Cablegate: Dominican Republic Fm On Economic, International, and Bilateral Issues

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

C O N F I D E N T I A L SECTION 01 OF 04 SANTO DOMINGO 005992

SIPDIS

HONG KONG FOR PATRICIA FIETZ

E.O. 12958: DECL: 10/24/2013
TAGS: DR EFIN ETRD MARR MX PGOV PHUM PREL SMIG SP VE XF KCOR
SUBJECT: DOMINICAN REPUBLIC FM ON ECONOMIC, INTERNATIONAL, AND BILATERAL ISSUES

REF: A. CARACAS 5391 (NOTAL)
B. SANTO DOMINGO 5946 (NOTAL)
C. SANTO DOMINGO 5786 (NOTAL)
D. USUN NEW YORK 2331
E. SANTO DOMINGO 5391 (NOTAL)

Classified By: Charge Lisa Kubiske for reasons 1.5 (b) and (d).

1. (C) Summary: Foreign Secretary Guerrero Prats, at a lunch
hosted by the Ambassador October 7, said the GODR was trying
through diplomatic channels to restore normal relations with
Venezuela after President Chavez downgraded them in
September. Trade/economic adviser (and daughter of President
Mejia) Carolina Mejia said the GODR was doing its utmost to
comply with IMF requirements in the face of severe financial
problems. She blamed traditional corrupt behavior in
business for the massive BANINTER banking scandal. The
Ambassador and DCM Kubiske stressed the need to prosecute key
suspects in the scandal and officials who may be trafficking
in persons or smuggling aliens. The foreign secretary
generally agreed with our stance on returning full authority
to the people of Iraq and said the GODR was reviewing a draft
SOFA with Kuwait to support Dominican troops in the region.
He expressed optimism about WTO and hemispheric trade
negotiations. End summary.

2. (U) Ambassador Hertell hosted a lunch October 7 for
Secretary of State for Foreign Relations Francisco Guerrero
Prats, U/S of State for Foreign Relations Miguel Pichardo,
U/S of State for Foreign Relations in Charge of Trade
Negotiations Santiago Tejada, Acting Director of
International Organization Affairs Jesus Hernandez, and
FTAA/monetary affairs/TIC adviser Carolina Mejia. DCM
Kubiske, CG Marshall, ECOPOL counselor, poloff, and econoff
also attended. (Note: We understand that Tejada has just
been reassigned as the General Manager of the Central Bank.
IO Director Hernandez is now permanently assigned to his
position.)

IMF Agreement
- - - - - - -

3. (C) The Ambassador expressed concern that the IMF team in
town earlier in the week had departed after a single day.
Carolina Mejia, the President's daughter who is involved in
GODR economic and trade issues, seconded by the foreign
secretary, replied that the government was doing its utmost
to analyze the situation and take corrective action to comply
with the requirements of the IMF standby agreement. Some
adverse events were beyond the administration,s control )
e.g,. a recent decision by the Supreme Court that the use of
a presidential decree to impose a 5 percent tax on exports
and 2 percent on imports was unconstitutional. The foreign
secretary commented that this was an example of judicial
independence typical of mature democracies. Carolina Mejia
added that an IMF staffer was in country, and as soon as the
GODR assembled the required data, the IMF team would return.
(Note: We understand that one or several IMF staff are still
here, working with the GODR on an unofficial basis.)
Carolina Mejia said that the country desperately needed the
United States' assistance in seeking prompt disbursement from
the IFIs.

Relations with Venezuela
- - - - - - - - - - - - -

4. (C) On GODR efforts to restore relations with Venezuela
after President Chavez,s withdrawal of his ambassador and
cutoff of oil supplies to the Dominican Republic (Ref A),
Guerrero Prats referred to President Mejia,s public
statement October 6. Guerrero Prats said that the Foreign
Relations Secretariat is looking into Chavez,s public
allegations of anti-GOV plotting here, that the foreign
secretary has received instructions on this matter, and that
"I do not discuss diplomatic issues on television."
Guerrero Prats expressed regret that Chavez in early October
reiterated the charges he had made in mid-September when
downgrading relations with Santo Domingo.

