Juan Guaidó, the “interim” president of Venezuela designated by the U.S. State Department, finds himself in a tight spot. His handler, Leopoldo López, is also in a predicament. Those claiming to promote democracy and adhere to its basic principles should understand that legitimacy is not something the State Department can conjure and bestow upon others. Legitimacy is reserved for democratically elected officials. When was the last time Juan Guaidó won an election? In his last election win, under what system/authority was he chosen? And what about López?
There are upcoming elections in Venezuela on November 21. The governing body that organizes and oversees the process, the National Electoral Council (CNE), is the same entity that previously declared Guaidó and López as winners. Now, Guaidó and López question the legitimacy of this organization, claiming that the elections won’t be free and fair in Venezuela… They are the only ones asserting this, while approximately 70,000 candidates participate. All opposition parties have fielded candidates. Even candidates from Voluntad Popular, López’s own party, are running. Where does that leave Guaidó and López?
This marks a notable change for Nicolás Maduro. Without moving an inch from his original position, he has successfully deflected everything the Trump administration threw at him. Not only has he evaded Treasury sanctions aimed at ousting him, but his control is stronger than ever, thanks to Trump and a set of idiosyncratic policies devised by high-ranking U.S. officials completely out of touch with reality. Even at the peak of Trump’s affinity for Guaidó, his allies were not persuaded to enact strict measures against Maduro. Europe as a bloc did barely anything, and individual European countries did even less, with Spain earning the title of Maduro’s best friend.
The magnitude of this debacle is so monumental, so inevitable, that the European Union is sending, for the first time since 2006, an electoral observation team to validate the upcoming elections. Oh, and the Carter Center, which suffered significant setbacks during its last engagement, is also back in play. The last time the Europeans were involved, their electoral observation team declared:
The electronic voting system in Venezuela was developed by Smartmatic, which was responsible for all programming of the virtual machines and development of the Results Aggregation Center software. However, the CNE owns the source code for all the Smartmatic software they use. An IT team from the CNE has completely audited the source code to verify functionality and identify areas that need improvement or redesign. CNE’s redesign requests included improved randomization methods to conceal the sequence of stored votes and the need for confirmation when casting blank votes. In the future, the CNE plans to take over all software development work from Smartmatic. After that, Smartmatic will only handle logistics, service, and hardware installation. While the source codes are owned by the CNE, they are not available for public scrutiny for commercial reasons, and no independent audits by third parties have been conducted on any part of the electronic voting system.” [bold added]
Has that changed in any way? No, it hasn’t, and therefore, Guaidó and López might be correct. However, their “justice” is hollow. Hypocritical. It is not based on principles but on a burning desire to remain relevant in a political establishment that shuns them. Maduro, someone almost universally regarded as foolish in opposition circles, has outmaneuvered many of them time and again. After all the chest-thumping of “End of usurpation, transition government, and free elections,” what remains in this pathetic spectacle of widespread capitulation is merely to kneel before him. The capitulation has already occurred, as tens of thousands of candidates submitted their candidacies to the CNE.
However, Guaidó and López’s isolated stance is just one aspect of the U.S. State Department’s dilemma concerning Venezuela. To keep them in the game, the Biden administration will need to do something truly extraordinary politically—somehow renewing/extending the “interim presidency” despite: 1) Guaidó’s lack of democratic legitimacy and, perhaps more importantly, 2) Guaidó’s lack of influence over Venezuela’s opposition establishment. It is an impossible situation, aptly described by a European official who recently commented that Guaidó and López no longer even represent their own party.
Beyond the political landscape, Joe Biden has another issue to contend with. The queue of creditors with legitimate claims against Venezuela wraps around the Treasury building. He cannot indefinitely maintain Trump’s protectorate over Venezuelan assets, especially when these assets—primarily CITGO—are under the control of Guaidó/López. The Department of Justice is set to investigate CITGO’s activities since Guaidó’s people took over. It’s almost certain that when transactions with Mercuria, for example, come under scrutiny, it won’t be Guaidó’s team and Mercuria’s people conducting legitimate B2B transactions. Intermediaries will surface. Agents will emerge. In other words, the routine operations (for Venezuela) will surface. So, how will Guaidó explain this? Because he still has to justify the corruption surrounding his closest associates in Colombia and the management of USAID funds.
Biden’s position is even more untenable under a legal framework. No independent court in the United States should dismiss the rights and judgments of investors under some obscure, ill-defined, and poorly implemented State Department policy to fence assets, allowing Guaidó to operate as president. The separation of powers is another pillar on which democracy rests, and we are told that American democracy is so solid that it can be exported.
Guaidó has utterly failed to present even a half-coherent defense of Venezuelan assets abroad. No one knows what is happening with Monómeros. In the case of Nynas, Guaidó’s defense team has yet to make any significant appearance. In the case of CITGO, the person tasked with defending Guaidó against Crystallex’s legal actions is the same individual Crystallex hired to provide an expert opinion on why courts should rule in their favor: José Ignacio Hernández. Crystallex leads that queue of creditors, seeking to collect a $1.2 billion award against CITGO. Not even a completely deranged Guaidó supporter could overlook Hernández’s conflict, yet he was appointed nonetheless, going to argue both sides and, as expected, laughed out of court.
Unfortunately, this summarizes the very position of the United States regarding Venezuela: you cannot have it both ways. Either Guaidó is the recognized president, or he is not. He cannot be “declared” by the State Department when the opposition movement he must lead and represent does a 180-degree turn and runs to collaborate with Maduro.
While the world continues to be “astonished” by the revelations of the #PandoraPapers, seasoned observers find very few new or innovative insights so far. In the context of Venezuela’s corruption league, the WSJ recently uncovered something genuinely novel: the SEC and FBI are investigating Morgan Stanley and Interactive Brokers for services rendered to Luis Mariano Rodríguez Cabello, a right-hand man of Diego Salazar, cousin of Rafael Ramírez, former executive president of PDVSA and Minister of Energy of Venezuela. However, Ramírez has inexplicably yet to be charged by the Department of Justice, despite playing a decisive role in sanctioning nearly all major corruption schemes currently underway.
Then, there is co-conspirator No. 2 in a $1.2 billion money laundering case that the Department of Justice is pursuing. This will be Alejandro Betancourt: a partner of the already charged Francisco Convit; and the already charged Nervis Villalobos; and the already charged Javier Alvarado; and the already charged *and* sanctioned by Treasury Raúl Gorrín; and of Gazprombank Latinamerica Ventures, already sanctioned by the Treasury; yet, there he is, basking in luxury between London and Madrid, entertaining Guaidó’s father and brother while “aiding” the cause of “democracy” that the Trump administration sought in Venezuela through Guaidó and López.
It is simply an unsustainable position. When the opposition wins some governorships, mayorships, and council seats across Venezuela, which it will, they will not turn against Maduro nor will they run to declare Guaidó as the Supreme Leader dictating all their actions. The elections will be validated by the EU and the Carter Center. There is still significant profit to be made playing nicely with Maduro, whether Americans want to participate or not, but more importantly, once the elections are held and winners declared, they will take office and continue with the business of governance. By the time the 2024 presidential race arrives, no one will question whether Maduro is legitimate or can run for another term. More clearly, with their participation, 70,000 candidates are poised to grant the only valid seal of legitimacy to Maduro’s “democracy.” That no one will be able to contest later, not even the direct descendants of the Liberator who left no heirs.