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### Viewing cable 06CARACAS958, EXPLAINING VENEZUELA'S COZINESS WITH IRAN,

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
06CARACAS958 | 2006-04-07 20:08 | 2010-12-01 21:09 | SECRET//NOFORN | Embassy Caracas

`

    VZCZCXRO6675
    PP RUEHAG
    DE RUEHCV #0958/01 0972019
    ZNY SSSSS ZZH
    P 072019Z APR 06
    FM AMEMBASSY CARACAS
    TO RUEHC/SECSTATE WASHDC PRIORITY 4003
    INFO RUCNMEM/EU MEM COLLECTIVE PRIORITY
    RUEHBO/AMEMBASSY BOGOTA PRIORITY 6275
    RUEHBR/AMEMBASSY BRASILIA PRIORITY 5360
    RUEHLP/AMEMBASSY LA PAZ PRIORITY 1877
    RUEHPE/AMEMBASSY LIMA PRIORITY 0083
    RUEHQT/AMEMBASSY QUITO PRIORITY 1952
    RUEHME/AMEMBASSY MEXICO PRIORITY 3674
    RUEHOT/AMEMBASSY OTTAWA PRIORITY 0655
    RUEHBU/AMEMBASSY BUENOS AIRES PRIORITY 1129
    RUEHSG/AMEMBASSY SANTIAGO PRIORITY 3426
    RUEHMU/AMEMBASSY MANAGUA PRIORITY 1124
    RUEHDG/AMEMBASSY SANTO DOMINGO PRIORITY 0110
    RUEHAO/AMCONSUL CURACAO PRIORITY 0723
    RUCNDT/USMISSION USUN NEW YORK PRIORITY 0090
    RUEHMI/USOFFICE FRC FT LAUDERDALE PRIORITY 2980
    RHEHNSC/NSC WASHDC PRIORITY
    RUMIAAA/HQ USSOUTHCOM MIAMI FL PRIORITY
    RUEHUB/USINT HAVANA PRIORITY 0622

` `

    S E C R E T SECTION 01 OF 05 CARACAS 000958

    SIPDIS

    NOFORN
    SIPDIS

    HQSOUTHCOM ALSO FOR POLAD
    FOR FRC LAMBERT

    E.O. 12958: DNG: CO 04/08/2026
    TAGS: PGOV MASS PARM VE
    SUBJECT: EXPLAINING VENEZUELA'S COZINESS WITH IRAN,
    C-NE6-00140

    REF: A. CARACAS 00661
    ¶B. 05 CARACAS 01822
    ¶C. CARACAS 00330
    ¶D. TD-314/18176-06
    ¶E. TD-314/18093-06
    ¶F. HAVANA 04139
    ¶G. IIR 6 902 9642 06

    CARACAS 00000958 001.2 OF 005

    Classified By: POLITICAL COUNSELOR ROBERT R. DOWNES FOR 1.4
    (D)

    -------
    Summary
    -------

    ¶1. (S//NF) Manifest in the public rhetoric of both
    countries, a shared hatred for the USG is the driving factor
    in the budding relationship between Iran and Venezuela. The
    BRV is favoring Iran with petroleum deals and other contracts
    that appear to make little commercial sense. Although rumors
    of Venezuela's cooperation with an Iranian nuclear weapons
    program appear baseless, Iran and Venezuelan spokesmen have
    announced their intention to develop Venezuela's civilian
    nuclear capabilities. Press reports and Embassy contacts
    suggest Venezuela is preparing to try to exploit its own
    uranium deposits with Iran's assistance. Sensitive reporting
    indicates Venezuela may also be seeking armaments,
    cooperation on maintaining aircraft purchased from the United
    States, and help in training its military reserves. Post
    will continue to monitor the relationship while seeking to
    exploit Venezuela's missteps as it isolates itself from
    countries alarmed about Iran's nuclear ambitions. End
    summary.

