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Viewing cable 10CARACAS219, Globovision Owners Acknowledge Defeat; El Nacional On the Ropes?

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Reference ID Created Released Classification Origin
10CARACAS219 2010-02-23 18:06 2011-01-24 21:09 SECRET Embassy Caracas
VZCZCXRO1197
OO RUEHAG RUEHAO RUEHROV RUEHRS RUEHSL
DE RUEHCV #0219/01 0541816
ZNY SSSSS ZZH
O 231815Z FEB 10
FM AMEMBASSY CARACAS
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0504
INFO EU MEMBER STATES COLLECTIVE IMMEDIATE
WESTERN HEMISPHERIC AFFAIRS DIPL POSTS IMMEDIATE
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC IMMEDIATE
RHMFISS/HQ USSOUTHCOM MIAMI FL IMMEDIATE
S E C R E T SECTION 01 OF 03 CARACAS 000219 
 
SENSITIVE 
SIPDIS 
AMEMBASSY ATHENS PASS TO AMCONSUL THESSALONIKI 
AMEMBASSY BERLIN PASS TO AMCONSUL DUSSELDORF 
AMEMBASSY BERLIN PASS TO AMCONSUL LEIPZIG 
AMEMBASSY BRASILIA PASS TO AMCONSUL RECIFE
AMEMBASSY OTTAWA PASS TO AMCONSUL QUEBEC
AMEMBASSY BRIDGETOWN PASS TO AMEMBASSY GRENADA 

E.O. 12958: DECL: 2035/02/23 
TAGS: PGOV PREL VE PHUM KDEM
SUBJECT: Globovision Owners Acknowledge Defeat; El Nacional On the Ropes? 
 
REF: 10 CARACAS 181; 09 CARACAS 663 
 
CLASSIFIED BY: DUDDY, AMBASSADOR, DOS, AMB; REASON: 1.4(B), (D) 

1.       (S)  Summary:  In separate meetings with the Ambassador between February 17-19, several of Venezuela's major private media
XXXXXXXXXXXX acknowledged that relentless Venezuelan Government (GBRV) pressure against their television and print outlets has threatened to put them out of business.  XXXXXXXXXXXX, confirmed the allegations of Globovision's outgoing director, XXXXXXXXXXXX, that threats from senior GBRV officials had forced them to fire XXXXXXXXXXXX and to tone down Globovision's strongly anti-Chavez orientation. In a separate conversation, XXXXXXXXXXXX asserted that due to the paper's substantial loss of advertising revenue from companies that had either been nationalized or been threatened by the GBRV, the paper would go out of business by April without substantial financial assistance. XXXXXXXXXXXX asked the Ambassador whether the U.S. could provide such assistance.    
End Summary. 
 
--------------------------------------------- ---------------------- --------

XXXXXXXXXXXX Resigns; Alleges GBRV Pressure on Globovision Owners 
 
--------------------------------------------- ---------------------- -------- 
 
 
2.       (SBU)  Following more than a week of widespread speculation regarding the potential sale of opposition-oriented television network Globovision (Ref A), station director Alberto XXXXXXXXXXXX announced his resignation during a February 18 press conference.  XXXXXXXXXXXX, who is also a minor shareholder in the station, alleged to reporters that Energy Minister Ali Rodriguez and Venezuela's Central Bank President Nelson Merentes had pressured the station's principal shareholders, Globovision President XXXXXXXXXXXX  and Banco Federal President Nelson XXXXXXXXXXXX, to sack XXXXXXXXXXXX, to get rid of controversial anti-Chavez talk show host Leopoldo Castillo, and to soften the station's strongly anti-Chavez orientation. In resigning, XXXXXXXXXXXX affirmed: "For now my objectives have been met. The channel has not been sold, Leopoldo Castillo is still on the air, and Globovision will not change its editorial line."  He added, "I have absolute faith in Globovision and XXXXXXXXXXXX that they will not modify their editorial stance." 

3.       (C)  In a private meeting on February 17, XXXXXXXXXXXX told the Ambassador that GBRV pressure on XXXXXXXXXXXX involved trumped up legal charges stemming from a May 21, 2009, raid on XXXXXXXXXXXX's Caracas residence. The raid had resulted in the confiscation of 24 new vehicles and hunting trophies (Ref B), criminal charges against XXXXXXXXXXXX and his son, and an order preventing XXXXXXXXXXXX's departure from the country.  (Note: XXXXXXXXXXXX has consistently claimed the automobiles belonged to his car dealership and were at his home for security reasons, and that the hunting trophies had been legally acquired abroad.  End Note.) According to XXXXXXXXXXXX, the February 12 lifting of XXXXXXXXXXXX's overseas travel ban by the GBRV was a bargaining chip used against XXXXXXXXXXXX to force his acquiescence. XXXXXXXXXXXX opined that the pressure point applied by the government against XXXXXXXXXXXX was ultimately his son: "XXXXXXXXXXXX would do anything to keep him safe." 
 
