Identifier
Created
Classification
Origin
04SANTODOMINGO2761
2004-05-07 20:43:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Santo Domingo
Cable title:  

DOMINICAN ELECTIONS #47 (REVISED): THE EXPENDITURE

Tags:  PGOV ECON DR 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 02 SANTO DOMINGO 002761 

SIPDIS

SENSITIVE

STATE FOR WHA, WHA/CAR, WHA/PPC 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 ALSO FOR POLAD

E.O. 12958: N/A
TAGS: PGOV ECON DR
SUBJECT: DOMINICAN ELECTIONS #47 (REVISED): THE EXPENDITURE
COST OF DEMOCRACY


UNCLAS SECTION 01 OF 02 SANTO DOMINGO 002761

SIPDIS

SENSITIVE

STATE FOR WHA, WHA/CAR, WHA/PPC 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 ALSO FOR POLAD

E.O. 12958: N/A
TAGS: PGOV ECON DR
SUBJECT: DOMINICAN ELECTIONS #47 (REVISED): THE EXPENDITURE
COST OF DEMOCRACY



1. (SBU) This is no. 47 in our series on the Dominican
presidential elections:

The Expenditure Cost of Democracy

Dominicans have lived in an increasing tempest of campaign
advertising over the past eight months. Just how much money
is being spent is unclear, as is the origin of private
contributions to political parties. A prominent politician
told us May 6 that total campaign expenditures by his major
party would reach one billion pesos (USD 20 million); he
guessed that the other two big parties were spending
similarly.

Such outlays have transformed the country's physical and
audiovisual landscapes with images of candidates --
principally of the leading three, but also of the minor
hopefuls. In a country with a monthly minimum wage of less
than USD 100, over most of the last year the parties have
lined major highways and urban thoroughfares with large
billboards costing an average of 100,000 pesos (USD 2000) a
month. Prime air-time, currently being consumed in great
amounts, costs 200,000 pesos (USD 4000) an hour. And these
are the costs only of rental of space or time, exclusive of
the conceptual, creative, and marketing services. By any
estimate, spending on ads signficantly exceeds the public
subsidies granted to the parties.

On April 7th, the Central Election Board (JCE) distributed
the government's public sharing funds in the amount of nearly
413 million pesos (USD 8.3 million) for the 23 political
parties. The formula for the distribution of money is
two-fold:

-- 25 percent of the money (103 million pesos)(USD 2.1m) is
divided equally among all registered parties; and

-- 75 percent (310 million pesos)(USD 6.2m) is distributed
according to the relative numbers of votes obtained in the
two previous general elections - in this case, the 2000
presidential election and the 2002 congressional and
municipal elections.

Since the three major parties captured 96 percent of voter
preferences, the PRD received 139.6 million pesos (USD
2.79m),the PLD 83.9 million pesos (USD 1.68m),and the PRSC

81.9 million pesos (USD 1.64m).

The 1997 Electoral Law stipulates that a party must account
for all of its income and expenditures to receive public
funds, but not every party has fulfilled this requirement.
During his visit in March, OAS observer mission chief
Santiago Murray reminded candidates of the need to document
campaign spending. The Central Electoral Board (JCE) appears
to be relatively indulgent concerning accuracy and timeliness
of reporting, leading to persistent inter-party accusations
of fraud, not easily subject to evaluation.

Opponents have maintained that President Mejia has used
government funds for his campaign and advertising; however,
on May 6 the visiting IMF review team told the Ambassador
that government financial records through March do not show
any such diversion. At the same time, none of the parties is
publicly identifying major private contributors or amounts
given. The common wisdom is that most major businesses have
lines of financing and influence to all three big parties.
According to public records for September 2003 - January
2004, Mejia as incumbent president outspent other parties on
pre-campaigning nearly 2 to 1: almost 73 million pesos (USD
1.5m) compared with the PLD's 38 million pesos (USD 780,000).
It is not clear how much of this was devoted to Mejia's
vigorous defense against other PRD rivals, which culminated
only in January.

Private sources of funding include business appeals and
fundraiser events. Parties seek donors primarily in the
Dominican Republic and the United States, especially in
Puerto Rico. For example, during President Mejia's brief
Easter trip to the United States, campaign dinners charged an
average of RD $500,000 (USD 10,000) per plate.

Funds are raised primarily to meet advertising expenses for
radio, television, and print media. Over the past five
months, it is estimated that parties spent at least 159
million pesos(USD 3.2m) on advertising, equivalent to nearly
40 percent of all JCE allotments. From September 2003 to
January 2004, the PRD invested almost 56 million pesos (USD
1.1m) in television ads - followed by the PRSC at 35 million
pesos (USD 700,000) and the PLD at 32 million (USD 640,000).

In this discussion we neglect entirely party expenditures on
logistics, vehicles, publications, hall rental, simple
handouts and all the other expenses of doing partisan
business. The exact costs of the campaigns are essentially
unknown, except to the managers, and given the laxity of
financial accounting in the country, perhaps not even to
them. There is a good deal of ad-hoc fundraising -- for
example, President Mejia reportedly has turned to the Spanish
owner of Air Europa to arrange and contribute return
transportation of the Dominican "Quisqueya battalion" of 302
soldiers. This handsome donation, probably never to be
costed for the accounts, will allow the President to fulfill
his promise of getting the boys back home before the election.

Though one would like to see such large sums - perhaps as
much as USD 20 million spent by each major party -- going
into productive investment rather than rival expenditure,
they do not represent a complete waste. Taken in a time of
economic contraction and inflation, campaign expenditures
have delivered a useful counter-cyclical stimulus with
significant multiplier effects. And, when all is said and
done - and counted - the cost of campaigning is part of the
price of democracy.


2. (U) Drafted by Leticia Cantu, Michael Meigs.


3. (U) This report and others in our series are available on
our SIPNET site at
http://www.state.sgov.gov/p/wha/santodomingo/ along with
extensive other material.
HERTELL