Venezuelan President Hugo Chavez has been called "Fidel Castro with oil." Now that description can be elaborated to -- "Fidel Castro with popular referendum." Unless charges of massive voter fraud by the Venezuelan are upheld, we are now stuck with another autocratic ruler in Latin America, an anti-American demagogue and an ally of Castro - with a democratic mandate.

With the recall petition against him rejected by 58 percent of Venezuela's voters, Mr. Chavez pulled off a calculated gamble. He is now here to stay, possibly for a third presidential term. On the losing side in this equation, we find the anti-Chavez opposition and U.S. foreign policy in the region.

By supporting the recall vote in the first place, the U.S. government placed its bet on a loss for Chavez. This was a reasonable and understandable decision, given the Venezuelan leader's record as an international troublemaker and supporter of terrorist groups, among them, the vicious Colombian FARC. He has shown scant respect for democratic institutions, but wields international clout because of Venezuela's oil reserves, the fifth largest in the world. The conundrum for U.S. officials will be how to adjust U.S. policy in the region to minimize the damage.

Six years of Chavez demagoguery has totally polarized Venezuelan society. Given Venezuela's political turmoil over the past two years, February's soaring levels of unrest and demonstrations in Caracas, which left 11 people dead in clashes with police, and given the resentment caused by Mr. Chavez's record of failed populist policies, his easy recall victory was stunning, to say the least.

Some 2.5 million Venezuelans had risked everything to sign the recall petition at great personal risk of harassment. The National Election Council, packed by Mr. Chavez with supporters, initially rejected one million signatures for failing to include sufficient personal data. Even fingerprinting was required. In May, under international pressure, Mr. Chavez changed tack and agreed to allow the recall to go forward.

One reason was surely that the recent spike in crude oil prices helped Mr. Chavez buy his way back into favor with Venezuela's poor, with a fund of $1.7 billion set aside for the purpose. And in return for oil deliveries to Cuba, he was able to import numbers of Cuban doctors, nurses and teachers to staff clinics and schools. All of which are time-honored populist practices, undermining an opposition that had no such resources at its disposal. And let's not forget, Chavez commands control of the electronic media.

In the end, furthermore, Chavez calculated that even if he did lose the referendum, he could run again in the presidential election that would be held 30 days later, in which he would probably defeat a disorganized Venezuelan opposition. All this maneuvering rested on shaky constitutional ground, but that has never presented an obstacle for this man.

So where do we go from here? International scrutiny of the election result is certainly the first order of business. With new voting machines, a record turnout and agonizingly long waits at polling stations, where hours had to be extended beyond 8 pm, the voting process certainly had problems. So far, two members of the National Election Council have refused to sign onto the result, calling into question the fairness of the process. If fraud is proven, the U.S. government should demand a recount and threaten international punitive measures like cutting off World Bank loans to Venezuela.

If the result stands, however, we must continue to work with the Venezuelan opposition. Given Mr. Chavez's penchant for running roughshod over political and legal processes, a robust democratic opposition will still be needed to prevent his worst excesses. That would at least be different from Cuba, where the political opposition speaks from jail cells, if at all.

And finally, though Mr. Chavez has yet to make good on his occasional threats to cut off oil to the United States, it would be much in the U.S. interest to minimize the 15 percent of its crude oil imports that it gets from Venezuela. We need to diversify. Alternative oil suppliers in this hemisphere with more reliable governments include Brazil, Canada, Ecuador, and Mexico. (And let's not forget the Alaskan Nature and Wildlife Refuge.) Moreover, we should help dependent Latin American and Caribbean nations diversify their own energy sources to minimize Mr. Chavez's clout. Depriving Mr. Chavez of his life-blood will curtail the damage he can do in the future.

Helle Dale is director of Foreign Policy and Defense Studies at the Heritage Foundation. E-mail: [email protected].