The Mouse on Steroids

By William Fisher
t r u t h o u t Perspective

Tuesday 30 May 2006

We can't be blamed if Venezuela's mini-public diplomacy program reminds us of "The Mouse That Roared" - and we can almost hear the gnashing teeth in the White House SitRoom.

I refer to the program being waged in the US by Venezuela's President Hugo Chavez. Under that program, Citgo, Venezuela's wholly-owned gas and oil subsidiary, provides discounts up to 60 per cent on heating oil to poor communities in the US.

Known as petro-diplomacy, the program is currently operating in Maine, Massachusetts, Pennsylvania, Delaware, Vermont, Connecticut, and Rhode Island. Local politicians, desperate for ways to reduce energy costs for their constituents, have welcomed it with open arms. In New York, Harlem congressman Charles Rangel announced expansion of the program into upper Manhattan, and Citgo struck a deal with three nonprofit organizations in the Bronx to deliver five million gallons of heating oil at 45 percent below the market price. Citgo says the deal will amount to a savings of $4 million for the 8,000 low-income households slated to benefit from the plan.

Citgo says the program has benefited more than 180,000 households - and is now attracting some big-name supporters (though Condoleezza Rice is not one of them).

Citgo says it initiated the heating oil program late last year in an effort to help low-income families in the US to cope with the cold winter and high oil costs. The Venezuelan government says the program costs Citgo relatively little because the oil is being supplied directly, without middlemen, who usually make substantial profits.

But Venezuela's "oil for the poor" program has also met with opposition from some local politicians. Last October, Citgo proposed to substitute diesel fuel for home heating oil, which is used only by a small number of Chicagoans. It offered a 40 percent discount on 7.2 million gallons of diesel if it was used for Chicago's public buses. Though the deal could have saved the city approximately $15 million, the offer was rejected over the objections of other elected officials and labor groups.

Undeterred, Chavez is now proposing a second phase of the program. He told a delegation of beneficiaries of the program that in addition to the 40% discount, only 30% would go towards Citgo's expenses and the remaining 30% would be set aside for a special local development fund, to help unemployed in the communities to set up cooperatives. The products of such cooperatives could then be sold to Venezuela, Chavez suggested.

The idea was immediately embraced by former Massachusetts Representative Joe Kennedy, a member of the US delegation and a key figure in facilitating the heating oil program in Boston via his Citizens Energy Corporation.

"This concept allows families to work out of poverty; it helps them by giving them the tools such as money to build a roof over their head, instead of just a one-shot benefit," said Kennedy.

Chavez also announced that the program will be doubled next year from its current level of 40 million gallons. "No one should believe that this is just a momentary interest," Chavez told the group. "Leave at ease and tell your neighbors of the communities you represent that the program will continue; it has just begun," he said.