US embassy cable - 05SANTODOMINGO709

S E C R E T SECTION 01 OF 03 SANTO DOMINGO 000709 
 
SIPDIS 
 
STATE FOR WHA, WHA/CAR, WHA/EPSC, INL; NSC FOR SHANNON AND 
MADISON; TREASURY FOR OASIA-LAMONICA; USTR FOR MALITO 
 
E.O. 12958: DECL: 02/09/2015 
TAGS: EFIN, KIPR, ETRD, DR 
SUBJECT: DOMINICAN PRESIDENT ON BROADCAST PIRACY, LAW 
ENFORCEMENT REFORM, EXTRADITION AND ECONOMIC PROGRAM 
 
 
Classified By: DCM LKUBISKE. Reason 1.4 (b) and (d). 
 
1. (C)  Summary.  Dominican President Leonel Fernandez 
discussed the Dominican economy, CAFTA, broadcast piracy, 
Haiti and police and intelligence reform during a February 2 
meeting with the Ambassador.  Fernandez believes the new IMF 
Standby Agreement is as important for creating confidence as 
it is for bringing stability to the country.  He said that 
his government is committed to educating the public on CAFTA, 
an agreement still misunderstood by much of the country.  He 
promised to look into the continuing problem of television 
broadcast piracy.  Fernandez gave details regarding planned 
changes in the National Directorate of Intelligence and said 
that he would accept Embassy information to assist in 
cleaning up the corrupt police force.  He said that he would 
speak with the Dominican Ambassador to Haiti regarding his 
behavior, and acknowledged the importance of a sensitive 
extradition case now underway.  End summary. 
 
2. (SBU) In a February 2 meeting, the Ambassador 
congratulated President Fernandez on completion of the IMF 
Standby Agreement, announced January 31.   Fernandez noted 
that the agreement is as important for creating confidence as 
it is for bringing economic stability.   He believes it vital 
for Dominicans to understand that the Standby agreement is 
not creating new austerity, but that his government began 
taking the current cost-cutting measures immediately after 
taking office last August.   &I think that the worst of the 
crisis has passed,8 he said. 
 
3. (C) The Ambassador noted that the quasi-fiscal deficit is 
a serious and persistent problem.  Fernandez said that yes, 
the deficit is real, but argued that the peso,s appreciation 
has made it a smaller problem than it was before.  He 
reported that a committee had been formed with 
representatives from the Attorney General,s Office, Central 
Bank, and the Banking Superintendent to decide how to 
liquidate Baninter debt.  Fernndez added that the proceeds 
from collections will be used to reduce the deficit, and 
pointed out that this year government deficit spending is .7% 
and that the 2006 target is to eliminate the deficit 
completely.  Any surplus in 2006 would be applied to reduce 
the quasi-fiscal deficit. 
 
CAFTA and IPR 
4. (C) The Ambassador mentioned the recent meeting of foreign 
ministers in Central America regarding CAFTA and their 
universal support for ratification.  Fernandez asked when the 
United States expected to ratify.  The Ambassador responded 
that ratification is moving forward in the United States 
already and that the Dominican Republic should proceed as 
soon as possible.  Fernandez noted that Chile has done 
exceptionally well and benefitted under its bilateral free 
trade agreement with the United States.  He was conversant 
with Chile's export figures and saw the country,s free trade 
relations with the United States under NAFTA as responsible 
for the country,s strong economic performance, adding that 
the Dominican Republic,s proximity to the United States 
should allow for even greater benefits here.  Fernandez said 
that he wants to organize a daylong program at his Global 
Foundation for Democracy and Development (www.funglode.org) 
to help explain and discuss CAFTA.   He thinks that there is 
still much misunderstanding about the agreement and that a 
discussion by Dominican senators, business leaders and 
economists would lead to greater public understanding of the 
benefits of CAFTA.  He hopes that one or two people from USTR 
could speak at this event. 
 
5. (C) The Ambassador incicated the U.S. Government,s desire 
to see an end to television broadcast piracy and noted that 
U.S. Representative Katherine Harris has expressed her 
concern about the broadcast piracy problem in the Dominican 
Republic and will soon be sending Fernandez a letter 
documenting her interest.  The Ambassador said that 
television broadcast piracy remains a serious problem here 
and that despite a court case late last year against the 
major Dominican station Telemicro, independent state action 
to stop the problem is urgently needed.  He reminded 
Fernandez of his desire to develop the film industry here and 
to organize a film festival in the future to promote the 
industry, noting that these plans will not advance if piracy 
continues.  The Ambassador told Fernandez that the Motion 
Picture Association of America (MPAA)  has asked for a review 
of the Dominican Republic,s GSP status based on the 
continuing problem.  Fernandez asked if CAFTA would not make 
GSP redundant.  The DCM noted that broadcast piracy will 
continue to be a problem in any number of contexts, including 
CAFTA ratification, if not cleaned up. 
 
