This is a surprise:

"Based on our careful and comprehensive forensic examination of each of the eight seized FARC computer exhibits and on consideration of all the evidence reviewed by our experts, Interpol concludes that there was no tampering with any data on the computer exhibits following their seizure on 1 March 2008 by Colombian authorities," Interpol secretary general Ronald Noble said...

Earlier Thursday US State Department spokesman Sean McCormack told reporters that reports on the contents of the computer that indicate Venezuela's support for FARC are "highly disturbing."

"The picture painted by some of the preliminary reports that I have seen over the last few days is disturbing, highly disturbing," he said.

"There are serious allegations about Venezuela supplying arms and support to a terrorist organization," McCormack told reporters.

Interpol had been expected to balk on the question of whether the captured laptops and hard drives were genuine. All of the nations involved -- the U.S., Ecuador, Colombia, Venezuela, and others -- had been waiting for Interpol to comment on the authenticity of the files. That impartial agency has now said that they are legitimate -- which means that Hugo Chavez has been working to upgrade FARC's weapons and influence. The U.S. will now have to consider whether to designate Venezuela a state sponsor of terror.

That's easier said than done, and any decision is likely to be made in discussion with U.S. allies (who would also be asked to apply sanctions). However, there's no question that this is bad news for Hugo Chavez and his allies.

A central complaint of Congressional Democrats in explaining their opposition to a vote on the Colombia Free Trade Agreement was to cite the alleged failure of that country to do enough to oppose paramilitary groups. President Alvaro Uribe is therefore seeking to take away that objection:

House Speaker Nancy Pelosi's main excuse for trying to kill the U.S.-Colombia Free Trade Agreement is that Colombian President Álvaro Uribe winks at atrocities by his country's illegal paramilitary groups. The charge has always been false, and yesterday Mr. Uribe proved it by extraditing 14 "para" leaders to the U.S.

The 14 include major paramilitary leaders who have been engaged in a long struggle against FARC terrorists. Mr. Uribe has been fighting the FARC even as he has tried to reduce violence by the "paras," who have sometimes been complicit in killing trade unionists. The 14 have been serving time in Colombian prisons for various offenses and are wanted in the U.S. for drug trafficking. They had been arrested under a Justice and Peace law that allowed them to avoid extradition if they agreed to certain conditions.

The real reasons the trade deal has been killed -- at least for the foreseeable future -- have more to do with paying off union backers, dealing the president a defeat, and gaining a bargaining chip for negotiations down the road. To the extent that undercuts an important U.S. bilateral relationship... well, that's a price Congress is willing to pay.

It's received relatively little attention, but even more information is emerging from FARC leader Paul Reyes's computers, which were recovered by the Colombian government after his death. And the evidence suggests that Chavez was working hard to upgrade FARC's weaponry and reach:

The documents--more than a dozen internal rebel messages--detail several years of close cooperation between top officials in Venezuela's government and military and the Revolutionary Armed Forces of Colombia, or FARC, including the construction of rebel training facilities on Venezuelan soil.

They also suggest Venezuela was preparing to loan the rebels at least US$250 million (euro190 million), provide them with Russian weapons and possibly even help them obtain surface-to-air missiles for use against Colombian military aircraft.

Most importantly, they outline a joint strategic project between Venezuela and the Colombian rebels, with Venezuela even seeking rebel training in "asymmetrical warfare" in preparation for a feared U.S. invasion.

HT: Counterterrorism Blog

The authenticity of the documents is challenged by Venezuela and FARC (but you could have guessed that without reading the article). Interpol will soon render its opinion on whether they are legitimate, but one government has already conducted a raid on a FARC facility identified in the documents--further bolstering their veracity (more on that at the Wall Street Journal). If the U.S. concludes they're legitimate, there will be serious pressure to name Venezuela a state sponsor of terror and cut off all trade with one of this nation's largest oil suppliers.

Beyond that, Democrats will have to answer for coddling this dictator. Joe Kennedy runs around extolling Chavez's virtues, Jimmy Carter disregards evidence that Chavez stole his 2004 victory, liberal actors kowtow to him for money, and Speaker Pelosi delivers on his top priority: defeat of the Colombia Free Trade Agreement. And all this occurs while FARC--with Chavez's help--is expanding its terrorist operations into Switzerland, Germany, and 15 other nations.

The Chavez cloud is starting to look like a gathering storm--one that could arrive before the November elections. When will Democrats confront the danger that Chavez poses?

From Congress Daily:

The president is described as passionate, convinced the FTA is necessary to buck up a beleaguered democratic ally and provide a bulwark against encroaching totalitarianism in South America. "I can't underscore how very much he believes in this," said one senior administration official. "He'll keep bringing it up over and over and over again." Pelosi has said she will not put the legislation to a vote until there is an agreement on a trade adjustment assistance program and other measures to help working families. But top Bush aides say they do not know exactly what Pelosi wants and suspect her demands may be a cover for bowing to union pressure to quash the FTA. "Normally to negotiate with someone you have to know what it is they want," said one senior U.S. trade official.

Sources say that the hope is to strike a deal on the Colombia Free Trade Agreement and pass it before the election. That's a complete pipe dream, however. Trade votes are anathema to the Democratic base, and there's no way they will allow the deal to be revived before the election now that it is mostly dead. There may be a chance of passing the agreement in the lame duck session after the November election, but that can only happen if John McCain wins; if a Democrat is the victor than the unions will insist on reframing the deal completely.

And as we have seen, it's also possible that if there's no deal, the Colombia FTA will simply become a campaign issue. The question then becomes whether Democrats believe the Latino vote is threatened enough to warrant action.

