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U.S. Juggernaut Rolls over Honduras as it Targets Hugo Chavez
E.P. HeidnerThe dark side of democracy is launching its most formidable assault of recent years in itswar against the poor in Central America. When the poor of Venezuela put Hugo Chavezin charge of the western hemisphere’s largest oil reserves, they redirected billions of dollars away from the coffers of western investors and, bankers to the needs of the poorin Venezuela, Honduras, Bolivia, Cuba, Ecuador, Dominica and Nicaragua.
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By sharingVenezuela’s wealth with its neighbors using oil subsidies, Hugo Chavez allowed it’s lessfortunate neighbors to focus on meaningful reform, thus initiating a series of eventsleading to the recent coup in Honduras.Using this oil subsidy from Venezuela to improve social benefits, President ManuelZelaya leveraged the benefits to increase the minimum wage in Honduras by 60%,where one of the largest industries is the textile/garment industry, employing 130,000.
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 Historically, one could anticipate such windfalls to find their way to numbered accountsin offshore banks, but Zelaya actually transferred the benefits to those in greatest need.The deal with Venezuela provided benefits for the poor not available from the U.S.“Honduras will receive access loans worth US$30m for farmers and a donation of 100 tractors from Venezuela, both aimed at improving agricultural productivity.Venezuela will also buy bonds worth US$100m for housing programmes and help toencourage technological development and promote oil exploration.”
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 All this was done in the absence of any viable support being offered from the U.S.
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Moreimportantly though, Zelaya threatened those who control the wealth in Honduras byasking the poor if they wanted to continue down the path of Hugo Chavez in Venezuela,Evo Morales in Bolivia and Rafael Correa in Ecuador, by allowing a true reform orientedPresident (Zelaya) to stay in power. Some might argue that it was Zelaya’s pursuit of reform that caused him to be ousted. Alternatively, there are a number of reasons tobelieve that the removal of Zelaya is nothing more than collateral damage in the wake of the juggernaut being launched at Hugo Chavez. If the takeover could not be ‘justified’ onsuch weak arguments being currently used, other reasons would have been found.Needless to say, the murkiness of the rationale provided enough leverage for Secretary of State Clinton to not need to push for re-instatement of Zelaya.The ouster of President Manuel Zelaya of Honduras in late June is one of several majoryellow flags in the recent international news suggesting that there is a coordinated effortby those that control U.S. foreign policy to remove Hugo Chavez as a threat to Americanstyle democracy, and enrich themselves on Venezuelan oil reserves. Rest assured, HugoChavez is a real threat to ‘U.S, procedural style democracy.’ By building an internationalalliance around the world’s largest reserves of hydrocarbons, he and is allies arewithdrawing from the World Bank and setting up an independent mutual defenseorganization. Most important is his withdrawal from the World Bank and its control over
 
the International Centre for Settlement of Investment Disputes (ICSID.) The ICSID isthe legal institution that determines what international corporations are to becompensated when a country nationalizes those corporations’ holdings.
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In 2008, ICSIDawarded ExxonMobil $12Billion against a claim that Venezuela contended was worthonly a tenth as much ($1.2 Billion).
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That Venezuela was able to arbitrate a successfulagreement without ICSID involvement with the other three companies that had its oilclaims nationalized should demonstrate that the World Bank represents an extension of U.S. foreign policy, and is punitive in its actions.
One curious connection between the World Bank and the coup in Honduras comes withrole of former Honduras Banco Futuro President Jaime Chavez, who on two occasionshas hosted religious revivals in Miami, and used General Romeo Vasquez – the leader of the coup – as a guest speaker.
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Banco Futuro was ab
sorbed by the Bank Latin AmericanFinancial Services (Lafise) Group, owned by close friend of 
the Bush family Roberto Zamora.Zamora and Jaime Chavez have their names sprinkled across a range of World Bank meetings and seminars. Zamora is also a middle man for the U.S. Overseas PrivateInvestment Corp. Through Lafise, he gets loans from OPIC, makes loans to CentralAmerican developers, and does well off the interest. Zamora helps developers build fivestar hotels with OPIC loans
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– Hugo Chavez and Manuel Zelaya use oil revenues to helpfarmers, build infrastructure, raise minimum wage. LAFISE is a major holder of Honduran debt.
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Jaime Chavez also operates as a ‘consultant’ on money-laundering.
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 Another pundit associated with this bank crowd is Octavio Sanchez, former Minister anddefender of the takeover.
