think core of being president of the subcommittee on the western hemisphere will come to order it's my pleasure to welcome you to today's hearing on venezuela i am pleased as usual to welcome my good friend assistant secretary for western hemisphere affairs tom shannon who had the pleasure just shaking his hand he's become a regular at our subcommittee hearings but there's a reason for that because we know of no one who is knowledgeable as you and has the that you have and so it's always wonderful to have you here and i'm holding this hearing knowing that there is plenty of passion surrounding the venezuela policy debate but hoping that we can examine venezuela and u policy toward the country as objectively as possible like many of my colleagues i have concerns about democracy in venezuela but i want to make it clear from the start that i have no hidden agenda and that ultimately i would like to see nothing more than a better relationship between the united states and venezuela as a member of the energy and commerce committee as well as the house foreign affairs committee i often speak about the perils of u s dependence on oil the united states consumes nearly twenty one million barrels of oil per day and our appetite for oil is growing i find this reliance on a single resource particularly troubling because much of it comes from nations that are run stable or on friendly towards the u in the case of venezuela petro dollars just keep on rolling in that's all they are state and its oil out of the country's state owned oil company said earlier this month that their net income rose eighty percent in the first quarter of this year as world oil prices soared and president chavez recently called on south american nations to create their own version of opec to be called pay throw so as we think about the u addiction to oil and its impact on our foreign policy it is tough to ignore the role that our dependence on oil plays in supporting what new york times columnist thomas friedman refers to as petro off the top or soar tarion leaders it's hard to look at venezuela these days and not take note of a number of troubling anti democratic developments from the closing down of r c t v last year to president chavez's allies recent blacklisting of candidates set to participate in november's local and state elections is no surprise that many view democracy as under strain in venezuela the december two thousand and seven government raid of la he built a jewish school and social club in caracas was especially alarming to me personally and i was also disturbed to learn that about one third of venezuela's jewish community has fled the country in recent years i however was pleased to see last week that as well in minister of the presidency yes a shock hone met with the jewish community i truly hope that this will be the first of many meetings and will lead to better government communication with and treatment of the community quite frankly anything less is simply unacceptable finally let me note that event as well as cozy relationship with iranian president mahmoud ahmadinejad is a very serious cause for concern that we are all closely monitoring as our recently revealed ties between two venezuelan citizens including one diplomat and hezbollah i must also say that that some of the rhetoric coming out of president chavez's mouth is  particularly troubling that today there is a report quoting president chavez and i will read part of it because i think it's relevant to this hearing it's says that chavez a relentless critic of u foreign policy and president bush advocates weakening the influence of the united states and calls the nation quote the empire unquote chavez told his supporters not to raise their hopes that relations with the united states would improve if obama is elected s president saying there was little difference between him and republican candidate john mccain and this is a quote from logo chavez quote the two candidates for the us presidency attack us equally they attack us defending the interests of the empire unquote shoppers said at a meeting of the of his socialist party quote let's not kid ourselves it is the empire and the empire must fall that's the only solution that it comes to an end unquote that's president chavez yesterday this is newspaper reports this morning rhetoric like that is especially troubling but i also welcome some of the more positive trends that have recently come to the service in to lay down arms likewise after an intelligence overhaul decree was met with skepticism in venezuela chavez quickly changed course and rescinded the decree a new york times editorial recently explain these actions by saying that quote chavez displayed willingness to self reinvention that has served him well in times of crisis throughout his political career time and again he has gambled by pushing brash positions and policies then shifted to a more moderate course when the consequences seem too dire unquote that's the new york times editorial in the case of the fark i hope that we can all count on president chavez to match his words with actions and do everything he can to bring an end to the fox protracted battle against the colombian government let me talk briefly about u s policy toward venezuela there's clearly been plenty of missteps in our relationship w the bush administration's rush to recognize a briefly installed cool leader in april two thousand and two i believe was a major mistake and the administration's past efforts to engage in a war of words with chavez was not a particularly sound strategy either but let me say how impressed i am again with secretary shannons steady diplomacy towards then as well over the past couple of years secretary shannon has led the administration away from rhetoric and towards a more constructive policy in which we avoid responding to president chavez's ridiculous verbal attacks and accentuate our positive actions in venezuela and throughout the hemisphere on that note let me say what a mistake i think it would be to add venezuela to the list of state sponsors of terrorism do i think we need to continue to closely monitor venezuela's links to the fark and terrorist groups in the middle east absolutely but designating venezuela i believe as a state sponsor of terrorism would simply hand chavez another rhetorical victory and bolster his base i believe it would prove to be counterproductive to the steady diplomacy that secretary shannon has pursued in recent years as i said the beginning i truly want nothing more than improve relations between our two countries and i think that diplomacy on our part is leading us in the right direction recent actions by president chavez including his call for the fark to lay down on make me somewhat cautiously optimistic mystic that we can somehow meet halfway and build a better relationship between venezuela and the united states and in that spirit of friendship and partnership let me be the first to congratulate mister as well on winning the miss universe pageant or not but the first runner up to miss venezuela was miss colombia so i think that might say something there is obviously still much more to cover but i will leave things here and i want to give mr burton a chance to make an opening statement thank you mr chairman i would like to have my whole statement submitted for the record without objection to what i don't want to duplicate everything that you said but i do have a few concerns that i'd like to mention i was just reading here that to the u s imports of venezuelan crude oil fell by seven point four percent this year to nine hundred ninety thousand barrels of oil per day  once again it shows that we have a real dependency on oil from people who really are in many cases our friends we're importing probably i don't know twenty percent of our oil from venezuela we're importing  a large part of it from the middle east and the people of this country are spending tons of money when they fill up their gas tank it's running over for the four to five dollars a gallon cost eighty bucks to fill up your tank and so i think  it's time that this congress take positive action to move toward energy independence and i'm not trying to say this from a political standpoint this is just a fact we're dependent on a great deal of our energy from people like chavez who has called for the destruction of america over the long period of empire he calls it and so i think it's important that we look at this from a national security standpoint and we should have a bipartisan approach to dealing with this energy crisis because i serve we don't want to be dependent on people who don't like us or hate us in the future we're already suffering and i and i think that's a major issue you mention the park and the laptop computers computer i think that's also a troubling thing i know he's asked the park to lay down their arms actually didn't come to fruition and so we'll have to wait and see but i certainly hope that he is doing everything he can to stop far from their real activities in colombia and to lay down their arms hezbollah has some people there on the ground that are  working that's a terrorist group that's a big problem for israel and the united states in the middle east i hate to see mr chavez allowing those kinds of people to work in venezuela and possibly be a conduit for more terrorist activity not only in the middle east but here in our hemisphere there are direct flights going from tehran to venezuela on a daily basis and he has had many i guess talks and meetings with people from iran and i'd like to believe that those aren't going to be threatening to the united states in the future but it is a concern and  we have heard some of the rhetoric rhetoric that emanates from those discussions and it's something that's very very troubling he has not allowed several of our da just to get visas i think there's seven of them that are pending right now if he were here  i would urge him to allow the d a just there there's a concern about the fark in their drug trafficking there's concern about drugs coming through venezuela and into the united states and i think if they're serious about helping us  deal with the drug problem the drug trafficking problem then i think that they ought to do everything they can to allow our da just to function down there and work with them and to make these visas are realistic  endeavor i think that's pretty much everything i have to say right now but i'll reserve the rest of my comments for secretary shannon i do want to say that i know he works very hard not look forward to continuing working with him i just talked to him about possibly having a congressional delegation go down to venezuela sometime in the future and i'm sure we'll be talking with him in the state department about whether or not that's advisable thing but if it is mr chairman i'd like to talk to you about that because i think you know actually  meeting with chavez again and hearing what he has to say and laying it right on the line