Identifier
Created
Classification
Origin
04SANTODOMINGO2918
2004-05-14 12:55:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Santo Domingo
Cable title:  

DOMINICAN ELECTIONS #47: THE EXPENDITURE COST OF

Tags:  PGOV 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 002918 

SIPDIS

SENSITIVE

STATE FOR WHA AND DRL;NSC FOR SHANNON AND MADISON;
LABOR FOR ILAB; USCINCSO ALSO FOR POLAD;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

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


UNCLAS SECTION 01 OF 02 SANTO DOMINGO 002918

SIPDIS

SENSITIVE

STATE FOR WHA AND DRL;NSC FOR SHANNON AND MADISON;
LABOR FOR ILAB; USCINCSO ALSO FOR POLAD;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

E.O. 12958: N/A
TAGS: PGOV DR
SUBJECT: DOMINICAN ELECTIONS #47: 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 is
being spent is unclear, as is the origin of private
contributions to political parties. But the physical and
audiovisual landscapes of the country have been transformed
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 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 2m) is
divided equally among all registered parties.

--- 75 percent (310 million pesos)(USD 6m) is distributed
according to a formula for the number of votes obtained in
two previous general elections - specifically 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
2.48m),the PLD 83.9 million pesos(USD 1.7m),and the PRSC
81.9 million pesos (USD 1.65m).

The 1997 Elections law stipulates that a party must account
for all of its income and expenditures to receive electoral
funds, but not every party has fulfilled this requirement.
During his earliest call in March OAS observer mission chief
Santiago Murray reminded candidates of the need to document

campaign spending. The 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; 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: nearly 73 million pesos (USD
1.4m) compared to the PLD's 38 million pesos (USD 76,000).
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, including
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 3.1m) on advertising, equivalent to nearly
40 percent of all JCE allotments. From September 2003-
January 2004, the PRD invested almost 56 million pesos (USD
1m) in television ads - followed by the PRSC at 35 million
pesos (USD 700,000) and the PLD at 32 million million(USD
64,000).

In this discussion we neglect entirely party expenditures on
logistics, vehicles, publications, hall rental, publications,
simple handouts and all the other expenses of doing partisan
business. The 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 battallion" 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 SIPRNET site at
http://www.state.sgov.gov/p/wha/santodomingo/ along with
extensive other material.
HERTELL