Chavez Turns to Generals to Defend Revolution Amid Illness

Venezuelan President Hugo Chavez, who began his climb to power in a failed revolt two decades ago, is returning to his military roots and promoting fellow coup plotters to top posts to ensure the survival of his revolution.

The socialist leader says he’s fit enough to win another six-year-term in October after undergoing cancer surgery in February for a third time in eight months. Still, the former tank commander’s treatment of his illness as a state secret has fueled speculation his health is worse than he’s letting on.

Chavez is falling back on officers who fought alongside him in the February 4, 1992 rebellion against then-President Carlos Andres Perez amid the uncertainty over his health and his refusal to name a political heir. By consolidating his power within an institution that has backed four coups since 1958, Chavez wants to “strike fear” in voters that the armed forces won’t allow an opposition victory, said Jose Machillanda, a retired army colonel.

“The message is that if Chavez isn’t there as president then his revolution will continue in the hands of the men of the 4th of February,” Machillanda, who teaches at the Caracas-based Ceppro research institute, said in a phone interview. “He trusts the military because they know how to obey orders.”

The most prominent promotion is that of former Lieutenant Diosdado Cabello, who in December was named head of the National Assembly and No. 2 behind Chavez in the governing United Socialist Party of Venezuela, or PSUV.

Married to the Revolution

Another loyalist promoted to the inner circle is Henry Rangel Silva, who as an army general told Caracas-based Ultimas Noticias in 2010 that the armed forces are “married” to Chavez’s revolution. In January, he was named defense minister. Five other soldiers who partook in the uprising have also been handed leading roles in Chavez’s re-election campaign.

The political maneuvering comes as Chavez faces his biggest electoral test yet in a 13-year tenure in which he has nationalized assets in the oil, metals and cement industries and rattled markets. After winning by margins of 22 percentage points in 2000 and 26 points in 2006, his approval rating has fallen as the world’s fastest inflation, a slow recovery from a two-year recession and shortages of staples like milk and corn flour erode support among his base of poor Venezuelans.

Chavez was supported by 46 percent of those surveyed in a poll by Caracas-based Consultores 21 taken between March 3 and March 13, while opposition candidate Henrique Capriles Radonski had 45 percent. The poll used a sample of 2,000 people with a margin of error of 2.3 percentage points, Consultores 21 Vice President Saul Cabrera said today in a phone interview.

Coup Anniversary

Chavez, 57, celebrated the 20th anniversary of the coup attempt with a military parade featuring Russian-made anti- aircraft missiles and fighter jets flying overhead -- a symbol of how the armed forces have prospered under his stewardship.

“They’ll have to bring an end to the armed forces because the armed forces are Chavista,” the president, responding to opposition criticism he’s politicized the military, said during a Feb. 2 ceremony. “Venezuela’s armed forces have Chavez in their heart, in their roots and Chavez has the armed forces in his heart, in his soul.”

While record revenue from crude oil prices that reached $116 a barrel March 16 is allowing Chavez to boost spending ahead of the vote, the International Monetary Fund forecast in October that the economy will grow 3.6 percent this year, less than the 4 percent average for Latin America. The central bank’s scarcity index, which measures the availability of consumer goods in stores, rose this year to its highest level since 2007.

Bond Rally

Investors have seized on Chavez’s health scare to buy up assets in South America’s biggest oil producer, speculating that he may be too weak to campaign. The nation’s bonds returned 22 percent this year, more than every country except the Ivory Coast, according to JPMorgan Chase & Co.’s EMBI Global index.

Chavez, who has not disclosed what type of cancer he has, returned from Cuba this month following surgery and a three-week convalescence on the communist island.

Should Chavez eventually drop out of the race, his opponent, Capriles, would be favored to defeat any handpicked successor, said Michael Shifter, president of the Inter-American Dialogue, a policy center in Washington. That includes Cabello, who lost to the 39-year-old Capriles in the 2008 election for the governorship of Miranda state.