to him on our concerns that might be a beneficial thing many times because of the media there's a misunderstanding or mis presentation of chavez sometimes would be wise to be on noriega i'm particularly interested in the relationship between colombia and venezuela so a couple of weeks ago the president of colombia visited it as well and i would like to get out that i'm also interested in the treatment of the jewish community in venezuela i know that there's been a large exodus and obviously but as well as it relates to shannon for being with us today i will save most of my time for questions but as i was listening to your opening statement mr chairman i agree with with most of it and and i've always enjoyed working with you because you do have an open mind to these issues that are sometimes difficult because not everybody agrees but i do want to  talk a little bit about the state sponsor of terrorism you know we have there are criteria and standards by which a country would be placed upon  list and i think what we have learned about hugo chavez and the far clearly demonstrates that they should be put on the state sponsor of terrorism list  one of the problems i think we're having in venezuela and also is that the feeling that they can that chavez can kind of have his way in latin for the region if we have a serious look at trying to either rehabilitate it or start over because they're standing in the way of progress for freedom and democracy  our hemisphere and i think it's irresponsible to continue an organization that is set up for failure so mr chairman i hope at some point we can also have a broader discussion about  to the middle whether it be allowing for the cooperation on drug addictions his announcement recently saying that far should disband although also showing that he was supporting them less than a year ago to see if that is a movement and i want to libby on on a very quick turnaround decided to get off the terrorist list and also work with us although i have to admit i don't the allegations are illusions that we're an empire anybody who watches congress in action would definitely not have been heaped upon you this morning i think you have served us well you've served the country well i would i would note the the observation  by the ranking member in terms of an opportunity to tamp the rhetoric down i welcome that and i think it is a  moment in time when we should all embrace that on both sides of the bilateral relationship i think it's important to no that just this month i think it was on july eighth where our ambassador to caracas patrick duddy engaged in a conversation with president ch relative to the issue of drugs and i would hope that that conversation would be pursued on a bilateral basis i think that  that meeting is a is a signal as you're aware secretary shannon in a trip that i took to caracas months ago and now i had an opportunity to meet with president chavez he indicated to me that he was willing to begin serious discussions about the draft proposal that is  been circulated both here and in caracas relative to the drug issue unfortunately rhetoric got in the way after having had that conversation a mira flores i laughed and had a an opportunity to have a discussion with the foreign minister we both addressed cameras in caracas indicating that there was a commitment on the the gentleman from new jersey that indicated that there was a meeting i think this past week between president uribe of colombia and president chavez of caracas my understanding of that meeting is that it was positive and constructive as you diplomats would you describe we might have an opportunity here i think we should seize on that opportunity i think the suggestion again by mr burton about visiting caracas once more with a bipartisan delegation to be led by our chair and ranking member and i would be happy to accompany them i would hope that all members of the panel would go might turn into a very productive session i would also note that in terms of the relationship between the far and done as well and i know that you are familiar with the efforts that w was involved in those discussions that there were two unilateral releases prior to the rather dramatic successful and i think unbelievable accomplishment by the  colombian military in releasing the fifteen hostages just recently that obviously necessitated through intermediaries discussions between mira flores and the fox so i think we've got to be careful to understand what the relationship between the fark and the child as government truly is but with that let me ill back to the chair and thank him for the time thank you  and now as i mentioned witness on our first panel tom shannon our excellent assistant secretary of state for western hemisphere affairs let me say secretary shannon as you can see there's been a lot of interest in this hearing today by you can see the attendance behind you and certainly the relationship between the u s in venezuela is something that's very important and very topical and i'm eagerly as i know the rest of the members of the subcommittee are meekly awaiting your testimony so this is secretary shannon thank you very much mr chairman and thank you to the members of the subcommittee here today is as always it's a pleasure to be i pleasure to have the opportunity to talk with you about such an important issue my remarks today will look at the theme of venezuela from three vantage points first the historic context of our relationship with venezuela second the current state of our relationship and the challenges it faces and finally what we can look forward to in the remaining months of this administration our relationship with venezuela has as has been noted here is longstanding broad and deep encompassing everything from co also been closely linked american mining engineers played an important role in the discovery and development of venezuela's petroleum wealth american corporations and investors helped develop venezuela's automobile banking manufacturing and agricultural sectors venezuela for its part has been one of the largest latin american investors in the united states venezuela through part of s and said go and refineries asphalt and petrochemical plants and one of the largest gasoline distribution networks in our country today our two countries enjoy a growing economic and commercial relationship bilateral trade between the united states and venezuela exceeded billion dollars in two thousand and seven the united states exported ten billion dollars worth of goods to venezuela last year an increase of over thirteen percent from two thousand and six venezuela exports to the united states of forty billion dollars ninety five percent of which is petroleum represents a seven percent increase in monetary value over the previous year we are venezuela's largest trading partner by a factor of two venezuela is our second largest latin american trading partner exceeded only by mexico venezuela as much as among our top five foreign oil suppliers and we remain venice where this principal customer and energy partner we also enjoy extensive cultural and people to people ties with venezuela the youngest director ever to lead the los angeles philharmonic the twenty seven year old gustave will do no matter who assumes the role next year is venezuelan there are fifty venezuelans playing on major league baseball teams nearly eight hundred in the minor leagues and distinguished venezuelans in academia foreign policy circles and the media and americans are played an important role in helping to build venezuelan universities political consulting consultancies and polling institutions such a rich tapestry of human connection would seem to indicate a positive and friendly bilateral relationship while this was the case for many years it is regrettably no longer true our bilateral relationship today is a troubled one characterized by resentment suspicion and misunderstanding for its part the government of venezuela claims that we have practiced interventionism in its political and economic life it regularly refers to us as an empire as noted by members of the committee opposes our initiatives in the americas and seeks out our adversaries as friends and allies it has broken off cooperation with us on counter drug and counterterrorism activity and its longstanding intelligence liaison relationships shut down military cooperation security assistance programs and nationalize the holdings of some american corporations from our point of view the venezuelan government has added a needless and conflict complicate ideological overlay to a relationship that was characterized historically by a fluid and productive dialogue this is made it difficult to address bilaterally our concerns about the government of venezuela's behavior these concerns are well known and relate to authoritarian tendencies and human rights violations domestically and internationally meddling in the fair's of its neighbors and promoting a diplomacy designed to undermine our interests as a result and over time we have taken specific actions to make clear our concerns and limit our engagement with venezuela the steps are substantive and not rhetorical specifically we have declared venezuela to be not fully cooperating in the fight against terrorism determined that the government of venezuela has failed the monster demonstrably in meeting its obligations under international narcotics agreements and us domestic counter narcotics requirements rescinded venezuela's eligibility to purchase most kinds of u s weapons and weapons systems close venezuela's military acquisition office in florida arrested on authorized menace with an agent in united states denied venezuela access to export import bank financing and overseas private investment corporation coverage and designated several venice where the nationals under executive order thirteen twenty two four and the narcotics kingpin act for support provided to has the line for trafficking illegal drugs venezuela's response to our actions has been to retreat into a distant and solemn relationship on occasional efforts to explore the part of our occasional efforts to explore the possibility of improved relations focused on areas of clear mutual benefit such as energy commercial and counter drug cooperation were rebuffed the government of venezuela those unrelenting anti american rhetoric and the absolute control exercised by president chavez over all aspects of our relationship have prevented until recently even the most tentative exploration of dialogue the resulting standoff has caused great discomfort within the region countries with close ties to venezuela and united states has had to learn how to navigate around our relationship most have resisted venezuela's efforts to enlist them in a larger crusade against us with only a few exceptions the government of venezuela's anti american rhetoric has not resonated well over time it has become tired and ritualistic this does not mean that venezuela's aggressive and erratic