Latin America Risk Report - 23 January 2020

Guaido's trip outside of Venezuela demonstrates continued international support for his effort to end the Maduro regime.

Welcome to the Latin America Risk Report - 23 January 2020

In this edition:

  • Venezuela - Guaido’s international tour

  • Brazil - Prosecutors charge US journalist critical of Bolsonaro

  • Corruption Corner and Reading List

This week, paying subscribers received a preview of Peru’s legislative elections plus several maps related to Mexico’s violence and some analysis on those maps. I have included one of the maps below. If you would like to support this newsletter and receive additional analysis every week, you can subscribe at

Venezuela - Guaido’s international tour

President Juan Guaido left Venezuela to attend a hemispheric anti-terrorism conference in Bogota and meet with officials in Europe. This morning, he spoke at Davos.

Guaido’s trip demonstrates two important attributes:

  1. Guaido retains freedom of movement around Venezuela and has an ability to leave and enter the country. Maduro’s inability to limit Guaido continues to suggest regime weakness.

  2. Guaido retains the support of a significant portion of the international community. The fact he is welcomed as president at meetings in South America and Europe highlights how Maduro’s regime has become an international pariah.

Yet, there should be real questions about what Guaido will accomplish with this trip. He does not need to convince world governments that Maduro is bad; most of the world already agrees with that assessment. Guaido’s biggest public requests for actions by foreign governments appear to be a slight strengthening of sanctions by Europeans including a designation of Venezuelan “blood gold” to restrict its trade and the financing of the Maduro regime. That would be a fairly limited amount of additional pressure for such a high profile trip. 

Guaido’s trip has Maduro nervous

With Guaido exiting the country, the Maduro regime has acted more strangely than usual and several of their moves appear to be in response to Guaido’s trip.

  • Maduro regime security forces raided the building Guaido uses as an office. Then, after international criticism, they tried to backtrack on the raid, claiming they were targeting two unrelated individuals for a corruption investigation. 

  • Sebin detained Ismael Leon, a member of the legislature in the Guaido coalition.

  • Both de facto Vice President Rodriguez and de facto Foreign Minister Arreaza traveled to Turkey on two separate trips this week to highlight ties with that country, an attempt to counter Guaido’s meetings with major world leaders.

  • Maduro announced that Cuba’s ambassador in Venezuela will receive the equivalent of a cabinet position in his regime.

Will Guaido be detained when he returns?

When Guaido left the country in February 2019, he said he would return as a president should, flying into the country and being greeted by immigration officials. Oddly, that’s exactly what happened. The Maduro regime did not dare detain Guaido following a successful set of global meetings that raised his profile. 

Maduro and Guaido will have the same standoff occur again in the coming weeks when Guaido chooses to reenter the country. Local sources suggest there is pressure on Maduro by actors inside his coalition including Russian and Cuban advisors to detain Guaido. 

However, detaining him also raises the possibility that the international community acts in a far greater way than it has so far. Maduro must fear that Guaido’s detention is one act that may cause the US, in particular, to do something with a higher impact than sanctions.

Separately, the US government granted new 90 day waivers to US oil companies involved in Venezuela so they can continue to operate in spite of sanctions. New sanctions were announced on PDVSA properties including planes used to move government officials around the world. 

Brazil - Prosecutors charge US journalist critical of Bolsonaro

Prosecutors in Brazil accused Glenn Greenwald of involvement in cyber crimes, claiming that he helped hack the phones of various government officials. Greenwald’s publication of those messages has been problematic for the reputation of the Bolsonaro government, particularly Sergio Moro. 

However, Brazilian authorities have admitted they have very little evidence that ties Greenwald to the actual theft of the messages. Prosecutors say they have intercepted communications proving Greenwald helped direct the hackers, but the evidence is more likely to demonstrate a journalist communicating with sources, something protected under Brazilian law, than his participation in a cybercrime. This prosecution on weak evidence is problematic because it suggests a politicization of cybersecurity issues in Brazil. Brazilian authorities are using cybersecurity regulations to target a journalist who they dislike.

The results of the Bolsonaro administration’s actions will be felt in other areas as well.

For companies looking to Brazilian authorities for assistance on stopping cyber crime and for information sharing on threats, they must now take into account that the Bolsonaro government is willing to use cybersecurity issues to target political opponents. This type of government abuse could make individuals and companies in Brazil more vulnerable to cyber attacks.

Politically, Bolsonaro’s opposition is grabbing on to this issue and taking advantage of it to hit Brazil’s president in the international media. Former President Lula da Silva has an op-ed in the Washington Post attempting to reinforce the global narrative that Bolsonaro is less than democratic.

Corruption Corner

Region - Transparency International released its global survey on perceptions of corruption. According to the Americas section of the report, Nicaragua and Mexico are doing worse while Guyana and Ecuador are doing better. Venezuela remains at the bottom for the hemisphere.

Honduras - The Hernandez government cancelled the MACCIH, an OAS anti-corruption unit that was helping investigate significant criminal activity in Honduras. Though many US politicians consider Honduras an ally, the MACCIH cancellation drew bipartisan criticism from the US Congress as well as several critical comments from Trump administration officials.

US, Venezuela - Alejandro Betancourt, the CEO of Derwick energy company, told Rudy Giuliani that he is helping finance the Guaido government. Giuliani, who has apparently been paid to help Betancourt avoid criminal prosecution or sanctions, mentioned Betancourt’s claim of supporting US policy in a meeting with Justice Department lawyers. Reuters published a story on this meeting based on conversations with Lev Parnas, a former associate of Rudy Giuliani. 

At the same time Giuliani was working for Betancourt, Giuliani and his associates were working with Ukrainian oligarch Dmytro Firtash to obtain information about Joe Biden, a factor in the current US impeachment proceedings. Both Firtash and Betancourt have significant financial ties to Russia’s Gazprom, which raises questions about whether Giuliani’s work with the two men was separate or linked.

Reading List

NYT - The Rebellion Against the Elites in Latin America

Wilson Quarterly - The Power of Protest 

Americas Quarterly - Why Latin America's Bet on Local Government Is Ambitious – and Risky

UNHCR - Data from interviews with Central American refugees

HRW - Social Control and Abuses by Armed Groups in Colombia’s Arauca Province and Venezuela’s Apure State

Inter-American Dialogue - Reviving Venezuela’s Oil Sector: The Role of Western Oil Majors

Atlantic Council - PeaceGame Venezuela: Pathways to Peace

InSight Crime -  Illegal Mining, Latin America’s Go-To Criminal Economy

WSJ - Brazil Prosecutors Charge Ex-Vale CEO Fabio Schvartsman With Homicide for Dam Collapse

Wilson Center - Eighth Annual U.S.-Mexico Security Conference: Taking Stock of Mexico's Security Landscape One Year On (all of the videos, presentations and reports are available from the event last week)

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