    ¶2. (SBU) Iran and Venezuela have been signing bilateral
    agreements galore. Iranian parliamentary speaker Gholam-Ali
    Haddad Adel told the press during his visit to Caracas in
    mid-February that the two countries had signed 100 accords.
    Iranian President Mohammad Khatami and Venezuelan President
    Hugo Chavez inked twenty of these together in March 2005,
    including plans to cooperate in petrochemical, agricultural,
    and housing projects. Venezuela often signs agreements to
    show off its importance on the world stage without following
    through. Yet, in the case of Iran, there appears to be more
    to the budding relationship than show. Below we examine
    several possible explanations for the bilateral coziness, in
    rough order of importance.

    --------
    Ideology
    --------

    ¶3. (SBU) Iran shares a disdain for the U.S. Government that
    the BRV seeks in its foreign allies. Chavez' ill-defined,
    left-wing, anti-American ideology often drives his foreign
    policy decisions, even when his foreign counterparts only
    appear to be seeking commercial benefits. With Iran,
    however, he has found a partner that shares his desire to try
    to face down the United States. Evident in his daily
    rhetoric, Chavez' ideology--and his accompanying attempts to
    use it to stir up his political base--best explain his
    decision to isolate himself from much of the world by
    supporting Iran. (Venezuela joined only Syria and Cuba in
    voting February 4 to oppose Iran's referral to the U.N.
    Security Council for its involvement in uranium enrichment.)
    Chavez, who regularly alleges the U.S. military has stolen
    Iraq's oil, has accused Washington of having designs on
    Iran's supply. Other BRV officials have taken Chavez'
    ideological cue to the point of making Venezuela appear

    CARACAS 00000958 002.2 OF 005

    fanatical. General Alberto Muller, a key proponent and
    planner of Venezuela's new military doctrine, announced
    February 14 that Iran would be acting "in legitimate defense"
    if it were to use nuclear arms, although he cautioned that
    Venezuela did not support the production of such weapons.
    According to Argentine newspaper La Nacion, Venezuelan
    Ambassador to Argentina Roger Capella Mateo stormed out of a
    Mercosur meeting with Spanish Foreign Minister Miguel Angel
    Moratinos when Moratinos said his country opposed Iran's
    refusal to submit to nuclear controls.

    ---------
    Petroleum
    ---------

    ¶4. (C) Ideology may be the only explanation for bilateral
    cooperation in the petroleum sector. Iran and Venezuela
    appear to enjoy each other's company as fellow radical
    oil-producing countries. Both Iran and Venezuela are OPEC
    price hawks, but their solidarity on the supply issue does
    not appear to have translated into many mutual benefits.
    Foreign Minister Ali Rodriguez told reporters March 11 that
    Iran and Venezuela were signing agreements because their oil
    policies coincided, but mentioned nothing tangible,
    digressing into how Venezuela could benefit from Iranian
    experience in the cooperative movement and in developing
    small agricultural machines. Venezuela has granted the
    Iranian company Petropars the rights to certify a block in
    the Faja region. The Iranians, however, have no experience
    exploiting the extra heavy crude found in the area. (The
    industry perception is that if a company is granted rights to
    study a block in the Faja, it will eventually be given a
    block in the area to exploit.) Chevron representatives told
    us that the Iranians approached them seeking assistance on
    carrying out the certification studies.

