Reports that the United States channelled hundreds of thousands of dollars in grants to American and Venezuelan groups opposed to President Hugo Chavez, is likely to cause the Bush administration even further headaches.
Although White House officials have vigorously denied any suggestion that they gave a green light to the forces involved in the attempted coup, mounting evidence supports the theory that there was a tacit collusion.
Over the past year, the National Endowment for Democracy, a non-profit organisation that is funded by Congress, quadrupled its budget for Venezuela to more than $877,000.
It has just been revealed that the organisation directed funds to the labour group whose protests led to the coup attempt.
The latest revelations follow an admission by Carlos Molina, one of the military officials involved in the short-lived ousting, that he was acting with American support.
The White House's rapid acceptance of Chavez's equally short-lived successor, businessman Pedro Carmona Estanga, also raised questions from the very beginning.
The State Department is investigating the latest claims, while the Pentagon, which continues to insist that American military officials did not encourage a coup, has ordered a review of its actions.
Chavez won a landslide presidential election victory in 1998 and his controversial measures have since polarised public opinion.
Social unrest and corruption have been rife since he assumed power, with Venezuela's catholic bishops claiming the administration "is characterised by the spread of corruption and opportunism".
Chavez, who regularly turns out for official events clad in camouflage fatigues and a red beret, recently passed some 40 new laws, one of which allows the seizure of land that is `improperly utilised'. He has attempted to impede the Venezuelan free press and threatened to jail the Venezuelan archbishop and assume control of the labour movement.
Further measures include precluding the sale of dollars to companies not domiciled in Venezuela and forcing oil companies to double royalty payments to the government.
Such demands fuelled the flight of overseas investors and alienated the business community and labour unions. But unemployment has fallen and inflation has decreased -- facts that ensure his continued support on the streets.
Venezuela is the third-largest supplier of oil to the US and a leading member of Opec, so the US has an obvious interest in its internal affairs. The administration's dislike of Chavez can be attributed to a number of factors.
His determination to keep oil prices high by limiting crude production, as well as visits to rogue states such as Iraq and Libya and his close friendship with Fidel Castro, to whom he sells oil at rock bottom prices, have been frowned upon by the US.
When Chavez denounced the killing of children in US bombing raids on Afghanistan, US Secretary of State Colin Powell was critical of his `insufficient support"'.
Chavez's attempts to assert control over the state-owned oil company, Petroleos de Venezuela (PDVSA), which accounts for one third of the $120 billion economy, triggered the events that led to the attempted coup on April 12.
Dissident executives and oil workers began a work slowdown that crippled oil production and exports after the President appointed allies to the state board. Venezuela's largest business and labour groups called a general strike to support them, and the wave of opposition forced Chavez from office.
Thousands of angry protesters subsequently stormed the presidential palace, thus ensuring the populist president's remarkable return to power within two days. Chavez has continued to plant like-minded allies in key positions and Opec secretary general Ali Rodriguez has just been appointed president of the PDVSA.
Rodriguez, a former Venezuelan oil minister, is politically close to Chavez. At Opec he oversaw four agreements last year to cut sales by a total of five million barrels a day.
That averted a glut as a slowing global economy brought demand growth to its lowest since the 1980s. Output from the 11-nation group almost reached a 10-year low in February. Rodriguez's appointment has been welcomed by analysts, who describe him as a steady hand and believe his appointment will bolster crude prices and ensure Venezuela keeps its output quotas.
But his appointment may not prove enough to save Chavez. The main labour federation has already called for a march against the government on May 1 and there have been renewed calls for a referendum to oust him from office.
Start Date: 2002-04-30 01:00:00-04
End Date: 2002-05-30 01:00:00-04
Created By: Sys Admin