[News] Agee - Venezuela Part 2

Anti-Imperialist News News at freedomarchives.org
Tue Sep 13 09:01:58 EDT 2005

How United States Intervention Against Venezuela Works, part 2 of 3
Use of a Private U.S. Corporate Structure to Disguise a Government Program
Thursday, Sep 08, 2005

By: Philip Agee

Part 1: <http://www.venezuelanalysis.com/articles.php?artno=1548>How United 
States Intervention Against Venezuela Works

Part 2 of 3

C. Venezuela: Some Examples of the Current U.S. Intervention Against the 
Bolivarian Revolution

In Venezuela the administration of George W. Bush is intervening in the 
political process with a combination of activities very similar to those 
the U.S. carried out in Nicaragua in the 1980s, but without a terrorist war 
on the scale of the Contras, and­at least until mid-2005­without an 
economic embargo.  These activities, with a 2005 budget approaching $10 
million, masquerade as “civic education,” “support for the electoral 
process,” and “strengthening the democratic system.”  In reality, all these 
programs, carried out almost silently, support the opposition against 
President Chávez and his coalition.

The action agencies of this “open support for democracy in Venezuela” are 
the State Department, the U.S. Agency for International Development (AID), 
and the National Endowment for Democracy (NED) with its four associated 
foundations.  The largest amount of money, some $7 million in 2005, is 
channeled by AID’s Office of Transition Initiatives (OTI) through a private 
contractor, Development Alternatives Inc. (DAI), a consulting firm based in 
Bethesda, Maryland, next to Washington D.C.  Additionally the CIA, as 
always, has its role in supplying secret funds and providing clandestine 

The web page of DAI describes the company, established in 1970, as having 
250 employees at its headquarters and about 1500 others working in 
international projects.  It has carried out development projects in 150 
countries, mostly in the Third World, “to build fair and effective 
government, strengthen local capacity to manage natural resources and 
agriculture production, fuel the economic engines that power growth from 
micro-finance to enterprise development, and leverage the impact of private 
investment in emerging markets.  Clients include the U.S. Agency for 
International Development, the World Bank, bilateral development agencies, 
global corporations, and host country governments.”  Its projects deal with 
agriculture and natural resource management, banking and financial 
services, crisis mitigation and recuperation, democracy and governance, 
solutions for global businesses and mitigation of the effects of 
AIDS.  DAI, as we shall be see further on, is an ideal corporate structure 
for inserting CIA officers and agents under commercial cover in foreign 

In Washington there is no doubt a high level committee that directs the 
operations with a name like the Venezuelan Inter-Agency Working Group.  The 
representative of the Department of State would normally chair the 
committee, and its other members represent AID/OTI, the Pentagon, CIA, NED, 
and other interested agencies.  Among its various responsibilities, this 
committee sets the budgets and decides what mechanisms will be used to 
channel the funds.  The committee also has to evaluate the effectiveness of 
the operations and keep appropriate committees of Congress informed.

The Department of State closely controls the interventionist program in 
Venezuela through the U.S. Embassy in Caracas where AID/OTI has an 
office.  The CIA, as a matter of course, also has an office in the Embassy 
under diplomatic cover.  Just as in Washington, there will be a 
coordinating committee in the Embassy chaired by the Ambassador or the 
Deputy Chief of Mission and whose members will include the chief of the 
political section, OIT representatives, the CIA station chief, a 
representative of the military attachés and perhaps others.

Also in Caracas, but apart from the Embassy and having legal status as 
private foreign entities, there are offices of two of the foundations 
associated with NED.  The International Republican Institute has its office 
in Altamira, Second Avenue, between Eighth and Ninth Transversals, Quinta 
Retana, ground floor; and the National Democratic Institute (NDI) is at 
Avenue Francisco de Miranda, Edificio Torre La Primera, 14th floor, Office 
14B, Campo Alegre. Additionally Development Alternatives Inc. (DAI), the 
consulting firm, has its office on Guaicaipuro Street, Hener Tower, 2nd 
floor, office 2-B, El Rosal.  Each of these three operations centers has 
U.S.-citizen personnel selected in Washington plus Venezuelan employees 
whose employment must receive prior approval in Washington.

