Arlington firm learns hard truth in Chavez’s nationalism
by Alejandro Chafuen
A U.S. company heavily invested in Venezuela is about to learn a difficult lesson: that you can't be silent when others are stripped of their rights without risking your own. Sure, silence may buy you several additional quarters of profits. But it also makes the company complicit in whatever injustice is taking place — and easier for the perpetrator to commit the next.
Just ask Arlington's AES Corporation, the soon to be former owner of Caracas Electric (La Electricidad de Caracas), Venezuela's oldest private electric utility, dating back more than 100 years.
While most Americans have been focusing on Iraq, Venezuela's virulently anti-American president, Hugo Chavez, has been consolidating power and transforming his country into a 1970s-style socialist mess, while using the country's oil riches — including the government-owned Citgo gasoline — to keep the economy afloat.
Viewed as a loud-mouthed buffoon by many Americans, Chavez may be the biggest thug in the Western Hemisphere and the biggest threat to freedom in the Americas since Fidel Castro before the Cuban missile crisis.
A year ago, The Wall Street Journal and The Heritage Foundation, in the 2006 Index of Economic Freedom, described Chavez's activities like this: "He has decreed new laws that define public protest as a crime, has imposed media restrictions that encourage substantial self-censorship under threat of operating license confiscation, and has begun to seize large rural farms and ranches that he claims are not sufficiently productive."
Since then, things have deteriorated. Chavez announced just recently that he plans to end the autonomy of Venezuela's Central Bank, strip the privately run Radio Caracas Television channel (RCTV) of its license, and take control of several major oil projects currently being undertaken by private companies.
He also declared recently his plans to nationalize Venezuela's electric power and telecommunications industries.
American firms have major interests in both. Verizon Communications, for example, still owns a 28.5 percent stake in Venezuela's national telephone company, though it has been trying to bail out, signing an agreement last April to sell its holdings to a Mexican firm.
AES is another story. A global power company operating in 26 countries, AES purchased Caracas Electric in 2000, a year after Chavez assumed the presidency. The company knew what it was getting into. Since that time — as Chavez has become more demonstrably anti-American and more openly an enemy of economic and personal liberty — the company has more or less practiced the art of accommodation, what some call "crony capitalism."
Though AES speaks of its commitment to "corporate responsibility," something that would have pleased the Zuloaga family — one of the mainstays of Venezuelan civil society and Caracas Electric's largest shareholder in the pre-AES days — a search of AES's Web site finds no references at all to Chavez. It brags instead about its "Dona tu Vuelto" (Give Your Change) program, which allows customers to support local charities — a fine idea, but not in the same league as supporting freedom.
There are those, including staunch supporters of the free market, who argue that private companies have no obligation to society beyond providing products and services and producing profits for share holders. This is a shortsighted view.
The nonprofit organization Transparency International ranks Venezuela as one of the most corrupt countries on the planet. The Fraser Institute, Heritage Foundation and Wall Street Journal all rank the Venezuelan economy as one of the least free on earth. Should companies blindly go about their business while freedom is being destroyed?
Those who have challenged Chavez, such as ExxonMobil, have seen the Venezuelan government renege on its contractual obligations. Most foreign companies, like AES, have been silent. They are just there for profits. But now Chavez is going after them as well.
Our concern is not for AES, but for the Venezuelan people and residents of other countries where Chavez's destructive ideas are being exported. It is unfortunate that some Americans, including firms like AES, place profits above principle. All too often it's the innocent who pay the greatest price.
* Alejandro Chafuen is chairman of the board of the Hispanic American Center for Economic Research (HACER) and president of the Atlas Economic Research Foundation, Arlington. He owns a small number of shares of both AES and ExxonMobil.
Source: Examiner
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