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By Senior investigative producer
NBC News
updated 3/5/2008 7:35:54 PM ET 2008-03-06T00:35:54
ANALYSIS

While there is "a great deal of posturing," as one senior U.S. intelligence official puts it, going on along the Andean Ridge, analysts inside and outside the U.S. government warn that the potential for war between Colombia and both Venezuela and Ecuador is very real.

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The crisis began in earnest last weekend when Colombia carried out an air and land raid just over the border into Ecuador. The strike killed Raul Reyes, reputed to be the second-ranking commander of FARC, the Colombian rebel group designated a terrorist organization by the State Department, as well as 20 others, angering Ecuador's president, Rafael Correa, and his ally, Venezuela President Hugo Chavez.

Retired Gen. Barry McCaffrey, former head of the U.S. Southern Command and former federal drug czar, says he has "serious, serious concerns" after hearing Chavez's anti-Colombian rhetoric and watching his troop deployments. 

McCaffrey pointed specifically to Chavez's use of political invective and insults against national symbols, which, he says, are "something South Americans don't do, at least not in public."

"I was personally shocked at the language," he said, noting that Chavez was threatening to use his new Russian-made fighter bombers against Colombia. "We are one stop short of miscalculation."

Additionally, high-ranking Pentagon officials have privately told friends that they believe the media has not paid enough attention to the crisis and have tended to portray it as typical Latin American bluster. As one high-ranking Pentagon official put it, while the Defense Department is not preparing for a war involving the three countries, he is "not unconcerned."

"We're not burning documents at the embassies yet," said a senior U.S. intelligence official who follows Latin America, "but that doesn't mean something can’t go wrong … this isn’t August 1914, but there is a potential for stupidity. When you have troop movements and an overlay of rhetoric, something could go amiss."

Julia Sweig, a respected Latin American expert at the Council on Foreign Relations, says that she, too, is taking the situation very seriously, especially since Chavez has made it clear that "commercial relationships are not holding him back." 

While last week’s raid obviously ignited the current crisis, Sweig believes that Chavez "crossed a red line" in mid-January when he called for the U.S. and Europe to remove FARC from their list of terrorist organizations and said Venezuela might recognize FARC as "an army of national liberation" — a direct affront to the Colombian government.

"Until then, I thought this was posturing, but now I have to say I am taking it seriously," said Sweig.  "I was in Colombia recently, and I hadn’t felt that degree of anxiety before. I have misjudged (Chavez’s) taste for doing provocative things, not just to the U.S., but to Brazil and Spain … simply put, maybe it isn’t posturing."

Chavez has ordered 10 battalions of troops to his country's border with Colombia and mobilized fighter jets to defend against a possible incursion, although U.S. intelligence says much of the movement is "virtual" and that it has seen no evidence that troops are in place.

Ecuador's president, Correa, has said he is sending 3,200 troops to the Colombia border. Colombian President Alvaro Uribe said he will not counter those moves, but Colombia's national police released a statement claiming Venezuela had sent $300 million to FARC, and Colombia’s vice president has said FARC was seeking uranium on the black market and had plans for a radioactive "dirty bomb."

McCaffrey says the Ecuadorians were deeply embarrassed by Colombia's attack on a rebel camp inside their border, calling it a double defeat.  It showed the impotence of the Ecuadorian military, particularly its intelligence apparatus, and exposed the Ecuadorian and Venezuelan ties to FARC in ways that previously had only been rumored.

Colombians claimed documents found on Reyes' laptop showed that FARC had received not only the money from Chavez, but also guarantees of safe transit through Ecuador from Correa.

"There is no doubt that the Ecuadorians have supplied active sanctuary to FARC," said McCaffrey. He added that he was surprised that Correa could have persuaded the Ecuadorian establishment to go along with FARC when "Ecuadorians and Colombians have been traditional historical friends."  There has always been animosity between Venezuela and Colombia and between Ecuador and Peru, but friendship between Colombia and Ecuador.

Sweig called the Ecuadorian outrage "hilarious," noting that the Correa government has allowed FARC to have "R and R" in Ecuador. "Now they’re complaining?" she asked rhetorically.

McCaffrey, who met with Chavez regularly in the 1990s at the request of President Clinton, said Chavez’s personality is the unknown factor, and he believes the Venezuelan leader is capable of acting on his "romantic, quixotic" feelings.

"No one can predict what would happen if (Chavez) decided to buzz Bogota with his Sukhois," McCaffrey said, referring to the Russian-built jets. "He is arrogant, aggressive and capable of very bad judgment. Any provocation could lead to a potential heated battle."

"All three nations have submarines — what happens if someone sinks a ship from the other side and 800 sailors drown? It happened in the Falklands" McCaffrey said, referring to the British Navy ship that sank an Argentine cruiser, the General Belgrano.

McCaffrey also warned against assuming Colombia's survival would be menaced by Venezuela and Ecuador acting together.  The Colombians, he notes, are the only "battle-hardened" army in South America, having fought rebels of both the left and right, as well as drug traffickers.

As for Venezuela's recurring threat to cut off oil to the U.S., McCaffrey said the big loser would be Venezuela. "It's hard to imagine how you hurt your enemy by setting off a hand grenade next to your head."

Still, a full-blown conflict could have enormous political and economic effects on the U.S.

John Kilduff, an oil trader at Man Financial, says any hint of war could cause the price of oil to skyrocket toward $125 a barrel and could have an effect well beyond South America.

"It’s certainly adding to the ‘security premium’" — costs added by security concerns — "that ebbs and flows on the price of oil," Kilduff said. Kilduff estimates that premium to be currently at about $25 a barrel.

"Venezuela is a major producer worldwide and supplier to the U.S. We have to hope everyone acts judiciously, because if we side with Colombia, how will OPEC respond?" Kilduff asked before adding a bleak reminder: "Look for Venezuela and Ecuador to lobby for sanctions against the U.S. — OPEC sided with Venezuela on the Exxon boycott."

As Kilduff emphasized, any disruption to the oil supply would be catastrophic.

"Venezuelan oil is irreplaceable," he said.  "Several refineries in the Caribbean and U.S. are designed specifically for Venezuelan oil, which has a certain composite." 

According to Kilduff, these refineries would be forced to close down — something Chavez is evidently willing to risk. "I believe he is willing to let his people starve to get at the United States," said Kilduff.

The question remains, how large a role can the U.S. play in mediating the dispute?

"U.S. has put down its markers with Colombia," Sweig argued. "The U.S. is deeply invested in strengthening this government.  But the reason why Chavez is taking up so much oxygen on this is that the U.S. is focusing on the bilateral rather than the regional dynamic. They’re our ‘It girl.’ So we’re beyond having any leverage with the other regional players. We hope to hell that the other big dogs in the region pull Chavez back and tell Colombia to contain itself."

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