US embassy cable - 03SANTODOMINGO7421

UNCLAS SECTION 01 OF 03 SANTO DOMINGO 007421 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR WHA AND DRL 
NSC FOR SHANNON AND MADISON 
LABOR FOR ILAB 
TREASURY FOR OASIA-LAMONICA 
USDOC FOR 4322/ITA/MAC/WH/CARIBBEAN BASIN DIVISION 
USDOC FOR 3134/ITA/USFCS/RD/WH 
 
E.O. 12958: N/A 
TAGS: DR, ECON, EFIN, PGOV, PREL 
SUBJECT: ASSISTANT SECRETARY NORIEGA MEETS DOMINICAN 
OPPOSITION LEADERS 
 
REF: SANTO DOMINGO 7395 
 
1. (SBU) Summary: Visiting Assistant Secretary Roger Noriega 
on December 11 discussed the presidential election campaign 
and proposed economic reforms with leaders of major 
opposition groups, including dissident factions of the ruling 
Dominican Revolutionary Party (PRD).  He said the USG wants 
to help but they share the responsibility forconcluding an 
IMF agreement, respecting its conditions, and holding a clean 
presidential election. The USG will seek to fund 
international election observers and will not interfere in 
the election.  Opposition leaders welcomed the visit, 
criticized Mejia, and discussed policy alternatives.  The A/S 
warned the PLD against anti-United-States stances like those 
of Venezuela's Hugo Chavez;  PLD leaders emphasized the 
party's 1996-2000 record supporting democracy and free 
markets.  End summary. 
 
2. (SBU) On December 11 WHA A/S Noriega, accompanied by the 
Ambassador, DCM , WHA/CAR Deputy Director, WHA Executive 
Assistant and poloff, held separate meetings December 11 at 
the Embassy with PRSC presidential candidate Eduardo Estrella 
and vice presidential candidate/Senator Jose Hazim Frappier; 
with PRD presidential pre-candidates Vice President Milagros 
Ortiz-Bosch, Tourism Secretary Rafael "Fello" Subervi, and 
Enmanuel Esquea; and with PLD senior advisor Temistocles 
Montas and PLD secretary general Reinaldo Pared Perez. 
 
PRSC Candidates 
- - - - - - - - 
 
3. (SBU) PRSC presidential candidate Estrella emphasized the 
need for the Mejia administration to eliminate the 
troublesome fiscal deficit by slashing his bloated government 
payroll instead of imposing more taxes.  He said the 5 
percent tax on exports pending in Congress would act as a 
brake on economic growth.  The export tax, he said, should be 
designed to be in effect only for a defined range in the 
dollar-peso exchange, decreasing in stages when/if the dollar 
falls.  Estrella expressed his "fear" that the GODR would not 
comply with the conditions of a new IMF agreement.  He said a 
PRSC administration would stimulate foreign investment and 
job creation and lower interest rates.  He concurred with 
Noriega's emphasis on fiscal discipline. 
 
4. (SBU) Estrella advocated attacking money laundering, 
narcotrafficking, and corruption. He criticized President 
Mejia for having the Central Bank reimburse wealthy 
depositors in the BANINTER bank collapse scandal.  He 
expressed worry that the Central Election Board (JCE) might 
not be evenhanded in the upcoming election.  At a recent 
meeting in Venezuela of the Christian Democratic Organization 
of the Americas (ODCA), Estrella requested ODCA obervers for 
the Dominican election, in addition to observers from the OAS 
and other organizations that he hoped would come. 
 
PRD Pre-Candidates 
- - - - - - - - - - 
 
5. (SBU) The three PRD pre-candidates planning (at that time) 
to compete in a nominating "convention" (primary election) 
with President Mejia, amid deep divisions in the party, told 
A/S Noriega that they want to restore their party's 
credibility and unify its broad base in the electorate.  Vice 
President Ortiz-Bosch advocated "deepening the reforms" to 
include institutional modernization, for example in 
education, rather than "cosmetic  reforms."  Reforms should 
be passed before the 2006 legislative elections, while the 
PRD still controls the Congress.  She emphasized the need to 
focus public attention on general issues, such as reform, 
rather than on the short-term deterioration of salaries and 
purchasing power.  Subervi said the private sector was more 
interested in concluding an IMF accord than the government 
was.  The Assistant Secretary replied that the GODR should 
set up an information campaign to explain the IMF program to 
citizens, so as to prevent political upheaval such as that 
which occurred in Bolivia. 
 
6. (SBU) Note: Since then, all three decided to withdraw from 
competition with Mejia at the PRD convention (reftel). 
Dissident PRD candidate and PRD secretary general Hatuey De 
Camps turned down our invitation to this meeting, after 
Embassy declined his request to bring a legislator belonging 
to his faction currently serving as "interim president" of 
the Hatuey-organized leadership.  Poloff explained that the 
meeting was limited to candidates and pre-candidates. 
(Embassy had earlier agreed to a De Camps suggestion to 
invite another PRD pre-candidate from the Hatuey faction, 
Senator Rafael Albuquerque, but this did not materialize.) 
De Camps had attended a meeting with Treasury Under Secretary 
Taylor on November 22. 
 
PLD Representatives 
- - - - - - - - - - 
 
7. (SBU) Temistocles Montas -- former technical secretary of 
the presidency during the Leonel Fernandez administration -- 
and PLD secretary general Pared Perez represented candidate 
Fernandez, who was out of the country.  They doubted that the 
JCE would organize a clean election and urged that 
international election observers from recognized entities 
such as NDI and IFES -- and, crucially, the USG -- should 
monitor the whole process, beginning in January.  They also 
raised the possibility that economic deterioration could 
trigger a political crisis, which could produce "another 
Haiti."  This lends special urgency to election observation. 
 
8. (SBU) To address "the worst economic crisis in 20-30 
years," the PLD leaders called for thoroughgoing reforms, not 
piecemeal measures, to avert a descent into 
"ingovernability."  They want a fiscal reform, not just tax 
reform, and a refinancing of the public debt. The current 
debt service burden is unsustainable, they argued.  Debt 
renegotiation would also impose budget discipline.  The PLD 
leaders told Noriega that his presence would help ensure that 
the GODR fulfills its commitments. 
 
9. (SBU) The Assistant Secretary commented that in the heat 
of the campaign, Fernandez might be tempted to contrast his 
proposals with President Mejia's so-called "neoliberal 
model."  Noriega warned against the temptation to take an 
anti-United-States stance for domestic political purposes. He 
pointed to the example of Venezuela's Hugo Chavez, who has 
polarized the situation in Venezuela at a high cost to that 
country.  Montas replied that the PLD when in office 
(1996-2000) had shown its commitment to democracy and free 
markets.  "We want to build the type of society you have 
built in the United States," he emphasized.  Asked whether 
Fernandez opposes a free trade agreement with the United 
States, Montas answered, "No, no, no."  Concluding the 
discussion, the Ambassador noted that he had suggested to 
Fernandez that he call on USG officials when visiting 
Washington in February. 
 
 
10. (U) This message was not reviewed by Assistant Secretary 
Noriega. 
HERTELL