Contrary to the reports of a spoonfed western press, Hugo Chavez was not unpopular and did not resign, says Greg Palast

Here's what we read this week: On Friday, Hugo Chavez, the unpopular, dictatorial potentate of Venezuela, resigned. When confronted over his ordering the shooting of antigovernment protestors, he turned over the presidency to progressive, democratic forces, namely, the military and the chief of Venezuela's business council.

Two things about the story caught my eye: First, every one of these factoids is dead wrong. And second, newspapers throughout the ruling hemisphere, from the New York Times to the Independent to (wince) the Guardian, used almost identical words - "dictatorial", "unpopular", "resignation" - in their reports.

Let's begin with the faux "resignation" that allowed the Bush and Blair governments to fall over their own feet rushing towards recognition of the coup leaders. I had seen no statement of this alleged resignation, nor heard it, nor received any reliable witness report of it. I was fascinated. In January, I had broadcast on US radio that Chavez would face a coup by the end of April. But resign? That was not the Chavez style.

I demanded answers from the Venezuelan embassy in London, and from there, at 2am on Saturday morning, I reached Miguel Madriz Bustamante, a cabinet member who had spoken with Chavez by phone after the president's kidnapping by armed rebels. Chavez, he said, went along with his "arrest" to avoid bloodshed, but added: "I am still president."

The resignation myth was the capstone of a year-long disinformation campaign against the populist former paratrooper who took office with 60% of the vote. The Bush White House is quoted as stating that Chavez's being elected by "a majority of voters" did not confer "legitimacy" on the Venezuelan government. The assertion was not unexpected from a US administration selected over the opposition of the majority of American voters.

What neither Bush nor the papers told you is that Chavez's real crime was to pass two laws through Venezuela's national assembly. The first ordered big plantation owners to turn over untilled land to the landless. The second nearly doubled, from roughly 16% to 30%, royalties paid for extracting Venezuela's oil. Venezuela was once the largest exporter of oil to the USA, bigger than Saudi Arabia. This explains Chavez's unpopularity - at least within that key constituency, the American petroleum industry.

There remains the charge that, in the words of the New York Times, "Chavez ordered soldiers to fire on a crowd [of protesters]." This bloody smear, sans evidence, stained every Western paper, including Britain's newest lefty, the Mirror. Yet I could easily reach eyewitnesses without ties to any faction who said the shooting began from a roadway overpass controlled by the anti-Chavez Metropolitan Police, and the first to fall were pro-Chavez demonstrators.

I have obtained a cable from the CIA to its station chief in the Capitol: "Re: Coup. Activities to include propaganda, black operations, disinformation, or anything else your imagination can conjure... "

Admittedly, this is old stuff: written just before the coup against Salvador Allende. Times have changed. Thirty years ago, when US corporations demanded the removal of a bothersome president, the CIA thought it most important to aim propaganda at the Latin locals. Now, it seems, in the drumbeat of disinformation buzzwords about Chavez - "dictatorial", "unpopular", "resigned" - the propagandists have learned to aim at that more gullible pack of pigeons, the American and European press.

· Greg Palast is the author of The Best Democracy Money Can Buy, out this month from Pluto Press.