The activities of these action agencies in Caracas---IRI, NDI and 
DAI---take the form of individual project contracts with activities, cost, 
dates of beginning and end, and some, as in the OTI-DAI contract, with 
options for extensions. IRI and NDI project descriptions are submitted by 
their Washington offices to the Department of State, AID/OTI, or NED for 
approval and financing under a contract. The funds are then distributed to 
the Caracas offices that pass the money to Venezuelan beneficiary 
organizations under sub-contracts, each of which requires approval by the 
headquarters of the agency where the funds originated.

The three action agencies with offices in Caracas also have to submit to 
their Washington headquarters the résumés of leaders of proposed 
beneficiary organizations, undoubtedly so that the CIA may do a background 
security check on them, internally and with other security agencies, as 
part of the approval process. Additionally, each contract requires that the 
executing agency in Caracas submit progress reports every three or six 
months plus special reports on important issues.  On the whole, this system 
of projects, approvals, contracts, and subcontracts are a concrete, 
sophisticated mechanism totally controlled by the U.S. government.  The 
evidence is contained in the hundreds of official documents, including 
contracts, obtained since 2003 through the Freedom of Information Act.  A 
great quantity of documents is published at 
<http://www.venezuelafoia.info/>http://www.venezuelafoia.info.  These 
documents reveal that NED has been directly financing at least 17 
Venezuelan non-governmental organizations apart from its financing of many 
others through its four associated foundations.

The activities directed and financed by the U.S. have been and are very 
diverse, but they all have as their objective the development and 
strengthening of the political opposition both in political parties and in 
NGOs such as the Venezuelan Workers Confederation (CTV). These include 
workshops, seminars and conferences, training courses to develop political 
parties, promotion of unity through party coalitions, campaigns to register 
voters and to assure that the greatest number vote, establishment of a 
parallel non-official list of voters, training of election observers to 
detect fraud, close monitoring of the National Electoral Council (CNE) to 
denounce irregularities, organizing parallel vote counts, rapid calculation 
of results (“quick counts”) for possible announcement before they are 
announced by the CNE. Apart from these specific objectives, the activities 
are designed to attract medium and long-term new volunteers to the 
electoral process but always in opposition to the Bolivarian 
Revolution.  The favored parties include Acción Democrática (social 
democrats), COPEI (christian democrats), Movimiento al Socialism, Projecto 
Venezuela and Primero Justicia.

Among the many beneficiaries of this intervention was the Coordinadora 
Democrática,[1] with representatives from business, labor and political 
parties, that fulfills a role quite similar to that of the Nicaraguan 
Coordinadora Democrática during the 1980s. Another beneficiary is the 
organization Súmate that emerged in 2003 at the end of the failed oil 
strike to begin the campaign for the recall referendum. This organization 
is very similar to Via Cívica in Nicaragua.  Finally, the consulting firm 
DAI functions just as the Delphi International Group functioned in 
Nicaragua, financing the anti-Chavez propaganda campaign called Venezuela: 
Initiative to Build Confidence (VICC).

To understand how US political interference functions in Venezuela, it is 
well to examine five AID/OTI contracts with the three action agencies that 
have offices in Caracas: DAI, IRI and NDI.  The following pages analyze: 1) 
the OTI contract with DAI set up following the failed coup of April 2002; 
2) two contracts with IRI to intervene in the recall referendum of August 
2004 and possible elections afterwards; and 3) two contracts with NDI also 
to intervene in the referendum.  The value of these five contracts in the 
two years before the referendum was about US$12 million and the original 
texts are published in English at 
<http://www.venezuelafoia.info/>www.venezuelafoia.info under USAID Contracts.

1. OTI-DAI Contract to establish Venezuela: Initiative to Build Confidence 

OTI/AID began operations in Venezuela as a key player in the U.S. 
government’s program after the failed coup of April 2002.  Until then, 
political intervention had been mainly in the hands of NED and its four 
associated foundations with an annual cost of about $ 1 million.  To run 
operations on the ground, IRI had set up an office in Caracas in 2000 
followed by NDI in 2001, offices that continue operating to this 
day.  These two institutes financed various organizations directed by those 
who signed the Carmona Decree during the coup that abolished democratic 
institutions, and they continued to support the coup plotters after it 
failed.  However, after the coup, there was an obvious decision taken in 
Washington to multiply its efforts in Venezuela with much more money, but 
now through OTI/AID and a contracted consulting firm, Development 
Alternatives Inc. This firm would act as a branch of OTI/AID under the 
guise of a private company.

