US embassy cable - 03SANTODOMINGO5992 (original version)

DOMINICAN REPUBLIC FM ON ECONOMIC, INTERNATIONAL, AND BILATERAL ISSUES (original version)

Identifier: 03SANTODOMINGO5992
Wikileaks: View 03SANTODOMINGO5992 at Wikileaks.org
Origin: Embassy Santo Domingo
Created: 2003-10-24 19:13:00
Classification: CONFIDENTIAL
Tags: DR EFIN ETRD MARR MX PGOV PHUM PREL SMIG SP VE XF KCOR
Redacted: This cable was redacted by Wikileaks. [Show redacted version] [Compare redacted and unredacted version]
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 
 
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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 
 
SIPDIS 
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 
 
SIPDIS 
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 
 
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"I do not discuss diplomatic issues on television.8 
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 
 
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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 
 
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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 
 
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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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