    --------------------------------------
    Commercial Agreements: Who's to Gain?
    --------------------------------------

    ¶5. (C) A USD 200 million binational fund to finance
    investment in both countries could ensure that commercial
    ties continue to grow. Nonetheless, the unprofitability of
    many of the deals inked with Iran again raises the question
    of whether ideological factors are driving the relationship.
    For example, in January Venezuela offered Iran contracts to
    build low-income housing even though Iran's bid was twice as
    expensive as the Venezuelan private sector's. (Note:
    corruption could explain the overpricing, as well.)
    Venezuela also plans to build a USD 220 million cement plant
    to supply the local market with Iran's help. Such a plant
    would appear to be a poor investment. Despite the enormous
    transportation costs for cement, multinational CEMEX
    currently exports cement from Venezuela for a price lower
    than the going Venezuela rate because its local buyers delay
    payments, according to a prominent economic contact. Chavez
    announced in February he would import 10 Iranian plants to
    process corn flour, a Venezuelan staple. The BRV likely sees
    the state takeover of this industry as a solution to recent
    shortages caused by its price controls. In another example
    of state economic planning and ideological ties trumping
    sound investment planning, Iran will establish an ethanol
    plant in Lara State, according to press reports. The BRV may
    view the production of ethanol--a by-product of sugar
    refinery--as a fringe benefit to its project to resurrect
    failed Cuban sugar mills in Venezuela.

    ----------------------------------------
    Going Nuclear?: Uranium Rumors and More

    CARACAS 00000958 003.2 OF 005

    ----------------------------------------

    ¶6. (C) As reported REF A, recent rumors that Venezuela is
    trafficking in nuclear weapons and mining uranium for Iran
    appear to be little more than the conspiracy-mongering by
    Chavez adversaries. More disconcerting, however, are BRV and
    GOI statements that suggest a long-term plan to develop
    Venezuela's nuclear potential. Chavez mentioned on his
    weekly "Alo Presidente" program in May 2005 the possibility
    of asking help from "countries like Iran" in developing a
    nuclear energy program. In February 2006, Iran publicly
    affirmed its willingness to help Venezuela develop nuclear
    energy, according to press reports. (See REF B for a
    description of Venezuela's need for foreign expertise to
    restart the fledgling nuclear program it shut down in the
    1980s.) In March 2005, a memorandum of understanding signed
    by the Iranian and Venezuelan Presidents established that
    Iran would help Venezuela create a "National Geoscience
    Database" that would contain a survey of the mineral deposits
    throughout Venezuelan territory. Tomasso Tosini, geologist
    and director of the Earth Sciences Institute of the Central
    University of Venezuela, told us in June 2005 that creating
    such a "basic geological map" of Venezuela would be the
    logical first step to restarting a uranium program in
    Venezuela.

    ¶5. (C) During a February 2006 meeting with poloff, UCV
    professor and senior Accion Democratica party official Nelson
    Lara claimed to have information substantiating Iran's
    involvement in Venezuela's mineral sector. Lara said active
    duty military officers in his classes told him that 20
    Iranian officials were working in the Ministry of Basic
    Industry and Mines. He said the Iranians did not answer to
    any Venezuelan management. Lara speculated about their
    involvement in uranium mining but said he did not know the
    Iranians' role in the ministry. He added that 37 Iranians
    were active in the Venezuelan Institute of Geology and Mines,
    which Chavez launched in mid-2004.

    ¶6. (C) Venezuelan threats to take over property in areas
    believed to have significant radioactive deposits are fueling
    additional rumors that Venezuela is planning to mine
    uranium. (Embassy note: Rumors that the BRV is planning to
    mine these areas appear overblown. Factors besides uranium
    are driving the government's targeting of land, although the
    delays in expropriations reported in REF C could also reflect
    BRV attempts to drag out negotiations for land until it can
    gauge the true value of properties' mineral wealth.) In the
    mid-1980s, the Ministry of Energy and Mines conducted
    preliminary geochemical samplings that indicated the possible
    presence of uranium deposits in at least two locations
    currently eyed by the government:

    -- The study revealed "anomalous areas to be assessed in
    more detail" along the Caroni River in Bolivar State, where
    the National Guard has begun evicting individual gold and
    diamond prospectors reportedly to prevent them from damaging
    the environment. In mid-March, National Guard attempts to
    dislodge people from the Caroni basin ended in the deaths of
    two miners. Demanding the withdrawal of soldiers stationed
    in the Venezuelan military's fifth theater of operations
    (TO5), miners responded by blocking roads and burning TO5
    facilities.