When Nancy Pelosi and congressional Democrats shot down the Colombia Free Trade Agreement earlier this month, I wondered when we'd see mainstream reporters point out their arrogant, go-it-alone foreign policy. Well, Nick Kristof does just that today. Worth reading.

With the House of Representatives likely to vote today to kill the Colombia trade deal, it's worthwhile to look at what the deal would do for our trade with that nation. The U.S. Trade Representative sends the following data:

...Since 1991, Congress has given Colombian products almost complete duty-free access to the US market while US products going into the Colombian market place still face stiff tariffs. The Colombia agreement finally allows American workers to compete on a level playing field. Eighty percent of all tariffs on US goods will go to ZERO on day one of the agreement entering into force (the tariff on cars is 35%, furniture is 20%, high quality US beef is 80%, etc).

Since 1991, U.S. workers and businesses have paid over a BILLION in tariffs to sell their wares in the Colombian market. Colombian workers and businesses have paid close to zero to sell in the U.S. Every day we delay enactment of the Colombia FTA we hurt U.S. workers, farmers and entrepreneurs who will benefit from opening the Colombian market to U.S. exports in manufactured goods like tractors from Illinois, TVs from Pennsylvania, washers from Ohio and agricultural goods like beef, pears and rice – all the time while the U.S. market is almost totally open to theirs.

Is the Colombia deal a good one for U.S. workers and consumers? Listen to Democratic Representative Linda Sanchez of California, who opposes it because it is too effective in expanding markets for U.S. goods:

The safety of Colombian workers is too important to risk. We need to see results.

I am also concerned that the FTA will gut Colombia’s legitimate agricultural industry. Colombian farmers will be forced to compete with subsidized crops in the United States.

Here's a crazy idea: let the Colombian government worry about their agricultural sector. If you honestly believe the accord will significantly increase sales of U.S. exports -- as it clearly will -- then you ought to approve it as quickly as possible, not kill it.

Speaker Pelosi's arrogant and unilateral move is a stick in the eye of America's staunchest allies in the hemisphere. By demonstrating that America is willing to break its word even to its best friends, it empowers Hugo Chavez just when it seemed that his influence was on the wane in the region. It also takes away from future presidents one of their most important 'soft' foreign policy tools: improved trade relations with the U.S.

That's a lot of damage done in one quick stroke. And for what?

Now that Nancy Pelosi and company have stalled the Colombia Free Trade deal -- after their presidential candidates thoroughly trashed NAFTA -- I'll be eagerly awaiting the coming stories about the Democrats' disregard for U.S. allies and their arrogant, unilateralist foreign policy.

The Wall Street Journal reports today on another surprising find on Raul Reyes' laptop: a suggestion that Congressman James McGovern (D-MA) may be more closely aligned with the terrorist FARC than with the government of our ally, Colombia:

Mr. Jones added that "a fundamental problem is that the FARC does not have, strategically, a spokesman that can communicate directly with persons of influence in my country like Mr. McGovern." Semana reports that in the documents Mr. Jones "rules himself out as the spokesman but offers himself as a 'bridge' of communication between the FARC and the congressman." Semana says when it spoke with Mr. Jones, he verified the letter and explained that "he made the offer because the guerrillas need interlocutors if they want to achieve peace and that it is a mistake to isolate them."

There's already quite a bit of finger-pointing over these documents. McGovern says that his communications with Jones were no more than an effort to secure the release of American hostages held by FARC for years. For better or for worse, McGovern made clear in January his willingness to meet with the terrorist leaders. So if McGovern is a 'FARC sympathizer,' at least he's been pretty above board about it. Further, an activist identified as the Democrats' 'lead political analyst' on Colombia says this is all bogus.

What the Wall Street Journal fails to mention is some of the other sensational material found in Reyes' laptop, and printed in Semana. One especially sensational item (my translation):

The Democrats of the USA, in Colombia, who were formerly in Venezuela, say they have a clear posture toward political negotiation with the FARC. [Gabriel] García Márquez is in charge of this mediation with the FARC on behalf of the U.S., and they want Panama to be the country through which they speak to the FARC. For that, García Márquez has already transferred that request to [Panamanian President Martin] Torrijos, and he accepted. Clinton told García Márquez in Cartagena, “I want a personal role. I want to help Colombia. There has to be an agreement with the FARC must be sought.” Senator McGovern [sic] told García Márquez that Bush wants to make Colombia what West Germany was against socialist Europe, and we have to stop him.

Clinton was in Cartagena with Marquez in 2007; it's not hard to imagine him offering some statement of support along the lines of what's included in Reyes' laptop. But has the government of Panama really been approached -- and agreed to help -- in negotiating between the U.S. government (or, is it just with the Democrats?) and the FARC? Given the cryptic mention of gringos backing Obama already noted on the laptop, this is an area that could use further investigation. Is this all in the imagination of terrorist stuck deep in the jungle, or is there substance here?

HT: Instapundit

If Venezuela's PDVSA is the goose that lays the golden eggs which enable Hugo Chavez to hold on to power, that goose may be on life support:

PDVSA is tight with financial information that other companies usually provide. But a study of official announcements, company figures and outside analyses suggests it is bleeding money and racking up huge debt, even as international oil prices are at record highs...

Figures from the International Energy Agency research center show an even bigger loss last year, $7.9 billion. The difference comes from widely divergent estimates of PDVSA's production: The IEA calculates that Venezuela produces about 2.4 million barrels of oil a day, about a quarter less than PDVSA says it is pumping out.

