An anonymous State Department source told the Miami Herald that they are exploring the possibility of placing Venezuela on the list of state sponsors of terrorism for their relationship with the FARC - as revealed in the laptops captured from FARC leaders.
Being declared a state sponsor of terrorism brings a host of sanctions down on a regime, however the administration has flexibility about how they are enforced (I'll leave it to some of my co-bloggers, who are among the leading experts on U.S. law and state sponsorship of terrorism, to flesh this out.)
More than likely, this leak is just a shot across the bow. Declaring Venezuela a state sponsor of terror is a complicated issue in which many factors have to be carefully weighed including the quality of the evidence, the effect on the U.S. economy, the declaration's regional impact, and whether it furthers U.S. goals.
The laptops seized from Raul Reyes' camp in Ecuador appear to confirm a high-level relationship between FARC and Chavez that is over 15 years old. But, there is the argument, made credibly at the Center for International Policy's Colombia Program that this is only seeing the FARC's perception of the events - not necessarily what actually transpired. The sudden escalation of a single unclear paragraph into a FARC conspiracy to build dirty bombs is but one example of taking the text too far. I for one don't doubt that when the evidence is weighed, Chavez and the FARC will be revealed as political bedfellows in a deep embrace. But the evidence has to be carefully examined first.
It is impossible to discuss sanctions on Venezuela without considering its role as the supplier of about 15% of U.S. oil. Doing business with state sponsors of terror is complicated and U.S.-Venezuela trade is over $40 billion annually. Closing down this relationship would be complicated and expensive. In some ways Venezuela needs the U.S. more than the U.S. need them. Venezuelan oil is heavy and requires special refineries - which exist in the U.S. but not elsewhere. Simply selling their oil to another customer is possible, but between increased transport and the need for new infrastructure Chavez would make a smaller profit. At the same time, the oil market is tight and it is difficult to imagine a U.S. administration causing a disruption that would quickly be felt at the pump - particularly during an election season.
The sanctions component of being declared a state sponsor of terror could be structured to let the oil continue to flow, but that risks making a mockery of the U.S. sanctions regime. Alternately, it could provide the next administration with some useful tools for curbing Chavez' behavior.
There is also the question of how it would play regionally and if it truly advances U.S. goals. Chavez taps a deep vein of anti-Americanism in Latin America (and around the world.) The U.S. has refused to take the bait, toning down its anti-Chavez rhetoric in order to avoid playing into his hands. Declaring Venezuela a state sponsor of terror would grant Chavez an endless issue to exploit. His message would resonate throughout the region and other leaders would have to at least pay him lip service. But it is worth remembering that during the Falklands War the United States (much to British consternation) started off trying to play honest broker in order not to side against Argentina and inflame Latin American public opinion. It turned out the Argentina's war made everyone else in the region extremely nervous and few were upset to see the Argentine junta lose its war. Chavez is also making others in the region nervous, and in his Washington Post column Jackson Diehl argued that many Latin American leaders would like to see the U.S. take a harder line against Chavez.
Finally, would the declaration help the U.S. achieve its long-term goals. Ultimately, the U.S. wants to see Chavez leave power and be replaced by a democratically elected leader. On the one hand the declaration might give him a cause to rally the cadres. On the other, it might embarrass the Venezuelan people (who are probably less anti-American than most in the region) and give them an increased impetus to boot out Chavez.
In sum, declaring Venezuela as a state terrorism supporter is a potentially useful tool in the context of a larger strategy. But first, let all the evidence be unearthed and evaluated. Declaring a state to be a sponsor of terror is a powerful tool - best not to dull it unnecessarily.