DOMINICAN TRANSITION #7: CONGRESS CONTINUES,

UNCLAS SECTION 01 OF 03 SANTO DOMINGO 004087

SIPDIS

SENSITIVE

STATE FOR WHA/CAR AND WHA
NSC FOR SHANNON AND MADISON
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; SOUTHCOM ALSO FOR POLAD

E.O. 12958: N/A
TAGS: PGOV PREL EFIN DR
SUBJECT: DOMINICAN TRANSITION #7: CONGRESS CONTINUES,
DESPITE DISARRAY

REF: SANTO DOMINGO 3358


1. (SBU) This no. 7 in our series on the transition to a new
presidential administration in the Dominican Republic:

CONGRESS CONTINUES, DESPITE DISARRAY

When President-elect Leonel Fernandez (PLD) takes office
August 16, the present National Congress will be only halfway
through its four-year term. The PRD -- although no longer the
ruling party -- will continue to dominate both houses of
Congress, with 29 of 32 senators and the largest block in the
Chamber of Deputies (72 of 150; compared with the PLD's 42
and the PRSC's 36).

Will Fernandez and the PLD secure enough cooperation from
rivals in Congress to pass urgently needed legislation,
including especially the IMF-mandated fiscal reform package
delivered July 12 to the Senate?

The short answer from PLD contacts: "We had a slimmer
representation in a PRD-dominated Congress from 1998-2000
than now, and we succeeded in passing legislation." For
those two years the PLD had a single senator and 12
representatives; now they have a single senator and 42
representatives.

The short answer from the PRD: "The country is in an economic
crisis, and we will put aside partisan bickering and work
together to forge consensus on fiscal reform and other
measures that are in the national interest."

Prospects for passing the tax reform package before July 27
adjournment are moderately good. At lunch with Treasury Under
Secretary John Taylor on July 10, Congressional leaders

SIPDIS
declined to make that promise, but they did expect to
complete a full round of hearings this session.

Beyond that single piece of vital legislation, prospects are
much less certain. Congressional cooperation with the
executive will depend on house leaders to be chosen August 16
for the next year. House of Representatives president
Alfredo Pacheco (PRD) is unchallenged for a second term and
has the support of all three major parties. He is a
respected, thoughtful, and effective negotiator. The
situation in the Senate is more contentious. Current
president Jesus "Chu" Vasquez (PRD),although well regarded
in civil society for enhancing transparency, has lost the
support of 20 of the 29 PRD senators -- enough to remove him
as presiding officer on August 16. He is likely to be
replaced.

Vasquez's PRD colleagues were "irritated" by his sensible,
non-partisan handling of the "ley de lemas" proposal in
February, when the PRD tried to alter the electoral law in
support of President Mejia's re-election bid. According to a
PRD congressman, the Senators also disliked Vasquez's
receptiveness to an audit of the GODR's accounting court
("Camara de Cuentas") following revelations in May by another
PRD senator of irregularities in the court's administration.
In June a majority of PRD senators voted down the audit. The
court has received IDB assistance since 2001 to reform and
modernize its procedures.

Vasquez's successor will be 2001-2003 Senate president Andres
Bautista, who now chairs the Senate trade committee.
Bautista has a record of cooperation with the Embassy and is
close to Mejia. He was the only senator to attend the July
10 lunch with Under Secretary Taylor, since most were on a
trip to Taiwan. Bautista's experience and prominence will be
an asset in negotiations with the new PLD administration on
its legislative proposals. Even so, Bautista has a
reputation among some PRD lawmakers as being very responsive
to Mejia and his PPH faction. The common wisdom is that
Mejia designated Bautista so as to reinforce his own
influence in preparation to oppose Fernandez. For now, most
PRD senators appear ready to continue taking orders from
Mejia.
Forging consensus on Fernandez's proposals will depend on the
dynamics of "cohabitation" -- and the dynamics between the
PRD and PRSC, both in opposition. Discipline could falter
among PRD and PRSC legislators as their parties regroup from
their poor showing in the presidential election. When the
PRD tried to choose its next whip (vocero) in the Chamber of
Deputies July 7, one-fourth of the party's representatives --
including three other contenders for the job -- were absent.
The PRD convention in November will provide the first full
test for Mejia. Current Vice President Milagros Ortiz-Bosch
heads the convention organizing committee; unsuccessful
vice-presidential candidate Rafael "Fello" Subervi (PRD)
leads the GODR's transition team. In his banishment,
outspokenly anti-reelectionist former PRD president Hatuey De
Camps retains some influence and media visibility. All will
try to loosen the grip of Mejia and his PPH faction.

The PRSC is coming apart. Reformistas who defected to
support Fernandez include former Dominican vice presidents
Jacinto Peynado and Carlos Morales Troncoso and former chief
executive Donald Reid Cabral. In early July they published a
"communique to the nation" signed by the "Provisional
Presidential Council" denouncing the current PRSC leaders as
out of touch with the voters and the times. They expressed
their desire to present "specific proposals to ensure the
frequent renewal of PRSC leadership" and "development of a
modern democratic party." They praised Fernandez for his
campaign promise to form "a government of national unity."

Other senior Reformistas including legislators and the
Estrella group held a "day of unity and reflection" June 27,
and some proposed a party assembly to select new leaders. On
July 9 the PRSC Executive Committee postponed the assembly
until sometime after August 16, on the excuse of reorganizing
before selecting delegates. No one knows how many would show
up at an assembly -- an existing outdated list shows several
thousand. No response to the defectors has been agreed.
Veteran party president Rafael Bello Andino, amid a crescendo
of criticism of his ineffectiveness, resigned July 11 -- but
by a vote of 17 to 11, the Executive Committee refused to
accept his resignation. For now, Reformista legislators are
a leaderless lot.


2. (U) Drafted by Bainbridge Cowell.


3. (U) This report and others in our election and transition
series can be read on the SIPRNET at
http://www.state.sgov.gov/p/wha/santodomingo/ index.cfm along
with extensive other current material.a
HERTELL