680. Telegram 1609 From the Embassy in Venezuela to the Department of State, March 2, 1972, 1525Z.1 2

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TELEGRAM
Department of State
CARACAS 1609

P 021525Z MAR 72
FM AMEMBASSY CARACAS
TO SECSTATE WASHDC PRIORITY 4998

CARACAS 1609

DEPARTMENT PASS PETER FLANIGAN AND GENERAL LINCOLN

SUBJECT: PRESENTATION OF PRESIDENT NIXON’S FEB. 17 LETTER TO PRESIDENT CALDERA: DISCUSSION OF PETROLEUM PROBLEM.

SUMMARY: WHEN AMBASSADOR PRESENTED PRESIDENT NIXON’S LETTER OF FEBRUARY 17 AND ACCOMPANYING EXPRESSION OF USG VIEWS ON OUR PETROLEUM RELATIONS WITH VENEZUELA, CALDERA APPRECIATED LETTER AND WAS ANGERED BY ACCOMPANYING TALKING POINTS. HOWEVER, HE SOON CALMED DOWN AND AGREED ON NECESSITY TO NEGOTIATE ACROSS THE BOARD ON “FUTURE OF OUR TRADE AND PETROLEUM RELATIONSHIPS,” TO USE WORDS OF PRESIDENT NIXON.

1. I WAS INVITED TO MIRAFLORES PALACE YESTERDAY EVENING AT SIX-THIRTY AND HAD A 45 MINUTE MEETING ALONE WITH PRESIDENT CALDERA. SIGNIFICANTLY, IN VIEW OF RECENT CLAMOR FOR MY HEAD BY LEADERS OF COPEI PARTY, PRESIDENT ASKED IF I OBJECTED TO HAVING OUR PICTURES TAKEN TOGETHER. I SAID I DID NOT MIND.

2. I PRESENTED ORIGINAL OF PRESIDENT NIXON’S LETTER OF FEBRUARY 16, WITH COPY OF U.S. FOREIGN POLICY FOR THE 1970’S, FOR WHICH CALDERA EXPRESSED APPRECIATION; AND APOLOGIZED FOR NOT HAVING YET RECEIVED SIGNED ORIGINAL OF PRESIDENT NIXON’S LETTER DATED FEBRUARY 17 (STATE 29206), OF WHICH I GAVE HIM TEXT MARKED “TELEGRAPHIC COPY OF SIGNED ORIGINAL.” I VENTURED OPINION THAT PERHAPS SINCE VENEZUELA WAS IN THE “V’S” SOMEONE IN DEPARTMENT’S POUCH ROOM HAD MISTAKENLY SENT ORIGINAL TO VIET NAM. N.B. IT ARRIVED THIS MORNING AND HAS BEEN SENT TO MIRAFLORES.

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3. PRESIDENT CALDERA WAS PLEASED WITH PRESIDENT NIXON’S LETTER, BUT NOT ITS ANNEX, MY INSTRUCTIONS AS SET OUT STATE 29285, MODIFIED IN PARA 3–A BY STATE 31327. HE READ IT CAREFULLY IN SILENCE, BUT I COULD SENSE THE ANGER RISING WITHIN HIM.

4. CALDERA’S FIRST COMMENT WAS THAT, WHILE PRESIDENT NIXON WAS SENDING A FRIENDLY LETTER, THIS ACCOMPANYING COMMUNICATION SEEMED LIKE A THREAT. HE PARTICULARLY TOOK UMBRAGE AT PARA 3–D. HE DID NOT THINK IT RIGHT TO CHARACTERIZE VENEZUELAN MINISTERS AS MAKING UNOBLIGING REMARKS ABOUT U.S. AND WENT OFF INTO A LONG DEFENSE OF PEREZ LA SALVIA’S PUBLIC REFERENCE TO USG HAVING RECEIVED “BAD ADVICE” ON OIL. HERE CALDERA MADE A DISSERTATION ON THE “PLANT REPORT” AND DEPARTMENT’S COMMISSIONING OF A STUDY ON LATIN AMERICA BY RAND CORPORATION. I REMINDED HIM THAT BOTH DOCUMENTS WERE UNOFFICIAL AND MORE THAN A YEAR OLD; THE PLANT STUDY IN FACT, DONE BY A PRIVATE SCHOLAR FOR A PRIVATE FOUNDATION, COUNCIL ON FOREIGN AFFAIRS.