5. (C) According to the foreign secretary, the GOV after
months of levying accusations in the media sent a diplomatic
note August 4 citing "denuncias" of the anti-GOV plots --
without furnishing any evidence -- and requesting
investigation by the GODR. Santo Domingo, by diplomatic note
22 days later, asked Caracas to furnish &proof8 and offered
to investigate on the basis of any evidence that might be
presented. So far the GOV has failed to provide specifics.
Guerrero Prats and his colleagues expressed their desire to
normalize relations with Venezuela, referring to a history of
close ties and the desirability of having the option to
resume oil imports -- even though the Dominican Republic is
now able to tap alternative suppliers. (Note: The two
countries have been discussing the issue in diplomatic
channels, but the oil cutoff remains in effect.)

Prosecution of Corrupt GODR Officials
- - - - - - - - - - - - - - - - - - -

6. (C) Earlier, as guests were gathering, the Ambassador,
DCM, and Consul General spoke privately with the foreign
secretary, urging investigation of a former Dominican consul
in Panama named Arias and the current director of the
Dominican commercial office in Hong Kong for involvement in
visa fraud and trafficking in persons. (Note: Embassy had
previously provided details of this suspected malfeasance to
the Foreign Secretariat.) Guerrero Prats replied that no one
had supplied evidence in these cases, only supposition. With
evidence, he said, he would pursue them. During the lunch,
the DCM underscored the importance we attach to the GODR's
pending prosecution of Dominican Congressman Guillermo
Radhames Ramos Garcia (of the ruling PRD), a suspected
smuggler of Asian nationals from Haiti into the Dominican
Republic. (Note: The Supreme Court has begun hearing this
case, as reported Ref B.)

Iraq
- - -

7. (C) The Ambassador noted U.S. circulation of a draft
resolution on Iraq in the UNSC October 2, on achieving a
political transition as quickly as possible and returning
full authority to the Iraqi people, and the Secretary's
emphasis in comments to the press on a major role for the UN.
The Ambassador asked the GODR to support this proposal. He
also expressed appreciation for the bravery of Dominican
troops in the stabilization force, who had taken fire twice
in early October, without casualties. Guerrero Prats
referred to his September 30 UNGA speech, in which he urged
restoration of sovereignty in Iraq.

SOFA with Kuwait
- - - - - - - - -

8. (C) The Ambassador expressed concern about the slow pace
of negotiations on a status of forces agreement (SOFA)
between the Dominican Republic and Kuwait. U/S Pichardo
replied that the GODR had proposed changes to the Kuwaiti
draft text and had passed them along to the Secretariat of
the Armed Forces for comment. The Ambassador stressed the
urgency of concluding the SOFA, to facilitate troop rotation
and treatment of any casualties from the Dominican unit in
Iraq. (Note: As reported Ref C, Embassy continues to work
closely with Foreign Secretariat Legal Adviser Jorge Santiago
to answer the GODR's questions on the draft SOFA.)

Trade and the WTO
- - - - - - - - -

9. (C) The Ambassador and DCM complimented the GODR for its
positive contribution at the Cancun WTO ministerial.
Guerrero Prats agreed that the Dominicans have won respect
for their consistent support of free trade and for promptly
submitting required documents in any negotiation. U/S
Ambassador Santiago Tejada took a more optimistic view of the
Cancun outcome. He said that contrary to appearances,
Brazil, leading the developing nations that opposed U.S. and
European positions, had been isolated in the Western
Hemisphere and that Mercosur and the Andean Group had been
deeply divided. Tejada said that there had been consensus on
at least two of the Singapore issues, which boded well for
progress at the next WTO meeting in Geneva December 15. He
added that the GODR was surprised by the early termination of
the ministerial, explaining that from his perspective furhter
negotiations might have been fruitful.

10. (C) The Ambassador said that U.S. authorities looked
forward to negotiation of a bilateral trade agreement. The
Foreign Secretary replied that the GODR already agreed with
75 percent of the draft and believed the remainder could be
finished within the timeframe (early 2004) necessary for
&docking8 with a Central American Free Trade Agreement
(CAFTA).

