US embassy cable - 04SANTODOMINGO2933

C O N F I D E N T I A L SECTION 01 OF 05 SANTO DOMINGO 002933 
 
SIPDIS 
 
DEPARTMENT 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 
DHS FOR CIS-CARLOS ITURREGUI; USSOUTHCOM FOR POLAD 
 
E.O. 12958: DECL: 05/14/2014 
TAGS: PGOV, PINR, DR 
SUBJECT: DOMINICAN ELECTION SERIES #49: LEONEL FERNANDEZ -- 
THE ONCE AND FUTURE PRESIDENT? 
 
 
Classified By: DCM Lisa Kubiske.  Reason:  1.5 (b) and (d). 
 
 1.  (SBU) This is cable #49 in our series on the Dominican 
presidential elections. 
 
FERNANDEZ: THE ONCE AND FUTURE PRESIDENT? 
 
(SBU) Lawyer turned politician, Leonel Fernandez once reigned 
over the small island nation of the Dominican Republic. 
Times were good - tourism and exports were up, the currency 
was stable, and the country achieved unmatched economic 
growth, up to 8 percent annually.  Fernandez owed his victory 
to unexpected support from outgoing President Joaquim 
Balaguer, but despite that twist in politics, he helped his 
small nation gain international stature, while pulling away 
from its dictatorial past toward institutionalized democracy. 
 Although this bright picture was clouded by allegations of 
corruption within his administration and a problematic, 
unpopular partial privatization of the electricity sector, 
most Dominicans recall Fernandez as the leader of prosperity 
and stability. 
 
Constitutions and Foundations 
 
(SBU) The constitutional changes negotiated following the 
flawed 1994 elections opened the way for Fernandez's 
candidacy by truncating Balaguer's term to two years, but 
they also instituted a ban on presidential re-election. 
Approaching the end of his term, Fernandez turned to private 
sector supporters to propose the establishment of a "think 
tank" for the Dominican Republic.  Donors responded 
generously, providing an endowment, a downtown lot, 
construction services and donations that allowed the "Global 
Foundation for Democracy and Development" (FUNGLODE) rapidly 
to become a busy, credible, U.S.-style institution in a 
modern four-story building with a fully furnished research 
library, auditorium, publications, a program of seminars and 
conferences, and formal links to universities (Columbia, 
Rutgers, Drexel) and institutions (the Smithsonian, Microsoft 
Corporation). Fernandez, as president, has had four years on 
international conference circuits. 
 
(U) FUNGLODE's mission statement could serve equally well as 
Fernandez's conceptual approach to government and 
campaigning; as a private, non-profit organization it is 
"dedicated to formulating strategic and conjuncture related 
innovative proposals on relevant issues of national interest, 
enhancing the quality of the national debate, and devising 
public policies crucial to the Dominican Republic's good 
governance and socioeconomic development."  There is a close 
association between the PLD and FUNGLODE, but the foundation 
has its own identity (see www.funglode.org).  FUNGLODE 
executive director Temistocles Montas was Technical Secretary 
to the Fernandez presidency and is a senior PLD advisor to 
Fernandez;  economic director Frederic Emam-Zade served as 
Under Secretary at the Fernandez Foreign Ministry. 
 
The Rational Man 
 
(C) Fernandez is a reader and a thinker, though not 
necessarily an original or deep thinker. His conceptual style 
is that of problem solver, an approach that retains the 
historical social concern of the PLD without the anti-market 
rhetoric of Juan Bosch. In January he had FUNGLODE commission 
an economic policy diagnostic from the Economist Intelligence 
Unit; in April the PLD published a 150-page party platform 
long on concern, lofty in ambition and relatively short on 
specifics. 
 
(C) Fernandez's soft-spoken, cerebral style contrasts 
markedly with the brash tendencies of his leading rival, 
incumbent President Hipolito Mejia.  Mejia has leveled a 
number of personal attacks against Fernandez, emphasizing 
legal retainer payments received from the spectacularly 
corrupt Baninter. Fernandez does not deny receiving these; 
and FUNGLODE staff acknowledge that Baninter pledged the 
revenue from identified financial assets to the endowment -- 
a gift that disappeared when Baninter collapsed.  None of 
these charges has been particularly damaging, probably 
because Baninter president Ramon Baez Figueroa gave funds to 
individuals, officials, causes, and charities across the full 
political spectrum. 
 
