DOMINICAN ELECTION SERIES #49: LEONEL FERNANDEZ --

C O N F I D E N T I A L SECTION 01 OF 05 SANTO DOMINGO 002933

SIPDIS

DEPARTMENT FOR WHA 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 FOR POLAD

E.O. 12958: DECL: 05/14/2014
TAGS: PGOV PINR DR
SUBJECT: DOMINICAN ELECTION SERIES #49: LEONEL FERNANDEZ --
THE ONCE AND FUTURE PRESIDENT?


Classified By: DCM Lisa Kubiske. Reason: 1.5 (b) and (d).


1. (SBU) This is cable #49 in our series on the Dominican
presidential elections.

FERNANDEZ: THE ONCE AND FUTURE PRESIDENT?

(SBU) Lawyer turned politician, Leonel Fernandez once reigned
over the small island nation of the Dominican Republic.
Times were good - tourism and exports were up, the currency
was stable, and the country achieved unmatched economic
growth, up to 8 percent annually. Fernandez owed his victory
to unexpected support from outgoing President Joaquim
Balaguer, but despite that twist in politics, he helped his
small nation gain international stature, while pulling away
from its dictatorial past toward institutionalized democracy.
Although this bright picture was clouded by allegations of
corruption within his administration and a problematic,
unpopular partial privatization of the electricity sector,
most Dominicans recall Fernandez as the leader of prosperity
and stability.

Constitutions and Foundations

(SBU) The constitutional changes negotiated following the
flawed 1994 elections opened the way for Fernandez's
candidacy by truncating Balaguer's term to two years, but
they also instituted a ban on presidential re-election.
Approaching the end of his term, Fernandez turned to private
sector supporters to propose the establishment of a "think
tank" for the Dominican Republic. Donors responded
generously, providing an endowment, a downtown lot,
construction services and donations that allowed the "Global
Foundation for Democracy and Development" (FUNGLODE) rapidly
to become a busy, credible, U.S.-style institution in a
modern four-story building with a fully furnished research
library, auditorium, publications, a program of seminars and
conferences, and formal links to universities (Columbia,
Rutgers, Drexel) and institutions (the Smithsonian, Microsoft
Corporation). Fernandez, as president, has had four years on
international conference circuits.

(U) FUNGLODE's mission statement could serve equally well as
Fernandez's conceptual approach to government and
campaigning; as a private, non-profit organization it is
"dedicated to formulating strategic and conjuncture related
innovative proposals on relevant issues of national interest,
enhancing the quality of the national debate, and devising
public policies crucial to the Dominican Republic's good
governance and socioeconomic development." There is a close
association between the PLD and FUNGLODE, but the foundation
has its own identity (see www.funglode.org). FUNGLODE
executive director Temistocles Montas was Technical Secretary
to the Fernandez presidency and is a senior PLD advisor to
Fernandez; economic director Frederic Emam-Zade served as
Under Secretary at the Fernandez Foreign Ministry.

The Rational Man

(C) Fernandez is a reader and a thinker, though not
necessarily an original or deep thinker. His conceptual style
is that of problem solver, an approach that retains the
historical social concern of the PLD without the anti-market
rhetoric of Juan Bosch. In January he had FUNGLODE commission
an economic policy diagnostic from the Economist Intelligence
Unit; in April the PLD published a 150-page party platform
long on concern, lofty in ambition and relatively short on
specifics.

(C) Fernandez's soft-spoken, cerebral style contrasts
markedly with the brash tendencies of his leading rival,
incumbent President Hipolito Mejia. Mejia has leveled a
number of personal attacks against Fernandez, emphasizing
legal retainer payments received from the spectacularly
corrupt Baninter. Fernandez does not deny receiving these;
and FUNGLODE staff acknowledge that Baninter pledged the
revenue from identified financial assets to the endowment --
a gift that disappeared when Baninter collapsed. None of
these charges has been particularly damaging, probably
because Baninter president Ramon Baez Figueroa gave funds to
individuals, officials, causes, and charities across the full
political spectrum.

Concerning the United States and the Region

(SBU) His relations with the United States were generally
good during his 1996-2000 term, and Fernandez has promised to
pursue strong cooperation with the U.S. Government if elected
to serve a second term. In mid-March 2004 a senior PLD
delegation met with NSC and State Department staff to deliver
an aide-memoire confirming PLD interest in good relations,
including support for the free trade agreement then in
negotiation, for law enforcement cooperation, and for
anti-terrorism efforts.

(C) The PLD platform advocates closer ties with other
Caribbean nations for regional and trade issues. As
president, Fernandez recognized Cuba in 1998. Fidel Castro
later visited the Dominican Republic and Fernandez gave him a
decoration in a state ceremony. Fernandez's PRD adversaries
seek to trade on the Cuba decision; they assert to their
followers that Fernandez now owns a hotel in Cuba (the logic
is lacking, but the smear is evident). Fernandez is pragmatic
on Cuba -- when the United States was seeking to persuade
Mejia to support the Cuba resolution at the UN Commission on
Human Rights in April, 2004, the Ambassador sought and
obtained Fernandez's assurance that he would not speak out
against a Dominican Republic vote against Cuba. Mejia's
reluctant vote provided the margin of victory, and Fernandez
kept his word, never mentioning the subject.

(SBU) Fernandez is on good terms with President Chavez of
Venezuela, in part because as FUNGLODE president he served as
the mediator who traveled to Caracas to negotiate the
engagement of the Carter Center in Venezuela's polarized
politics. U.S. authorities saw this as a positive example of
Dominican engagement in the region.

(U) The Fernandez administration revised procedures in 1998
so as to make possible the extradition to the United States
of Dominicans and other nationals. Several fugitives were
delivered under these provisions, although some extradition
requests were denied.

