THE BLOG
08/03/2010 11:21 am ET Updated May 25, 2011

Venezuela: Real Trouble South of the Border

How could Oliver Stone be so fond of Hugo Chavez, the President of Venezuela, and hawk his new documentary about a man that many of us think may become the next Fidel Castro?

The film, South of the Border, has not exactly won rave reviews. And how could it? The image of Stone arm-in-arm with the Venezuelan caudillo, lobbing softball questions to the Kirchners in Argentina, is borderline embarrassing. Stone's film perpetuates the myth among some that Chavez is merely a populist, a leader who does have some fair grievances about Western capitalism. You know, the kind of leftist who might find himself spoken of fondly in the Hollywood cocktail circuit.

This depiction, of course, is merely the cinematic portrait of Chavez. I know the truth because I have seen, first-hand, the 12-year rule and destructive transformation of a country living the non-fiction version of Chavez -- and, I can tell you, he is far more akin to Stalin. I spent more than a decade working in Latin America and was in Venezuela during the final weeks leading up to the election in December of 1998. It started with excitement and hope -- Chavez had run on an anti-corruption and anti-poverty platform. I was happy for the people of Venezuela. But, then, the dream of a Venezuela that was to protect, support, feed and educate its lower classes fell apart and fell into a worse abyss than that which had defined Venezuela for the previous four decades.

Such a story would have made a more interesting and candid film that might have had some impact in starting the wheels of change turning. But, Stone didn't have the courage or, maybe, the basic insight, to tell it. Or, someone may simply have pulled the wool over his eyes.

With the U.S.'s diplomatic interests so intensely focused on the Middle East this past decade, it's no wonder that Chavez has risen, ever so quietly, to become a geopolitical nightmare for the United States. His close relations with Tehran, financing of the Colombian terrorist organization FARC, and support for other Bolivarian strongmen, like Bolivia's President Evo Morales, risks destabilizing the entire region.

In recent months, emboldened perhaps by our turn-the-other-cheek approach to Latin America, Chavez has aggressively moved to gain absolute control of his country's various branches of government and civil society. In February, the Inter-American Commission on Human Rights issued a report about widespread human rights abuses in the country; at that time and since, many government critics headed into exile, and some prominent citizens have been tossed in jail. Not surprisingly, they are all owners of companies in key industrial sectors in Venezuela.

Chavez's appetite for private sector takeovers has been swift and efficient, reminiscent of how Putin's Kremlin stepped in to quickly take over its oil industry by jailing the CEO of Yukos in 2003. The charges against Khodorskovsky were, of course, cooked, and the trial that ensued was a farce. But it did not matter. Moscow now has complete control over Yukos -- hence it controls its national patrimony, oil.

This scheme is playing out in real time now in Caracas. In the past seven months, the government has seized control of more than a dozen banks, giving Chavez control over 30 percent of the industry. Last month, Caracas took control of 11 oil rigs owned by a U.S. firm (that is a story unto itself for a different day). In all, Chavez has privatized Venezuela's oil, banking, media and food sectors. The takeover of the last two industries -- and the most recent -- effectively give Chavez a vise-grip on his country.

Given our own country's distraction with a poor economy, a deadly and unwinnable war in Afghanistan and man-made disasters such as the Gulf of Mexico oil leak, it's no surprise that the victims of Chavez' crackdown are getting little press.

The most visible case concerns Guillermo Zuloaga, the main shareholder of Globovision, and his partner, Nelson Mezerhane. Together, they own a private independent television station in Venezuela that has been fiercely critical of Chavez. The Venezuelan authorities have issued an arrest warrant for Zuloaga. Prosecutors accuse Guillermo Zuloaga, who owns the Globovision channel, of "business irregularities" and Mr Zuloaga's supporters --- of which I am one -- say the warrant is an effort to silence him.

The other involves Ricardo Fernandez Barrueco, whose case most resembles that of Yukos's fallen CEO. His firm, PROAREPA, dealt for a while with Caracas, was one of the largest suppliers for Chavez's Mercal Program, which was essentially a government effort to distribute food to the poor. When, the government fell behind in its payments and racked up a $1 billion debt with PROAREPA, and after Barrueco bought three banks, Chavez threw him in jail in November of 2009. Fernandez Barrueco was not formally charged with a crime until January of 2010, and has been in prison since. However, a trial date has yet to be set. Meanwhile his family has been driven into exile and all of his assets in Venezuela have been frozen and expropriated by the government.

The jailing of wealthy businessmen is a textbook move by textbook strongmen like Chavez and Putin. Let's be honest, outside of the G20, it's how the world operates. So no one should be surprised that Zuloaga and Mezerhane are both in exile in the United States, while businessmen like Barrueco sit in prison cells in Caracas.

However, the U.S. should be concerned when legitimate business leaders are getting jailed by the week. These moves are the final act in a political passion play that we have witnessed before. Just ask the many Cuban-Americans in Miami who saw their livelihoods and families stolen away all in the name of revolution. What started as a "democracy" has turned into more than 40 years of the pope of Cuba waiting for the election that would provide another candidate other than Castro.

But, back to Venezuela -- a country that was once filled with richness in culture, history and resources and which is now being destroyed and squandered. A place where, in the end, Chavez's revolution is being televised. Except that, unfortunately, we have only Oliver Stone to thank for that.