US embassy cable - 04SANTODOMINGO2761

UNCLAS SECTION 01 OF 02 SANTO DOMINGO 002761 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR WHA, WHA/CAR, WHA/PPC 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 
DHS FOR CIS-CARLOS ITURREGUI; USSOUTHCOM ALSO FOR POLAD 
 
E.O. 12958: N/A 
TAGS: PGOV, ECON, DR 
SUBJECT: DOMINICAN ELECTIONS #47 (REVISED): THE EXPENDITURE 
COST OF DEMOCRACY 
 
 
1.  (SBU) This is no. 47 in our series on the Dominican 
presidential elections: 
 
The Expenditure Cost of Democracy 
 
Dominicans have lived in an increasing tempest of campaign 
advertising over the past eight months.  Just how much money 
is being spent is unclear, as is the origin of private 
contributions to political parties.  A prominent politician 
told us May 6 that total campaign expenditures by his major 
party would reach one billion pesos (USD 20 million); he 
guessed that the other two big parties were spending 
similarly. 
 
Such outlays have transformed the country's physical and 
audiovisual landscapes with images of candidates -- 
principally of the leading three, but also of the minor 
hopefuls.  In a country with a monthly minimum wage of less 
than USD 100, over most of the last year the parties have 
lined major highways and urban thoroughfares with large 
billboards costing an average of 100,000 pesos (USD 2000) a 
month.  Prime air-time, currently being consumed in great 
amounts, costs 200,000 pesos (USD 4000) an hour.  And these 
are the costs only of rental of space or time, exclusive of 
the conceptual, creative, and marketing services. By any 
estimate, spending on ads signficantly exceeds the public 
subsidies granted to the parties. 
 
On April 7th, the Central Election Board (JCE) distributed 
the government's public sharing funds in the amount of nearly 
413 million pesos (USD 8.3 million) for the 23 political 
parties. The formula for the distribution of money is 
two-fold: 
 
-- 25 percent of the money (103 million pesos)(USD 2.1m) is 
divided equally among all registered parties; and 
 
-- 75 percent (310 million pesos)(USD 6.2m) is distributed 
according to the relative numbers of votes obtained in the 
two previous general elections - in this case, the 2000 
presidential election and the 2002 congressional and 
municipal elections. 
 
Since the three major parties captured 96 percent of voter 
preferences, the PRD received 139.6 million pesos (USD 
2.79m), the PLD 83.9 million pesos (USD 1.68m), and the PRSC 
81.9 million pesos (USD 1.64m). 
 
The 1997 Electoral Law stipulates that a party must account 
for all of its income and expenditures to receive public 
funds, but not every party has fulfilled this requirement. 
During his visit in March, OAS observer mission chief 
Santiago Murray reminded candidates of the need to document 
campaign spending. The Central Electoral Board (JCE) appears 
to be relatively indulgent concerning accuracy and timeliness 
of reporting, leading to persistent inter-party accusations 
of fraud, not easily subject to evaluation. 
 
Opponents have maintained that President Mejia has used 
government funds for his campaign and advertising; however, 
on May 6 the visiting IMF review team told the Ambassador 
that government financial records through March do not show 
any such diversion.  At the same time, none of the parties is 
publicly identifying major private contributors or amounts 
given. The common wisdom is that most major businesses have 
lines of financing and influence to all three big parties. 
According to public records for September 2003 - January 
2004, Mejia as incumbent president outspent other parties on 
pre-campaigning nearly 2 to 1: almost 73 million pesos (USD 
1.5m) compared with the PLD's 38 million pesos (USD 780,000). 
 It is not clear how much of this was devoted to Mejia's 
vigorous defense against other PRD rivals, which culminated 
only in January. 
 
Private sources of funding include business appeals and 
fundraiser events. Parties seek donors primarily in the 
Dominican Republic and the United States, especially in 
Puerto Rico. For example, during President Mejia's brief 
Easter trip to the United States, campaign dinners charged an 
average of RD $500,000 (USD 10,000) per plate. 
 
Funds are raised primarily to meet advertising expenses for 
radio, television, and print media. Over the past five 
months, it is estimated that parties spent at least 159 
million pesos(USD 3.2m) on advertising, equivalent to nearly 
40 percent of all JCE allotments. From September 2003 to 
January 2004, the PRD invested almost 56 million pesos (USD 
1.1m) in television ads - followed by the PRSC at 35 million 
pesos (USD 700,000) and the PLD at 32 million (USD 640,000). 
 
In this discussion we neglect entirely party expenditures on 
logistics, vehicles, publications, hall rental, simple 
handouts and all the other expenses of doing partisan 
business. The exact costs of the campaigns are essentially 
unknown, except to the managers, and given the laxity of 
financial accounting in the country, perhaps not even to 
them.  There is a good deal of ad-hoc fundraising -- for 
example, President Mejia reportedly has turned to the Spanish 
owner of Air Europa to arrange and contribute return 
transportation of the Dominican "Quisqueya battalion" of 302 
soldiers.  This handsome donation, probably never to be 
costed for the accounts, will allow the President to fulfill 
his promise of getting the boys back home before the election. 
 
Though one would like to see such large sums - perhaps as 
much as USD 20 million spent by each major party -- going 
into productive investment rather than rival expenditure, 
they do not represent a complete waste. Taken in a time of 
economic contraction and inflation, campaign expenditures 
have delivered a useful counter-cyclical stimulus with 
significant multiplier effects. And, when all is said and 
done - and counted -  the cost of campaigning is part of the 
price of democracy. 
 
2. (U) Drafted by Leticia Cantu, Michael Meigs. 
 
3. (U)  This report and others in our series are available on 
our SIPNET site at 
http://www.state.sgov.gov/p/wha/santodomingo/   along with 
extensive other material. 
HERTELL