In June 2002, OTI/AID started this new program in Venezuela by sending two 
officials to the U.S. embassy in Caracas to supervise the program.  The OTI 
web page indicates that this office is in charge of interventions in crisis 
areas where there is a transition from war to peace or transition from a 
non-democratic government to a democratic system.  Apparently, AID/OTI 
considers Venezuela to be a country “in transition towards democracy” 
despite the various free and fair elections since the first election of 
President Chávez in 1998.  The OTI budget in Venezuela for the first year 
was $2.2 million, more than double the annual budget that NED then had for 

In August 2002, OTI contracted the consulting firm DAI to establish in 
Venezuela programs intended to “support democratic institutions and 
to ease societal tensions and maintain democratic balance,” and 
in October of that year DAI opened its office in Caracas.

The budget was USD$5.2 million for the first year and almost USD$4.9 
million for the second year of operations.  These were quantities much 
greater than the annual budgets for NED and its foundations, which were 
around $1-2 million.  For each year the DAI budget included $3.5 million 
for distribution in money or materials among the beneficiary Venezuelan 
organizations and the rest was for fixed costs, salaries, transport 
investments, communications, computers and other administrative costs plus 
DAI’s commission, the amount of which was censored in the contract released 
under FOIA. As it happened, this program continued during the optional 
second year, and the contract has been prolonged until September 2005.  In 
all probability, it will be extended again through the national elections 
in late 2006.

According to the contract, the reasons why OTI decided to establish a 
program in Venezuela were:

1) “Political tensions have increased dramatically” since April when 
“several protesters were killed outside the presidential palace” (no 
mention of the coup);

2) The U.S. has “a strong interest in ensuring that (democracy) endures in 

3) Venezuelan “institutions” need support to “restore democratic balance” 
and “ensure the protection of human rights and the free expression of 
ideas, including, at both at the national and local levels, by the media, 
civil society, political parties and the government institutions.”

The AID/OTI contract with DAI, dated 30 August 2002, consists of 49 pages 
that detail the way in which DAI will have to work in Venezuela.  In the 
introduction, OTI describes itself as a rapid response force in the face of 
social, economic, and political crises as in Kosovo, the Philippines, 
Haiti, or Columbia.  It describes its programs as “fast, flexible, 
innovative, tangible, targeted, catalytic, and overtly political.”  It 
adds, “OTI is often engaged in the most sensitive political issues of the 
U.S. government’s priority and high profile countries.”  Its money comes 
from the U.S. International Disaster Assistance Fund, and its programs 
normally last one or two years at the end of which OTI generally passes the 
operations on to another AID department or they are closed down.  The 
contract makes it clear that OTI is the equivalent of an international 
political fire brigade that is used by the government to bring under 
control social and political upheavals that threaten U.S. interests – 
something similar to the military’s Special Forces.

The types of foreign organizations that OTI supports, according to the 
contract, are a list that until the 1980’s and the adoption of Project 
Democracy, would have been the CIA’s list for covert actions: local, 
regional and national governments; private, voluntary organizations; 
international organizations; indigenous groups; cooperatives, associations 
and student groups; informal groups; media, private sector and coalitions 
of these groups.  Its activities include the promotion of reconciliation; 
prevention and resolution of conflicts; promotion of independent media with 
training in journalism; legal reform; de-mobilization and re-integration of 
ex-combatants; promotion of national messages using television, radio and 
the press; reactivating key non-governmental organizations with initial 
funding; and promoting governance with electoral support and the 
development of a strong civil society.

Specifically in Venezuela, the contract requires DAI to work with “labor, 
business, political organizations, government, and civil society to 
strengthen democratic institutions and processes” as well as “media 
institutions through journalistic training.”  Furthermore, DAI is required 
to work with “NGOs that seek to promote dialogue on an inclusive social and 
political agenda for Venezuela and open avenues of dialogue currently 
closed due to the polarization of the population.”  The contract stipulates 
that the programs will be non-partisan and that no support will be given to 
organizations that seek to alter the political order by unconstitutional 
means. In fact all financing under this program has gone to the political 
opposition, including some who signed the Carmona Decree that abolished 
democratic institutions during the failed coup of April 2002.

