA), stepped in and sold
modest allotments. Kennedy got the credit.
This time, Rep.
Delahunt may have gone over the edge. However well-intended his
constituent service, he is helping Chávez drive a wedge
between the American people and their government. Granted, freezing
Citizens Energy customers in New England may see things
differently. But the rest of the country should take umbrage at a
congressman dancing with a market manipulator who helped jack-up
global petroleum prices only to sell at below-market prices to a
select few.
In 1999, it was
Chávez who stopped PDVSA from increasing shipments when
other producers cut theirs. He then urged OPEC to reduce oil
production to boost global prices and shelved plans to increase
production capacity. His 2001 Hydrocarbons Law doubled royalties on
foreign operators and restricted future private investment.
Following a devastating oil workers strike in 2003, he took
personal charge of a new national council that controls PDVSA.
Today, oil prices
are higher than they would be otherwise because of Chávez.
His talk of suspending exports to some countries creates a climate
of speculation, artificially raising prices as refiners scramble to
secure suppliers. His deferrals of investment in field equipment
have lowered production capacity, also contributing to hikes.
Despite
accusations at home that he is squandering public patrimony,
Chávez still supplies Cuba's Castro regime with 50,000 to
80,000 barrels of oil and oil derivatives per day, all at
below-market prices and on easy credit, reportedly financed over 15
years at 2 percent interest. Cuba allegedly owes Venezuela more
than $1 billion in arrears.
Mr. Chávez
also promised below-market petroleum to Caribbean nations in return
for friendship. This past June, he signed a pact with 13 countries
to supply them with oil at 60 percent of the market price, with the
other 40 percent converted to a 25-year loan. The island nation of
Trinidad and Tobago, a hydrocarbons producer, is now losing sales
because it can't arbitrarily cut prices for special customers like
Chávez does.
This September,
Chávez reportedly promised Nicaragua's Sandinista party
leaders that he would supply selected municipalities with
subsidized oil, which could hold down costs of taxi and bus fares.
But what the president giveth, he taketh away-if and when he
chooses. From 2003 to 2004, he halted petroleum shipments to the
Dominican Republic because an adversary, former Venezuelan
president Carlos Andrés Pérez, lived there in
exile.
In the larger
scheme of things, Chávez's coercive diplomacy has done
little to win him friends. Caribbean and Latin American consumer
nations haven't voted with his government in international forums
because they know he helped to raise prices and keep them high
while Venezuelans sip gas at about 12 cents a gallon.
Moreover, his
friendship means little. Chávez's demeanor can switch from
seeming benevolence to hateful insults depending on mood swings and
perceived differences of opinion-as Mexico's Fox well knows.
Senator John Kerry
(D-MA) had it right when he said during his 2004 U.S. presidential
bid that "Chavez's policies have been detrimental to our interests
and those of his neighbors." Unfortunately, his House colleague
doesn't see it that way. Instead of freelancing with a foreign
power, as Rep. Delahunt has done, U.S. lawmakers should focus on
letting free markets develop alternate energy sources and sidestep
mischief from hostile, tricky regimes.
Stephen
Johnson is Senior Policy Analyst for Latin America in the
Douglas and Sarah Allison Center for Foreign Policy of the Kathryn
and Shelby Cullom Davis Institute for International Studies at The
Heritage Foundation.