behavior has not been a cause of concern in the hemisphere however countries around the region of seem to political space open to venezuela shrinking there are several reasons for this to begin with the reemergence of countries that have traditionally been regional leaders as constricted venice where those diplomatic movements second venezuelan setbacks and key international arenas such as losing its bid for a seat on the united nations security council were seen as clear evidence of overreach third some about us where those closer allies have found themselves bogged down in their own internal difficulties and unable to help fourth of the emerging story of illicit relationship with the fark and colombia's recent successes have undermined venezuela's credibility these factors have contributed to a growing international perception that venezuela has hit the limits of its international influence venezuela neighbors have watched with interest the obvious political challenges that president chavez faces at home these include the failure of the december two thousand and seven constitutional referendum current difficulties in consolidating his single political party and the upcoming november two thousand and eight gubernatorial in may or election also they have noticed the emergence and initial consolidation of an effective civil society the student movement has become an important counterpoint to the government on the issue of civil and political rights parents of twice defeated government efforts to impose changes in educational curricula popular rejection of a harsh cuba style intelligence law forced president chavez to send a law back to the national assembly for reconsideration while president chavez continues to enjoy strong support among important political constituencies in venezuela he faces a more complicated internal scenario and must contemplate the possibility of an election in two thousand and twelve and which he cannot be a candidate in this environment venezuela has for the first time in many years expressed a willingness to explore improved relations with united states president chavez recently told our ambassador that he wanted to improve our counter drug cooperation and remembered with fondness when he could meet with the u s ambassador to discuss bilateral issues this comment was repeated through venezuela's official news agency we have told venezuela that we would like to explore this diplomatic opening cooperation in the counter drug fight would be a familiar ground for both governments and would be well received in the region it would resonate especially well and hispaniola the dominican republic and haiti have been the recipients of most of the clandestine aircraft departing venezuela with cocaine headed for the united states and europe and especially where west africa where the drug trade is exploding and exploding and causing instability in the region embassador dudie recently sent foreign minister my daughter a letter reiterating our desire to work together to confront this challenge and the special coordinator for going to swain affairs at the state department ambassador david robinson will be traveling to venezuela next week mr chairman as we look forward we operate under no illusions the rhetoric and reflexive anti americanism of the venezuelan government has damaged the ability of venezuela to communicate effectively with us and many of its neighbors however we remain committed to a positive relationship with the people of venezuela and have the patience and persistence necessary to manage our challenging relationship in so doing we will remain focused on our larger positive hemispheric agenda to consolidate democratic institutions and ensure that the benefits of democracy and open markets reach all citizens mr chairman i'm very happy to take questions at this point and respond to the very specific issues and concerns that were raised in the opening comments thank you very much for the well thank you mr secretary for those very thorough comments and i certainly appreciate them very much in your last few sentences you talked about democratic instead in venezuela and let's talk about them a little bass there is  has been a recent blacklisting of candidates who were set to participate in november as well in local and state elections that is something that obviously is very troubling  as you mentioned in your testimony parents have twice defeated government efforts to impose changes in educational curriculum despite all these things that we that we see however there has been  o real attempt to to absolutely shut down democratic institutions totally we know there was a vote where president chavez tried to consolidate power it was  democratic institutions it's it's not done by coup it's an attempt by a referendum but then again there's blacklisting of candidates who cannot participate november's election so there's kind of a mixed signals here and i'm wondering if you could if you could comment on some of that thank you very much for an important question obviously is as we look at the state of democracy in venezuela our focus is institutional and and also rights based in other words we look at the ability of institutions to do their jobs within a democratic set and to do them in a constitutional fashion but also understand the degree to which citizens enjoy political civil rights and can exercise them broadly speaking the struggle for for political power especially the struggle to maintain consolidate power by and by the current government involves a series of actions that are great us on both the institutional side and on the right side and you've mentioned some of them already the decision to clo is that democratic space is still open it has not collapsed entirely and civil society has shown an ability to exploit that opening and to make their case and i think the the defeat of december two thousand and seven constitutional referendum was an important reference point for several reasons first because it was a student movement was was new and unexpected but it showed that an ability to take a rights based  dialogue to the venezuelan people resonated in a dramatic way and it was one of the reasons it resonated that the student movement did not associate self either pro or against government it was in favor of the rights of people to express themselves and especially of o up to vote and obviously did not show up as a of sending a very strong message that they had concerns about governance issues really indicates that that democratic space democratic principles and democratic activity are alive and in venice way that that there is a capacity to organize and express and that as civil society consolidate itself that we are looking ahead i believe to elections in november of two thousand and eight that will be important thank you when i was recently led a codel to a few countries in south america including bolivia we had expressed to the leader of bolivia that we that the iranians we were very much a grand that he was allowing the iranians to build a radio and t v station that would be able to be broadcasted throughout south america president chavez has visited iran several times as well the two countries have signed a variety of agreements in agriculture petrochemicals oil exploration and other areas and weekly flights as was mentioned before between the two countries began last year according to the state department's annual terrorism report passengers on these flights reportedly have not been subject to immigration and customs control at cmon believe our international airport so i'd like to hear specifically what concerns do you have about event as well as ties with iran what about iran's increasing inroads in other countries such as bolivia in south america and specifically what concerns you have obviously anything that involves iran gets our attention and in many instances our media concern we understand iranian efforts in this region as as an effort to show that it has a capability to build relationships with countries in a natural area of u s influence during a period of time when iran faces u n security council sanctions and enormous international pressure regarding its nuclear weapons program there is no doubt that president  prime promoter of iranian relations in south america today and central america there are many countries in the region that have diplomatic relationships with iran and are able to manage them in a way that we consider to be responsible and especially are able to keep a close watch in tabs on the activities of iranian intelligence officers what worries us about the relationship with venezuela is that that kind of control and supervision doesn't seem to be present and you know  the frequency of their flights you know that there is some indications that people coming on those flights don't pass through normal customs and immigration procedures and again we think this is disturbing and a mistake and we have said so publicly and in a variety of environments and we've said so to venezuela in this regard what we need to be doing a fact of is constantly reminding our neighbors that the evidence of iranian ties to diplomatic institutions in that in those countries thank you you you mentioned me ask one final question and i touched upon it in my remarks you and you just mentioned the the bombing of i mean the israeli close to the state as well as to two raids on a jewish community center in caracas in two thousand and four and two thousand and seven i stand simply looking for guns which is ridiculous and of course none were were found as i mentioned in my remarks i was encouraged by the recent meeting between the minister of the presidency jesse sure cone and the venezuelan jewish community and i'm also told that they're going to be some other contact as well with jewish communities in not only in venezuela but jewish communities organizations around the world so i want to just ask you what is your assessment of the  government treatment of venezuela's jewish community and how specifically is the state department addressing these concerns and what do you think congress should do to assist the jewish community in  that anti semitism is not part of his larger political movement the truth is that on the far ends of latin america's political spectrum both at the far left and in the far right and anti semitism has been present for a long time because it fits nicely into the conspiratorial mindset that one finds on the far ends of political spectrum and the unfortunate truth is that venezuelan news agencies and some government officials have spoken in a way that is very well to the jewish community and very worrisome to anybody concerned about anti semitism we have regular contact with the jewish community in venezuela through our embassy our special envoy in the fight against anti semitism mr rickman was recently meeting with the jewish community and as you noted the jewish community has declined in time by about one third in venezuela some of this