5. HOWEVER, SINCE PRESIDENT SEEMED SO NETTLED BY PARA 3–D AND SAID HE WOULD HAVE TO REJECT IT, I MADE A LATIN AMERICAN GESTURE, WHIPPED OUT MY FOUNTAIN PEN, AND CROSSED OUT THE OFFENDING PARAGRAPH. THIS AT ONCE ENDED THE TENSION; THE PRESIDENT SMILED, AND WE WENT ON TO MORE SUBSTANTIVE MATTERS. AFTER ALL, EVEN THOUGH PARA 3–D WAS CROSSED OUT, MINISTERS CAN STILL READ IT.

6. RE PARA FOUR, STATE 29285, PRESIDENT SAID HE WOULD BE HAPPY TO INSTRUCT HIS MINISTERS TO NEGOTIATE. HE WENT ON AT SOME LENGTHS AND RATHER DEFENSIVELY ABOUT NEED FOR, AND TIMING OF, DENUNCIATION OF RECIPROCAL TRADE AGREEMENT, SAYING THAT FROM U.S. POINT OF VIEW IT WAS BETTER BEFORE ENTRY INTO AN ELECTION YEAR, WHILE FROM VENEZUELAN POINT OF VIEW IT WOULD HAVE BEEN “IMPOSSIBLE” IN ELECTION YEAR 1973. SURELY SOME MODUS VIVENDI COULD BE FOUND TO REPLACE TRADE AGREEMENT. CALDERA INDICATED HE WAS AWARE THAT AUTOMATIC INCREASE IN PETROLEUM DUTIES ON EXPIRY OF TRADE AGREEMENT WOULD AFFECT ALL EXPORTERS OF PETROLEUM TO U.S., AND NOT ONLY VENEZUELA. SURELY LAWYERS ON BOTH SIDES COULD FIND A SOLUTION.

7. ON KEY ISSUE OF OIL PRESIDENT STARTED BY SAYING THAT IT WAS CURIOUS THAT BRITISH AND DUTCH GOVERNMENTS NEVER PROTESTED ON BEHALF OF ROYAL DUTCH SHELL, WHILE U.S.G. (AS IN PRESENT [Page 3] INSTANCE) SEEMED TO BE WORKING FOR THE COMPANIES. HERE HE PACED OVER MUCH-TROD GROUND, ACCUSING U.S. OIL COMPANIES IN VENEZUELA OF USING ALL MANNER OF PROPAGANDA AND PRESSURE, REVERTING TO CREOLE’S UNFORGETTABLE BRIEFING ON EVE OF HIS ASSUMING PRESIDENCY, WHEN EVERY ONE OF CREOLE’S POOR-MOUTH PROPHECIES PROVED WRONG, AND IN SUM DISTINCTLY CONVEYING IMPRESSION THAT USG IS PRACTICALLY UNDER THE THUMB OF THE OIL COMPANIES. IN FACT, AT ONE MOMENT HE SAID AS MUCH.

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8. I REPLIED THAT I WAS NOT HERE AS AN OIL COMPANY AGENT, AND ASKED RHETORICAL QUESTION WHETHER, IF WE COULD BEGIN NEGOTIATIONS GOVERNMENT-TO-GOVERNMENT, HE COULD REALLY BELIEVE HE WAS DEALING WITH WASHINGTON AND NOT STANDARD OF NEW JERSEY IN NEW YORK. CALDERA LEVELED A LONG LOOK WITH HIS BLACK, OBSIDIAN EYES AND REPLIED, “YES, I CAN.”

9. PRESIDENT VOICED A DISAPPOINTMENT (READ RESENTMENT) THAT AFTER HIS STATE VISIT TO WASHINGTON “NOTHING HAD HAPPENED.” HE SAID THAT AFTER HIS TALKS WITH PRESIDENT NIXON, HE THOUGHT “EVERYTHING WOULD BE EASY.” APPARENTLY AT THAT TIME HE THOUGHT HEMISPHERIC PREFERENCE WAS IN THE BAG. THIS REMARK CONFIRMS OTHER INFORMATION REACHING US THAT A MEASURE OF CALDERA’S DISCONTENT IS A FEELING OF DISILLUSIONMENT THAT ALL HE HAS RECEIVED FROM THE JUNE 4, 1970, CONFERENCE IS SIDEWINDERS, AN OLD SUBMARINE, AND A FREQUENTLY REITERATED INTEREST IN CODESUR. MOST OF ALL HE IS DISAPPOINTED IN NON-FULFILLMENT OF HIS DREAMS FOR HEMISPHERIC PREFERENCE; AND HE STILL RANKLES OVER OUR NEGATIVE DECISION ON F–4S.

