By Jessica Donati, Andrew Restuccia and Ian Talley
The Trump administration's bid to replace Venezuela's authoritarian leader Nicolás Maduro hit a roadblock after a meeting with Russian officials in Rome last year -- and has never recovered.
U.S. envoy Elliott Abrams arrived at the Westin Excelsior hotel hoping to persuade Russia to withdraw its support for Mr. Maduro and to recognize Juan Guaidó as Venezuela's legitimate leader. Russian deputy foreign minister Sergei Ryabkov instead demanded the U.S. back down from military threats and lift the economic sanctions intended to force Mr. Maduro's hand.
In the months that followed, the U.S. campaign spiraled into a foreign-policy debacle, thwarted by familiar adversaries, Russia and Cuba, as well as allies, Turkey and India -- all countries that one way or another helped Venezuela sidestep U.S. sanctions, according to current and former U.S. officials and Venezuelan opposition activists. The European Union watched from the sidelines.
The Trump administration, confident Mr. Maduro would fall, didn't foresee Russia leading the way for other countries to eclipse the sanctions. In turn, administration reluctance to impose sanctions on Russian enterprises and others kept Venezuela's oil and gold flowing to buyers.
This month, in a sign of how much the opposition is floundering, Venezuela security forces blocked Mr. Guaidó from entering the National Assembly building, where he was seeking re-election as leader. Mr. Guaidó, in a blue suit, tried and failed to scale the spiked iron fence.
Russia now handles more than two-thirds of Venezuela's crude oil, current and former administration officials said, including helping to conceal export destinations. The lifeline has helped Mr. Maduro slow the economy's free fall, consolidate his grip on power and weaken the opposition.
Almost half of the $1.5 billion in Venezuelan crude exported to India in the nine months after the U.S. sanctions was purchased by an Indian joint venture with Russia's oil giant, Rosneft, according to a Wall Street Journal analysis of data compiled by trade database Import Genius.
The United Arab Emirates has imported around $1 billion in gold from Venezuela since gold sanctions were imposed in late 2018, according to Venezuela trade records. U.S. intelligence officials say the actual amounts are far higher, based on evidence that Venezuelan gold is leaving the country masked as originating from Colombia, Uganda and elsewhere. The exports land in Turkey, the U.A.E. and other gold-trade hubs.
The Turkish embassy in Washington denied any oil or gold trade with Venezuela that breached U.S. sanctions. "The allegations do not reflect the facts, and they are only speculative and hearsay," a spokesman said.
The Russian embassy in Washington declined to comment. It referred to past foreign ministry statements criticizing the U.S. for interfering in Venezuela's affairs. Officials from India and the U.A.E. didn't respond to requests for comment.
Administration officials acknowledge President Trump's frustration and say the White House continues to press for Mr. Maduro's ouster. Mr. Trump, pointing to America's superior economy and military, suggested in a recent interview with the Journal that the U.S. had the resources to outlast Mr. Maduro. "We have a lot of options," the president said.
Yet with an election, impeachment and attention turned to the Middle East, Venezuela has for now moved to a back burner, an administration official said.
The stalemate allows Mr. Maduro to take a star turn as David to America's Goliath. He makes speeches and appearances nearly every day to show he remains comfortably in charge. He chided Mr. Abrams and other U.S. officials, saying they misled Mr. Trump that a regime change would be easy.
"They're trying to save their jobs because Trump is furious with the lies they've fed him on Venezuela," Mr. Maduro said in a recent address. "They failed, and Venezuela triumphed."
Mr. Maduro's hold on the presidency has been costly for what was once Latin America's most-prosperous economy. Hyperinflation, high infant mortality rates and a shortage of medical supplies contribute to the humanitarian crisis there. Food, electricity and water shortages have driven an exodus of 4.5 million people.
Mr. Abrams, the U.S. envoy, acknowledged this month that the yearlong U.S. effort to remove Mr. Maduro has stalled. "We underestimated the importance of the Cuban and Russian support for the regime," he said. "The Russian role in the economy, particularly the oil economy, is larger and larger."
Mr. Guaidó, in an interview, sounded a similar note. "I think we did underestimate things," he said. He called on countries to help block gold exports from Venezuela. "You have to try to bring pressure on those who support the regime," he said. "Sanctions today are the only real tool we have."
Mr. Guaidó's approval rating had fallen by more than 20 points to 38%, according to Venezuelan pollster Datanalisis. Allegations against opposition members, including accepting bribes from Maduro cronies, have eroded confidence.
Despite the setbacks, administration officials said there are no plans to abandon Mr. Guaidó. Vice President Mike Pence last month summoned senior administration officials to a meeting in the White House's Situation Room. U.S. officials later hosted a conference with opposition leaders to try to reinvigorate them, people familiar with the gathering said.
Mr. Guaidó's backers see Russia as their principal obstacle and want the U.S., Europe and other allies to take a harder line on sanctions loopholes.
"Russia in my view has become the most important partner of Maduro," said Carlos Vecchio, the Venezuela ambassador to the U.S. for Mr. Guaidó. "A multilateral approach on sanctions is critical."
The EU hasn't introduced sanctions or prevented Maduro officials from traveling to the eurozone to raise money and support.
Charles Shapiro, a former U.S. ambassador to Venezuela who is now president of the nonpartisan think tank World Affairs Council of Atlanta, said the Trump administration's predicament showed the difficulty of regime change without military force.
"And if you use military force," he said, "there are all sorts of other problems."
The U.S. has warned officials in Russia, Turkey, the U.A.E. and India about sanctions violations in private meetings, U.S. officials said, but hasn't moved to blacklist companies or individuals suspected of breaking the sanctions.
Policy options have split the administration. Some officials believe sanctions on Russia's oil firm Rosneft and other companies doing business with intermediaries could close loopholes that have allowed Mr. Maduro to survive.
