Cablegate: Dominican Republic Elections: Leonel Fernandez On

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 SANTO DOMINGO 005135

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: DR EFIN EPET ETRD PGOV PREL VE
SUBJECT: DOMINICAN REPUBLIC ELECTIONS: LEONEL FERNANDEZ ON
US, VENEZUELA, DOMESTIC ISSUES

REF: A. (A) SANTO DOMINGO 4915
B. (B) SANTO DOMINGO 5003 (NOTAL)

1. (SBU) Summary: Former president and presidential
pre-candidate Leonel Fernandez (PLD) emphasized to the
Ambassador September 9 the importance of the Dominican
Republic's relations with the United States, commented on the
Dominican Republic's bumpy relations with Venezuela and the
recent interruption of oil supplies from there, and claimed
to be the front runner in voter preferences for the May 2004
elections. Fernandez reiterated opposition concerns about
the GODR's election preparations, fiscal problems that he
believes will be left for the next administration to solve,
and free trade negotiations. The Ambassador stressed the
USG's interest in a free and fair election, with
international observers, in strengthening democratic
institutions, and in completing negotiations quickly on a
free trade agreement that would integrate the Dominican
Republic with the Central America Free Trade Agreement
(CAFTA). End summary.

Relations with the United States
- - - - - - - - - - - - - - - - -

2. (SBU) Former president (1996-2000) and declared opposition
presidential candidate in elections next May, Leonel
Fernandez, discussed international and domestic issues with
the Ambassador on September 9 at the spacious new
headquarters building of Fernandez's NGO, Global Foundation
for Democracy and Development (www.funglode.org). Fernandez
declared that he considers the United States the most
important foreign country for the Dominican Republic's
future. The Ambassador expressed appreciation for the
Dominican Republic's participation in the Coalition of the
Willing in Iraq. Fernandez replied that he strongly supports
the war on terrorism, but quipped, "President Mejia's
administration doesn't have a monopoly on good relations with
the United States" and cited his own prior record in this
regard. Fernandez also reviewed various projects that are
planned or underway between his "Global Foundation" and U.S.
universities and NGOs, mainly in Florida and New York.

Venezuelan-Dominican Relations
- - - - - - - - - - - - - - - -

3. (SBU) Fernandez dismissed as "exaggerated" Venezuelan
President Chavez's recent accusation that the GODR was
condoning local activity by coup plotters seeking to
overthrow the GOV. The Venezuelan had based his charges on
"inaccurate intelligence," and in any case President Mejia
would have no interest in actions that might jeopardize
DR-Venezuela relations. Fernandez characterized former
Venezuelan president Carlos Andres Perez as a "very active"
anti-Chavez expatriate in Santo Domingo, but claimed that
Perez is making numerous enemies here and has "no capacity to
harm Venezuela." "I'm the only friend he has left here,"
Fernandez claimed. Another Chavez adversary, Venezuelan
businessman Gustavo Cisneros, stirs suspicions in Caracas
every time he has a meeting at the Casa de Campo resort (in
La Romana, Dominican Republic), according to Fernandez, but
Cisneros, he claimed, has limited political clout. Fernandez
recalled that Chavez had been "very upset" with President
Mejia for granting political asylum to two Venezuelan
military officers.

Election Prospects
- - - - - - - - - -

4. (SBU) Fernandez confirmed what we had heard from other
leaders of his Dominican Liberation Party - PLD (ref B) that
recent presidential preference polls conducted by the party
showed Fernandez leading the pack of pre-candidates with some
60 percent of voter intentions -- far ahead of President
Mejia (PRD) or Eduardo Estrella (candidate of the Reformist
Social Christian Party - PRSC). However, Fernandez repeated
concerns we have heard from other opposition contacts
(reftels) that the Central Electoral Board may be biased in
favor of Mejia's reelection bid and is moving too slowly to
resolve problems with electoral registration and
organization. He echoed his party's charges that Dominican
Army chief of staff Radhames Zorrilla Ozuna is illegally
meddling in the election campaign. Some opposition critics,
according to Fernandez, are saying that Mejia believes the
USG will let him get away with such irregularities because of
his administration's support in Iraq. The Ambassador
stressed the USG interest in a free, fair, and transparent
election and in the strengthening of democratic institutions.

Financial and Trade Issues
- - - - - - - - - - - - - -

5. (SBU) The Ambassador raised his concern about the economic
impact of the BANINTER bank corruption scandal and the USG's
interest in judicial independence and due process in the
resolution of this case. Fernandez replied that the PLD
platform advocates judicial reform, but asserted it would
have to start "from zero" because of lower-level judges'
susceptibility to improper influence. He commented that the
Central Bank's quasi-fiscal deficit resulting from the bank
collapse would impose a "terrible" crunch on government
finances within a year and that the only solution would be an
international bond issue. Fernandez predicted that GODR
would fail to meet the IMF-imposed deadline of July 2004 for
a tax reform, which he expected to slip until one to three
months after a new administration takes office. When the
Ambassador asked about prospects for legislative approval for
the GODR to negotiate a bilateral free trade agreement to
"dock" with the Central American Free Trade Agreement (CAFTA)
and reiterated strong U.S. interest in this proposal,
Fernandez expressed support, but complained that the PLD's 42
members in the Chamber of Deputies needed to be better
informed about the talks. Fernandez also raised agricultural
subsidies, which he said should be dealt with in technical
committees (e.g., the Trade and Investment Committee). He
said the GODR's recent announcement of a 5 percent tax on
exports and a 2 percent tax on imports should be rescinded to
boost the nation's competitiveness and prepare it for free
trade. (Comment: The Senate has subsequently voted against
the 5 percent export tax, and it is likely to be shelved.
End comment.)

Comment
- - - -

6. (SBU) As a former president, remembered favorably by many
Dominicans for the nation's greater prosperity during his
tenure, Fernandez appears to be the front-running
presidential candidate -- but he will meet a tough match
when, as seems likely, President Mejia settles current
quarrels within his own PRD and secures the nomination.
Fernandez also faces unresolved allegations of his financial
ties to Ramon Baez Figueroa, the imprisoned kingpin of the
BANINTER scandal, including speculation that the Global
Foundation's lovely new headquarters was built with
siphoned-off bank funds.

7. (SBU) Fernandez attended elementary and junior high school
in New York City in the 1960s and feels close ties to the
United States, despite his leadership of a historically
leftist party. He showed little sympathy for Venezuelan
President Chavez and took a nationalist line against Chavez,
while also criticizing the Mejia administration for provoking
the Venezuelan in the handling of the asylum cases. Now that
Chavez has publicly confirmed his intention to continue the
measures he took against the Dominican Republic last month --
the oil embargo and withdrawal of the Venezuelan ambassador
-- opposition leader Fernandez may have little choice but to
show solidarity with the current GODR on this matter.

8. (SBU) Fernandez's comments on financial and trade issues
may foreshadow the line he will take during the campaign --
charges of financial mismanagement against Mejia, who is
particularly vulnerable during the current economic slump,
and skepticism on specific aspects of a free trade agreement.
His comments on the election campaign are staple rhetoric of
the PLD -- the leading opposition to President Mejia and the
PRD -- but also reflect a need for the Central Electoral
Board to do more to build public confidence in what will
probably be a generally free and fair electoral process.
HERTELL

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