February 5, 2007  --   The following article presents numerous facts about Venezuela which should not be ignored. The Wall Street Journal's Mary Anastasia O'Grady, in her weekly Monday column, notes that Venezuela  is now facing "the official installation of the dictatorship."  The piece goes on to report that ..." Venezuelans have been watching their democracy slowly suffocate for seven years now. The militarized government has methodically gobbled up institutional independence; it has bribed where it couldn't bully; it has sowed hateful class envy. Each valiant effort by democrats to hold ground and salvage civility sapped a shrinking supply of fortitude."

One might conclude that O'Grady writes about how Chavez will turn off the lights- functional lights- in Caracas. Chavez has already said he will turn off sound in Caracas by shuttering free speech and the media. There will be no functional lights, no sound and no actions for the people of Venezuela under these terms.

Ecuadoreans face a similar, if not an identical, fate today which can no longer be deemed "just" a Venezuelan problem or some fluke of "progressive political activism" which must be adjusted to under some mythical passive-aggressive enabling of state-backed suicide which kills any remaining light or quality of life. There is nothing to be gained from surrendering to Hugo Chavez's plan for obedience to one ruler under a serf-like existence for Ecuador. Ecuadoreans have been given the gift of advance warning: they can learn from Venezuela's mistakes and move with sure steps to bar the total dictatorial power grab underway by Rafael Correa's team of Chavez-backed activists and well funded NGOs, sometimes called his Cabinet and advisors. To do so, Ecuadoreans will have to first utilize their still in existence constitutional right under democracy and demand first a full disclosure of every planned governmental consequence and not surrender to the seemingly endless propaganda pressures which insist that Ecuadoreans never ask what lies ahead and blindly enjoin the so called Constitutional plebiscite underway, knowing full well that any concerns for liberty will of course be ignored as Correa's government refiguration plan is to deny all constitutionally guaranteed freedom. The Correa plan underway is no magical plan for reforming Ecuador's myriad problems: it is an escape artist's dream to install a totalitarian regime for self enrichment of the Chavez team..

With no meaningful or written knowledge of Rafael Correa's intended and fraudulent constitutional switch from democracy to a non-democracy as is underway, any Ecuadorean who willingly agrees to Correa's deceptive terms of plebiscite engagement is irresponsibly foolish and naively exhibiting a childish capacity to be deceived on a grand scale. No one with a brain would sit down to "negotiate" under the Correa terms for his opaque, in- name -only "plebiscite" which first demands removing the very language that is supposed to be considered. If this detail seems small, we say it is huge. It is hugely important to first know what the terms of engagement are, what is the very matter to be so discussed, and what the possible socio-economic and geo-political outcomes may be. Rafael Correa has repeatedly stated that there will be no compromise and no rules for engagement in his "constitutional plebiscite" because he intends to destroy democracy and install a one man dictatorship to mimic his ally Hugo Chavez. There is no defense for or justification known for destroying the Republic of Ecuador.

Any acquiescence or surrender to the suicidal Rafael Correa rules of engagement to ostensibly refashion their constitutional democracy today by any in Ecuador would be an admission of either rank bribery or failure to act responsibly as an office holder or citizen. To fend off state suicide, all persons should know well the suicide pact they enter into. Ecuador's Rafael Correa has failed to deliver the facts of his regime.

In just a few short weeks, Correa, with dizzying speed, has presented an illicit and incomplete Annual Budget to Ecuador's Congress which is intentionally full of omissions and misleading statements; the Congress of Ecuador should send this back to Correa and demand a legal, complete Budget;

Correa has informed Ecuadoreans that they will soon be part of the Hugo Chavez orbit of failed nations under his leadership; Ecuadoreans need to insist on factual knowledge about what this means and a cost-benefit analysis;

Correa has an obligation to deliver to the Congress of Ecuador his new contracts and agreements with Hugo Chavez and Iran. Unless and until full disclosure is underway, Correa is intentionally acting to deceive. Unless and until these intentional acts of deception are corrected, any future trust relationship with Correa is a fool’s errand or on the take (or both);

Correa has swept out of office reformers and leaders of the National Police and the military brass. While it is a new president's right to depend on trusted advisors, Correa has installed advisors loyal only to him and Chavez and not to the constitutional democracy of Ecuador

Correa demands a new communist manifesto called a new constitution to replace democracy. With profound deception, he has set out to sell this plan using a very expensive advertising campaign to gin up support while still refusing to factually share any details of his convertibility of democracy plan. This is a fool's errand.