is for economic reasons but some has to do with a general sense of discomfort not only because of acts such as the raid on the school you mentioned but also because of a commitment to world leaders such as the leader of iran who are explicitly committed to the destruction of the state of israel and from again what we have found is that kind of maintaining close contact with the community understanding their concerns and then finding ways to express those concerns to the venezuelan government has been unhelpful and the degree to which our congress can participate in that either through visits to the region or by receiving people here  would be very helpful thank you some of the the rhetoric that you you know that you mentioned has been coming from the government and some of it has been attributed to mr chavez and self and it certainly is very troubling and mr chairman mr shannon if you might take your pencil in hand i have a number of questions that i'd like to ask and then you can ask answer them and i have to the other the drug trafficking has increased from fifty seven metric tons in two thousand and four to almost five times that much two hundred fifty metric tons of cocaine in two thousand and seven and i've got a map here that shows where they're flying you're right they go to spend all of the dominican republic an haiti most of them but they're also going through to central and south america central erica it looks like mexico and some of the other central american countries  like to know you know occur and update on that and whether or not there's any indication that that's going to be curtailed by the by the government down there also the chairman just talked about  department i believe that that they're getting actual financial support from venezuela also these people who are coming in from iran on these direct commercial flights i understand they don't even have to go through machines that would indicate that there's an explosive device or some kind of a weapon and that's also a concern because these people they come in on a visa they're divan as we left and they end up going all over central america and possibly into the united states so i'd like to have a comment on that the oil imports from venezuela have dropped dramatically from one point two eight million barrels a day to one point one three million million barrels away a day and the last time it was that low was when they had a strike down there and that of course is hurting the united states because of our the price of crude oil in the price of gasoline and is it's obvious and it's beings as stated by the venezuelan government they're trying to find other markets i e china and india to sell their oil to i'd like to get your assessment on what that means for the united states as far as our energy problems are concerned and i don't know if you can speculate on what we should do about that or not i mentioned hizbullah setting up shop in venice well if you believe that now i want to talk about something you probably don't have any knowledge but i wish you'd go back to state department and the administration these light bulbs that they're going to give to the united states to help with these people who are suffering to help them with their energy costs they have mercury in them and those lightbulbs are made in china and when those light bulbs are broken there is a serious health risk and we've had people who have suffered health problems because lightbulbs broke because they're made with mercury in them they do save energy but they also probably provide a real serious health risk and if you can answer the question on that i we should go back to the to the administration and our health agencies and say and we're mandated next year to start using those light bulbs everybody in this country and they have a toxic substance in them  delahunt from massachusetts indicated that he thought that might be a good idea like to get your an issue a response to that and if you want to as i said before we talk privately if you want to contact us later let us know what you think would be advisable i'd like to know about that too with thank you very much i will address each of the questions in turn in regards to drug trafficking there's a reason why we're seeing an increase in the amount of drugs traveling through venezuela and that is an effective air interdiction program in colombia and brazil so that those who traffic drugs and have to travel by air into the caribbean know that what they need to do is move them quickly out of colombia in short hops into venezuela and then use venezuela as a trampoline or a enhance understanding within venezuela just how dangerous this is for venezuela over time because no matter how successful their own unilateral interdiction efforts might be they simply can't control the flow of drugs and has a huge security impact inside of cooperation with great interest but we also note that for this cooperation to be effective it cannot be only with us it has to be with other interested parties it has to be with great britain it has to be with members of the european union and ideally it would also be with those countries in the caribbean to feel themselves quite exposed and quite an attendant to as venezuela as they face a big trafficking problem in regard to the law support  and the presence of iranians i noted that that this is a big concern for us and the the fact that these flights seem to come and go oftentimes with only cursory immigration and customs  checks gives us very little insight into who is traveling in venezuela and where they beyond venezuela and so again we continue to talk with the degree possible with the government of venezuela but especially with venezuela's neighbors to underscore our real concern about the identities of who is coming and going and what to what degree they might have ties to hezbollah or other dangerous organizations in regards to the drop in  oil imports and the expressed desire to look for other markets president chavez and his government have said on several occasions that they would very much like to reduce our dependency on the u s market which is almost total and look for other energy partners  whether it be china or or others the problem they face of course is the nature of their oil which is a heavy crude and sour crude that requires very sophisticated refining capabilities most of which exist in the united states and s effectively to to change its energy relationship with united states and diversify it would have to invest enormous amounts of money in building similar refineries elsewhere in the world and up to this point it just hasn't been able to to do that it's important to note that the energy situation in latin america is changing trade and tobago is consolidating itself as a major supplier of petroleum and gas both to the east coast united states but other countries in the region of the county say a project in peru will be online in the near future and will be supplying natural gas to the west coast of the united states into mexico and the oil finds that have that brazil has discovered dramatically alter brazil's status as as an energy supplier both in petroleum and gas and i think what we'll be seeing over the next decade is that venezuela's role as an energy supplier will begin to decline and other countries will emerge as  important suppliers of petroleum but more importantly countries like brazil for petrobras will have work to develop modern institutional structures to manage their exploitation and development of the oil industry and will be very very effective  ministration are aware of that and then in regard to dialogue members of congress are played an important role in maintaining the channels of communication open with the government of a good job as and i realize  it has not always been easy appreciate the role that you played that that others have played in the congress and mr delahunt is not here but he has also played an important role in this regard and from my point of view it's important to maintain that that avenue of communication because that's important for going to swallow and especially present charges to understand that the kinds of concerns we have are not particular peculiar to this ministration that they really resonate throughout the congress in a larger north american society internationally and he recognizes that he needs to kind of consolidate his power base internally and protect himself internationally and this could very well be one of the reasons why he's decided that this is an important moment to reach out i th in order to determine whether or not this is just a ploy to defuse some internal problems and to show a better face internationally or whether or not it really is reflective of a recognition that the drug see that as a limiting national influence money is an important motivator of relationships especially internationally and the degree to which oil prices continue to rise and that mr chavez has additional resources at his disposal obviously will help him diplomatically but in the region itself i think there's an understanding that a political phenomenon which at one point seemed on stoppable inside of venezuela and seemed to have enormous resonance beyond venezuela now appears less steady and less powerful and the consolidation of leadership elsewhere in the region and the emergence of new factors such as i mentioned the oil and gas finds in brazil our own willingness to do biofuels cooperation with brazil a hostage rescue projecting itself again into the region in a reasonable way i think it means is that that the space that president chavez has to operate in has been limited it doesn't mean that his influence disappears in fact quite the contrary i think it will it will it will be a considerable factor in the region but i really do think we've seen high tide i think i think it's starting to how much was chavez hurt by the fact that his behavior after the rescue by colombia where he said he was going to send the army to the border border provoked a profound concern throughout the region because the last thing anybody want to see was armed conflict along the venice wing colombian border and there was a huge effort made diplomatically to kind of pull him pull him back and and that was a i think a useful moment as as a region understood that their larger projects of south american integration really could be at risk because of a specific dispute between between colombia and venezuela cause profound concern among most of colombia's democratic partners and and our democratic partners and again in regard to the hostage release the ability of the colombians to do this to rescue these hostages and then the colombian decision really to no longer require need international mediation to address an existing hot still existing hostage problem but to attempt to communicate with the far directly has really kind of close that space for foreign participation directly in mediation and that means it's close that space for venezuela