CARACAS, VENEZUELA -- A diplomatic row between the United States and Venezuela escalated this past week when President Hugo Chávez expelled a US naval attaché for espionage, prompting Washington to order the Venezuelan ambassador's chief of staff to leave the US.
Mr. Chávez fanned the flames in front of thousands of supporters Saturday by vowing to buy more arms to defend his country from a possible US invasion.
Beyond the heated rhetoric on both sides, one of the actions the Chávez government views as most theatening is the US government's funding and support of opposition groups that Chávez charges hope to overthrow his government.
Tuesday, the attorney general is scheduled to take a get-out-the-vote group called Súmate to court on conspiracy charges for accepting $31,120 from the US-funded National Endowment for Democracy (NED). The case, which comes at a time when US-sponsored democracy-building programs are facing increased scrutiny worldwide, has bolstered Chávez's claims that the US is meddling in Venezuelan affairs. Yet Washington says the persecution of Súmate, an organization highly critical of Chávez, smacks of a political witch hunt that damages democracy in the country.
Despite the attention the case has garnered, Súmate's NED money is small change compared with the millions of dollars given to Venezuelan groups by a little-known branch of the US Agency for International Development (USAID) called the Office for Transition Initiatives (OTI). The Venezuelan government and some analysts question OTI's motives in Venezuela, since it is less transparent than other US aid agencies, more directly tied to US foreign policy interests, and has unusual budgetary flexibility.
US aid agencies have been under scrutiny in Venezuela since it was revealed that some members of US-funded groups were at the forefront of the opposition movement and supported the failed coup against Chávez in 2002. But OTI's mode of operations, until recently, has gone under the radar.
Called "the special forces of development assistance" by Harvard University public policy professor Robert Rotberg, OTI was designed in the 1990s to help former Soviet Union countries make the transition to democracy. It now works in areas such as Iraq, Haiti, Sudan, and the West Bank.
Even though Venezuela is not experiencing the kind of civil strife seen in countries where OTI operates, OTI devoted $4.5 million to its Venezuelan program in 2005, more than six times NED's budget.
OTI, which derives its money from disaster-assistance funding, can issue urgent short-term grants much faster than normal USAID programs.
OTI says it works to nurture Venezuela's "fragile democratic institutions" by funding groups that strengthen human rights, the judicial system, and public dialogue in a polarized society.
But critics have raised concerns. "The [Bush] administration's nation-building mission includes trying to weaken or challenge the Chávez administration," said Riordan Roett, director of Latin American studies at Johns Hopkins School of Advanced International Studies in Washington. "OTI is really at the front line of what the administration thinks of Venezuela."
The State Department accuses Chávez of bordering on dictatorship, saying he is gaining near-total control over the judicial system, the legislature, and the nation's vital oil industry.
The Venezuelan government responds that Chávez's party and its allies have won all seven elections held in the past seven years. It questions why the US is using an agency dedicated to transition initiatives when Venezuela has officially been a democracy since 1958.
"It's absolutely outrageous," says lawyer Eva Golinger, who investigates US funding in Venezuela. "This isn't a government in transition at all. For an entity that is allegedly promoting democracy and using US taxpayer dollars to do so, OTI is highly secretive - and suspiciously so."
OTI has broken an initial promise made by one of its implementing partners to stay in Venezuela only two years. The agency is designed to stay in a country for no more than two or three years, but has been in Venezuela for almost four years.
The US government says OTI is still operating here, housed in the US Embassy, because Congress has not earmarked enough funds for USAID to open its own office in the country.
Roett says Washington opted against a larger USAID mission because it might be seen as a provocation to Chávez. Yet unlike most USAID programs, OTI describes itself as "overtly political" and particularly tied to foreign-policy goals.
In order to issue grants quickly, OTI can spend money free from earmarks for specific programs that Congress often puts on regular USAID funds.
OTI says on its website that transparency is one of its "strategic principles," but declined to release the names of its grantees and denied requests for any on-the-record interviews on its Venezuela program. The US government did agree by phone to release to the Monitor descriptions of all 2005 OTI grants with most of the grantees' names blacked out. These documents have not yet been received.
"This is being done devoid of public scrutiny," said Larry Birns of the Council on Hemispheric Affairs in Washington. "I personally think that it's outrageous that the US government can dispose funds with no real consultation."
The US government says releasing the names of OTI grantees would jeopardize the groups' safety. It says five recipients of US funding have recently been investigated by the Disip, Venezuela's state security force. The US also cites the case against Súmate - which has received OTI grant money - as evidence that the Venezuelan government targets its grantees.
Armando Obdola, director of the group Kapé Kapé, which promotes leadership and education in indigenous communities, said that the Disip questioned him for 12 hours and bugged his phone after Golinger announced on state television that the group was receiving NED funding.
"Why do we have to hide if we're doing nothing wrong?" Mr. Obdola said when acknowledging that his group was US-funded. "We're doing effective work in the indigenous communities."
The US says OTI has provided assistance to Chávez's Fifth Republic Movement party as well as the three largest opposition political parties.
"Every grant we have is a good grant," said a US official, who spoke on the condition of anonymity. "They're good projects, things we are proud of. But we can't have their names published."