Concerning the United States and the Region 
 
(SBU) His relations with the United States were generally 
good during his 1996-2000 term, and Fernandez has promised to 
pursue strong cooperation with the U.S. Government if elected 
to serve a second term. In mid-March 2004 a senior PLD 
delegation met with NSC and State Department staff to deliver 
an aide-memoire confirming PLD interest in good relations, 
including support for the free trade agreement then in 
negotiation, for law enforcement cooperation, and for 
anti-terrorism efforts. 
 
(C) The PLD platform advocates closer ties with other 
Caribbean nations for regional and trade issues.  As 
president, Fernandez recognized Cuba in 1998.  Fidel Castro 
later visited the Dominican Republic and Fernandez gave him a 
decoration in a state ceremony.  Fernandez's PRD adversaries 
seek to trade on the Cuba decision; they assert to their 
followers that Fernandez now owns a hotel in Cuba (the logic 
is lacking, but the smear is evident). Fernandez is pragmatic 
on Cuba -- when the United States was seeking to persuade 
Mejia to support the Cuba resolution at the UN Commission on 
Human Rights in April, 2004, the Ambassador sought and 
obtained Fernandez's assurance that he would not speak out 
against a Dominican Republic vote against Cuba.  Mejia's 
reluctant vote provided the margin of victory, and Fernandez 
kept his word, never mentioning the subject. 
 
(SBU) Fernandez is on good terms with President Chavez of 
Venezuela, in part because as FUNGLODE president he served as 
the mediator who traveled to Caracas to negotiate the 
engagement of the Carter Center in Venezuela's polarized 
politics.  U.S. authorities saw this as a positive example of 
Dominican engagement in the region. 
 
(U) The Fernandez administration revised procedures in 1998 
so as to make possible the extradition to the United States 
of Dominicans and other nationals.  Several fugitives were 
delivered under these provisions, although some extradition 
requests were denied. 
 
(C) The Ambassador is acquainted with Fernandez from the 
1996-2000 presidency and has met periodically with him in 
formal and informal settings, one-on-one and in groups.  The 
relationship has warmed considerably over time.  At the 
Ambassador's private lunch for Fernandez and senior aids on 
April 13, Fernandez said he would be happy to "vet" with the 
Embassy any prospective appointees for sensitive positions. 
He confirmed his intention to support the free trade 
agreement and to work to implement it.  At about the same 
time, he commented publicly that a Fernandez administration 
would honor Dominican commitments to the United States 
concerning support for the effort in Iraq (later, 
unfortunately, Mejia withdraw the troops). 
 
The March Back 
(SBU) The PLD's candidate for the presidency in 2000, Danilo 
Medina, placed a weak third, leaving the way clear for 
Fernandez to reassume control of the party.  The 
deterioration of the Dominican economy in 2002-2003, due both 
to externalities and to errors by the Mejia administration, 
made Fernandez look golden.  An easy winner in the PLD party 
selection process, Fernandez has enjoyed poll numbers near 60 
percent since October of 2003. On looming purple and yellow 
billboards across the country, his smiling face promises 
Dominican voters a "return to progress" if he is elected on 
May 16th. (Mejia's slogan in weak response in the later 
campaign has been "Let's Work Together to Get to the Good 
Times.") The numbers have diminished slightly, but reputable 
firms estimate Fernandez's support around 55 percent of the 
electorate. 
 
(U) With 71 percent of Dominicans believing the country is in 
worse shape now then it was when Fernandez left office in 
2000 and about the same number declaring outright rejection 
of Mejia, PLD faithful are predicting a first-round victory. 
Some observers worry that PLD members' triumphalism now may 
lead to violence if results declared by the Central Electoral 
Board (JCE) do not immediately and obviously favor Fernandez. 
 
