By Monte Reel
Washington Post Foreign Service

CARACAS, Venezuela -- After the rumble of tanks died down and the last soldier high-stepped past the spectators' pavilion, President Hugo Chavez told the thousands attending Venezuela's Independence Day parade July 5 that no invading army could match the fighting force that had just marched by, "armed to the teeth."

The hypothetical invasion he invoked was patently clear: Two days before, Chavez had announced the discovery of evidence that the United States had drawn up blueprints to invade Venezuela, a plan he said was code-named "Operation Balboa."

American officials dismissed the claim as fiction, just as they have denied Chavez's repeated assertions that the CIA is trying to assassinate him, or that the Bush administration was behind the military coup that briefly toppled his government in April 2002.

There is little doubt, however, that relations between Venezuela and the United States, strained for years, are plunging to new lows.

Chavez has always been outspoken in condemning what he calls "U.S. imperialism," mocking President Bush as "Mr. Danger" and Defense Secretary Donald H. Rumsfeld as "Mr. War." But Venezuelan officials insist that his recent threats to sever ties with Washington -- thereby suspending the export of 1.5 million barrels of oil per day -- are more than the rhetoric of a populist rallying domestic support.

"When the president talks, it is not a joke," said Mary Pili Hernandez, a senior Foreign Ministry official. "The only country Venezuela has bad relations with is the United States; with all other countries we have good or very good relations. But with just one word, the U.S. could resolve all of the problems. That word is 'respect.' "

Chavez asserts that the 21st-century equivalent of the Cold War is the developed world's thirst for oil -- and its attempts to manipulate weaker governments to secure it. Oil-rich Venezuela sells 60 to 65 percent of its crude oil to the United States, making it the fourth-largest oil supplier to the U.S. market. This year, near-record-high oil prices have helped Chavez finance a variety of social programs that he vows will make the country more independent of U.S. influence.

Observers say the oil revenue also has emboldened Chavez's foreign policy strategy. He has recently inked oil agreements with Argentina, Brazil and his Caribbean neighbors and has launched efforts to strengthen ties with China through oil accords.

Rafael Quiroz, an oil industry analyst in Caracas, said the Chavez government believes that the conflict between developing countries endowed with such natural resources and nations with high demands will only intensify in coming years. Chavez would like to precipitate that conflict, Quiroz said.

"I think he's correct to try to speed up that kind of confrontation, because the developing world -- where 85 percent of world reserves are -- will stand in a better place after that," Quiroz said. "Every day it is more apparent that oil is fundamental for Venezuela in its international relations, and it is the main ingredient Chavez uses to form strategic alliances."

Venezuela could find other buyers for oil and the United States could find other suppliers, but both have sound financial incentives to continue the current trade arrangement. If Venezuela cut supplies, the United States would probably have to pay more to fill the gap, driving up domestic fuel prices.

Venezuela would also suffer because of higher shipping and infrastructure costs, according to U.S. officials. There are now five refineries in the United States specifically tooled to process Venezuela's variety of heavy crude oil; no other countries are similarly equipped, officials said.

"It would be a disruption, but at the end of the day, no one country can control the international oil market," said William R. Brownfield, the U.S. ambassador to Venezuela.

U.S. officials have also complained about strains in the traditionally cooperative efforts against drug trafficking. Earlier this year, the Venezuelan National Guard seized equipment from neighboring Colombia's anti-drug task force, which works closely with the United States. And last month, the head of Venezuela's drug-fighting squad -- whom international drug agents had considered very supportive -- was fired.

Venezuelan authorities bristle at suggestions they are being uncooperative in law enforcement matters. They argue that the U.S. government follows a double standard, pointing in particular to the case of Luis Posada Carriles, a former CIA operative who participated in the failed Bay of Pigs invasion of Cuba in 1961. A naturalized Venezuelan citizen now in a Texas prison on immigration charges, Posada, 77, has been accused of bombing a Cuban airliner in 1976, killing all 73 aboard. He was arrested in Venezuela on terrorism charges but escaped from prison in 1985.

After becoming embroiled in a network run by former White House aide Oliver L. North to smuggle weapons to anti-government rebels in Nicaragua, and an alleged assassination attempt against Cuban President Fidel Castro for which he was imprisoned in Panama, Posada was spotted in Miami earlier this year. U.S. officials indicated they were unaware of his whereabouts, but in May, after he was interviewed by the Miami Herald, he was arrested and sent to a detention facility in El Paso. He is now seeking asylum to protect him from a Venezuelan extradition request. He faces a hearing in August.

The Posada case is as complex as a spy novel, but Venezuelan authorities say it boils down to this: If the United States is serious about prosecuting the war on terrorism, it should extradite Posada -- whom they compare to Osama bin Laden -- to face justice in the airliner bombing.

"If you have a president who speaks all the time about the importance of fighting terrorism," said Hernandez, the Foreign Ministry official, "we don't understand" the U.S. reluctance to extradite Posada. "The main reason to do it is to give justice to the families of the 73 people who died."

Posada's attorneys assert that he essentially was acquitted twice -- first by a Venezuelan military court, then by a civilian court that failed to convict him. His attorney here, a former intelligence officer named Joaquin Chaffardet, was indicted but never convicted for allegedly organizing Posada's prison break.

"I absolutely justify that decision," Chaffardet said of Posada's escape, adding that he was convinced Posada could never get a fair trial in Venezuela. "It is not justice to have someone waiting nine years for a trial after being acquitted already."

Venezuelan authorities say the civil case against Posada was still proceeding when he escaped. Posada's defenders insist the Venezuelan extradition request has nothing to do with bringing a terrorist to justice; they say Chavez is simply using the case as a tool against the United States.

Political opponents of Chavez also criticize the president's repeated claims that the CIA is backing a plot to murder him. On June 24, the government canceled an annual military parade, citing reports of an assassination plot against Chavez. On Independence Day, he watched a parade of the newly formed military reserve force that he hopes will eventually grow to 2 million loyal defenders. One group of opposition legislators calculates that Chavez has increased funding for his own security by 673 percent in the past six years.

The president's security concerns are not surprising, since he was temporarily toppled by a coup three years ago. This month, a judge ruled that the opposition group Sumate -- accused of accepting $31,000 from the U.S. government-funded National Endowment for Democracy -- must stand trial for its alleged role in inciting the coup.

One of the group's members, Maria Corina Machado, also is charged with civil rebellion for her role in the government that replaced Chavez for two days, until loyalists returned him to power. In May, Bush met with Machado in the White House, a move that infuriated Chavez. A State Department spokesman earlier this month defended Sumate, saying the group is devoted to educating voters and encouraging democracy.

"The judicial actions that are being taken here are, from our perspective, simply part of a Venezuelan government campaign that's designed to intimidate members of civil society and prevent them from exercising their democratic rights," Tom Casey, a State Department spokesman, said at a July 8 briefing.

U.S. officials say the atmosphere between the two countries is tainted with so much bad blood that no simple solution is likely to wash it away.

"We are going to constantly be in his cross hairs," one senior U.S. official said of Chavez. "We're talking about a man who has gone through all of his adult life in confrontation mode. It's not a question that we will have a negative relationship with him."

© 2005