the gentlemens the time is expired but i'm going to let him ask one question on cuba which he had mentioned in his opening statement  obviously this is a very important relationship for venezuela because a an ability to connect to a cuban revolution that has historically been hostile to united states it has been an ideological northstar of sorts what has been interesting to note  inside of cuba at this point is that the relationship historically has been between chavez and fidel castro and president chavez it has really had to work hard to build a relationship with raul castro and with those around  castro who play a very important roles in the day to day governance of cuba there is an important energy and financial relationship that still exists and has a big influence on how the cuban government behaves towards venezuela but at the same time other countries in the region have recognized that an exclusive relationship between cuba and venezuela is not healthy it's not healthy for the region it's not healthy for cuba and especially not healthy for any hope of promoting a larger democratic transition inside of cuba we've heard a lot on the committee so far about talking and meeting and questioning whether or not some of the recent statements and actions by our interactions i should say but statements of a job as if somehow this is a change in attitude or a change of direction and i would submit that it's a charade we know we know what he is after he is after he wants to be president for life and that goal of his is not changed so in your opinion do you agree with that you agreed that that the things that he is saying now are all it's just an attempt to kind of calm the waters so he can make another run at this constitutional referendum allow him to be president for  in our interest to try to find a way to stop it it's in our interest to continue to remind president chavez and venezuela that this has a very corrosive impact on the region and beyond the region in africa and europe so we will find out very shortly whether or not it's a charade by how he responds to our willingness to sit down and talk with him in regard to his own personal ambitions there's no doubt this is a very ambitious man who believes in his heart that that the success of  his bolivarian revolution requires him to be a central actor politically inside of venezuela but again the reality at this point is that he has no constitutional mechanism to perpetuate himself in power and unless he finds a all understand this is a government hugo chavez where there's human rights violations supporting supporting terrorist organizations allowing drug trafficking through the country wants to be president for life blacklisting potential political opponents and on and on and on and somehow a few statements from hugo chavez it sounds to me anyways either in the congress or on the committee think that there's this is not some sort of ploy and like you said he is he's a political guy and he's going to do whatever he has to do to win i would suggest  to the committee that the free trade agreement the couple of free trade agreements that are pending in latin america you talk about that open space if we do not act and if we do not pass these free trade agreements one we send a message to the rest of latin america that they need to question whether or not they can count on us and which creates more space for hugo chavez to spread his influence with oil money so i would i would suggest that the committee take a leadership role in trying to push our leadership in the congress to pass the free trade agreements i'd also suggest that the committee work hard on reforms to the oas because we need to have again when you talk about that open space if we had a stronger organization we would be able to limit that space available for chavez to spread his bowl of varian revolution and i'd just like to get your thoughts on on some of those one of our principal focuses and in addressing the larger political issues of the region has been to build a positive agenda which is all about working with like minded countries with commitments to democratic values and that share our understanding of the importance of markets and also share our the importance of linking economic opportunity and capacity through investing in people and one of our most effective tools in addressing the challenges presented by authoritarian in the region is to show that that our democratic partners can be successful and consolidating a broad commitment to the values and economic understanding that we have and one of the most important tools that we've had in this regard have been free trade agreements and the ten free trade agreements that this administration has negotiated and concluded have really built a virtue free trade area of the americas that stretches from canada to the tip of chile and encompasses two thirds of the g d p of this region that creates i think a very important strategic platform that allows the region to kind of reach across the pacific into the dynamic economies of asia and also allows of a very new and i think creative conversation with america countries and so it's no secret that we believe that that quick consideration of the colombia free trade agreement and the panama free trade agreement consolidating what we've accomplished over the past many years would be an important step forward but i would also note that that if this congress is looking for some kryptonite that can be used to address authoritarianism it's here in the congress it's called the colombia free trade agreement if you just also thank you but address the concerns that i have with them the oas like any multilateral institutions is only as good as its member redefine their national interests in the process of doing this are looking for new ways to communicate and new ways to have political dialogue and political cooperation and we're seeing an explosion of integration efforts and  collaboration cooperation efforts throughout the region whether it's the caribbean single market whether it's caste whether it's the central american integration system whether it's the ending community whether it's america's sure whether it's a larger union of south american countries implement a larger hemispheric agenda it needs to be strengthened and and in order to strengthen that it requires constant attention from the united states but it also requires constant attention from some of the larger countries in the region  we've been thankful that canada is now a member of we think that's been a very very helpful development but we also believe that countries that are playing important roles in other kinds of integration efforts mexico brazil argentina peru colombia but also countries that tend to operate as blocs especially caricom can play a much stronger and more important role in the oas and can actually take advantage of some of the institutional capabilities at the oas brings to the region so i think oas can be better there's no doubt that it can be more effective and we need to work towards that but we won't be successful unless some key members of the us make a similar comment the germans time has expired mr klein of course there's a lot of emotion a lot of passion a lot of business interest in other things so we're very serious and as everybody on this committee has in terms of trying to deal with venezuela trade is an important part and i think that those all those trade agreements are being considered need to be advanced and find the right ways to accomplish them and if there are some myths there we need to work those out on the any question about that but i also like to suggest that trade is not the only answer and i think that this is ministration and previous administrations has found this niche of opportunity in providing whether it's health care or other kinds of social services to get the attention of some of the people in these regions castro did this for a while with the with the doctors but one of questions i had is there is this view that you're presenting the possibility that some expressions may be changing and i would certainly suggest that there's a lot of skepticism and all those but all that being said there is a lot of resources or a lot of money on the table venezuela  flush resources because of the price of oil and nobody seems to be think that's me going down with me more and more money what do you see is the status of chavez's continued view providing these kinds of to the lowest levels in the communities you know the rural areas and some of there is the kinds of support that he has brought is this a sustained kind of thing do you see this changing how do you see other countries is viewing  that thank you very much i think you made some very important points especially the recognition that full engagement is required to address the challenges that democratic governments face in the region today obviously  facing the huge social agenda poverty inequality and social exclusion cannot be addressed only through trade it has to be addressed by building human capacity and by investing in people and this has obviously been very successful at at that exploiting the seam between economic prosperity that is driven by trade and the effort to build the capacity to take advantage of opportunity through through human investment by trying to identify resources both money and petroleum that allow these countries to meet some of the big budget problems they face but also some of the big social problems they face what we are are seeing however over time  is several things first on the energy side there is enormous political pressure among many countries to do deals with venezuela because of the short end financing which is very very attractive especially for countries that are seeing an increase in oil prices really hit at their public sector budgets but there's a way to deal with that more broadly and ultimately from our point of view the temptation of accepting short term financial gains for long term financial cost is not the right approach we really need as a country united states but also operating within multilateral institutions to be building a capacity to help these countries especially the most vulnerable ones in central america in the caribbean to bac have which is which is building a capacity to take advantage of economic opportunity well and i think that's something that led to develop further after this meeting but again i think we're very concerned about that long term impact and what the impact of other of our larger industrialized friends brazil argentina in that area what how they're dealing with us the question of a different nature now the chair brought supportive eleanor reinforce this there's been concern for quite some time about the jewish community in venezuela and the there's some different communications are coming out of the community but there's continued to be statements about christ killers and the un resolutions and things like that and what is the likelihood in