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Cablegate: Par for the Course: Mayor of Caracas Expropriates

VZCZCXRO9586
RR RUEHAO
DE RUEHCV #2624/01 2422059
ZNR UUUUU ZZH
R 302059Z AUG 06
FM AMEMBASSY CARACAS
TO RUEHC/SECSTATE WASHDC 6080
INFO RUEHBO/AMEMBASSY BOGOTA 6962
RUEHBR/AMEMBASSY BRASILIA 5750
RUEHBU/AMEMBASSY BUENOS AIRES 1441
RUEHGE/AMEMBASSY GEORGETOWN 0203
RUEHLP/AMEMBASSY LA PAZ 2317
RUEHPE/AMEMBASSY LIMA 0565
RUEHMD/AMEMBASSY MADRID 3178
RUEHQT/AMEMBASSY QUITO 2401
RUEHSG/AMEMBASSY SANTIAGO 3747
RUEHDG/AMEMBASSY SANTO DOMINGO 0302
RUEHAO/AMCONSUL CURACAO 0993
RUEHGL/AMCONSUL GUAYAQUIL 0637
RUEHSO/AMCONSUL SAO PAULO 0050
RUEATRS/DEPT OF TREASURY
RUCPDOC/DEPT OF COMMERCE
RUMIAAA/HQ USSOUTHCOM MIAMI FL
RUEHUB/USINT HAVANA 0968
RUCNDT/USMISSION USUN NEW YORK 0483

UNCLAS SECTION 01 OF 02 CARACAS 002624

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ECON PGOV VE
SUBJECT: PAR FOR THE COURSE: MAYOR OF CARACAS EXPROPRIATES
LOCAL GOLF COURSES


-------
Summary
-------

1. (SBU) During an open session of the Metropolitan Council
of Planning and Public Policy held in Caracas on August 22,
Mayor Juan Barreto announced that he was going to issue
expropriation decrees for all three golf courses in the
Caracas metropolitan area and use the terrain to build 25,000
family homes. In that session, he also publicly and
personally insulted the two opposition mayors (septel). Two
days later he issued expropriation decrees for the Valle
Arriba Golf Club and the Caracas Country Club. The La
Lagunita Golf Club was also targeted by Barreto but no decree
has been published yet. National Guard elements were spotted
in front of Valle Arriba Golf Club on August 29, although it
was open for business. The measure is largely a political
play to Barreto's lower-class voting base, and is not viewed,
even by the Minister of Housing, as a viable alternative to
deal with the housing shortage. On August 30, Vice-President
Rangel issued a press release disagreeing with the decrees.
End Summary.

-----------------
Why golf courses?
-----------------

2. (SBU) The reason behind the expropriations, as outlined
by the director of the Metropolitan Urbanization Institute
(MUI) and Barreto himself, is to construct 25,000 homes for
homeless Venezuelans. Juan Vadell, attorney general for the
metropolitan district, said that "we are guarantors of
private property, but these courses allow us to resolve a
collective problem." (Note: Venezuela faces a 1.68 million
unit housing shortage, felt most acutely in Caracas. In 2006
alone, Barreto has issued expropriation decrees for an
estimated 195 residential buildings, and is looking to enact
blanket expropriations for properties meeting certain
criteria (such as having the same tenant for 20-plus years,
etc). End Note.) The three golf courses targeted are
located on prime Caracas real estate.

3. (SBU) Valle Arriba Golf Club has reportedly already begun
clearing out its pro shop in fear of confiscations, although
play was proceeding as usual the morning of August 30.
National Guard troops were posted in front of the property on
the night of August 29. In La Lagunita, National Guard
elements have reportedly secured the golf course, and two
Chavistas on motorcycles were seen eyeing the land. The
owner of Caracas Country Club commented to the press on
August 29 that he hadn't received any official notification
from the Mayor.

---------
The irony
---------

4. (SBU) Despite Barreto having targeted La Lagunita Golf
Club specifically in his August 22 tirade, the expropriation
decree for this property was not published alongside the
others. There is anecdotal evidence that wealthy
pro-government individuals (Chavistas "light") have bought
property around the golf course, and some speculate that they
pressured Barreto to delay or stop the measure. In the past
year, members of the BRV have often mentioned using Caracas
metropolitan properties the government already owns - such as
Fort Tiuna or La Carlota airstrip - to build homes, but those
efforts have fallen flat. Expropriating golf courses may be
more a political statement than an actual housing solution.
On August 26, the Minister of Housing, Ramon Carrizalez,
declared that national housing plans do not include
construction on La Lagunita, and that there are more
appropriate lots to build on.

CARACAS 00002624 002 OF 002

---------
What next
---------

5. (SBU) According to the 2002 Expropriation Law, owners
have 30 days after the property is declared "of public
utility" (i.e. an expropriation decree is issued) to contact
the expropriating entity and begin negotiations. An
inspector must then value the property, and the National
Guard or police can temporarily occupy it for a period of six
months. If the owner chooses not to settle, he can fight the
proceedings in court. Construction on or occupation of the
property (by tenants) cannot legally occur until the process
is finalized. However, in nearly all prior cases of Caracas
expropriations by Barreto, occupants have flooded in, often
with complicity of authorities.

-------
Comment
-------

6. (SBU) The fact that Barreto announced the expropriations
while hurling insults at two opposition mayors shows the
political motivation to target the upper (and middle) classes
and play to his lower-class voter base (after all, golf is an
"elite" sport). The housing plans for these properties are
precarious - La Lagunita is zoned as a "recreational area"
and it would be illegal to build residential homes without
re-zoning, a process that normally takes up to two years.
It's also hard to imagine how 25,000 families will fit on 58
acres, with buildings limited to maximum of six stories, and
still leave room for parks and green areas (as per the
Metropolitan Urbanization Institute's plan). The cost of the
expropriations alone would be well above the municipality's
budget. Both Capriles and Lopez said that Barreto is doing
this to distract voters away from mismanagement in his own
municipality (except for Chacao and Baruta, all other
Chavista-run municipalities are unkempt and broken down).

7. (SBU) As has happenned with Barreto's pushes for
expropriation in the past, a high-level BRV member has come
out publicly against the measures when reactions turn sour
(in this case Rangel, in the January 2006 wave of
expropriations, it was Attorney General Isaias Rodriguez).
Barreto seems more and more like a BRV litmus test to feel
out public opinion on contentious issues - and if there is a
backlash, the BRV can localize the issue and use Barreto as a
scapegoat. Given that only 13.6 percent of Venezuelans in a
recent Datanalisis poll said that expropriation should be the
means to providing social benefits, Barreto may be alienating
those very voters he is trying to court. End Comment.


WHITAKER

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