Most independent experts use IEA figures, which say production has dropped by 800,000 barrels a day since 1997. A continued fall means Chavez would have to cut back on social programs at home and on billions of dollars in charity to foreign governments.

If the United States designates Venezuela as a state sponsor of terrorism, a step now under consideration, it will reduce that nation's oil sales significantly, and quickly. And given the Chavez regime's ties to the FARC, such a designation would be well justified.

Hugo Chavez has been waging a war against the free market and rule of law. And as if guided by an invisible hand, the Venezuelan economy is responding rationally:

Capital flight out of Venezuela established a record during 2007, the Central Bank of Venezuela has reported, despite strict currency controls adopted in 2004 by President Hugo Chávez's government to limit the outflow of money...

According to recent Central Bank statistics, nearly $19 billion in private Venezuelan capital was transferred offshore during 2007 -- a record since Chávez was first elected president in 1998...

''This is only the official figure,'' said José Guerra, the Central Bank's former chief economist. '"There is an escape of capital investments that the Central Bank cannot account for.'"

It's becoming more difficult for Chavez to hold onto power, seemingly by the day. And with the United States considering designating Venezuela a state sponsor of terror--with encouragement from Members of Congress--things may get even harder for the Venezuelan strong man.

And how does Chavez respond? By announcing plans to build more weapons.

Fausta comments on the possibility that the Bush administration could designate Venezuela a state sponsor of terror:

The US is Venezuela's largest oil customer, buying 65% of Venezuela's oil output, while only 15% of the US's oil comes from Venezuela.

Hugo needs the oil revenues to stay in power. Without American oil revenues, Hugo's power collapses. Hugo's facing the option of having Venezuela on the State Department sponsors of terrorism list, or selling the FARC down the river.

The United States depends on Venezuela for 15 percent of its oil; Venezuela depends on the United States for 65 percent of its oil sales (and oil sales account for about half of Venezuela's government revenue). If the U.S. ceased to purchase from Venezuela, the country would have no immediate recourse. It would lose access to U.S. refineries that have been geared to process its crude. And while the nation will continue to expand its oil sales to China and India, it would be impossible to replace all of the lost export revenue immediately.

And as the United States assesses whether to designate Venezuela a state sponsor of terrorism, Secretary Rice is traveling to Latin America to check in with two dependable U.S partners in the region: Chile and Brazil. And next week, the Organization of American States is expected to announce findings on the Colombian incursion into Ecuador which resulted in the death of FARC leader Raul Reyes. The OAS has already conducted a site visit to the destroyed FARC camp, which it has described as a "permanent" installation. If the OAS findings bolster the case for designating Venezuela a sponsor of terrorism, the United States could soon render a decision that would do great damage to Chavez.

A curious statement from a State Department spokeswoman suggests that the United States is now in possession of the laptop and hard drives seized by the Colombian military when it killed FARC leader Raul Reyes:

"We are currently evaluating the contents of the confiscated laptop and hard drive and will continue to monitor the situation carefully," a State Department spokeswoman said yesterday. "We are not in a position to comment fully at this time."

In an interview with The Washington Times, also yesterday, CIA Director Michael V. Hayden said there was "no reason to doubt" the Colombian government's claims regarding the data.

"The Colombians want to share" the information, Mr. Hayden said. But he added that the CIA did not yet have its own copy of the laptop's contents.

There could be far-reaching ramifications if reports about the contents of the laptop are substantiated by the U.S. government. First and foremost, reports state that laptop files show that Hugo Chavez's government offered FARC $300 million in assistance. If true, Venezuela could be designated a state sponsor of terrorism. The imposition of trade sanctions would follow. And while such a designation does not automatically lead to a complete cut-off of trade, we currently don't do a whole lot of business with the countries already on the list: Cuba, Iran, North Korea, Sudan, and Syria. The United States consumes about 20.7 million barrels of oil per day, more than 10 percent of which comes from Venezuela. Designating Venezuela a sponsor of terrorism could potentially have a serious effect on the U.S. energy supply.

The laptop also contained a bizarre memo referring to the possibility of improved relations with the U.S. if Barack Obama is elected president. It will be interesting to see if the U.S. government's review of the laptop and its contents sheds any more light on this item.

Yesterday the Senate unanimously approved legislation to extend favorable tariff treatment to 4 Andean nations:

The Senate cleared legislation Thursday that would renew trade preferences for four South American countries, just a day before their scheduled expiration.

The measure (HR 5264), which passed by voice vote, would extend duty-free treatment for most goods from Bolivia, Colombia, Ecuador and Peru through the end of 2008. The current extension, enacted in 2007 (PL 110-42), expires Friday...

The Andean bill would reduce revenue from customs duties by an estimated $82 million in fiscal 2008 and $37 million in fiscal 2009, according to the Congressional Budget Office.

I thought that Senator Clinton favored a 'strategic pause' in trade agreements? I thought both she and Senator Obama were deeply concerned about the negative effects of expanded trade on U.S. workers? Why were they absent when the Senate voted to extend favorable tariff treatment to 4 countries, with low-wage workforces, all of which have trade surpluses against the United States?

Hugo Chavez seems to be Fidel Castro's biggest fan, and proudest disciple. Press accounts suggest the two talk regularly. Therefore, I was surprised not to see a reaction from Chavez early yesterday to the news that Castro was retiring from public life. Yesterday evening, he made a statement:

In his first official reaction to his friend and ally Fidel Castro's decision to withdraw from power, Venezuelan President said on Tuesday that 'Fidel is not resigning or giving up anything, but is moving on to take the place that is his in the Cuban revolution and the Latin American revolution'.

