US embassy cable - 05SANTODOMINGO4690

C O N F I D E N T I A L SECTION 01 OF 04 SANTO DOMINGO 004690 
 
SIPDIS 
 
STATE FOR WHA, WHA/CAR, WHA/CCA,WHA/EPSC, EB/CBA, INL, 
INR/IAA, EB/ESC/IEC/EPC, OES; STATE PASS USTR FOR VARGO, 
MALITO, AND HAUDA; STATE PASS USAID/LAC; NSC FOR LATIN 
AMERICA ADVISOR; USSOUTHCOM ALSO FOR POLAD; TREASURY FOR 
OASIA-MAUREEN WAFER; USDA FOR FAS; USDOC FOR 
4322/ITA/MAC/WH/CARIBBEAN BASIN DIVISION; USDOC FOR 
3134/ITA/USFCS/RD/WH; DHS FOR CIS-CARLOS ITURREGUI 
 
E.O. 12958: DECL: 10/17/2015 
TAGS: DR, ECON, EFIN, ENRG, TBIO, ETRD, SNAR 
SUBJECT: MEMCON:  THE AMBASSADOR AND THE DOMINICAN 
PRESIDENT, SEPTEMBER 29 
 
 
Classified By: DCM Lisa Kubiske.  Reason: 1.4 (b) and (d). 
 
 1.  (C) On September 29 President Leonel  Fernndez received 
the Ambassador for two hours in the 
Palace.  Fernndez had just finished a four-hour meeting on 
energy and was unaccompanied. The 
Ambassador was accompanied by DCM and USAID director.  Topics 
discussed, mostly at USG initiative, 
were: 
 
- - Millennium Challenge Corporation - Encouragement to try 
to qualify for MCC assistance from 2006 
 
- - HIV/AIDS - Use of grants from the Global Fund 
 
- - Electricity sector - Update on the general situation; 
Fernndez is concerned about the financial 
implications 
 
- - Ethics and government procurement - The Ambassador urged 
Fernndez to sign and issue the "bridge 
decree" directing that government procurement above defined 
ceilings be carried out through an open bid 
process 
 
- - Illegal narcotics -- The Ambassador showed the President 
a chart of tracks of recent drug flights, largely 
from Venezuela; the Ambassador compared them to a Venezuelan 
attack on the Dominican Republic. 
 
- - Police training program - - Concern that  Secretary of 
the Interior Almeyda had not been supportive of 
plans for USG (INL)-funded police training activities 
 
- - Cuba's activities in the Dominican Republic 
 
- - Preview of the SOUTHCOM-organized assessment of 
management of the border with Haiti 
 
- - Recent interruptions to express courier service due to 
forceful Customs interventions 
 
2. (SBU) Fernndez raised the OAS General Assembly, which 
will take place in Santo Domingo in June, 
2006, and his vision for forming a new Dominican Republic. 
 
3.   Detail follows: 
 
(SBU) Millennium Challenge Corporation Funding:  The 
Ambassador explained that the Dominican 
Republic was unlikely to be chosen for MCC funds this year, 
based on its ranking on a series of indicators 
compared to other lower middle income countries.  He provided 
a list of the formal indicators used to rank 
countries,  along with a chart that suggested that Dominican 
competitiveness had dropped significantly in 
the past year.  U.S. officials suggested that the 
administration could work to show it had the political will 
to 
improve, possibly bring up its scores, and thereby have 
better prospects in 2006.    Fernndez said he had 
wanted to put together a committee of people to work on this. 
 He asked the Ambassador's opinion about a 
possible chair for the committee and suggested Andres van der 
Horst  of the Competitiveness Council or 
Technical Secretary of the Presidency Temistocles Monts. 
U.S. officials suggested that as a senior 
administration official Montas might be a better choice. 
Fernndez said he would name Monts to head the 
committee. 
 