There can be no support for Correa's surgical plan to fashion and new Frankenstein monster of communism for Ecuador;

Correa has triggered his paid, violent golpistas to cause harm to Ecuador's Tribunals, courts, and its Congress. As of February 1, 2007, Correa sent his mouth organs to the Congress of Ecuador to publicly lie that while Correa would call off his paid dogs of attack, he expected their Congress to submit under pressure to fully supporting his communism- installing plans- even though their Congress had never seen one scrap of paper outside Correa's internal texts;

Rafael Correa has already cost Ecuadoreans huge financial losses. His illicit economic plans, in less than one month, have cost Ecuadoreans billions of dollars even as sustainable investors flee for the exit door, fully repulsed by the graft, extortion and corruption of the Correa team. There will be no legitimate economic growth for Ecuador under Rafael Correa whose sole intention is to provide Hugo Chavez off the books oil while converting Ecuador in to subservient serfdom by deception while fashioning a “new” constitution which will make crime legitimate and legitimate acts as illegitimate.

As a self professed and committed communist, Rafael Correa has expanded state ties to Castro’s agents even as rumors swirl about Correa’s willingness to serve as a pass through actor for Hugo Chavez’s ally, Iran’s Ahmadinejad.

Ecuadoreans have an obligation to demand disclosure of the Correa-Chavez-Iranian activities which some rumor as ranging from Iranian missile installations to assist Chavez’s offensive weapons build up to Chavez’s pass through of Iran’s cash-for-golpistas in Ecuador (violent actors for Correa’s self coup underway to force surrender of democracy) .

When the peoples of a nation choose to remain ignorant of its own fate and fail to stand on principle, it dooms itself into unending unethical failures. Ecuadoreans have a chance to turn off the power grab of Rafael Correa's total powers. It is not enough to simply inquire why Iran’s Ahmadinejad was seated with Hugo Chavez and holding hands with Bolivia’s Evo Morales at Correa’s installation event. To be sure, this symbolic gesture of Ecuador’s backers of Correa: Chavez, Morales and Ahmadinejad- was a repulsive surrender of the state to the global Axis of Evil. 

The facts are this: Ecuadoreans can choose to act responsibly for meaningful change under their own nascent constitutional democracy without shooting themselves by crafting a totalitarian regime. Their own constitution can be legitimately reformed with sustainable effects while refusing Correa’s illegal Hezbollah-style tactics and totalitarian governance.

Freedom lovers know that they face an uncertain future in the Andes. Bribery and infiltration is rampant as previously dependable leaders across Ecuador lose their strength for a variety of reasons. We have advised a faux machismo, slapping on testosterone patches to deal with the brain drain and loss of courage underway but this snappy trick will not be enough. Real courage comes from the convictions of ones’ acts which start with the admission of certain facts.

The Organization of American States (OAS), faced with these facts, can no longer stay huddled in Washington, ignoring the gathering perversities of Correa’s governmental, structural assault on democracy, no matter how strong is its approval of Correa’s KGB-style political hate-filled propaganda activities to subvert democracy in to Iranian style totalitarianism.

The facts of Correa’s auto-golpe must be on the table and not simply rely on recycled propaganda-Chavez’s propaganda. Just because Correa has temporarily called off his attack dogs on Ecuador’s congress, it remains that Rafael Correa encouraged and backed well organized, illicit and violent attacks on the remaining independent governmental entities that he did not already control.  That Rafael Correa illicitly laid out his own craven extortion before congress that his deal was to restrain his own backed violence if and only if Ecuador’s congressional leaders would submit to his /Correa’s demands that they become a rubber stamp congress in show only, like Correa’s kangaroo courts, as are all other institutions in Ecuador today. This is a defilement of the obligations of the OAS which must now act to regain some semblance of integrity, seriously missing in Ecuador as democracy is under attack- violent attack from Correa’s paid thugs. This will not be as easy as it is to switch off an electric light but it must be done with a demand for full and enforceable constitutional disclosure from their own government, under the light of transparency as must be demanded by the OAS, or else their lights of liberty will go out. And there will be no one left to blame but themselves.

 The Editors, ECrisis

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The Wall Street Journal

February 5, 2007                                                                             

THE AMERICAS

Lights Out in Caracas

By MARY ANASTASIA O'GRADY
February 5, 2007; Page A16

Venezuela's congress didn't sing the Internationale last week when it granted President Hugo Chávez the power to rule by decree in a ceremony on Caracas's historic Plaza Bolivar. But it did pledge unwavering allegiance to a socialist revolution that rivals the Paris Commune. It was the moment Venezuelans had been dreading for years: the official installation of the dictatorship.

Mr. Chávez had asked congress for the power to rule by decree because, he said, "it is necessary to draw up the mother of all revolutionary laws, especially in the area of economics." Now that he can govern unchallenged, the first order of business under the new rules, he says, will be to seize control of the largest private electricity company in the country (Electricidad de Caracas), the privately held oil operations in the Orinoco Belt, and the country's largest telephone company, known by its Spanish initials as CANTV. This is shades of Cuba 1960, and if things go according to plan, it won't be long before Caracas could start looking like Havana.