Calling Castro's decision 'a gesture that elevates him' rather than resignation, Chavez said the move was 'a lesson for all those who accuse men like Fidel of desperately clinging to power'.

Chavez added that Fidel 'has not completely recovered his health'.

He's 'moving on' to take his place in the revolution? He's been 'elevated?' He's not 'completely recovered' his health? Does Chavez know something he's not sharing yet? Has Castro joined Bolivar and Guevara?

The Miami Herald reports:

The Navy is considering restoring the Fourth Fleet in the Atlantic Ocean, a bureaucratic change that would raise the prominence of Pentagon maritime activities in Latin America and Caribbean.

Navy Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, made the disclosure during a visit to the Southern Command on Monday - calling it "a great idea" that "as far as I know is moving forward."

The move would bring no new vessels to the region but would put Southcom on par administratively with other Pentagon outposts that have large budgets and bigger muscle. For example, the Central Command operates the Fifth Fleet in the Middle East.

It would also restore an institution that sent U.S. Navy warships into southern waters in search of Nazi U-boats. The Navy created the Fourth Fleet in 1943 to hunt submarines in the South Atlantic during World War II.

There won't be any new ships for this reborn fleet, but there is a rationale, and I don't think it's quite as vague as what the Navy's making it out to be. Defense News quoted Admiral Roughead as saying the reorganization "would enable us to more effectively carry out the maritime strategy," (the WWS spoke with Roughead about that new maritime strategy late last year) and the Herald quotes Frank Mora, professor of national security strategy at the National War College: "It gives the Navy a bigger profile in the region . . . It sends a message to the region that you are important at a time when there is a sense that we don't care."

All these things are true, but I expect the Fourth Fleet will do exactly as it once did during the Second World War: hunt subs in the Caribbean and, to a lesser extent, the South Atlantic. Only this time the enemy won't be Nazi U-Boats, but Russian Kilos operated by the Venezuelan Navy. Last summer there were numerous reports that Venezuela was planning to purchase anywhere between five and nine of the boats from Moscow in a deal valued at between $1 and $2 billion depending on the final numbers.

This is the most likely explanation for why the Navy would revive a fleet after a nearly 60 year hiatus. The Coast Guard is capable of handling the current interdiction mission in the Caribbean. And while the Navy may want to engage more extensively with the Brazilians, who now operate an aircraft carrier purchased from the French in 2000, Venezuela is is the only potential threat to shipping in the region. As one expert told me, if Chavez gets his own sub fleet "it would turn the Caribbean into a Venezuelan lake." You have to figure that the U.S. Navy is thinking the same thing.

Last Tuesday (18 December) a Brazilian actor dressed as Santa Claus (known as Papa Noel in Brazilian Portuguese) had a slightly unpleasant incident en route to a large children’s party in the Rio de Janeiro favela of Nova Mare. While passing over another favela, Vilo do João, the helicopter that the Rio Santa was flying in came under fire from drug traffickers who thought the chopper was part of a police raid.

The helicopter pilot was able to return to base, but two bullet holes were found in the fuselage of the aircraft. Police spokesmen in Rio state that it is only a matter of luck that no one on board was struck or killed by a stray round.

Favelas exist in almost every city and town in Brazil, but the most famous of them are in and around Rio, which has over 700 of them scattered throughout the city’s metropolitan area. Drug trafficking and other criminal gangs remain the center of life in many of the favelas, a Portuguese word that means "slum" or ‘"shanty town," but those English phrases do not quite capture the meaning of the word and its connotations in terms of Brazilian culture and society.

These sprawling and constantly expanding settlements are perhaps Brazil’s greatest social problem. Their existence and the plight of the inhabitants has been the subject of such famous films as a Cidade de Deus (City of God) and a documentary called Bus 174, which is named for one of the bus routes that skirts the areas of a favela in Rio.

The favelas themselves are for the most part unauthorised settlements of squatters who bootleg electricity off of the power grid and have no title to the land that their one-on-top-of-the-other brick and corrugated tin homes are built on. The city administration has almost no authority inside of these neighbourhoods, and the Rio police only will make forays into these "danger zones" in large numbers and with near-military force that many times includes--as can be seen from last week’s shooting--helicopter gunships.

Their growth has been accelerating over the past ten years. In the 1990s numerous Rio residents of Copacabana, Ipanema, and Leblon migrated to a more distant but chic suburb called Barra de Tijuca located in the Zona Oeste, which is sometimes referred to as "Carioca (a slang word meaning a resident of Rio) California," in order to escape the crime and other problems brought on by the nearby and ever encroaching favelas. Unfortunately for them the favelas have kept up a steady growth in their direction to the point where many of the residents are almost as close to one of these shanty towns as they used to be back in Ipanema.

The issue of how to cope with the favelas goes on and, as one American friend who lives and works in Rio told me one day as we sat at sidewalk café, "it is not going to be solved in our lifetime." There is a semi-happy ending to the helicopter story, however.

Upon his return to the helicopter pad the Brazilian Santa took a car (generally considered to be much more dangerous a method for travelling to a favela than by helicopter) and arrived at the Christmas bash to distribute gifts to the more than 1,000 children and their parents who had been waiting for him. The president of the resident’s association described the children as somewhat crestfallen "as they had expected Santa to arrive by helicopter."

If planning a similar event for your Rio Christmas party, it may be safer for Papa Noel to come in an armoured Range Rover. Otherwise you might want to paint your helicopter red and write "Papa Noel On Board" on the underside of the fuselage. In the meantime, Feliz Natal and Feliz Ano Novo to everyone.