Banking Scandal
- - - - - - - -

11. (C) Carolina Mejia blamed the massive collapse of
BANINTER and two other banks on longstanding behavior
patterns among wealthy Dominican businessmen, some of whom
were "thieves" ("ladrones"). She said this was an old Latino
scam ) profiting from other people,s money. The government
had done its job properly, she asserted. (Former) GODR Bank
Superintendent Alberto Atallah and the U.S. accounting firm
Price Waterhouse approved the banks, performance based on
the data the firm had received, but many illegal transfers
were hidden from the auditors. The impact of the Baninter
collapse in spring 2003, followed by the takeover of two
smaller banks due to insolvency, has been &very hard,8 she
commented, but perhaps this ordeal was necessary to force the
country to modify the corrupt behavior. According to Mejia,
the fault lay in the society, not the government. To create
the kind of society that younger Dominicans such as she
wanted, the government would have to prosecute the persons
responsible for the banks' collapse. The DCM strongly
concurred with this point.

UNGA
- - -

12. (C) Regarding the UNGA special emergency session on the
Middle East September 19 (Ref D), the Ambassador asked why no
GODR representative had attended or voted. The Dominican
absence had been noticed in Washington. The foreign
secretary said the Dominican Republic prefers to vote within
blocks on these types of measures and suggested that the USG
should have approached regional groupings such as GRULA or
the Rio Group to elicit support for the U.S. position, rather
than relying on bilateral demarches. If this is not
possible, he said, the GODR varies its voting behavior on
unhelpful resolutions ) sometimes voting no, sometimes
abstaining, and sometimes being absent/not voting.

Presidential Visit to Spain
- - - - - - - - - - - - - -

13. (C) The foreign secretary said that President Mejia's
September 15-23 visit to Spain and other countries had run
into glitches, particularly in Spain where the media
emphasized GOS leaders' criticism of the Dominican Republic's
treatment of foreign investors. This referred to Spanish
investors' problems in the electricity sector and the GODR's
October 1 renationalization of two power distribution firms
(Ref E). Guerrero Prats said he had publicly thanked the
Spanish brigade commander in Iraq for having pressed for
delivery of equipment to the approximately 300 Dominican
troops deployed with the stabilization force. (Note: The
equipment was delivered promptly.)

President Mejia,s Government
- - - - - - - - - - - - - - -

14. (C) Carolina Mejia said that when her father Hipolito
Mejia assumed office as president three years ago, he had no
idea what challenges his administration would face. In her
view, his election in 2000 was providential. Confronted with
severe economic problems, he has tried to address these
issues and give the country its best government ever. She
said his controversial bid for reelection in 2004 is
necessary to enable him to finish the job.

Draft Dominican Law on Migration
- - - - - - - - - - - - - - - - -

15. (C) The Ambassador inquired about progress on a draft
migration law, designed to ensure fair treatment for one
million Haitian immigrants present in the Dominican Republic,
and urged expeditious handling of the legislation. He noted
that Congressional leaders had complained of a delay in
receiving comments on the bill from the Secretariat of
Foreign Affairs. The Secretary said the comments were ready
and he or U/S for Consular Affairs Wenceslao Guerrero Pou
would offer to brief the relevant committees. (Note: The
bill has been passed by the Chamber of Deputies, but is still
pending in the Senate.)

Comment
- - - -

16. (C) The lunch afforded an opportunity for the Ambassador
to press the Foreign Secretariat -- and the President through
his daughter -- on pending bilateral issues, which the
Embassy will continue to pursue. These include the GODR's
IMF commitments, prosecution of key suspects in the banking
scandal, and legal action against officials who may be
trafficking in persons or smuggling aliens.

17. (C) Concerning the Palestinian UNGA resolution, on the
date of the special session on the Middle East, Foreign
Secretary Guerrero Prats had to deal with the mini-crisis
with Venezuela and thus delayed his arrival in New York. He
may not have sent guidance to the GODR permrep, who
consequently was left free to avoid the controversial
resolution. Under other circumstances we believe the GODR
might have attended but abstained.
KUBISKE

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