Chavez Urged by U.S. to Compensate American Companies (Update2)
(I guess there was an update 1 at some point. I know nothing, but I think it's hilarious that Chevron and Verizon are trying to get money out of this guy. Given his track record I bet he's all, "Oh, sure! Do I make the check out to 'blow me' or 'go fuck yourself?'")
By Brendan Murray
Jan. 9 (Bloomberg) -- The Bush administration urged Venezuela to compensate U.S. companies that would be affected by President Hugo Chavez's plan to transfer the country's utilities to state ownership, a White House spokesman said.
Chavez said yesterday he plans to nationalize the country's largest phone company and utilities, gain greater control over the oil industry and seek authority to make laws by executive order. His comments sent Venezuelan stocks and bonds tumbling.
The U.S. has "seen the results of nationalization in other places, and in general these types of actions do not produce economic benefits as expected,'' White House spokesman Gordon Johndroe said. "If any U.S. companies are affected, we expect them to be promptly and fairly compensated.''
Exxon Mobil Corp., ConocoPhillips, Chevron Corp. and Total SA may lose their shares in the four heavy oil ventures if Chavez's plan is approved by Venezuela's congress. New York- based Verizon Communications Inc. has a stake in the country's telephone network.
Senator Joseph Biden of Delaware, a Democrat who chairs the Foreign Relations Committee, suggested that the expansion of government economic control would end up undermining Chavez. "The prospect is that Chavez will continue to escalate his new socialist revolution to the point he loses support,'' Biden said.
The U.S. is seeking details on how Venezuela plans to carry out the nationalization, according to Eric Watnik, a spokesman for the State Department's Bureau of Western Hemisphere affairs. He expressed U.S. concern over Chavez's pledge to strip the central bank of its autonomy.
"Independent central banks have a global track record in achieving low inflation and economic stability,'' Watnik said. "Separation of powers, and checks and balances, are fundamental to democracy.''
To contact the reporter on this story: Brendan Murray in Washington at
brmurray@bloomberg.net