your view of any kind of physical attack by stre groups funded by the government or others inside venezuela as we've noted we're very concerned about anti semitism in venezuela our embassy has regular contact with the jewish community and recently mr rickman our special envoy on issues related to anti semitism travel to caracas and had an opportunity to meet with representatives of the jewish community and this is something we track very closely and we've been worried by one of the rhetoric but by some very specific actions that really appear to be acts of intimidation like invasions of schools and other and other properties is a point of contact a point of interest in our contact with the venezuelan government underscoring that that this has enormously corrosive impact on venezuela's image in the region but especially in the united states  in terms of the possibility for physical violence i would like to say that it's minimal but but again we are maintaining very close contact with the jewish community and and will be focused fund university of texas and texas a and m and their institutions and that was a direct from from literally one hundred fifty years ago so i don't have a problem that my concern is that if it's actually working and raising the and there's no doubt that he's created a political space and a political voice for some in venezuela that historically have not had and that he has provided the state resources in areas that historically have not had those resources and that that's positive  however as we look at this more broadly we don't see the investment in infrastructure all infrastructure capability to sustain that we don't see the job creation we don't see the building of  to take advantage of this this concentration of resources in a much neglected sector and link it to an economy that really should be creating jobs it should be developing infrastructure and it should be making very clear that if you go to school but are you actually getting something that you can turn into a skill or an education to be able to get on and help yourself to help your country at the same time and that's the long term goal i think that that should have and frankly our country should have for our own our own constituents and that's my concern and i also share the disparity in the numbers of available capital for infrastructure in the energy sector industry out of educating folks to do health care and in providing that quality health care in the community but are they can they do both can they do the the education side and the health care shot and still invest in their infrastructure to continue producing  this is the big question and this will determine venice why the switch or our own view is that venezuela had a great opportunity to connect with some of the most dynamic cutting edge companies and institutions in the world to take an enormous resource and exploit it to the point where venezuela changes its strategic relationship with people and also creates internal wealth that allows them to but different kinds of production in a public sector driven economy actually limits venezuela's opportunity to promote economic growth in the future well and good you can buy some of the technology that last from the iranians or someone else but again it still won't replace what they've given away so thank you mr chairman thank you for having the hearing and i appreciate your thank you mr mrs secretary i wonder if i can just ask a couple of questions touching on some of the things that i mentioned in my in my opening statement if you can give us some additional details that some members of congress have called on the bush admin to gratian to designate venezuela as a state sponsor of terrorism mr mack mentioned in his opening statement and others have have talked about it i know that you cannot publicly discuss the internal process involved in making such a designation for venezuela but can you tell us what specifically such a designation would mean for us venezuelan economic and political relations on the other side of the coin some argue that designating venezuela as a state sponsor of terrorism would simply play into president chavez's hands and bolster his base do you agree with this analysis and what can you tell us about the administration's thinking  about the possibility of designating venezuela as a state sponsor of terrorism thank you for the question you identified is a delicate one it is but it's an important one and it needs to be addressed i believe and in its direct and open a way assess possible obviously designating a country to be a state sponsor terrorism is a huge step we only have a handful of countries that are that have been so designated and none has been so designated recently and the impact of such a designation is significant it involves restrictions on u s foreign assistance a ban on arms related to nuclear related exports and sales controls on exports of dual use items and impose the imposition of a variety of financial and other restrictions and this is just the beginning  depending on the the industrial structure the investment structure and the other legal tools available to us the impact on a relationship can can be broadened and dramatic as as we look at venezuela's relationship we still have some steps to go in determining certain aspects of that relationship so we're not prepared to declare one way or another in terms of state sponsorship of terrorism however it is important to note that  there is a relationship that exists between venezuela and the fark although it is a relationship that from what we understand really involves a small group of people very close to president  who have been assigned with managing the relationship with the far and doing so in a way that enhances our best way of us ability to gain leverage inside of colombia political leverage inside  of colombia and that is it involves several things that is involved working to create a kind of secure in grass point for weapons and ammunition it has involved acting as  a go between between members of the far and members of the international arms selling community especially those who operate on black markets and it is also involved in some instances the possibility we have not confirmed but the possibility of cash transfers to the secretariat at a moment when the secretary it was facing a liquidity crisis because of the success of the of the colombian army against against a far this is all very worrisome to us and is indicative of a relationship that goes far beyond release of hostages it has a strategic purpose to it and and we have said on public on several occasions publicly that we have a broad understanding and recognition of the nature of the relationship that venezuela faces a big question and that question is will it attempt to use its relationship with a far to bring peace to colombia or will it continue to conspire against a democratic neighbor it's our hope that president chavez recent statements indicate that he has chosen the former not the latter that he is calling on the fark to lay down its weapons calling on the far to release hostages and calling on the fark to look for a wa advantage in the sense that we know for the most part what the relationship is between venezuela and the far you know the individuals that have managed it we believe that while these individuals have you state institutions that the relationship with the probably has not been the policy of the state institutions but the institutions themselves have been used or abused for the purpose of this of this relationship and we're looking very closely at this handful of people to determine what then more and more broadly speaking as we assess and determine what our next steps are we need to be sure that that those who have been building a relationship with the far are exposed for what they've done and pay a political price for what they've done and in the process that we don't actually enhance president chavez or those around  who have been working these issues and so the decisions that we take will be will be based obviously on the criteria of the law and on our understanding of what individuals have have been doing and have been up to but will also be very focused on on what the consequences will be more broadly was it since you mention the fark let me just ask you this i know mr burton has a follow up question is as well we've talked extensively about the the laptop computer files from colombia's march raid on a fox group camp in ecuador i mentioned in my opening statement that president chavez remark on june eighth called for the fark to release all hostages unconditionally  seize military operations so we sort of seen both sides you recently noted importance of chavez's words and expressed hope that they would be and i'm quoting you backed up by actions designed to prevent the use of venezuela's fantail with colombia for the movement of weapons so could you just tell us a little bit more about should we take president chavez at his word on the far can have you seen a change in his interaction with the fark over the past month  do you see any movement by venezuela to stop the use of its territory by the fark or to stop gun running from venezuela to the far and what role if any do you see venezuela playing in the future in helping resolve  colombia's conflict or negotiating the release of any additional four hostages and finally we mentioned that there was a meeting last friday between president chavez and president a rebate wondering if you can tell us anything about  results of that meeting well to begin with the meeting from from our point of view is an important step forward in the relationship between colombia and venezuela and the  willingness of venezuela to begin to reconstruct a variety of fronts here and border commissions that helped in a swathe in colombia over the years regulate security issues along the frontier regulate commerce and regulate the movement of people is welcomed by the united states because again this is a very important front here for colombia it's a very important frontier for venezuela there are a lot of of  between president a rebate and president chavez and and i think this meeting is also to a certain extent a recognition that in the larger struggle between the colombian democratic state and the far that the colombia functioning drug trafficking and terrorist organization which does not mean it is not dangerous and which does not mean that it does not still pose a threat to the democratic state but i think there is a broad recognition that it is its ability to present itself as a political alternative to the current government or its ability to present itself as an institution that deserves a a a space at columbia's political table has declined dramatically and i would think that this is cause president chavez and his government to reassess the worth or the value of their long term relationship with the farm but again this is something we're going to have to watch in order to