(C) HIV/AIDS: Fernndez commented that the Dominicans need to 
be concerned about HIV/AIDS because 
neighboring Haiti has high rates.  The Ambassador pressed 
Fernndez to get his officials to deliver results 
from the phase 1 grant from the Global Fund of USD 14 million 
so as to qualify for a Phase 2 grant of USD 
37 million.     Fernndez expressed disappointment at hearing 
the program was functioning slowly.  He said 
that he had thought that director of the anti-AIDS program 
COPRESIDA Alberto Fiallos would be more 
efficient than his predecessors. 
 
(SBU) Electricity Sector: Fernndez said he expected energy 
to be very expensive for about two weeks. 
"If the price can get down to USD 60/barrel after that, we 
can manage."  He planned to make budget 
adjustments in the last quarter of 2005 to cover the higher 
costs.   Fernndez considered that the 
government could not pass along higher LPG prices to 
customers because that could provoke unrest. 
Fernndez said that in addition to the recent price shock, 
the Dominican Republic faces a problem with 
inefficient distributors in electricity.  Separately, he also 
noted that the publicly owned distributors were not 
meeting IMF/World Bank targets on cutting losses via improved 
collections, and that international managers 
for government-owned regional distributors Ede-Norte and 
Ede-Sur had been hired.   Fernndez said had 
given up on the idea of buying the two coal plants the 
government had been considering after learning that 
the seller was less than reputable.  Instead, the government 
would issue an international public tender for 
coal plants to be constructed in 2007. 
 
(C) Ethics Commission:  Commenting on the abrupt resignation 
of technical director of the new Ethics 
Commission Gustavo Montalvo in August and later press reports 
of differences between the Commission 
and the director of the presidency's office for information 
services (OPTIC) Domingo Tavarez, Fernndez 
said that since OPTIC had been looking at acquiring Microsoft 
systems, it was very unlikely that there had 
been malfeasance in regard to the briefly published request 
for bids to furnish an "electronic portal for 
government."   He said he had felt embarrassed by the need to 
suspend the tender and to ask for an Ethics 
Commission review.  Fernndez commented that Montalvo had 
been unhappy anyway and had thought he 
was in charge of the e-government initiative.   Fernndez 
said Montalvo had previously quit other 
assignments when unhappy. 
 
(SBU)  Draft "Bridge Decree on Government Procurement."  The 
presidency has been holding since 
March a draft decree that would require government agencies 
to use public bidding process to acquire all 
goods, services, and construction valued above relatively 
restricted amounts.    Fernndez said he wanted 
to hold a seminar in the next 15 days or so with government 
entities that would have to implement the 
decree.  The seminar would explain the changes and officials' 
responsibilities under the new process.  As 
soon as everyone understood,  Fernndez said, he would sign 
it.  He anticipated needing 6-7 months to 
establish all of  the institutions needed for full 
implementation; even so, he said, he hoped to have the 
structure in place and ready to go at the time the CAFTA 
agreement goes into effect. 
 
(C) Police Assistance/Almeyda.  The Ambassador raised his 
concerns that recently announced programs 
of cooperation with the John Jay College of Criminal Justice 
in New York might distract from the NAS- 
funded basic training activities for the National Police. 
Fernndez expressed his strong interest in 
Dominican cooperation with John Jay, the New York Police 
Department, and others, though not to the 
exclusion of the USG-financed program.  He inquired whether 
the USG might be able to fund the John Jay 
program.  He said recognized that Secretary Almeyda's abrupt 
manner had caused some problems; he was 
aware, he said, that Almeyda had dressed down the new 
Dominican police chief in front of subordinates. 
Fernndez said he was  "working on the Almeyda problem." 
 
(C)  Cuban Assistance.  The Ambassador inquired about rumors 
that Cuba might be seeking involvement 
in  police work and training.   Fernndez  said emphatically 
that Cuba was not doing any political, security, or 
"sensitive" training, and any such proposal would have to 
come through him. 
 