According to the contract, an official at AID headquarters in Washington, 
called the Cognizant Technical Officer (CTO) supervises each OTI program, 
and his approval is necessary for every important decision.  The CTO, named 
in the contract as Russell Porter, works in close coordination with the 
Department of State and directs the activities of the OTI staff assigned to 
the embassy in Caracas who are designated OTI Field Representatives.  These 
officers supervise the day-to-day activities financed by OIT and executed 
by the IRI, NDI, and DAI offices in Caracas.

According to the contract, DAI has full responsibility for executing the 
program, including administrative, logistics, acquisitions, and financial 
matters.  DAI is required to establish the office, buy office equipment and 
vehicles, recruit Venezuelan employees, establish communications and 
accounting systems, develop and maintain a database with all the details of 
their activities, develop a program to distribute funds via subcontracts 
and monitor their effectiveness and impact.  The system of disbursing funds 
requires that DAI propose funding for NGOs and other Venezuelan 
organizations to the Senior Field Representative of the OTI in the Embassy 
who can authorize payments up to $100,000.  Any proposal greater than that 
has to be approved by the CTO at AID/OTI’s Washington office.

The contract has several pages of details relating to the responsibilities 
of DAI U.S.-citizen personnel both before and after they arrive in 
Venezuela.  It underlines the speed with which DAI has to organize 
equipment and prepare itself to start the program, including preparation of 
a list of contacts in Venezuela such as NGOs, government offices, and 
international organizations.  It is also noteworthy that the contract 
demands that distribution of funds should begin as soon as possible after 
the team arrives in Caracas.  From these requirements it is obvious that 
before going to Caracas the DAI team must have had a good understanding of 
the previous NED activities and its four foundations so that they can to 
begin work immediately in coordination with the IRI and NDI offices in Caracas.

DAI furthermore is required to rent space for offices and obtain furnished 
accommodation for its personnel and any OTI personnel assigned to 
Caracas.  The selection of offices and residences has to comply with 
Embassy security requirements and to have prior written approval from the 
AID Regional Security Office.  The contract states that the office should 
be no lower the 3rd floor if it is in an office building.  It must have 
strong doors and iron bars on the windows if it is on a ground floor. It 
must be set back from the street, with secure, well-lit parking spaces and 
surrounded with walls or fences.  Additionally the contract established 
that DAI has to arrange necessary services such as landline telephones, 
fax, internet connection, portable radios, radios in the vehicles, cell 
phones, satellite telephones, GPS systems, and an in-house computer 
network.  It also requires that DAI prepare an evacuation plan for the 
U.S.-citizen personnel and OTI officials, and it mentions the possibility 
of firing personnel for security violations.  On the whole these detailed 
requirements bind DAI to quickly establish an operation of high security, 
self-sufficient, and capable of leaving Venezuela from one minute to the next.

The most interesting aspect of this contract is the designation of the U.S. 
personnel for the DAI Caracas office (5 people) plus one coordinator based 
in Washington.  These 6 people, referred to as “Key Personnel”, are named 
in the contract by OTI, but only by last name and initial: J. McCarthy, 
Chief of Party; H. Méndez, L., Blank and G. Díaz, Program Development 
Officers; G. Fung, Financial Management Specialist; and J., Jutkowitz, 
Local Program Manager in Washington.  The contract does not state one word 
about who these people are nor where they come from for this urgent and 
quickly mounted operation.  Obviously each one had to have extensive 
knowledge about Venezuela, U.S. policy there, and fluency in Spanish in 
order to carry out their duties from the moment they arrived.  Under the 
contract OTI reserves the right to substitute any one of the six.  Thus 
DAI, a private consulting company, cannot choose the project 
personnel.  One cannot dismiss the possibility that these 6 people are CIA 
officers placed under commercial cover with DAI.  Furthermore, for each 
prospective Venezuelan employee, DAI has to submit his/her resume and other 
information for approval by the CTO before hiring.  It is obvious that with 
this contract OTI is simply renting DAI’s corporate structure for a wholly 
governmental operation, while attempting to disguise it as a private sector 
program.  And in fact all the OTI requirements in the contract are tasks 
that are to be carried out by personnel assigned by OTI, with DAI being 
only a commercial cover.