The key issues are:
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Hugo Chavez’s control of Venezuelan oil wealth has created a financialcounterweight to U.S. control of Central and South America, allowing localpoliticians to make decisions which favor their own constituencies rather than theinternational investors;
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This counterweight is in the process of wresting legal control away from WorldBank courts where pro-U.S. investors usually have their way with third worldnationalizations. Other nations in the Americas and Africa are taking note andfollowing suit;
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Venezuela has recently completed taking effective control of “all” aspects of itsoil industry by taking over controlling interest in services;
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The U.S. has failed in its efforts to takeover Iraqi oil, and has been pushed out of its behind-the-scenes of Russian oil. Its national policy advisors are desperate tosecure long term ‘control’ over global oil reserves.The response appears to be a series of quiet initiatives within the U.S. foreign policy toisolate and remove Hugo Chavez. In many respects, the actions mirror activitiesundertaken to bring down the collapse of the Soviet Union in 1991, and take over its oilindustry. Moreover, the reader should not forget the terrible “carpet of bombs’ that theU.S. was able to promise to rain down on the Taliban when it dared to announcedeparture from its deal with Enron on the Afghan pipeline - a promise made severalmonths before September 11, 2001.
 
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Removing Manuel Zelaya begins a political isolation process; Removing Zelayamaintains U.S. control over its military bases in Honduras used so effectively tohost the anti-Sandinista (Contras) forces in the rebellion that destabilizedNicaragua. The Central American ALBA coalition can expect more of the same,whereas under Zelaya that would not happen;
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The purportedly illicit $134 billion in U.S. bonds confiscated in Italy in June of this year were suggested by the Italian officials to be targeting Venezuela. Thebackground to these bonds is explained elsewhere, but essentially it is speculatedthat the funds support the takeover of Venezuelan oil.
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U.S. based oil platform contractors are stopping the pumping of oil, reducing flowof oil and revenues to Venezuela;
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Fitch is lowering the credit rating, increasing the costs to Venezuela of its bonds,and citing the ‘rising risk of fiscal crisis’;
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There has been inexplicable market speculation occurring around the Venezuelanbonds, above and beyond normal market demand.
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 The recent announcement by the U.S. Central Intelligence Agency that it intends onhiring a ‘bench’ of financial experts in derivatives should only confirm that it is going toengage in actions to financially destabilize its perceived enemies and pursue its goals.
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 Anyone anticipating that President Obama - while expressing ‘outrage’ at the coup – willactually do anything about it should review some history. The reality appears to be thatObama has arranged a quid pro quo with Wall Street that trades control of foreign policyto Wall Street in exchange for his ability to finance his domestic initiatives. FranklinRoosevelt arranged for financing of the New Deal with Wall Street in the wake of theattempted coup by the Liberty League coup. In Roosevelt’s case, the bankers were sparedembarrassment, prison, and even execution for treason in exchange for their support of the New Deal. Obama has comparable leverage over the investment bankers with therecent Wall Street scandals, but he has to give them something. Venezuelan oil reservesof 310 billion barrels
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should give them the incentive they need. It appears as thoughHugo Chavez’s head is part of that deal. Zelaya is just collateral damage.
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“With no petroleum resources, Honduras signed a generous oil subsidy deal with Venezuela, and thenlast year joined the emergent regional trade bloc, ALBA, the Bolivarian Alternative for the Americas.Inspired by Venezuela it now has Bolivia, Cuba, Nicaragua, Dominica and Ecuador as members.Simultaneously, Zelaya implemented domestic reform policies, significantly increasing the minimumwage of workers and teachers’ salaries, while stepping up spending in health care and education.”Crossing the Rubicon in Latin America, Honduran Coup: Target Left? , Roger Burbach, July 3, 2009,http://www.counterpunch.org/burbach07032009.html 
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Latin American Countries Worlds Apart in Economic Downturn ,Mariana Minaya, Online NewsHour,March 13, 2009, http://www.pbs.org/newshour/updates/latin_america/jan-june09/economy_03-13.html
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Honduras joins a club promoted by Venezuela and Cuba, The Economist Intelligence Unit ViewsWire,October 20, 2008,http://www.economist.com/agenda/displaystory.cfm?story_id=12451680 
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“Mr Zelaya has openly recognised that his approach to Venezuela was the result of a lack of supportfrom the US, the multilateral agencies and domestic business for his economic initiatives. In contrast,Venezuela's financial aid is not conditional on economic policy considerations, nor will Mr Chávezobject to decisions taken by Mr Zelaya's government” Ibid.,
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