“Chavez can’t transfer his appeal and charisma to anyone else,” Shifter said in a phone interview. Capriles’ campaign didn’t respond to calls seeking comment.

The Consultores 21 poll showed Capriles beating Chavez’s brother Adan, Vice President Elias Jaua, Foreign Minister Nicolas Maduro and Cabello in an eventual head-to-head election.

Marginalizing Civilians

As he promotes loyalists, Chavez is on the lookout for defectors and is marginalizing allies from the more ideologically-driven, civilian wing of his movement.

This month, he suspended Monagas Governor Jose Gregorio Briceno, calling him a “traitor” for accusing Cabello of trying to destabilize his rule in the oil-producing state. He’s also asked Vice President Jaua and Foreign Minister Maduro to step down and run in gubernatorial elections, something tantamount to a demotion for two of the most prominent civilian members of his cabinet, Machillanda said.

The divisions, which may become more intense as the election nears, are being fueled by Chavez’s refusal over the years to cultivate a successor in the belief that his leadership is indispensable, said Gregory Weeks, director of Latin American studies at the University of North Carolina in Charlotte. Since taking office in 1999, he’s shuffled his cabinet numerous times, in the process going through seven vice presidents.

“If he were to name somebody right now he’d be telling the world, ‘I’m pretty sure I’m going to die soon,’” said Weeks in a phone interview. “I see Chavez as pretending he’s healthy as long as he possibly can.”

Cabello’s Ascent

Like his mentor Fidel Castro in Cuba, who named his 26th of July movement that overthrew Fulgencio Batista’s dictatorship in 1959 for a failed attack on an army barrack six years earlier, Chavez has long touted his Bolivarian revolution’s militarist origins. In 1992, after the uprising was squashed, the then- unknown paratrooper urged his fellow conspirators to surrender, famously saying he had failed “for now” in his bid for power.

After spending two years in jail, Chavez was pardoned by Perez’s successor, Rafael Caldera, and went on to defeat Henrique Salas Romer in the 1998 election.

Second in Command

Cabello, 48, has stood alongside Chavez throughout, occupying the presidency for a few hours in the chaos that followed Chavez’s ousting by a civilian-backed faction of the military in 2002 and return to power two days later. As head of the National Assembly, he’s first in line to assume the presidency if Chavez wins re-election but is unable to be sworn in for a new term in February.

He’s also one of the leading candidates to substitute Chavez should the president drop his re-election bid. When Chavez returned from Cuba March 16, Cabello greeted him at the airport and a day later joined him as he addressed supporters from the “People’s Balcony” of the presidential palace.

“He’s emerged as one of the most prominent figures within Chavismo and to the extent that there will be a discussion about succession he’ll play a very important role,” Francisco Rodriguez, a senior Latin America economist at Bank of America Corp., said in a phone interview from New York.

Calls to Cabello’s office at the National Assembly went unanswered, while Chavez’s information ministry didn’t respond to a phone call and e-mail seeking comment.

Pragmatist

Business leaders see Cabello as more of a pragmatist than the civilian, pro-Cuban wing of the government. In 1999, as chief telecommunications regulator, he ended Cia. Anonima Nacional Telefonos de Venezuela’s monopoly on fixed-line phone service.

“People in business felt that Cabello was someone they could talk with,” said Rodriguez, who was an economic adviser to Venezuela’s congress from 2000 to 2004. “While I don’t think that’s currently the case it does appear to illustrate less of an ideological strain of thinking.”

Cabello has repeatedly denied speculation of tension within the government as different factions jockey for power.

“There’s no other option for a candidate representing the PSUV except Chavez,” Cabello said on state television March 12. “There’s no plan B, plan C or plan D.”

To contact the reporter on this story: Charlie Devereux in Caracas at cdevereux3@bloomberg.net; Corina Pons in Caracas at crpons@bloomberg.net.

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net.

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