In what may be the least surprising story of the year, Newsweek reports that Chavez might not have been so gracious in defeat after all:

[B]y midweek enough information had emerged to conclude that Chávez did, in fact, try to overturn the results. As reported in El Nacional, and confirmed to me by an intelligence source, the Venezuelan military high command virtually threatened him with a coup d'état if he insisted on doing so. Finally, after a late-night phone call from Raúl Isaías Baduel, a budding opposition leader and former Chávez comrade in arms, the president conceded—but with one condition: he demanded his margin of defeat be reduced to a bare minimum in official tallies, so he could save face and appear as a magnanimous democrat in the eyes of the world. So after this purportedly narrow loss Chávez did not even request a recount, and nearly every Latin American colleague of Chávez's congratulated him for his "democratic" behavior.

If it's true, one would expect the purges to begin in Venezuela any moment now. But don't expect any deep introspection on the left, where the new story of Chavez shows Bush what real democracy is has already become a favorite narrative.

HT: Farley

Fausta Wertz pulls together some interesting stories about Venezuela. Indebted to Russia, expecting oil revenue that probably won't be realized, and now potentially dealing with a rival with deep oil reserves of its own.

It could not happen to a nicer fella than Hugo Chavez.

In June of 1992, right before President George H.W. Bush’s scheduled visit, a group of Panamanian thugs ambushed an American Humvee north of Panama City, killing a U.S. soldier. Among the murderers, according to a U.S. indictment, was a man named Pedro Miguel González. Over the weekend, González became leader of the Panamanian National Assembly.

His election comes at a time when Panama’s center-left Democratic Revolutionary Party (PRD) is torn between its moderate wing and a more radical bloc associated with jailed dictator Manuel Noriega, who led Panama until his ouster by U.S. troops in 1989. According to Otto Reich, who served as a senior diplomat for Latin America under Presidents Ronald Reagan and George W. Bush, González “belongs to the Noriega faction.” Reich says the PRD radicals consider Panama’s current president, Martín Torrijos, also of the PRD, to be “too moderate” and “too pro-U.S.” If the name sounds familiar, that’s because Martín’s father was the late Omar Torrijos, Panama’s erstwhile military ruler.

For Panamanians, the timing of González’s elevation could not be worse. Congress is now mulling the U.S.-Panama free trade agreement, signed in June, which Panamanians broadly support. But Democratic House leaders are demanding that Panama first amend its domestic laws before the FTA is approved. Having González installed as Assembly leader will only harm the country’s image.

González, of course, maintains his innocence in the 1992 murder case. In 1997 a Panamanian court acquitted him. But as Reich points out, senior U.S. officials believe that the trial was “a sham.” The State Department is now aghast at his political ascendance.

In an official statement, Deputy Spokesman Tom Casey said that Foggy Bottom was “deeply disappointed” with the choice:

“González and others have been indicted in the United States on charges including first degree murder, conspiracy to murder, and attempted murder of a U.S. national in the killing of U.S. Army Sergeant Zak Hernandez-Laporte and the attempted murder of U.S. Army Sergeant Ronald T. Marshall in an assault near Chilibre on June 10, 1992. There is an outstanding arrest warrant for González. The United States wants those responsible for the murder of Sergeant Zak Hernandez-Laporte and the attempted murder of Sergeant Ronald Marshall to face justice.”

Panama is currently experiencing a tremendous economic boom. (“It looks like Dubai,” says Reich.) Thus far, Torrijos has pursued responsible policies to sustain the boom and has eschewed the radical line promoted by Venezuela’s Hugo Chávez. He has shown that Washington need not fear center-left Latin leaders, provided they uphold democracy and free markets. Even though corruption persists, as the Economist noted in July, “Mr. Torrijos’s government has a cleaner record than its predecessors,” and has also “been rather more effective than its predecessors.”

But the election of González is a big setback. “The U.S. sees this as very, very worrisome,” Reich says.

I've written before on the help that the United States has gotten from Brazilian president Lula Inacio da Silva in dealing with Hugo Chavez. While the United States and Lula's Brazil aren't 'allies,' we've developed a pretty good working relationship based on shared interest. And what do we share an interest in today? Apparently on denying Hugo Chavez admission to Mercosur, where he could turn that Latin American alliance to his own goals:

Mercosur faces its most serious political crisis following the spiraling conflict between Brazil and Venezuelan President Hugo Chavez who publicly announced a three months "ultimatum" for the definitive approval of his country's entry to the main South American trade block.

"We're going to wait until September. We're not going to wait any longer because the congresses of Brazil and Paraguay do not have the political or moral standing to decide our incorporation (to Mercosur). And if they don't, we'll withdraw until new conditions emerge." said Chavez on national radio and television.

Venezuela's final incorporation to Mercosur must still be voted in the legislatives of Brazil and Paraguay, (Argentina and Uruguay have already done so), but following the incident between the Brazilian Senate that questioned the Chavez regime decision not to renew the license of Venezuela's oldest (and opposition) television station which forced it out of the air, the vote has been stalled.

The Brazilian Congress is waiting for a retraction following Chavez' description of them as "United States parrots" and "oligarchs." Brazil's Foreign Affairs minister Celso Amorim suggested a "friendly gesture," but the Venezuelan president replied that it's the Senators who must apologize for having interfered in Venezuelan internal affairs and considered Amorim's suggestions as "impertinent."