(C) Fernandez and senior supporters are worried about the 
possibility of fraud and concerned at the aggressive attitude 
of Mejia and his faction of the PRD. In early 2004 Fernandez 
asked publicly and privately for more extensive international 
observation of the elections.  At a lunch hosted by the 
Ambassador in April, he spent the first 20 minutes of the 
encounter on this subject.  As with FUNGLODE, he was able to 
tap the Dominican private sector -- ten donors associated 
with the National Council of Entrepreneurs (CONEP) stumped up 
a total of $100,000 and members of a U.S.-based 
Dominican-American business group matched that or better. 
These donations financed a 25-person electoral observation 
team from the International Foundation for Electoral Systems 
(IFES), to function independently of the OAS observer mission 
supported by the United States, the European Commission and 
Canada. 
 
Tough Road Ahead 
 
(SBU) If he is elected, Fernandez will be facing far greater 
difficulties than he did in 1996-2000.  The Congress in 
office until 2006 is dominated by the PRD (with an absolute 
majority in the Senate).  The IMF program is on continuing 
review until at least June, at which time the principal goals 
must be renegotiated; any Dominican government will be 
carrying out a challenging austerity program over the medium 
term.  Fernandez has told supporters they'll have to give him 
time to set things right, but expectations will be 
irrationally high if he is elected. 
 
(C) The PLD has traditionally been a fairly exclusionary 
party -- for example, Fernandez gave reformistas virtually no 
posts in his government, even though he owed his election in 
large part to the support of Balaguer.  Many interests would 
be clamoring for a place in his administration; among the 
first in line will be the senior reformistas who broke 
bitterly with Eduardo Estrella to support Fernandez. 
 
(C) Another question, in our opinion,is whether Fernandez 
will be tough enough.  Mejia has taken decisions, even if 
they were at times wrong decisions; as for Fernandez, it's 
not yet clear whether Fernandez will cut through the dialogue 
and contending interests to impose clear direction and 
discipline within his administration.  This is particularly a 
concern as regards corruption -- a major ill of Dominican 
institutions that without forceful action will continue to 
poison politics and the economy. 
--------------------------------------------- ------- 
Lawyer, politician, intellectual - a brief bio 
--------------------------------------------- ------- 
 
(U) Leonel Fernandez was born in Santo Domingo on December 
26, 1953, but moved to New York City in 1956 and attended 
elementary and junior high school there.  In 1969, he 
returned to Santo Domingo for high school and college, 
eventually receiving a law degree in 1978 from the Autonomous 
University of Santo Domingo (UASD).  Fernandez has done 
postgraduate work in law at Columbia University and at the 
State University of New York.  He is the current chairman and 
president of the PLD, as well as the founder and president of 
the Global Foundation for Democracy and Development 
(FUNGLODE). 
 
(SBU) Fernandez entered politics in the early 1970s under the 
tutelage of Professor Juan Bosch, long time member of the 
Dominican Revolutionary Party (PRD).  In the mid-1970's he 
left the party with Bosch to establish the leftist Dominican 
Liberation Party (PLD).  During the 1980s and early 1990s, 
Fernandez was the PLD's press secretary, eventually becoming 
the party's unsuccessful vice-presidential candidate in 1994. 
Fernandez practiced law before running as PLD candidate for 
President in 1996 and winning thanks to Balaguer's support. 
(Balaguer's move was widely interpreted as against the PRD's 
Jose Francisco Pena Gomez rather than for Fernandez.) 
 
(C) During his presidency, Fernandez elevated the 
international presence of the Dominican Republic by making 
historic official visits to Haiti and to Europe, 
participating in international forums and summits, and 
concluding free trade agreements with CARICOM and the Central 
American nations.  His domestic record was more mixed, 
however, as strong economic growth and successful 
privatization of several unprofitable state enterprises 
coincided with an ineffective partial privatization of the 
system of regional electricity generators and distribution 
companies. For the last two years of his term he faced an 
opposition-dominated Congress. 
 
(U) Fernandez speaks native Dominican Spanish, fluent English 
and some French. 
 
(U) In 2003, Fernandez married fellow lawyer Margarita 
Cedeno, and the two have a daughter, Yolanda.  Fernandez has 
two other children, Nicole and Omar Leonel, from a previous 
marriage that ended in 1995. 
 
2.  (U) Drafted by Clare Ribando, Michael Meigs. 
 
3.  (U) This report and others in the series are available on 
the classified SIPRNET at 
http://www.state.sgov.gov/p/wha/santodomingo/  along with 
extensive other material. 
 
 
 
 
 
 
 
 
 
 
 
HERTELL