(SBU)  The President said Cuban assistance is accepted only 
for non-security, non-sensitive areas, such as: 
 
- -Adult literacy - under Cuba's program, adults could be 
taught to read in 7-8 weeks 
 
- - Providing copies of their educational curricula K-12 
curricula in math, bio, physics, and chemistry so that 
the Dominicans can compare them with the national curriculum 
and that used in New York state.  The 
Education Ministry has already compared the national 
curriculum with that of New York. 
 
- -Training of teachers 
 
- - Eye care - originally, the Cubans wanted Dominicans to 
travel to Cuba, but the Dominicans asked the 
Cubans to train Dominicans here. 
 
- - Assistance in the area of preventive medicine at the 
primary care level, because it would lower demand 
for the already overflowing Dominican hospital system 
 
- - Certain kinds of natural disaster assistance (forestry, 
etc).  Fernndez said that he wants Dominican 
technicians to understand what Cuba does in this area and 
how.  The Ambassador referred to the USG 
programs in this area, and  Fernndez suggested the USG 
provide training in meteorology.   Fernndez said 
he would be interested in forming an alliance with Florida's 
hurricane center. 
 
(C)  Illegal Narcotics:   Fernndez said he had named lawyer 
Vinicio "Vincho" Castillo his adviser on 
counter-narcotics and wants Castillo to develop strategy and 
policy for fighting illegal narcotics trafficking. 
He commented said that the National Anti-Drugs Agency (DNCD) 
needs to be cleaned out again.  The 
Ambassador showed Fernndez a chart of recent  air tracks 
from Venezuela to the Dominican Republic and 
compared the situation to a Venezuelan attack on the 
Dominican Republic.  Fernndez looked and listened, 
without comment. 
 
(C) Haiti.  The Ambassador again expressed USG concern about 
Haitian nationals residing in the 
Dominican Republic while seeking to destabilize the Haitian 
elections. 
 
(SBU)  Border Assessment:  The Ambassador noted that the 
assessment of the Dominican-Haitian border 
based on extensive fieldwork in July coordinated by the U.S. 
Southern was almost ready.  Its 
recommendations would offer an opportunity for fundamental 
change. 
 
(SBU) Express mail companies:  The President and Ambassador 
reviewed the conflicts and changes that 
had resulted in a four-day suspension of Customs clearing 
services for all express mail companies, including 
the major international firms UPS, FEDEX and DHL.   Fernndez 
reaffirmed that Customs Director General 
Miguel Cocco is capable and a man of integrity.  He commented 
that the suspension was bad for the 
country's image.   Fernndez had heard of the conflict while 
he was in the United States.  The Ambassador 
said that honest U.S. companies should not  be penalized for 
the suspect behavior of others. 
 
(SBU) OAS General Assembly: Fernndez said he wants to 
propose the theme of  "Digital Solidarity" for 
the June 2006 general assembly meeting to be held in Santo 
Domingo.  His concept is to pursue a plan to 
get financing to provide more individuals access to the 
Internet. 
 
(C) A new Dominican Repuiblic:  At the end of the two-hour 
conversation, President Fernndez said that 
the Dominican Republic was still in a painful transition, and 
he was having to deal with many problems 
simultaneously.   "It will take a long time - more than 
another 4 year term or two - to create a modern 
Dominican Republic."   He felt very alone, he said, because 
there was not yet a critical mass of people 
committed to public service with experience in running a 
modern government.  Technical Secretary 
Temistocles Montas, Chief of Staff Danilo Medina, and Legal 
Advisor Pina Toribio were three who did 
understand and who formed the core of his team dedicated to a 
modern state. 
 
(C) As for himself, Fernndez said, his own commitment is to 
democracy and to establishing a modern 
Dominican state.  He said he identified with the United 
States, because he had grown up there.  He said he 
understood perfectly the importance of the bilateral 
relationship. 
BRINEMAN