You have to give Chavez credit for chutzpah; it takes a bold man to 'withdraw' an application that Brazil and Paraguay have refused to act on. And taken along with Brazil's success at blocking Chavez's goal of an 'OPEC for gas,' and their willingness to sign an ethanol deal with the United States, it's starting to look like Lula and Chavez just don't like each other.

According to Alberto Garrido--a columnist with Venezuelan daily El Universal--the rift between Venezuela and Brazil is real and significant:

Chávez has run into a brick wall in his effort to turn Mercosur into a ''revolutionary'' bloc, and Brazil and Argentina have reached a dead end in their efforts to use the regional trade bloc as a way to mollify Chávez's anti-capitalist, investment-scaring rhetoric. As a result, Venezuela's big plans for an anti-U.S South American alliance are going nowhere, Garrido said.

'What Chávez once called `the Caracas-Brasilia-Buenos Aires strategic axis of South American liberation' is now broken,'' Garrido told me. ``What's left for him to lead is the Bolivarian Alternative of the Americas group made up of Venezuela, Cuba, Bolivia, Ecuador and Nicaragua.''

Brazil might ultimately decide it has invested too much in Venezuela to risk a major breach in their bilateral relationship. But with Venezuela as a full member of Mercosur, it would be much harder to reach trade deals with large, free economies--such as the EU. Whatever the outcome, it looks like Chavez has just about reached the limits of what he can accomplish with economic power. That may be all the more reason to take his military program very seriously.

In what has become something of an annual ritual, the House of Representatives yesterday approved an amendment to appropriations legislation to expand commerce with Cuba. But while the House has voted every year since 1999 either to lift the embargo or the travel ban, this year it limited itself to an important technical change that would kick start farm exports to the island dictatorship:

By voice vote, the House adopted an amendment by Jerry Moran, R-Kan., that would block the Treasury Department from enforcing a rule that has effectively limited agricultural sales to Cuba. The rule requires payments for U.S. goods to be made before a ship leaves port. It replaced an earlier regulation that allowed U.S. firms to accept payment after the goods were received in Cuba.

Moran said the current restriction is “disruptive” to the U.S. economy and hurts the country’s reputation as an exporter because it slows the flow of agricultural goods.

In a brief House floor debate on the amendment, supporters argued that Cuba is--technically--open to U.S. agricultural exports now, due to an exemption from the embargo approved in 2000. Two years ago, however, the Treasury Department began to require that Cuba pay for these goods before they are shipped.

And why is that such a problem? Because Cuba doesn't pay its bills. This is from the floor statement of Congressman Lincoln Diaz-Balart, a Cuban American proponent of the existing policy:

[The 2005 amendment] stemmed from requests by U.S. financial institutions that were becoming concerned by the increasingly slow rate of payment for agricultural sales by the Cuban regime. The financial institutions requested OFAC to clarify the legislative intent of cash in advance, which is in the law, in order to protect the interests of those financial institutions on their claims.

The Cuban regime's entity in charge of agricultural purchases has an abysmal record of not paying its creditors and has been known to extort or seek to extort agricultural associations in order to increase the regime's lobbying pressure in favor of the unconditional lifting of sanctions, which is sought by the regime. The regime promises more agriculture purchases if agriculture interests lobby Congress for what the regime seeks, an end to sanctions. In effect, the opening of mass U.S. tourism and trade finance.

Currently, Mr. Chairman, the Cuban regime's foreign debt represents close to 800 percent of its GDP, and it is ranked by international credit agencies as the second worst, if not the worst, credit risk in the world. Countries throughout the world are taking extreme measures to obtain restitution for billions of dollars they are owed, which the Cuban regime refuses to pay.

It's not the change in Congressional leadership that's led Cuba trade advocates to lower their sights, according to the WEEKLY STANDARD''s own Duncan Currie. He says "there was not an anti-embargo majority when Republicans were in control; now, my guess is, there would be. But if any bill weakening Cuba sanctions reaches his desk, President Bush will veto it... he has been absolutely consistent on this issue."

And in case you think President Bush might change his mind, the 'Statement of Administration Policy' on the bill includes this rather clear statement: 'If the final version of the bill contained a provision that weakens current restrictions against Cuba, the President would veto the bill.'

So if Fidel wants to enjoy any American farm products before the good Lord takes him away, he'd better get out his checkbook.

Hugo Chavez is an outsized personality with a bit of Don King about him. His foolish policies, anti-Americanism and devotion to a walking cadaver earn him a tremendous amount of attention in the United States. Less noticed, however, is that his attempt to remake Latin America after his own image has led to opposition from the region's largest player: Lula Inacio DaSilva. The Los Angeles Times reports that Lula is traveling around South America seeking to promote Brazil's role as leader of the region. He is at pains to make clear that this is not aimed at Chavez:

Though Lula has denied any effort to undermine Chavez's petro-diplomacy, South American analysts see the Brazilian president responding to his Venezuelan counterpart's oil-funded strategy to become a regional power broker — a role Lula believes should rightly be his because his nation is Latin America's largest and most populous.

Away from the attention of the U.S. media, Chavez and Lula have been clashing over energy for a while--at least since Brazil's Petrobras lost much of its investment in Bolivia when Evo Morales followed Chavez's advice and lead by nationalizing the country's gas sector. Since then, a rivalry between the two over hydrocarbons and ethanol has taken shape. After a regional energy summit last week, it looks like Lula won hands down. Brazil blocked Chavez's effort to create an 'OPEC' for South America's natural gas exporters (Argentina, Venezuela and Bolivia), and forced Chavez to back down on his opposition to Brazil's ethanol partnership with the United States:

Ethanol, it seems, is main ingredient for a new geopolitical relationship that has arguably increased US influence in South America while presenting real possibilities of a global presence for Brazil.