Others say they could undermine U.S. interests elsewhere, including Iran. India agreed to stop importing Iranian crude as part of Washington's pressure campaign against Tehran, but it continues to import Venezuelan oil. India pays for the deliveries in gasoline, a trade that the nation says doesn't violate U.S. sanctions.
Secretary of State Mike Pompeo hasn't ruled out negotiations with Mr. Maduro.
"We will continue to tweak our policy to get the strategy just right, but we've seen no evidence that Maduro is remotely interested in having free and fair elections," Mr. Pompeo said recently about direct talks. "As far as our strategy, the tack we'll take, I'm sure that will change over time."
Mr. Guaidó, 36 years old, was virtually unknown in Mr. Trump's circles before he came to Washington with a delegation in December 2018. Administration officials and opposition leaders made a plan to put Mr. Guaidó in charge, and Mr. Pence was given a central role.
Administration officials targeted Venezuela, in part to punish Cuba and win support among Cuban Americans, a potent Republican voting bloc in Florida. Republican Sen. Marco Rubio of Florida and Mauricio Claver Carone, the National Security Council's head for Latin American affairs, had roles in forging Venezuela policy.
Cuba provides Mr. Maduro with intelligence and security services, helping to minimize defections in his government, U.S. officials said.
When Mr. Guaidó declared himself interim president in a widely watched oath of office ceremony a year ago, the U.S. swiftly recognized him as Venezuela's legitimate leader. Canada, Brazil, Argentina, Colombia, Chile, Peru and other South American countries followed. They supported Mr. Guaidó on the grounds that Mr. Maduro's election to a second six-year term was a sham.
Two days after Mr. Guaidó's oath, Mr. Abrams was appointed as the top envoy to Venezuela. He was given one job: Remove Nicolás Maduro.
Mr. Abrams rattled some at the State Department, in part for his involvement in the Iran-Contra affair, a covert operation in the mid-1980s to sell weapons to Iran and use the proceeds to arm rebels in Nicaragua.
Some career State Department staff feared that any heavy-handed U.S. intervention would derail Mr. Guaidó's popular support, while political appointees questioned Mr. Abrams's support of Mr. Trump.
In March, Mr. Abrams met with the Russian deputy foreign minister in Rome. After Russia refused to back Mr. Guaidó, the U.S. envoy promised more sanctions and possible military action.
The realization that regime change wouldn't be easy came in April. The opposition planned to have Venezuela's top court recognize the National Assembly, headed by Mr. Guaidó, as the legitimate representative of the Venezuelan people. That would give the country's armed forces legal grounds to abandon Mr. Maduro.
Guaidó supporters expected high-ranking Maduro officials to announce they were switching sides. The plan flopped, and White House frustrations erupted.
In May, secret talks brokered by Norway opened in Barbados between Mr. Maduro and the opposition, which called for fair elections. In August, Mr. Maduro quit the talks.
Looking back, the U.S. campaign originated with unrealistic expectations, current and former U.S. officials and Venezuelan opposition activists said.
"There was a firm belief, and briefed to the president, that all that had to be done was to recognize Guaidó, and Maduro would fall," said Fernando Cutz, a former White House National Security Council official during the Trump and Obama administrations who was involved in U.S.-Venezuela policy.
The administration's call for the Venezuelan military to defect and support Mr. Guaidó was wishful thinking, said Michael Shifter, president of the Inter-American Dialogue, a nonpartisan think tank: "The last thing the military are going to do is follow orders from a foreign power, especially the U.S."
Mr. Trump complained to aides and allies that he was led to believe Mr. Maduro would be removed quickly, people familiar with the matter said.
The president directed much of his anger at national security adviser John Bolton, those people said, adding that those frustrations contributed to Mr. Bolton's ouster in September.
With Russia's help, Venezuelan oil output could return to 1 million barrels a day from a low of 650,000 to 700,000 barrels, Rapidan Energy Group, a geopolitical risk consulting firm, said in December. Rosneft is helping Petróleos de Venezuela SA, the state oil company, pay for overdue maintenance and the hiring of foreign experts, according to the group.
Russia has provided Venezuela more than $300 million in currency over the past 18 months -- dollars and euros that have become more scarce under the sanctions, according to the Journal analysis of data from Import Genius.
Mr. Abrams said he still believed sanctions will work. "The situation of the regime is untenable and many people in the regime clearly know it,' he said. "They would not keep sending their money, their wives, their children, and their mistresses out of the country if they thought it was stabilizing."
Cynthia Arnson, director of the Latin American program at the Woodrow Wilson International Center for Scholars, said the standoff this month at the National Assembly underscored the opposition's weakened state.
"At the same time," she said, "the [Maduro] government has no real options for ending the economic, humanitarian and legitimacy crises that it faces."
The issue surfaced at a Trump reelection event this month in Florida, a battleground state with the largest population of Venezuelans in the U.S. Some of Mr. Trump's supporters in Florida have voiced frustration that Mr. Maduro remained in power.
Commerce Secretary Wilbur Ross. speaking informally to a small group at the event, said the administration had expected the leadership change to happen faster, and that some officials sought more aggressive efforts, according to a person familiar with conversation.
A spokesman for Mr. Ross declined to comment on the meeting but said the administration is looking at all options. "The U.S. is 100% behind Guaidó," Mr. Ross said Thursday in a TV interview.
--José de Córdoba,
, Kejal Vyas and Vivian Salama contributed to this article.
Write to Jessica Donati at firstname.lastname@example.org, Andrew Restuccia at Andrew.Restuccia@wsj.com and Ian Talley at email@example.com
(END) Dow Jones Newswires
January 27, 2020 10:37 ET (15:37 GMT)
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