    -- The ministry report cited a section of Cojedes State as a
    source of concentrated uranium. The area contains ranch and
    nature preserve Hato Pinero, which the government has
    targeted for possible expropriation. Concerned that the
    ranch's alleged mineral wealth might attract BRV interest,

    CARACAS 00000958 004.2 OF 005

    ranch owner Jaime Perez Branger gave us a copy of an earlier
    (1959) Ministry of Mines report calling Pinero's granite "the
    most radioactive in the region." A footnote in the document,
    however, noted that the counters used in the 1959 study would
    not have detected uranium ore, one of many possible sources
    of radioactivity.

    -------
    Defense
    -------

    ¶7. (S//NF) Defense cooperation may also help explain the
    expansion of the bilateral relationship (REFS D and E).
    Indeed, an army official is scheduled to replace the current
    Iranian Ambassador to Venezuela. According to sensitive
    reporting, the Venezuelan Government is seeking lethal
    armament from Iran such as rockets and other explosive
    materiel. Venezuela has also sought from Iran parts for the
    U.S. aircraft in its fleet that have been denied under the
    Department's policy prohibiting the sale of components for
    lethal munitions. Finally, sensitive reporting suggests that
    Venezuela has sought help from Iran in establishing its
    military reserve force. The Iranian popular mobilization
    army (Basij) and the revolutionary guard corps (IRGC) invite
    comparison with Venezuela's still evolving parallel military
    structures: the reserves and the territorial guard.
    Commander of the Basij Gen. Mohammed Hejazi visited Venezuela
    in 2005, and an IRGC colonel has arrived here probably on
    permanent assignment. A retired military officer citing
    Venezuelan reservists told us March 24 that Iran had a small
    number of soldiers in Venezuela training the reserves.

    ---------------
    Shared Culture?
    ---------------

    ¶8. (S//NF) Venezuela has a Muslim population of about
    250,000 including some tens of thousands of Shia'. In
    addition to its political activities, the nine
    Iranians--including four career diplomats--posted to the
    Iranian Embassy in Venezuela represent a small but growing
    number of their citizens working in Venezuela in both the
    formal and informal sectors. Cultural ties between the two
    countries, however, do little to help explain the expanding
    relationship. Most Venezuelans are unfamiliar with Muslims
    and are unable to distinguish Iranians from Arabs or from
    other Muslims. Indeed, as REF F states about Iran and Cuba,
    Venezuelan and Iranian societies have little more in common
    than their despotic leaders' antipathy toward the United
    States.

    -------
    Comment
    -------

    ¶9. (C) Venezuela's support for a country that has nuclear
    ambitions, supports terrorism, and talks about wiping Israel
    off the map is of grave concern. It also alarms
    nations--such as France (REF G)--that have tended to make
    light of our concerns about Venezuela's antidemocratic
    tendencies and militarization. We can exploit this alarm.
    Just as the shared animosity toward Washington driving the
    Iran-Venezuela relationship leads to irrational commercial
    endeavors, it is also likely to lead to additional diplomatic
    gaffes and other missteps that reflect poorly on the BRV
    among wary international observers.

    ¶10. (C) We should not dismiss the uranium rumors. At the
    very least, it appears clear Venezuela plans to prospect for

    CARACAS 00000958 005.2 OF 005

    uranium with the intention of starting a nuclear program.
    Like many BRV schemes, the plan may remain in bureaucratic
    and financial limbo for years, and it may never be
    fulfilled. Yet, in the event that its ends are not peaceful,
    it warrants careful monitoring. All source information
    indicates Iran needs foreign sources of uranium to maintain
    its nuclear program. How Iran would benefit from any
    Venezuelan plan to extract uranium will be an open question
    as long as Venezuela's uranium deposits remain unverified.

    BROWNFIELD

`