Feb. 23 (Bloomberg) -- What stuck most in Timothy Towell’s memory was the car. When the former U.S. diplomat met with Leopoldo Lopez in September 2006, the Venezuelan opposition leader showed up in an SUV riddled with bullet holes.
“The car had been machine-gunned, with a dozen holes going right up the side, and all the old senior American diplomats and their wives were looking at it and sticking their fingers in the bullet holes,” Towell, who was in Caracas on a trip organized by the Council of American Ambassadors, said in a phone interview. “It made the dramatic point that people were being shot at for being in favor of a push for democracy.”
Last week, Lopez, 42, found himself in another SUV. He was shoved into a police vehicle and hauled to Ramo Verde, a military prison two hours away from Caracas. The former mayor of a Caracas municipality and founder of two political parties was accused of arson and inciting crimes for his role in protests that started Feb. 12 and led to the death of at least eight people. He can face 10 years in jail, according to Bernardo Pulido, his lawyer.
Caracas was rocked by protests on Feb. 19 as Lopez was arraigned in a closed hearing at Ramo Verde, the detention center for high-profile opponents of the late President Hugo Chavez. Opposition and pro-government supporters rallied in cities across Venezuela yesterday and dozens were injured last night in the capital, municipal Mayor Ramon Muchacho wrote on his Twitter page.
“Don’t surrender. I won’t,” Lopez’s wife, Lilian Tintori, posted on her husband’s Twitter feed on his behalf after the arrest. “I don’t negotiate with dictatorships.”
Earlier in the night of Feb. 19, gunshots were heard, tear gas was fired and streets were blocked by burning tires in the eighth day of protests against President Nicolas Maduro’s 10-month administration, which blames Lopez for plunging Venezuela into turmoil.
“You are either for the constitution or you are for violence,” Maduro said Feb. 20 in a televised speech. “Unfortunately, Leopoldo Lopez took the path of violence and immersed the country in problems.”
Lopez became the public face of the push against the government when discontent with the fastest inflation in the world and shortages of everything from food to medicine spilled into the streets of Venezuela this month.
When Chavez ran for re-election in 2012, Lopez dropped out of the opposition primary, citing obstacles due to a government political ban against him, and threw his support behind Henrique Capriles. Capriles lost to Chavez and was beaten again by Maduro last April after Chavez died of cancer.
Now, Lopez has differentiated himself from Capriles, 41, over the tactics of the opposition movement, favoring street confrontations over electoral politics.
“Leopoldo saw an opportunity to lead the protest in accordance with his vision of what opposition should be,” said Colette Capriles, a political science professor at Simon Bolivar University in Caracas, who isn’t related to Henrique Capriles. “We don’t have clear leadership either in the government or in the opposition to control the situation.”
Lopez’s imprisonment may exacerbate the protests that were already occurring as the country faces an “economic tsunami,” she said.
Consumer price increases have more than doubled to 56 percent during Maduro’s term, and shortages of goods are at a record, according to the central bank’s scarcity index. More than one of every four products is out of stock at any given time, the index shows.
Maduro signed on Feb. 18 a new currency law he said would boost the supply of dollars in the $380 billion economy, allowing importers to purchase more goods and alleviate shortages at an exchange rate weaker than the official rate of 6.3 bolivars per dollar. On the black market, the bolivar trades at a rate of about 88 per dollar.
The yield on Venezuela’s benchmark dollar bond Feb. 21 fell 26 basis points, or 0.26 percentage point, to 15.31 percent.
“We want an economy that’s not dependent on oil, that’s competitive, stable and trustworthy,” Lopez’s party, Voluntad Popular, says in a manifesto posted on its website. “That’s based on work, property, productivity, enterprise and innovation. With a sector that’s productive, prosperous, solid, secure and has a high grade of social commitment and responsibility.”
Lopez is a Caracas native. He traces his lineage to Simon Bolivar, who helped liberate Venezuela from Spanish colonial rule in the 19th century. His father, Leopoldo Lopez Gil, is on the editorial council of El Nacional newspaper. His mother, Antonieta Mendoza de Lopez, worked in public affairs for Petroleos de Venezuela SA and is now a vice president of corporate affairs for Grupo Cisneros, the holding company owned by billionaire Gustavo Cisneros. Lopez is married and has two children.
He has opted for a confrontational strategy because he is bold and the situation has worsened, said Michael Shifter, president of Washington-based policy group Inter-American Dialogue, who has known him for 15 years.
Lopez refused to cancel a Feb. 18 march even when Maduro summoned his allies to also take to the streets, in a move that could have resulted in bloodshed. In April, Capriles chose a different path, canceling a demonstration protesting alleged electoral fraud when Maduro threatened to crack down.
“Capriles has shown himself more interested in the same approach that had been used, which is organizing, contesting elections, but not aggressively going to the streets,” said Eric Farnsworth, head of the Washington office of the Council of the Americas. “Lopez has been more confrontational.”
Tintori, Lopez’s wife, posted a note from him on Twitter calling on protesters to reject violence and stay united.
“To the Venezuelan people, more strength and more faith,” wrote Lopez, who is being held in the military prison on charges of inciting violence. “We’re going to achieve change in Venezuela.”
Lopez attended Kenyon College in the U.S. and received a degree in public policy from Harvard University’s Kennedy School of Government in Cambridge, Massachusetts. At Kenyon, in Gambier, Ohio, he would wake up at 5 a.m. to run, said Jay Sullivan, his roommate in freshman and sophomore years.
“Leo was just a volcano of energy,” Sullivan, a lawyer, said in a phone interview. “He knew everyone on the campus within a week, not only the kids but the professors, the priests, the people who worked in the dining halls, the men and women who cleaned the dorm rooms.”
His training in the U.S. helped turn him into a “strong advocate of free markets” who during the 2012 opposition presidential primaries proposed selling 9 percent of state-owned PDVSA on the stock exchange, Francisco Rodriguez, senior Andean economist at Bank of America Corp., said in a phone interview.
Back in Venezuela, Lopez ran for mayor of his hometown, the Caracas municipality of Chacao, under the banner of the Primero Justicia party that he co-founded with Capriles in 2000. He won election that year as Capriles became mayor of Baruta, another part of the capital. Both were re-elected in 2004 and served as mayors until 2008.
Lopez was banned in 2008 from holding public office following allegations by the government that he embezzled public money. He was never tried, and denies the charges. In 2011 the Inter-American Court of Human Rights ordered Venezuela to lift the ban.
By presenting himself as a leader of the current protests, Lopez may have given Maduro’s allies a common “enemy” to unite against, said Eduardo Mills, an analyst at Southern Pulse, an Annapolis, Maryland-based strategic analysis firm. While he doesn’t speak only on behalf of the elite, he isn’t winning his main support from the poor, said Farnsworth.
The backing Lopez has received so far is still short of the groundswell that would be needed to unseat Maduro, said James R. Jones, a former U.S. ambassador to Mexico.
On the 2006 trip, Towell, 80, a former U.S. ambassador to Paraguay, said Lopez told the visiting group that Chavez backers were responsible for the gunshots that scarred his SUV and killed his bodyguard.
“I thought, ‘Here’s a guy who has real guts, real courage, and somebody who was real smart from a public relations point of view,’” Towell said. “He’s the future of the nation, if they allow him to live.”
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