understand better and again we have no illusions about what we're dealing with but what has but important i think the advantage we now have is with a clearer understanding of what the relationship has been like we're going to be able to track it more closely and we i can't give you specific results at this point in time because this is all happened so need some time in order to better assess and understand its its impact on the far and its impact on the relationship between the far can present job but i would like to close with with just one final point and that is that  twenty government and those around president chavez in the far several years to really figure out how to communicate with each other and how to understand each other and find some way to build the relationship that we have seen over time and while it's a worrisome relationship existed the fark has been in decline in other words the relationship has not helped the fark stablish itself militarily or politically in fact it's probably harmed thank you i told mr burton i'd let him do a follow up question on this real quickly regarding the potential or possibility of venezuela becoming declared a terrorist state as a practical matter venezuelan united states would would would would suffer if that should happen we get almost a million barrels of oil a day i know it's heavy crude like you're talking about in venezuela would have a terrible time disposing of all that all while which would hurt their economy should there be that kind of a division and the united states because we're not in a position of being energy independent would suffer because we would probably see price spikes in things like gasoline and other energy products so if if if we continue to see an escalation and you just indicated we won't but if you saw a man's escalation of activity between hezbollah and to try to answer but because of this center did dependency if it makes it look like it's something that just wouldn't fly t but but what kind of determination we make is based under law and under the criteria by more than just a political relationship that's that's created or established it is really linked to more direct contact and ties to terrorist activity and so we would we would evaluate this this very carefully so if in the event in the event today we really considered them a terrorist state we would find a way around the the economic interdependence that exists or we would try to do that especially if we thought that th organizations that is really more to the point of the discussion about whether or not venezuela's put on this on this list and if you look at how you know they they worked a long time building that and learning how to communicate is taken and another set of laptop computers that we find that has the information with dennis in iran so i would urge you to  continue the discussions and my understanding is that it won't be until the next report will come out sometime at the end of well or come out next year but the data will collect it will be through the rest of this year on the laptop some were suggestive of a relationship some were not some were statements even about american officials that were proven to be at inaccurate at least as related to american officials that an accurate statement i'm sorry inaccurate and accurate in terms of the bolivia the statement itself regarding not talking about the laptop i'm not talking about tampering with the laptop i'm talking about the musings if you reyes some of which were clearly without substance in terms of accuracy maybe this is what the individual believed but it  anyway provide evidence regarding anything unless that is corroborated in a different way yeah many of the documents on the laptops  e mails and memorandum which the fark is communicating with itself in which different members of the secretary are talking back and forth and they could be talking about time shannon for example actually and they might have been in there and they might have and it could or could not be accurate right and so obviously that this i don't want to spend anymore at this reflects in some instances it reflects impressions but it is important and out that the laptops aren't the only information available to us right what i what i want to get to is  decline to about duty four percent it's back up around fifty percent is that an accurate is that accurate according to your information i haven't seen the latest polling data but but his popularity fluctuates depending on on on my guess my question is if you noted the approval rating of the united states congress i will leave that to you sir have you noted the approval rating of the american people of the administration of the president various issues that are in play domestically i do not consider the venezuelan people to be dumb or stupid they're not there are a remarkable people all of them all one hundred percent of the ones that i've met and i think we have to respect the dignity in the sovereignty of the venezuelan people and i know that you do that and i know that my colleagues on the dias  as well so when they support policies that involve renegotiation of oil contracts by the chavez government i presume that that has the support boil industry for the nationalized cement industry for the nationalized but and maybe we would approach it differently but my the standing is that those areas where there there's been settlements and compensation has been made i mean and i presume the some litigation but in many cases it's been affected in a way that we would do it here within expropriation ok i think then that does he would be pursued by the you know by the government but from communications that i've had with american companies that have found themselves in that they appeared to be satisfied i guess the point i'm saying is because of the profile of hugo chavez it creates a certain reaction and one has to remember for example that there is a national oil company in norway pemex in mexico is a national oil company i mean i think there are some here in this congress that would nationalize a few american  oil companies given the price of gas that wouldn't be me i want to be clear with with you mr chairman and my friend from florida but i guess my point is that the conditions in venezuela are such that it's important for us to understand what those conditions are individuals like president uribe of colombia and president chavez of venezuela they just don't indicated that in latin america he has the strangest relationships could you identify those countries with which he and i have great respect for president uribe in colombia and i think he has taken a formidable task and it has addressed it as well as we ca n but i don't think necessarily that we understand totally at least here in this congress the various new wants is in the relationships that exist in latin american countries i have a vivid memory of president lula praising president chavez now i'm sure that like many of us here on this dias safe things sometimes that maybe we have some reservations about that might not be forthcoming fully but i think we've got to understand that every leader in every nation state at different times has different is viewed in a different lens by other nations and in my opening remarks i try to emphasize that i think and hope that this might be an effort this might be a moment when we can begin to repay other relationships and i think we really should take advantage of that and demonstrate that we're willing to open up to be forthcoming to see if we can move forward i think that's important not just in terms of the bilateral relationship but for the hemisphere and i'm sure that you know you support that kind of approach and i and i think it's important to follow through we're going to have a new administration i mean it's clear to me that that it was the chairman the call the handling of the incidents in april of two thousand and two a mistake by the administration i think it was a debacle i think that soured the relationship and so to the point where it has continued to decline and that there is such a level of mistrust because of the white house's statements surrounding the co that it's important to get past that now to move forward and to begin as best we can to diplomatically work a modus vivendi that benefits all of us i'll yield back i again i appreciate the comments by mr delahunt and appreciate you know his willingness to to work hard to maintain an open degree of communication between the u s congress and venezuela as i noted earlier in the day he's got this kind of communications important and as a i've noted also you know we welcome the recent statements by president chavez indicating willingness to to explore improve cooperation with us on the counterdrug side and we're moving right now to to underscore our interest and and seeing whether or not this this can be made real it's an important moment and it will be i think in an important moment for whoever follows this administration because the degree to which president chavez can build some level of cooperation and trust with this administration it will certainly carry over into whoever comes next and we've said that to the venezuelans on a variety of occasions but whatever the level of mistrust whatever the level of suspicion or or accusation i think we have made clear in a variety of moments and and in a variety of venues that there are areas where the interests of our two countries are so overwhelming that they should allow us to sit down and talk this is not happened yet and it is largely not happened because venezuela has chosen not to make it happen  the way and i want i will again thank you for your testimony as usual we appreciate it very much and as was mentioned by myself and many other people on this subcommittee we all appreciate the good work that you do for our country and you mr chairman and as the secretary leaves i wish for the younger people in the audience he would explain what kryptonite is so well thank you thank you very very much and the first panel is now concluded we're going to we have two votes coming very soon so we're going to try to get the second panel in order and maybe have a few opening statements before we go to vote thank you mr secretary let me let me call upon the second panel now we're pleased to have a distinguished group of academics join us and may ask them to to come and and said subcommittee will come to order we're going to see if we can get in a number of opening statements prior to the vote and once the vote is called we have about ten or fifteen minutes to where we can still continue so we're pleased to have a distinguished group of academics i join us on the second panel how v a corrales is an associate professor of political science at amherst college david myers is an associate professor of political science at pennsylvania state university jennifer mccoy is a professor professor of political science at georgia state university and director of the americas program