10. I SAID THAT, ALTHOUGH THERE WERE UNDOUBTEDLY MISCONCEPTIONS ON BOTH SIDES, THIS WAS ALL THE MORE REASON TO SIT DOWN AND TALK. HE MIGHT NOT LIKE WHAT WE SAID AND WE MIGHT NOT LIKE WHAT HE SAID, BUT GIGANTIC FACT REMAINED THAT ON PETROLEUM BOTH U.S. AND VENEZUELA WERE DISCUSSING RELATIVE MEASURES OF MUTUAL ADVANTAGE. EVER SINCE MY APPOINTMENT TO VENEZUELA, I HAD IN WASHINGTON MADE NO BONES OF FACT THAT I FAVORED HEMISPHERIC [Page 5] PREFERENCE, IF IN RETURN FOR IT U.S. OIL COMPANIES IN VENEZUELA WERE FAIRLY TREATED. LOOKING DOWN THE ROAD IT WAS OBVIOUS TO ME THAT BOTH COMPANIES AND GOV SHOULD TAKE MEASURES FOR JOINT VENTURES IN THE FUTURE OR SERVICE CONTRACTS, OR OTHER ARRANGEMENTS OF MUTUAL COOPERATION. FUNDAMENTAL TO BOTH OUR COUNTRIES WAS CREATION OF THAT CLIMATE OF CONFIDENCE WHICH ALONE COULD ASSURE HUGE INVESTMENT OF CAPITAL REQUISITE FOR AN LNG INDUSTRY AND EVENTUAL DEVELOPMENT OF THE TAR SANDS.

11. I SAID I MIGHT BE ONLY A VOICE CRYING IN THE WILDERNESS. I HAD NO KNOWLEDGE OF WHAT EVENTUAL POLICY WOULD BE ADOPTED BY MY GOVERNMENT. THAT THERE WERE PRESENT DOUBTS, WAS OBVIOUS FROM PRESENTATION I HAD JUST MADE. HOWEVER, I PERSONALLY WAS IN FAVOR OF A SPECIAL RELATIONSHIP FOR VENEZUELA IF IN RETURN -- AND ONLY IN RETURN -- WE RECEIVED FAIR TREATMENT.

12. UPSHOT OF A LONG INTERVIEW WHICH BEGAN ON AN ALMOST EXAGGERATEDLY FRIENDLY NOTE FROZE TO ICEBERG TEMPERATURE AT REFERENCE IN PARA 3–D AND THEN WARMED WHEN MY CROSSED LINES TURNED THE ICEBERG OVER, WAS AGREEMENT BY CALDERA TO NEGOTIATE ACROSS THE BOARD, AS INVITED IN PRESIDENT NIXON’S LETTER. WHEN I SAID THAT, SINCE VENEZUELA GOVERNMENT HAD CAST THE DIE BY DENOUNCING OUR TRADE AGREEMENT, WE NOW HAD A SELF-IMPOSED ULTIMATUM WHICH EXPIRED ON MIDNIGHT JUNE 30, AND THAT THEREFORE I HOPED AN AGREEMENT COULD RE REACHED IN NEXT FOUR MONTHS, CALDERA NODDED IN AGREEMENT.

13. HE CONCLUDED INTERVIEW WITH AN ODD REMARK: “I HOPE YOU WILL NOT MISINTERPRET ME NOR TAKE IT AMISS IF I SAY THAT GENUINELY THE VENEZUELAN PEOPLE APE FRIENDS OF THE UNITED STATES. I HAVE NEVER UTTERED AN UNFRIENDLY WORD ABOUT YOUR COUNTRY. WE ARE AND WANT TO BE YOUR FRIENDS.”

14. I REPLIED THAT THIS WAS WHAT OUR MEETING WAS ALL ABOUT. I WAS CONFIDENT THAT WITH A BASIC BLENDING OF GOOD WILL AND MUTUAL INTEREST WE COULD REACH LASTING SOLUTIONS.
GP–3.
MCCLINTOCK

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 797, Country Files, Latin America, Venezuela, Vol. 2, 1972. Secret; Priority; Exdis. Nixon’s letter to Caldera is referenced in the source note to Document 679. Telegrams 29285 and 31327 from the Department, February 18 and 23, respectively, are ibid., RG 59, Central Files 1970–73, PET 1 US.
  2. President Caldera defended the timing of his decision to rescind the Reciprocal Trade Agreement, and voiced disappointment that Venezuela had not received hemispheric trade preferences for petroleum. Caldera agreed to start negotiations, which President Nixon had proposed in a letter to him.