6. (C) Fernandez said that he knew that Telemicro had 
broadcast &new8 (pirated) movies in the past, but thought 
that the problem had been resolved.  He said that he would 
check into the issue, adding in English,  &I've got the 
message.8   Continuing with the theme of IPR enforcement 
related to movies, Fernandez mentioned that he had argued 
with the head of the National Copyright Office (ONDA) 
recently for having conducted a raid on a prominent local 
video store.  He noted that the video rental business has no 
interest in pirated products and that these &legitimate8 
stores are against piracy.  (Note:  We have heard several 
versions of the raid story; and one includes the use of 
presidential police to call off ONDA during the raid.  The 
issue of video stores is murky, involving legitimately 
purchased products created for the U.S. market being sold 
here, circumventing the regional code protocols set up by 
major studios.  End note.) 
Paulino--Drugs 
7. (C ) Speaking of the recent arrest of retired Captain 
Quirino Paulino Castillo for narcotrafficking, Fernandez said 
that the case had taken the country by surprise.  Fernandez 
commented that it is often impossible to know what a person 
is truly like.   During his campaign the president personally 
heard very positive comments about Paulino.  He noted that he 
hopes for Paulino,s prompt extradition without mishaps.   He 
promised to try to ensure adequate security for Paulino while 
his extradition request is pending a Supreme Court decision. 
 
Concerns about Dominican Intelligence Chief 
8. (S) The Embassy raised problems with the National 
Intelligence Directorate (DNI) under the leadership of 
Retired General Manuel de Jesus Florentino y Florentino, and 
led a frank discussion concerning questions about 
Florentino,s competence and personal integrity, as well as 
information linking Florentino to Paulino.  The President 
noted that during his first term Florentino had served as his 
Secretary of the Armed Forces and had headed the presidential 
 
SIPDIS 
security guard as well.  Fernandez had seen him as a serious, 
and &correct8 officer and said that he had not known of any 
association by Florentino with narcotrafficking.  The 
president seemed to acknowledge Embassy arguments, however 
and agreed to remove Florentino &soon8 at a less 
politically volatile moment, and sought Embassy input on his 
replacement. 
 
Crime and Corruption 
9. (C ) Commenting on the military, Fernandez said that it is 
understood that high-ranking military staff members routinely 
take 10% of resources that passes through their hands as a 
"commission,8 adding &the military is a corrupt 
institution.8  He said that if he moved too fast in firing 
corrupt officers, his own position would be in jeopardy.  He 
noted that Mejia was fond of the military and kept his guards 
dressed in uniform while Fernandez prefers civilian clothing 
for his guards. Fernandez considered it a significant 
achievement to have forced retirement of 100 generals since 
taking office.  He commented that this still leaves 100 more 
who should be relieved.  On the other hand, he said, "if one 
thing works in the Dominican Republic, it,s the military,8 
-- indicating that the military is disciplined, and 
hierarchical, and proud of position. 
 
10. (C)  Fernandez said one of his government,s priorities 
is dealing with crime and an important element is cleaning up 
the police force.  Immediately after his inauguration, he 
noted, Dominicans just wanted him to strengthen the peso, but 
now all they want is a lower crime rate.   Fernandez asked 
for Embassy ideas on combating police corruption and said 
that he was receiving advice from the New York City Police 
Department, the NYPD, New Jersey State Police, and John Jay 
College of Criminal Justice of the City University of New 
York, and had invited the Bogota (Colombia) police chief to 
help improve training of the Dominican police force.  Embassy 
NAS Officer noted that training and equipping the police 
force is vital, but narcotics-related corruption at the 
highest levels of the police force must also be addressed. 
Fernandez said that he would fire corrupt police officers 
when provided with evidence and asked for Embassy,s help in 
obtaining this.  The Ambassador offered to provide additional 
details regarding known corrupt officials. 
 
Haiti 
11. (S) As a followup to previous discussions between the 
Ambassador and President Fernandez regarding Haiti, the 
Ambassador referred to rumors that Dominican Ambassador to 
Haiti Jose Serulle Ramia was not being entirely faithful to 
Dominican policy guidelines.  Fernandez replied that he had 
chosen Serulle for this position because he belongs to a 
respected family and is serious, educated, honest, and 
trusted, and fluent in French and Creole and thus a fitting 
representative for the Dominican Republic.  However, 
Fernandez conceded, Serulle, like others in his family, is a 
&little crazy8 and very emotional, and commented only half 
in jest that he would not be surprised if Serulle considered 
himself a viable candidate for the presidency of Haiti. 
Fernandez stated categorically that he understands that 
Serulle is meeting in a "leadership role" with all sectors of 
Haitian society, including the opposition, -- which, 
according to Fernandez, "is not his job."  Fernandez promised 
to rein in Serulle.  He emphasized that the Dominican 
Government recognizes the Haitian Interim Government (IGOH). 
He said that he believes his government has a responsibility 
to help Haiti, since Haiti,s situation affects both sides of 
the border.   (Note:  Foreign Minister Carlos Morales 
Troncoso, in comments to the Ambassador on February 7, called 
Serulle &useless8 and &crazy8 and said he would be 
removed within the next two weeks.  Septel reports details of 
that meeting.  End note.) 
SECRET 
 
SIPDIS 
HERTELL