at the carter center and finally norman bailey is adjunct professor of statecraft at the institute of world politics and president of the institute for global economic growth i welcome to all of you and let me first say if you can keep your opening statements please to five minutes to be happy we are happy to submit your your testimony into the official record and if you could just summarize your testimony in five minutes or less but we'd appreciate it very much and we'll start with dr myers of it so what i'm going to try to do is summarize some of the points perhaps that people haven't we don't repeat exactly the same thing one of the important things to remember i think is that hugo chavez came to power of elected by the venezuelan people after they rejected a democratic system that had been in power for more than forty years that democratic system was modeled somewhat on our system here in the united states we had very close relations with it it had lost credibility and part of chavez's antagonism toward the united states relates to the fact that he felt that we had kept  r democratic system which served our interests rather than his interests and i think that's important one of the other things to remember is that shah this continues to have the support of a large number of venezuela just was talking with some friends that work with me in public opinion polling and the most recent polls show that chavez commands about forty percent of the support about forty percent of people don't like him and twenty percent are in between so you know that's after being in power for nine years now a couple things here i want to talk really quickly about the political situation the economic situation maybe latin american is that there are two can two really important dimensions here one is freedom of speech and the other's freedom to organize chavez has not been all that bad on freedom of speech until you really begin to have an impact affecting his popularity and i think what you see is that this happened with r t c and when he saw it was having an impact and he moved rather precipitous against  c on the other hand what he did is he took some of the channels and he gave it to community stations these community stations were able to talk with each other to try to figure out where ben as well it should go but within the overall chavez system so i think that's the way he'll let you have a lot of freedom of speech in venezuela except when it really appears to be challenging his ability to remain in power i think the other dimension that you can look at  here very clearly is the dimension of the ability to organize and what he's done here is he systematically undercut the ability to organize of all of the interest groups that have developed under the previous democratic system over the previous forty years the for example the labor unions he began to go after them when he was unable to control them and they actually undercuts the petroleum union which was the heart of the venezuelan union the party's you want to remember the co pay with the two best organized parties perhaps in all of latin america and the system was set up so they would have a type of public funding that came out of the electoral council when chavez came to power they change the electoral system and the end result is that the parties and you can argue they did abuse some of it previously but they didn't have access to public funding and the contrast some of the public funding through sort of backdoor ways went into the chavez movements and in a sense even though i would argue that the elections were open and fair having been a observer in in in the last actually two presidents three presidential elections the day in and day out was fair but  playing field was not level when they started because of the way the money had gone into the political parties certain parties had more money more funds more access to t v and so forth terms of international relations i think one of the things that perhaps hasn't been talked about too much is the brazilian tie and chavez would really like to work with brazil and america or because brazil sees america as an alternative to united states influence through the free trade to the america all in favor of that the problem is that when chavez and the brazilians get together brazilians tend to have the dominant hand and the end result of that is not exactly what chavez wants so i think that that's a key relationship to determine the balance of power in the future in a south american continent and it's one that we need to look at more in iran the only thing i would emphasize and talk about that we haven't is the nuclear dimension long talked about the importance of each country being able to develop its own nuclear power supported iran in its nuclear confrontation with the united states and his deeds look forward to getting technical assistance and there are some agreements signed once again he argues that this nuclear relationship should be a a peaceful one the same way the iranians would argue let me ask you to to summarize  your time is my time it's done i've done ok let me summarize just in terms of the future relations started out very bad we refused to let chavez into the country when he was running for president after that when he met with president bush and in quebec he felt that he had been slighted i talked with him when he came back from that meeting and he said those of those gringos will never do that to me again then of course we had what happened in the possibility with a new administration to open a new page with him but it will have to be done extremely cautiously well that that be the last word for now obviously will be questions i'm going to call on dr mccoy and probably after dr mccoy testimony mr burton i will have to leave for two votes and then we will come back immediately after the votes and and reconvene dr mccoy thank you very much for the invitation to be here my written testimony does three things i analyze the background goals and challenges of the chavez administration bolivarian revolution and particularly focusing on democracy in governability and i addressed two questions that invitation in particular the disqualification of candidates for the upcoming elections and the implications of the information the fark laptops and find they make some suggestions for u s policy towards in a smile and latin america so obviously i will summarize here in trying touch on some of the questions you raised this morning but i want to know at the outset building on what professor myers said that we we've got to look at  in the context of the change that the people demanded and they actually demanded radical change when they first voted in go shop it in one thousand nine hundred eighty eight and what we're seeing is a trend basically a country still in a transitory state trying to build a new political and social and economic system the process has been very conflictual and the society remains polarized they have not yet settled on a new model and a new social contract that involves everybody that has the consensus of everybody they are not the only ones in latin america they're the first ones in latin america in this recent period to go through this and so it's important to look at this context as we understand latin america as a whole and been a spoiler in particular in terms of the questions about are these the recent openness or retreat from some of the radical positions that president chavez had is this permanent or is this simply a facade some of the questions raised in the first panel this morning i would say that certainly his attempts to radicalize the revolution that were defeated in the constitutional referendum vote in december did produce a very clear retreat at least temporary retreat and and i do think it's temporary in the sense that he's not given up his goals of twenty first century socialism however i have known president be in the ten years that i've known him to be a very pragmatic person and a person who has evolved his ideas and so i wouldn't discard the possibility of eve of reform of his modification of the definition of twenty first century socialism which has been evolving and has not been made clear so that while some of the retreats probably are electorally oriented for the upcoming november election and and are also a pragmatic response  some of the pressures he's facing on the ground today in terms of problems with in venezuela food shortages inflation excedrin and also the structural context of the region i think that we should allow for the possibility of some modification of his goals in the future but not abandoning those goals of twenty first century socialism we do see though in two thousand and eight more of a political openness and the  expectation that the opposition could make some electoral gains and if this happens that certainly would create more pluralism which i think would be healthy for business wailing and that raises the issue that you the questions you had raised about the disqualification of candidates for this year i wanted to comment on because it's it is actually a complex question and in venezuela it involves legal questions as well as the perceptions of political bias and the problem is that there is a law that was approved in two thousand and one by  of a large majority of the congress including opposition members that gave this authority to the controller general to actually disqualify individuals found to have conducted some kind of administrative irregularity which really means corruption to disqualify them from running for office or even holding an appointed position in the civil service and the questionable thing is whether this authority which does exist in the law violates the constitution by giving the authority of administer administrative sanctions to go beyond simply imposing fines to actually disbarring a person from running for office or holding a position and so it's really important for the supreme court to answer the questions of whether this law violates the venezuelan constitution and what should be the definition of administrative sanctions that one vidual official it is able to carry out so hopefully the supreme court which has several cases before it will decide this question before august fifth which is the opening of the period to register candidacies before the november election regardless of this i would say there's still the perception of political bias because those aspiring candidates who are currently on the disqualification list the most well known of them are opposition candidates and so if there appears to be political bias in this situation i'm out of time so i'll leave the rest of my testimony on that the fark laptops and relationships with the united states for the possibility of questions we'll we'll make sure that we get into some of those questions with you i'm going to call a brief recess mr burton i'm going to go vote your two votes so i would think we'd be back in about twenty minutes twenty