DOMINICANS PUZZLED BY CHAVEZ'S ACCUSATIONS AND

UNCLAS SECTION 01 OF 02 SANTO DOMINGO 005157

SIPDIS

SENSITIVE

DEPT FOR WHA/CAR

E.O. 12958: N/A
TAGS: EPET PREL DR VE
SUBJECT: DOMINICANS PUZZLED BY CHAVEZ'S ACCUSATIONS AND
"CUTOFF" IN OIL EXPORTS


1. (U) Summary. Relations between Venezuela and the
Dominican Republic have been strained since July 27, when
Venezuelan President Hugo Chavez accused ex-Venezuelan
President Carlos Andres Perez of conspiring to assassinate
him and criticized the Dominican government for allowing this
to take place within its borders. The relationship hit a new
low September 19, when Venezuela officially announced that it
would no longer deliver oil to the island country. The
economic impact on the Dominican Republic will be minimal,
with the country turning to the world market. End Summary.


2. (U) On July 27, Venezuelan President Hugo Chavez, while
speaking on his domestic show &Alo, presidente,8 accused
ex-Venezuelan President Carlos Andres Perez (CAP) of leading
a conspiracy from the Dominican Republic to assassinate him.
(Chavez' failed coup in 1992 was directed against Perez.)
Chavez accused the GODR of tolerating this "centro de
conspiracion8 to operate and called on Dominican President
Hipolito Mejia to take drastic action against Perez.
Although at first the focus of these allegations was on Perez
himself and not on the GODR, Chavez's assertions of knowledge
of these activities and accusations of "irresponsibility8
strained relations between the two countries and the
presidents. Mejia responded quickly by classifying Chavez's
remarks as a &syndrome Chavez has towards Carlos Perez" and
denying GODR involvement. Presidential spokesman Luis
Gonzalez Fabra followed by announcing that Dominican security
agencies kept close watch over suspicious foreigners living
legally in the Dominican Republic, including the anti-Chavez
Venezuelans, and that there was nothing for the GOV to worry
about.


3. (U) The opposition Dominican Liberation Party (PLD) of
former president Leonel Fernandez complained to the press
about the Mejia government's "failure to investigate" the
case. Chavez in his remarks asserted that "proof" had been
given to the GODR but Mejia commented that nothing
substantial had been provided.


4. (U) Tension between the two countries escalated further
after Venezuelan Foreign Minister Roy Chaderton remarked at
the end of an Andean Nation Community/MERCOSUR meeting in
August that the accusations presented by President Chavez
(and the Dominican response) had indeed affected relations
between the two nations. Following those statements, Chavez
further alleged that Dominican officials as well as people of
&great power8 from the Dominican Republic were involved
with CAP in the plot to assassinate him.


5. (U) Venezuela's Energy & Mines Minister Rafael Ramirez
supported his president's statements during a press
conference on Friday, September 19, where he specifically
accused private traders and companies involved in the
shipment of oil to the Dominican Republic as being part of
the conspiracy. He declined to identify the oil traders by
name. During that same press conference Ramirez announced
the end of Venezuelan oil shipments to the Dominican Republic
&in defense of our country's democracy and sovereignty.8


6. (SBU) The Dominican Republic was purchasing about 53,000
barrels of oil per day through the San Jose Pact Energy
Agreement that allows it and other Central American and
Caribbean countries to purchase oil from Venezuela and
Mexico. The formal end of shipments from Venezuela has
confirmed that the GODR must purchase on the world market
(GODR officials told the press that in fact the erratic
nature of Venezuelan supply has been a reality "for months,
making us buy elsewhere.") Under the terms of the San Jose
pact, Venezuela and Mexico supply oil to 24 beneficiary
countries and may convert up to 20 percent of the cost into
long-term development loans at concessionary interest rates.
(The GODR's former ambassador to Caracas dismisses this as "a
dead letter," asserting that no country except perhaps CUBA
secures any benefits through these clauses.)


7. (SBU) Perhaps in an effort to help Mejia and to take the
pressure off the GODR, ex-President Perez took calls from
Dominican journalists and confirmed that he had been living
in his New York apartment for the last three months and said
that he was not involved in any conspiracy to assassinate
Chavez or overthrow his government.


8. (U) Last week's news from Caracas was that Chavez did not
intend to return his Ambassador to Santo Domingo "until a new
government is in place." Questioned by the press, GODR Vice
President Milagros Ortiz Bosch, acting head of government
while Mejia is on a state visit to Spain, said that
differences should be handled by diplomatic means. The GODR
Foreign Ministry confirmed that the Dominican ambassador will
remain in Caracas.


9. (SBU) Comment. Although relations between the Dominican
Republic and Venezuela may be strained for the moment, they
provide more fuel for press speculation than cause for
concern. The suspension of oil shipments will have little
effect on the Dominican economy. The government has assured
the people that the country has dependable access to oil from
other sources. Chavez is chasing demons for domestic
political advantage; while those demons exist, few them are
resident in the Dominican Republic. End Comment.
HERTELL