This argument, however, was absent from the regional energy conference held on 16 April in Venezuela, just two weeks after Lula visited Bush at Camp David. Rather than use the forum where 12 South American heads of state were present to attack Lula, Chavez offered his support for ethanol as a regional energy effort.

And in the middle of this back-and-forth between Brazil and Venezuela, Lula found time to host Bush and to travel to Camp David--in a matter of just a few weeks. What do you suppose motivated the White House to spend such time on Lula, and to put such priority on an ethanol deal with Brazil?

When it comes to ties to the United States and the Bush White House, Lula's Brazil will never be Tony Blair's Britain. But the U.S. has developed a good working relationship with Brazil. At its core lies a significant common interest: the desire to reduce Hugo Chavez's influence in Latin America. And common interests are often the foundation of very productive relationships.

From the AP:

[President] Silva made the economy and crime the cornerstones of his inauguration speeches Monday. He vowed to increase economic growth that has lagged behind the rest of South America, without sacrificing the social programs that are largely responsible for his high popularity.

But political opposition to needed economic-policy reforms and entrenched criminal gangs will make meeting those goals no easy task, analysts said.

But political opposition to needed economic-policy reforms and entrenched criminal gangs will make meeting those goals no easy task, analysts said.

First elected in 2002, Silva, known familiarly as Lula, adhered to strict fiscal discipline and market-friendly policies during his first term, attracting foreign investors, strengthening the currency and curbing inflation.

But Latin America's biggest country has seen only feeble economic growth, reaching 2.8 percent in 2006 and expected to rise 3.4 percent in 2007 — far below Silva's stated goal of 5 percent.

"If growth were to reach or exceed 5 percent, Lula would be in better position to pursue even more aggressive and successful anti-poverty policies, giving him a splendid legacy in Brazil and even throughout Latin America," said Michael Shifter, Latin America analyst at Inter-American Dialogue research group in Washington.

"But Lula will have a very tough time reaching a higher rate of growth, raising productivity and stimulating investment, unless he carries out thoroughgoing policy reforms," he added….

From today's Wall Street Journal:

Senior military officials are betting that larger U.S. military training teams that would live and work with Iraqi units could speed the development of an Iraqi army force that has shown some promise, but is still bedeviled by corruption, absenteeism and logistical problems. How quickly the Iraqi army improves could ultimately determine how quickly U.S. troops could withdraw from the country.

However, even the staunchest advocates of building up the Iraqi army warn that the strategy carries significant risks that could derail it. In the near term, commanders say, shifting more U.S. troops into training and advisory jobs could lead to an increase in sectarian violence in Baghdad, because there would be fewer U.S. troops patrolling the streets. Iraqi army units and their U.S. trainers would have to pick up the slack.

But how does a surge in violence advance the political process? If drawing the training teams from current US brigades on the ground “carries significant risks,” why do it? Why not take the advice of former Army Vice Chief of Staff Gen. Jack Keane and others? The bottom line: the commander in chief needs to act. Is there still a copy of “Supreme Command,” a book on the president’s summer reading list a few years back, somewhere in the West Wing?

From AP:

After battling, Panama wins seat on U.N. Security Council

Panama got 164 votes in the 192-member U.N. General Assembly, more than the 120 needed to win the two-year term starting January 1. Venezuela got 11 votes, Guatemala 4 votes, and Barbados 1 vote.

(With the opposition splintered, an Ortega victory seems likely according to preliminary results today. If he wins, will President Ortega keep some distance from Chavez or embrace him? Will President Ortega keep his campaign promises or will he go back to his old socialist, anti-American ways?)

(The latest poll has Sandinista leader Daniel Ortega leading the presidential race by 10 points. Venezuela's Chavez, who's been lobbying for a seat on the UN Security Council, has been just as busy trying to put Ortega in office. A Chavez win on both counts would obviously not be good news for the U.S.)

Posted on July 23, 2006:

Once again, Venezuela's Hugo Chavez has become an issue in a presidential campaign. This time in Nicaragua, where Chavez has been showering gifts upon Sandinista party leader Daniel Ortega. Today’s Washington Post reports:

Ortega, 60, whose armed revolution made him the Reagan administration's chief antagonist in the hemisphere during the 1980s, is also getting a boost this time from Washington's current bête noir in Latin America: Venezuelan President Hugo Chávez.

Among other shows of support, Chávez recently bypassed Nicaraguan President Enrique Bolaños and negotiated a deal directly with Ortega to sell oil to Nicaragua under a long-term credit scheme intended to free more government funds for social spending…. In addition to the oil deal, Chávez has arranged to distribute fertilizer at cut-rate prices to Nicaraguan farmers through an association allied with the Sandinistas….

But there are signs that Chávez's assistance could backfire. In a recent poll commissioned by the Nicaraguan weekly Confidencial, 49 percent of Nicaraguans said they thought Venezuela was interfering. And there are rumors that Chávez is directly financing Ortega's campaign -- fueled by the abundance of enormous posters of Ortega's smiling face across not merely the capital but also in the countryside.

Aside from delivering a political black eye to the U.S., Chavez may have other things in mind with his oil charity and in pushing for an Ortega victory. He may hope that a President Ortega returns the favor by derailing Managua’s current plan to allow for more extensive oil exploration off its coast. The prospect of tapping these potentially large oil deposits is something that I’m sure doesn’t sit well with the oil-rich Chavez. Stay tuned ...

