Venezuelan Leader Under House Arrest - Chavez Deepens Revolution

CARACAS, Venezuela (Reuters) - A Venezuelan opposition leader detained last week for spearheading a two-month strike against President Hugo Chavez was placed under house arrest on Sunday after a judge charged him with civil rebellion for his part in the protest.

State security police nabbed business leader Carlos Fernandez on Wednesday in a midnight raid on a Caracas restaurant that foes of the leftist leader portrayed as the start of a political witch hunt.

Police hustled a worn-looking Fernandez out of the capital's central courthouse early on Sunday after the judge ordered him detained at his home in the western city of Valencia, his lawyer Pedro Berrizbeitia told reporters.

Fernandez faces charges of civil rebellion and criminal instigation, although three other charges were dismissed. The conditions of his house arrest were not immediately clear.

Fernandez's capture and an arrest warrant issued for another strike leader, Carlos Ortega, stoked fears among the opposition of a crackdown against foes of Chavez, who brands his critics "terrorists" and "coup plotters."

Union leader Ortega, one of the president's fiercest critics, has gone into hiding as his supporters urge the international community to condemn charges they see as illegal and politically motivated.

"This is like someone giving you a huge blow to the head and then handing out sweets when they drop some of the charges and put you under house arrest," said opposition leader Julio Borges, of the Justice First party. "But the whole incident makes no legal sense; this is about politics."

Opponents of the populist president, who they accuse of disregarding democracy and ruining the economy, called the strike to pressure Chavez into stepping down as president of the world's No. 5 oil exporter.

The shutdown, which fizzled out during the first week of February, severely disrupted the oil exports that account for half of state revenues. Venezuela's economy, already deep in recession, contracted by nearly 9 percent by the end of last year, partly due to the stoppage.

Chavez, who survived a coup in April, has so far resisted calls to leave office. He accuses his opponents of trying to sabotage the oil industry and has demanded judges jail the opponents he accuses of trying to topple him again.

The Venezuelan leader, who was first elected in 1998 with vows to ease poverty, has recently hardened his position and calls 2003 the "year of the offensive" to deepen his self-styled revolution.

Fernandez's arrest follows the unsolved killings of three dissident soldiers and an anti-Chavez protester a few days earlier. Police are investigating those killings, but relatives of the victims blame political persecution.

Critics claim strike further polluting Venezuelan lake - oil *** MARACAIBO, Venezuela -- Under the scorching sun on Lake Maracaibo, oil wells by the thousands suck up natural gas and crude oil, the wealth of Venezuela, for home use and for export. But much more crude than usual has been ending up in the water since oil workers joined a national strike against President Hugo Chavez in December, environmentalists and government critics contend. Although the walkout against Chavez has fizzled, many oil workers remain off the job, and the critics say the shortage of employees and lack of know-how among those who are working is causing environmental damage.

The state-owned oil monopoly, Petróleos de Venezuela SA, or PDVSA, denies that. It insists spills are small and rare and that they are quickly controlled. It also blames many of the spills on striker sabotage. The situation is difficult to check independently. The oil fields have been sealed off by army and national guard troops who enforce a no-fly zone over the lake and turn back boats carrying journalists trying to get a look.

"They won't let us overfly the lake to look for oil slicks anymore," said Eddie Ramirez, a former executive for the oil monopoly. "It's all militarized now. We still have people working in the oil fields who give us information. But it is getting harder to get." Norberto Robodello, who directs the Ministry of the Environment and Natural Resources' environmental quality program, complains there are areas even his ministry isn't allowed to see. ***

Chavez Plans for Terrorist Regime***Reports on the investigation rescued from Chavez's burn pile and showed to Insight specify that two of the suspects sought by the FBI -- Fathi Mohammed Awada [Venezuelan ID card No. V6282373] and Hussein Kassine Yassine [No. V6293922] -- withdrew $400,000 from the branch of the Banco Confederado in Margarita before gong to Lebanon in December 2001. The report concludes that the individuals were "engaging in suspicious transactions which validate the suspicions of the U.S. government."

The money transfers never were recorded by Venezuela's national banking superintendent, a Chavez appointee. U.S. diplomatic sources in Caracas confirm that official inquiries through Venezuela's banking authorities have failed to reveal evidence on terrorist money laundering. "We've only consulted officials of the government," admits a U.S. economic officer.

Intelligence sources familiar with the cover-up say Chavez is withholding information on the Arabs, some of whom were important financial contributors to his presidential campaign. The report, withheld from the United States, also mentions Nasser Mohammed al-Din, described as a powerful entrepreneur and a close personal friend of Chavez, at whose home in Margarita the Venezuelan president stays on his frequent visits to the resort island, which is a favored venue for his private meetings with Castro. According to presidential pilot Maj. Juan Diaz Castillo, Chavez and Castro get together two or three times a week.

Margarita Island appears to be the center of an extensive terrorist financial network stretching throughout the Caribbean to Panama and the Cayman Islands, where three Afghanis traveling on false Pakistani passports were caught entering from Cuba with $200,000 in cash in August 2001. According to British colonial authorities, efforts to launder the money through Cayman banks also involved a group of Arab businessmen.

Chavez's ties to international terrorism date back to the days of his bloody 1992 military rebellion against the government of Carlos Andres Perez in which nearly 100 people were killed. After being received with honors by Castro in Havana, Chavez proceeded to Tripoli and Baghdad. "He came back with a lot of money to form his Movimiento Revolucionario Venezolano [MRV] and run for president," says Col. Pedro Soto, a Chavez supporter at the time.

Chavez paid presidential state visits to Libya, Iraq and Iran in February 2001, signing cooperation agreements with Muammar Qaddafi, Saddam Hussein and Tehran's ruling mullahs. Castro visited Libya, Iran and Syria some months later. An MRV politician and close Chavez aide closely tied to the Circulos Bolivarianos, Freddy Bernal, was in Iraq last March. He got caught trying to move arms into Saudi Arabia by U.N. peacekeeping forces policing the border.

Back in the days when he was a frustrated coup leader, Chavez also received help from Colombian narcoguerrilla organizations. He now is repaying them by closing Venezuelan airspace to U.S. antidrug flights. A military-intelligence report shown to Insight by the former commander of the 2nd army theater of operations on the Colombian border, Gen. Nestor Gonzales, shows that the Colombian drug forces are being protected by Chavez in camps inside Venezuelan territory. The sick leader of Colombia's National Liberation Army (ELN), Comandante Pablo, rests under DISIP protection at a villa in the upmarket Caracas neighborhood of El Marques.***

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