4.       (C)  XXXXXXXXXXXX affirmed to the Ambassador that Nelson XXXXXXXXXXXX had been under similarly intense GBRV pressure to 
engineer a change in Globovision's management and editorial line. XXXXXXXXXXXX claimed that XXXXXXXXXXXX had been threatened by Energy Minister (and previously Finance Minister) Rodriguez that if 
XXXXXXXXXXXX did not comply with GBRV demands, "we will go after your bank." 
CARACAS 00000219  002 OF 003 
 
--------------------------------------------- ---------- 
XXXXXXXXXXXXConfirm Capitulation 
--------------------------------------------- ---------- 

5.       (S) In a February 18 meeting with the Ambassador, XXXXXXXXXXXX largely confirmed XXXXXXXXXXXX's account. Following various GBRV threats, some even from Chavez himself in the past, XXXXXXXXXXXX claimed that Minister Rodriguez had attempted to pressure XXXXXXXXXXXX into buying out Globovision shareholders XXXXXXXXXXXX and XXXXXXXXXXXX, firing XXXXXXXXXXXX, and getting rid of Leopoldo Castillo, to forestall the GBRV withdrawing millions of dollars in deposits from Banco Federal; XXXXXXXXXXXX added that he "had practically been forced to sell the bank." XXXXXXXXXXXXtold the Ambassador the GBRV strategy was for XXXXXXXXXXXX to buy Globovision for nearly 32 million dollars and for XXXXXXXXXXXX to "leave quietly... to work on expanding Globovision from abroad."  XXXXXXXXXXXX further agreed to "Send Leopoldo Castillo away for a while... first class tickets for two weeks in Australia." 
 
6.       (S) Despite XXXXXXXXXXXX's pronouncements at his press conference that Globovision would not self-censor despite the GBRV pressure, XXXXXXXXXXXXadmitted they were being forced to soften the station's future editorial line. XXXXXXXXXXXXobserved that "this arrangement has bought us some time.  Globo will continue on, however we will not use the screen to scare people.  We will report on the problems in an objective, independent manner... we will, however, most likely refrain from naming names."   When asked why the Government had allowed the station to operate for so long, XXXXXXXXXXXX replied, "The Government needs to leave a small window open to pretend there is freedom of expression here. "  XXXXXXXXXXXX added, "Globovision is Chavez's 'Carta de Libertdad de Expression' ("free speech credential")... he can say, 'look here is Globovision, see, we are a democracy'.'' 
 
7.       (S) XXXXXXXXXXXX told the Ambassador that the station is financially independent and healthy despite the GBRV's recent attacks, increased lawyer's fees, and continual legal harassment. (Note:  Globovision currently confronts civil and criminal charges stemming from six separate GBRV investigations.  End Note.) In reflecting on his decision to bend to the GBRV's will, XXXXXXXXXXXX noted "I have over 13,000 employees, plus the bank, to care for." Looking towards the September National Assembly elections, XXXXXXXXXXXX predicted: "If Chavez wins, we are all gone. Our next meeting will have to be in Boca Raton... Buying time before the election is the name of the game. XXXXXXXXXXXX 
 
--------------------------------------------- ---- 
Major Newspaper Taking Its Last Gasps? 
--------------------------------------------- ---- 

8.       (S)  In a separate February 19 meeting, Ambassador Duddy met with XXXXXXXXXXXX. Lamenting the GBRV's "economic asphyxiation" of El Nacional and the independent media generally, XXXXXXXXXXXX told the Ambassador that El Nacional was reaching the end of its financial rope. Due to plummeting advertising revenue that stemmed from the loss of advertising partners that had either been nationalized or been otherwise intimidated by the GBRV to cease such advertising, XXXXXXXXXXXX predicted that El Nacional could 
CARACAS 00000219  003 OF 003 
be out of money and thus business by April. XXXXXXXXXXXX affirmed that fellow independent daily El Universal was also having severe financial difficulties, and for similar reasons.  (Note: In his February 18 meeting with the Ambassador, XXXXXXXXXXXX had highlighted that El Universal had lost over 14% of its advertising revenues just with the recent nationalization of supermarket chain Exito. End Note.) XXXXXXXXXXXX commented, "Globovision has now been lost. We will be the next to go." 

9.       (S) XXXXXXXXXXXX noted that increased GBRV nationalizations would further reduce already limited commercial space/advertising revenue, and limit the independent media's space to maneuver in the months ahead. To keep El Nacional alive, XXXXXXXXXXXX asked the Ambassador whether the Embassy knew of services of private financing they could approach outside the country, or failing that, if the USG could be persuaded to help.  (Note:  The Ambassador noted that investors and financial institutions in the U.S. were increasingly anxious about expansion in Venezuela.  He also noted that he had never heard of the USG underwriting a newspaper even, for instance, during the difficult period in the early 80's in Pinochet's Chile. 
End Note.) 

10.   (C)  Comment:  Chavez continues to reduce the private media's ability to serve as a countervailing democratic force.  With Globovision executives softening their tone, counting their remaining days, and major print media in apparently dire financial conditions, Chavez is close to his goal of "domesticating"  or eliminating the remaining free and independent media in Venezuela. 
End Comment. 
DUDDY