As for the possibility that this OTI and DAI activity is really a CIA 
operation, it is convenient to recall what I wrote in Inside the Company: 
CIA Diary (1975) about the use of commercial cover for CIA officials in 
foreign countries.  From its beginnings in 1947, the CIA placed officers 
overseas to manage operations under non-governmental cover in order to 
separate very sensitive activities from the officers working in embassies 
with diplomatic cover.  Through the years various U.S. international 
corporations cooperated by placing CIA officers in their overseas 
operations.  However, a CIA officer working in an embassy always had to 
back up the non-official cover officer in many ways, and this 
administrative task typically took up much, if not too much, time.

During the 1960s, an effort was made to establish small, self-sufficient 
groups of officers under commercial cover with direct communications with 
CIA headquarters in Langley, Virginia, outside Washington. The goal was to 
reduce the demands for so much time from the officers working in the 
embassies.  That was the case in Mexico City where a group of three CIA 
officers established an import business with the code name LILINK.  Even 
though the CIA officials inside the embassy directed this non-official 
cover office, there were secure communications that reduced the need for 
personal meetings and other support from the embassy.  The DAI office in 
Caracas fits perfectly in this pattern, both to give supposedly private and 
commercial cover to CIA officers and to try to disconnect embassy officers 
from such sensitive intervention in internal Venezuelan politics.

To sum up this contract, after the failed coup of April 2002, the 
government of the United States widened its program of intervention in the 
Venezuelan political process through the Agency for International 
Development (AID) with budgets much greater than those of the National 
Endowment for Democracy (NED) and its four associated foundations whose 
programs with the opposition nevertheless continued.  In August 2002 
AID/OTI contracted the consulting firm Development Alternatives, Inc. (DAI) 
to develop various programs to support the political opposition with annual 
budgets of around $5 million.  DAI then established an office in Caracas, 
very possibly as a front for and with personnel from the CIA, while passing 
as an ordinary subsidiary of a U.S. transnational corporation.  In reality, 
it is a key office of the U.S. embassy disguised as a private company.

At least 67 projects up to end of 2004 have been financed by the DAI 
program called Venezuela: Initiative to Build Confidence.  The first 
projects started in the fall of 2002 were designed to support the lockout 
and sabotage of the oil industry from December 2002 to February 2003.  This 
support included financing the TV ad campaign in favor of the strike.  When 
the strike failed, DAI focused its projects on the referendum of August 
2004, and among its main beneficiaries was Súmate, the main NGO that 
promoted the referendum against Chávez.  Parallel to these activities DAI 
has financed the development of the opposition’s political program against 
the Bolivarian Revolution known as Plan Consensus.  Some of the 
beneficiaries of this project were Queremos Elegir (We want to Choose) and 
Liderazgo y Vision (Leadership and Vision).  Now, since the victories of 
President Chávez in the referendum and in the local and state elections of 
October 2004, DAI is focusing on the national elections of 2005 and 2006.

At the end of 2004, OTI had active operations in 11 countries including 
Venezuela, Iraq, Afghanistan, Democratic Republic of the Congo, Sudan, 
Bolivia, and Haiti.  It is noteworthy that on the OTI web page that has a 
list of the countries where they have programs, all the countries have a 
link to pages that describe the programs, except Venezuela which does not 
have a link or a description of the program.  As for DAI, at the end of 
2004 it had programs in dozens of countries in Africa, Asia, Eastern 
Europe, and Latin America. Apart from Venezuela, it had programs in 
Bolivia, Colombia, Brazil, Ecuador, El Salvador, Haiti, Honduras, Jamaica, 
and Mexico among others).  These OTI and DAI programs certainly merit 
review to see if they operate under the same conditions as in Venezuela, 
that is, as possible fronts and covers for the CIA.

Translated from Spanish by Maria Victor


Part 3: <http://www.venezuelanalysis.com/articles.php?artno=1550>Analysis 
of Four USAID Contracts with with Republican and Democratic Party 
Foundations in 

[1] Editor’s note: the Coordinadora Democratica fell apart shortly after 
the August 15, 2004 presidential recall referendum.

Original source / relevant link:

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