US embassy cable - 04SANTODOMINGO4501

C O N F I D E N T I A L SECTION 01 OF 02 SANTO DOMINGO 004501 
 
SIPDIS 
 
DEPARTMENT FOR WHA/CAR (MCISAAC) 
NSC FOR SHANNON AND MADINSON 
TREASURY FOR OASIA AND LAMONICA 
 
E.O. 12958: DECL: 08/05/2014 
TAGS: PREL, PGOV, EFIN, EINV, ENRG, MCAP, DR 
SUBJECT: TRANSITION #10 - THE AMBASSADOR MEETS WITH LEONEL 
FERNANDEZ 
 
REF: SANTO DOMINGO 
 
Classified By: Ambassador Hans H. Hertell, reasons 1.4 (b) & (d). 
 
1.  (U)  This is cable number 10 in our series covering the 
transition between the Mejia and Fernandez governments. 
 
President-elect Fernandez - Two weeks from power 
 
2.  (C)  Summary.  President-elect Leonel Fernandez told the 
Ambassador in a private meeting on August 3, 2004, that his 
government will renegotiate the IMF agreement, will receive a 
total of US $750 million in assistance from Spanish hotel 
owners and the government of Venezuela, will work to fight 
corruption and will look for guidance in its efforts to 
right-size the Dominican military.  End summary. 
 
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Economy and Energy 
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3.  (C)  President-elect Leonel Fernandez told the Ambassador 
on August 3, 2004, that he plans to renegotiate the GODR 
agreement with the IMF as soon as practicable after taking 
office on August 16.  Fernandez was critical of President 
Mejia and his handling of the economic crisis and the failure 
of the PRD-led government to comply with the terms of the 
current IMF agreement.  Fernandez told the Ambassador that he 
plans to travel to Washington soon after his inauguration to 
meet with the IMF and USG officials. 
 
4.  (C)  In order to provide capital to the country, 
Fernandez has negotiated with hotel developers from Spain and 
expects to receive US $500 million in return for rolling back 
the proposed tax on hotel rooms.  Fernandez told the 
Ambassador that the assistance from Spain was a "firm 
commitment." 
 
5.  (C)  The Ambassador and Fernandez discussed the Dominican 
energy sector.  Fernandez told the Ambassador that Venezuela 
would provide oil to the Dominican Republic at half the 
current world rate per barrel.  In addition, Venezuela would 
provide US $250 million in assistance.  Fernandez offered to 
serve as a messenger between Venezuelan President Chavez and 
the United States.  He also speculated that President Chavez 
would be successful in the upcoming Venezuelan referendum. 
 
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Corruption 
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6.  (C)  The Ambassador and Fernandez discussed potential 
appointees to Fernandez's cabinet.  Fernandez was grateful 
for the USG offer to vet potential appointees and receptive 
to the USG message that members of the in-coming 
administration should be free of ties to corruption. 
Fernandez assured the Ambassador that he will not allow 
corruption in his administration.  Fernandez criticized the 
current Attorney General and said that he would "fry8 former 
legal advisor to President Mejia, Guido Gomez Mazara. 
Fernandez also said that current Attorney General Victor 
Cespedes accepts sexual favors from incarcerated Colombian 
nationals in return for their release. 
 
7.  (C)  Fernandez denied rumors that he or his transition 
team is brokering a deal to drop criminal charges against 
former Baninter executives Ramon Baez Figueroa and Marcos 
Baez Coco.  Fernandez said that Baez Figueroa,s attorney, 
Vinicio Castillo, is not only one of the best attorneys in 
the Dominican Republic, but one of the best in the world.  He 
told the Ambassador that when the case goes to trial, 
Castillo would implicate current President Mejia, Colonel 
Pepe Goico, Central bank Governor Jose Lois Malkun and 
members of the Baninter liquidation committee. 
 
8.  (C)  Fernandez expressed dismay at the state of the 
nation saying that there is &no Dominican Republic to 
inherit8 and that he will be "restructuring the country from 
scratch.8 
 
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Military matters 
----------------- 
 
9.  (C)  Fernandez asked about methods for reducing the size 
of the Dominican military and professionalizing the troops. 
The Ambassador and Defense Attache suggested that the 
military would provide a good opportunity for Fernandez to 
demonstrate a &zero tolerance8 policy against corruption. 
Defense Attache will provide Fernandez with information on 
right-sizing the military and a copy of the current PRD 
administration's regional security strategy that Fernandez 
requested.  The current Dominican regional security strategy 
has not yet been implemented. 
 
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Comment and action request: 
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10.  (C)  Comment.  Fernandez was open and pleased to meet 
with the Ambassador.  He appeared genuine when he told the 
Ambassador that his door will always be open for the 
Ambassador.  Fernandez recognizes the importance of the 
strong bilateral relationship between our countries.  He is 
predisposed to working with us, although he has a broader 
world view than outgoing President Mejia and will most likely 
dedicate more time to building relationships with Latin 
American and European partners.  End Comment. 
 
11.  (C)  Action Request:  Embassy Santo Domingo requests 
Department assistance in scheduling the following meetings 
with Dominican President-elect Leonel Fernandez as soon as 
possible after Fernandez takes office (August 16): 1) The 
President (or drop-by meeting); 2) The Secretary; 3) NSA Dr. 
Condoleezza Rice; 4) Treasury Secretary Snow. 
 
12.  (U)  Drafted by Angela Kerwin. 
 
13.  (U)  This report and others in our transition and 
election series are available on our SIPRNET site 
http://www.state.sgov.gov/p/wha/santodomingo/  along with 
other material. 
MARSHALL