(C) The Ambassador is acquainted with Fernandez from the
1996-2000 presidency and has met periodically with him in
formal and informal settings, one-on-one and in groups. The
relationship has warmed considerably over time. At the
Ambassador's private lunch for Fernandez and senior aids on
April 13, Fernandez said he would be happy to "vet" with the
Embassy any prospective appointees for sensitive positions.
He confirmed his intention to support the free trade
agreement and to work to implement it. At about the same
time, he commented publicly that a Fernandez administration
would honor Dominican commitments to the United States
concerning support for the effort in Iraq (later,
unfortunately, Mejia withdraw the troops).

The March Back
(SBU) The PLD's candidate for the presidency in 2000, Danilo
Medina, placed a weak third, leaving the way clear for
Fernandez to reassume control of the party. The
deterioration of the Dominican economy in 2002-2003, due both
to externalities and to errors by the Mejia administration,
made Fernandez look golden. An easy winner in the PLD party
selection process, Fernandez has enjoyed poll numbers near 60
percent since October of 2003. On looming purple and yellow
billboards across the country, his smiling face promises
Dominican voters a "return to progress" if he is elected on
May 16th. (Mejia's slogan in weak response in the later
campaign has been "Let's Work Together to Get to the Good
Times.") The numbers have diminished slightly, but reputable
firms estimate Fernandez's support around 55 percent of the
electorate.

(U) With 71 percent of Dominicans believing the country is in
worse shape now then it was when Fernandez left office in
2000 and about the same number declaring outright rejection
of Mejia, PLD faithful are predicting a first-round victory.
Some observers worry that PLD members' triumphalism now may
lead to violence if results declared by the Central Electoral
Board (JCE) do not immediately and obviously favor Fernandez.

(C) Fernandez and senior supporters are worried about the
possibility of fraud and concerned at the aggressive attitude
of Mejia and his faction of the PRD. In early 2004 Fernandez
asked publicly and privately for more extensive international
observation of the elections. At a lunch hosted by the
Ambassador in April, he spent the first 20 minutes of the
encounter on this subject. As with FUNGLODE, he was able to
tap the Dominican private sector -- ten donors associated
with the National Council of Entrepreneurs (CONEP) stumped up
a total of $100,000 and members of a U.S.-based
Dominican-American business group matched that or better.
These donations financed a 25-person electoral observation
team from the International Foundation for Electoral Systems
(IFES),to function independently of the OAS observer mission
supported by the United States, the European Commission and
Canada.

Tough Road Ahead

(SBU) If he is elected, Fernandez will be facing far greater
difficulties than he did in 1996-2000. The Congress in
office until 2006 is dominated by the PRD (with an absolute
majority in the Senate). The IMF program is on continuing
review until at least June, at which time the principal goals
must be renegotiated; any Dominican government will be
carrying out a challenging austerity program over the medium
term. Fernandez has told supporters they'll have to give him
time to set things right, but expectations will be
irrationally high if he is elected.

(C) The PLD has traditionally been a fairly exclusionary
party -- for example, Fernandez gave reformistas virtually no
posts in his government, even though he owed his election in
large part to the support of Balaguer. Many interests would
be clamoring for a place in his administration; among the
first in line will be the senior reformistas who broke
bitterly with Eduardo Estrella to support Fernandez.

(C) Another question, in our opinion,is whether Fernandez
will be tough enough. Mejia has taken decisions, even if
they were at times wrong decisions; as for Fernandez, it's
not yet clear whether Fernandez will cut through the dialogue
and contending interests to impose clear direction and
discipline within his administration. This is particularly a
concern as regards corruption -- a major ill of Dominican
institutions that without forceful action will continue to
poison politics and the economy.
-------------- --------------
Lawyer, politician, intellectual - a brief bio
-------------- --------------

(U) Leonel Fernandez was born in Santo Domingo on December
26, 1953, but moved to New York City in 1956 and attended
elementary and junior high school there. In 1969, he
returned to Santo Domingo for high school and college,
eventually receiving a law degree in 1978 from the Autonomous
University of Santo Domingo (UASD). Fernandez has done
postgraduate work in law at Columbia University and at the
State University of New York. He is the current chairman and
president of the PLD, as well as the founder and president of
the Global Foundation for Democracy and Development
(FUNGLODE).

(SBU) Fernandez entered politics in the early 1970s under the
tutelage of Professor Juan Bosch, long time member of the
Dominican Revolutionary Party (PRD). In the mid-1970's he
left the party with Bosch to establish the leftist Dominican
Liberation Party (PLD). During the 1980s and early 1990s,
Fernandez was the PLD's press secretary, eventually becoming
the party's unsuccessful vice-presidential candidate in 1994.
Fernandez practiced law before running as PLD candidate for
President in 1996 and winning thanks to Balaguer's support.
(Balaguer's move was widely interpreted as against the PRD's
Jose Francisco Pena Gomez rather than for Fernandez.)

(C) During his presidency, Fernandez elevated the
international presence of the Dominican Republic by making
historic official visits to Haiti and to Europe,
participating in international forums and summits, and
concluding free trade agreements with CARICOM and the Central
American nations. His domestic record was more mixed,
however, as strong economic growth and successful
privatization of several unprofitable state enterprises
coincided with an ineffective partial privatization of the
system of regional electricity generators and distribution
companies. For the last two years of his term he faced an
opposition-dominated Congress.

(U) Fernandez speaks native Dominican Spanish, fluent English
and some French.

(U) In 2003, Fernandez married fellow lawyer Margarita
Cedeno, and the two have a daughter, Yolanda. Fernandez has
two other children, Nicole and Omar Leonel, from a previous
marriage that ended in 1995.


2. (U) Drafted by Clare Ribando, Michael Meigs.


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











HERTELL