(The AP reports some good news: "Guatemala, whose candidacy had been backed by the United States, received 109 votes, 15 short of the necessary 124 and triggering a second round. Venezuela trailed with 76 votes." Russia and China reportedly backed Chavez.)

Posted on August 9, 2006:

This fall the UN will vote to replace the current non-permanent members of the Security Council with new nations. Though little reported in the media, for many weeks Hugo Chavez has been traveling the globe trolling for enough votes from regimes opposed to the U.S. to get on the Council. He’s been offering cut-rate oil deals and has signed agreements to buy weapons. His latest campaign swing brought him to Tehran, where he lavished praise on the regime for standing up to the Americans. Now, he’s taken up the cause of Hezbollah and has accused Israel of perpetrating a “new Holocaust” in Lebanon. On Monday, Israel withdrew its ambassador to Venezuela. Earlier, Chavez recalled Venezuela’s charge d’affaires to Israel. In a recent televised speech, the BBC reports, Chavez said that he had

no interest in maintaining diplomatic relations, or offices, or businesses, or anything with a state like Israel….

Israel has gone mad. It's attacking, doing the same thing to the Palestinian and Lebanese people that they have criticised - and with reason - the Holocaust. But this is a new Holocaust.

At least one very senior Republican I know of believes the Bush administration must make denying Chavez a seat on the Council a top priority. Specifically, all U.S. ambassadors should let their host country know that the U.S. government would view a vote for Chavez as an unfriendly act. The administration should also encourage a friendlier nation in Latin America to seek a Security Council seat.

One thing is for sure: If Chavez succeeds, it would be very bad news for the U.S.

(Today's Christian Science Monitor has more on his bid for a Security Council seat: “One country that supports Venezuela's campaign is China, which is perhaps not enthralled with the Chávez rhetoric but is lured by the idea of more countries holding its worldview on the Council. China has not been shy about its preference to see greater respect in Security Council deliberations for nation-states' rights, and less attention to individuals' universal rights - ideas implicit in Chávez's discourse.”)

Posted on August 9, 2006:

This fall the UN will vote to replace the current non-permanent members of the Security Council with new nations. Though little reported in the media, for many weeks Hugo Chavez has been traveling the globe trolling for enough votes from regimes opposed to the U.S. to get on the Council. He’s been offering cut-rate oil deals and has signed agreements to buy weapons. His latest campaign swing brought him to Tehran, where he lavished praise on the regime for standing up to the Americans. Now, he’s taken up the cause of Hezbollah and has accused Israel of perpetrating a “new Holocaust” in Lebanon. On Monday, Israel withdrew its ambassador to Venezuela. Earlier, Chavez recalled Venezuela’s charge d’affaires to Israel. In a recent televised speech, the BBC reports, Chavez said that he had

no interest in maintaining diplomatic relations, or offices, or businesses, or anything with a state like Israel….

Israel has gone mad. It's attacking, doing the same thing to the Palestinian and Lebanese people that they have criticised - and with reason - the Holocaust. But this is a new Holocaust.

At least one very senior Republican I know of believes the Bush administration must make denying Chavez a seat on the Council a top priority. Specifically, all U.S. ambassadors should let their host country know that the U.S. government would view a vote for Chavez as an unfriendly act. The administration should also encourage a friendlier nation in Latin America to seek a Security Council seat.

One thing is for sure: If Chavez succeeds, it would be very bad news for the U.S.

One way to send a message to Hugo Chavez, as Sen. McCain argues, is for Senate Democrats to stop obstructing the confirmation of John Bolton as UN Ambassador. From the AP:

Bolton Derides Venezuela Airport Protest

UNITED NATIONS (AP) -- U.S. Ambassador John Bolton on Monday derided the Venezuelan foreign minister's protest over being detained at a New York airport as ''street theater'' and propaganda.

Foreign Minister Nicolas Maduro claimed officials tried to frisk and handcuff him at John F. Kennedy International Airport as he left the annual U.N. General Assembly session on Saturday. Screeners grew suspicious when Maduro used cash to purchase a one-way ticket to Miami shortly before the flight was to leave, U.S. officials said….

The U.S. State Department has apologized for Maduro's treatment, but Bolton was less conciliatory.

''There was no 'incident' at the airport -- this was Venezuelan street theater,'' Bolton said. ''He did not request the courtesies we would have extended to get him through the airport. He purchased his ticket at a time and in a manner and with funding such that he was asked to go to secondary screening and he objected to that.''

''And the first thing he did was call the press and speak to them in Spanish, so this is propaganda,'' Bolton said….

Nancy Pelosi and Charles Rangel were quick to condemn the remarks of Hugo Chavez. Good for them. But there’s something else afoot here. I suspect Democratic election strategists are a bit nervous over all this. Americans view Democrats as far more willing to work through the UN to deal with international problems than Republicans. Fair or unfair, the extensive news coverage of the UN circus (let alone the oil deals a few Democrats have cut with Chavez) isn’t helpful to the Democrats, and I bet Nancy Pelosi and Harry Reid know it.

So what should the Republicans do? Here’s a suggestion: bring John Bolton’s nomination to the Senate floor as soon as possible and ask Sen. McCain to lead the fight for his confirmation on the floor and in the media. McCain’s a very strong backer of Bolton, and Democrats would be hard pressed to maintain a filibuster preventing an up or down vote on Bolton. Moreover, the Republican message should be straightforward if a cloture vote is necessary: a vote to end the Bolton filibuster is a vote against Hugo Chavez. That will get the attention of voters.