US embassy cable - 04SANTODOMINGO2918

UNCLAS SECTION 01 OF 02 SANTO DOMINGO 002918 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR WHA AND DRL;NSC FOR SHANNON AND MADISON; 
LABOR FOR ILAB; USCINCSO ALSO FOR POLAD;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 
 
E.O. 12958: N/A 
TAGS: PGOV, DR 
SUBJECT:  DOMINICAN ELECTIONS #47: 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 is 
being spent is unclear, as is the origin of private 
contributions to political parties.  But the physical and 
audiovisual landscapes of the country have been transformed 
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 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 2m) is 
divided equally among all registered parties. 
 
--- 75 percent (310 million pesos)(USD 6m) is distributed 
according to a formula for the number of votes obtained in 
two previous general elections - specifically 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 
2.48m), the PLD 83.9 million pesos(USD 1.7m), and the PRSC 
81.9 million pesos (USD 1.65m). 
 
The 1997 Elections law stipulates that a party must account 
for all of its income and expenditures to receive electoral 
funds, but not every party has fulfilled this requirement. 
During his earliest call in March OAS observer mission chief 
Santiago Murray reminded candidates of the need to document 
campaign spending. The 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; 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: nearly 73 million pesos (USD 
1.4m) compared to the PLD's 38 million pesos (USD 76,000). 
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, including 
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 3.1m) on advertising, equivalent to nearly 
40 percent of all JCE allotments. From September 2003- 
January 2004, the PRD invested almost 56 million pesos (USD 
1m) in television ads - followed by the PRSC at 35 million 
pesos (USD 700,000) and the PLD at 32 million million(USD 
64,000). 
 
In this discussion we neglect entirely party expenditures on 
logistics, vehicles, publications, hall rental, publications, 
simple handouts and all the other expenses of doing partisan 
business. The 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 battallion" 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 SIPRNET site at 
http://www.state.sgov.gov/p/wha/santodomingo/   along with 
extensive other material. 
HERTELL