In March 2009, shortly after taking office, President Barack Obama met Venezuela's authoritarian populist leader Hugo Chavez at an Organization of American States summit in Trinidad. They shook hands and Obama informed Chavez that he wished to be friends and reset US-Venezuelan relations. Chavez responded by presenting Obama with his book on US exploitation of Latin America. Now the Obama administration and the Chavez regime appear to be headed for confrontation after Chavez has rejected Larry Palmer, the US ambassador designate to Caracas. Chavez announced that if Palmer would fly in to Caracas he would be detained, given a coffee at Chavez' expense and then told "bye bye". The Venezuelan Foreign Ministry labeled the Palmer appointment "a new provocation".
Chavez has not forgiven Palmer for his answers to Senator Richard Lugar, the ranking Republican on the Senate Foreign Relations Committee in his confirmation hearings in August. When Lugar sought his response to Venezuelan government repression against owners of an independent TV station, Ambassador Palmer replied, "I share your deep concerns about limitations on freedom of the press and freedom of expression in Venezuela."
Regarding free and fair elections, Palmer replied, "I am also concerned by the increasing centralization of power in the executive branch." Palmer particularly irked Chavez by informing the senate panel that morale in the Venezuelan armed forces was at low ebb given political appointments in the armed forces. Finally the then-nominee endorsed the accusations that Chavez was assisting the FARC terrorists in neighboring Columbia: "I am keenly aware of the clear ties between members of the Venezuelan government and Colombian guerrillas."
A pro-Chavez newspaper fired back by denouncing Palmer. "It is worthwhile noting that Larry Palmer, when he was an ambassador in Honduras (2002-2005) […] he created from the embassy the whole penetrating web of the CIA, using USAID and the whole structure of the State and the government of Honduras. […] Palmer has the tendency to interfere in internal policies and there is no doubt that Obama wants with him to deepen the instability and to topple by any means President Chavez."
The Palmer affair merely highlights the rocky relations between the two countries. Chavez' success in obtaining special decree powers has been decried as a power grab by the State Department. Chavez got the lame duck Venezuelan National Assembly to rubber stamp his 12 month emergency powers three weeks before its terms expires.
While Chavez will still command (thank to gerrymandering) 60% of the seats in the incoming National Assembly, this majority pales in comparison with the 90% super majority that he enjoyed in the outgoing one. This presents difficulties for constitutional changes, judicial appointments and anything else requiring a special majority. Chavez' opponents have accused him of seeking dictatorial powers and the Venezuelan President did not hide his satisfaction over the fact that the incoming assembly was effectively emasculated.
"They will not be able to create even one law, the little Yankees,.. Let's see how they are going to make laws now."
Banks in last minute legislation have been accorded the status of public utilities meaning that they may be nationalized if they do not cough up a percentage of earning for Chavez' "special relief projects" The government is augmenting media censorship by seeking powers to regulate Facebook and Twitter. Lawmakers loyal to Chavez fast-tracked media responsibility laws designed to restrain freedom of expression.
The opposition, in addition to branding the laws and decree powers dictatorial, claims that Chavez' appetite for power is inversely proportional to his declining popularity.
In marked contrast to growing prosperity in Latin America, Venezuela, despite its oil revenues, contends with galloping inflation, food shortages and an energy crisis. On top of this it has been hit with massive floods that constituted the pretext for the emergency powers.
The US had no choice but to respond to Chavez' assumption of special powers."This is the fourth time that President Chavez has employed one of these decrees. He seems to be finding new and creative ways to justify autocratic powers," said State Department spokesman Philip Crowley.
Relations have also deteriorated due to Chavez' efforts to bolster the Iranian regime of Mahmoud Ahmedinejad. According to the German daily, Die Welt, of November 25, 2010 Iran is planning to place medium-range missiles on Venezuelan soil in a reprise of the Soviet move during the Cold War of positioning missiles in Cuba to threaten American cities.
What Chavez gets out of the deal according to Die Welt is Iranian permission to use these facilities for "national needs" –for example against neighbors like Colombia. Venezuela also receives access to Iranian missile technology. Additionally, Venezuela allows Iran to bypass international embargoes. For example, Russia did not send its advanced air defense system to Iran in deference to the sanctions but Venezuela has now ordered the system and it may find its way to Teheran by the back door from Caracas.