Venezuelans have been watching their democracy slowly suffocate for seven years now. The militarized government has methodically gobbled up institutional independence; it has bribed where it couldn't bully; it has sowed hateful class envy. Each valiant effort by democrats to hold ground and salvage civility sapped a shrinking supply of fortitude.

Thoroughly frustrated by a rigged system, opponents called for a boycott of the congressional elections in December 2005. An abstention rate of 75% to 80% confirmed widespread dislike for the president. But the few who showed up gave Mr. Chávez's sympathizers 100% of the congressional seats. That's how the president, "reelected" in December 2006 in a process that was neither free nor fair, managed to get the legislative branch to hand him dictatorial powers. One Venezuelan newspaper captured popular opinion last week with the headline "Heil Hugo."

Comparisons between Mr. Chávez and Europe's 20th-century dictatorships are natural but they overstate the Venezuelan president's management skills. At least Mussolini made the trains run on time. Mr. Chávez, on the other hand, seems to possess a reverse Midas touch. Under his leadership the country has soaring murder rates, double-digit inflation, food shortages, oil-field depletion and a massive brain drain. Petroleum prices are coming off all-time highs but a Jan. 25 Economist Intelligence Unit briefing referred to Venezuela's "difficult economic climate," as well as "unattractive" labor markets and "severely distorted" financial markets. The most high-profile infrastructure news in the past seven years has been the collapse of one of the country's busiest bridges.

The more likely fate of Venezuela under Mr. Chávez is that of Cuba, once the third-richest country in Latin America and now so poor and backward that it would take a major economic upgrade to qualify it as a banana republic. Sadly, this is where Venezuela seems to be heading.

Much has been made of the threat to seize private property in the Orinoco oil fields, and to be sure this is a serious matter. Oil companies tend to yield to tyrants and Venezuela is likely to get away with a lot, even though it badly needs private-sector technology. But the oil industry is not the only one getting pummeled. An equally alarming assault on property rights is the promised expropriation of the most reliable supplier of electricity in the country: Electricidad de Caracas (EDC), now owned by the U.S. company AES.

EDC is not only a well-run, private-sector enterprise. It is also a symbol of the entrepreneurial ambition of Venezuelans before the 1973 oil boom that changed the psyche of the nation. The company was founded by a young engineer named Ricardo Zuloaga, who read about hydroelectric transmission in a scientific journal in 1891, spent years raising capital, traveled to Europe to acquire the necessary equipment and, once back in Venezuela, transported it on mules to build the plant. EDC began supplying electricity to Caraqueños only about one year after the Niagara Falls electric plant started up in the U.S.

EDC remains Caracas's power supplier today and is one of the few things that still work in the country. But that could soon change. The government doesn't have a very good record of running utilities. In 2006, according to the Venezuelan daily El Universal, the state-owned electric company Cadafe, which supplies most of the rest of the county, was responsible for 70 of the 92 major power outages that affected Venezuelan electricity users. Other state-owned generation, transmission and distribution facilities were responsible for a majority of the remaining 22 failures. EDC, which both generates and distributes electricity, experienced only three major outages last year.

Things got so bad halfway through 2006 that, according to a report in the July 21 issue of the economic newsletter VenEconomia, there was a spate of protests -- some violent -- against the headquarters of Cadafe and its subsidiaries for the increasing frequency of power failures. VenEconomia commented on "the incomprehensible paradox" of Cadafe's performance in a country with abundant energy sources.

The explanation is simple: There has been serious underinvestment in power generation and transmission at Cadafe during Mr. Chávez's tenure. "From 2001 to 2005 Cadafe completed barely 24% of its investment objectives at a time when it registered millions of dollars in operational losses," VenEconomia noted. Meanwhile, energy demand increased 9% per year nationwide since 2003, and in some areas of the country demand jumped by as much as 20% per year over the same period. Though Cadafe had been budgeted more than $2 billion in government funds, VenEconomia said, the company warned that the new thermal generation projects would take between two and three years to complete.

When AES bought EDC in a hostile takeover in 1999, investors were already bailing out of Venezuelan assets due to the shadow Mr. Chávez was casting on his country. AES thought it got a bargain. But it may turn out to have overpaid. The Venezuelan government has still not said how it will value the company, but it is doubtful that investors will receive the market price.

The real losers in this deal are likely to be the people of Caracas. They will not only have to suffer all the tribulations of a state-owned electric company; they will also be living in an environment where investors have been driven away.

Write to O'Grady@wsj.com