AMBASSADOR'S MEETING WITH PRESIDENTIAL CANDIDATE

C O N F I D E N T I A L SANTO DOMINGO 000124

SIPDIS

SIPDIS

STATE FOR WHA/CAR

E.O. 12958: DECL: 01/23/2018
TAGS: PGOV ECON ENRG VE DR
SUBJECT: AMBASSADOR'S MEETING WITH PRESIDENTIAL CANDIDATE
VARGAS MALDONADO

REF: A. 07 SD 0233 (VARGAS WINS NOMINATION)


B. 07 SD 0329 (VARGAS' POLITICAL DIRECTOR)

C. 07 SD 0347 (PRESIDENTIAL PRIMARIES)

D. 07 SD 0348 (VARGAS FOREIGN POLICY)

E. 07 SD 0590 (FERNANDEZ TO RUN)

F. 07 SD 0685 (FERNANDEZ DEFENDS RE-ELECTION)

G. 07 SD 0846 (PLD DIVIDED)

H. 07 SD 1017 (VARGAS WITH DIPLOMATIC CORPS)

I. 07 SD 1078 (FERNANDEZ WINS PRIMARY)

J. 07 SD 1501 (ARISTY WINS PRIMARY)

K. 07 SD 1691 (CAMPAIGN TEAMS)

L. 07 SD 1710 (ESTRELLA LEAVES PRSC)

M. 07 SD 2143 (CENTRAL ELECTIONS BOARD)

N. 07 SD 2366 (ANALYTICAL OVERVIEW)

O. 07 SD 2568 (VARGAS WITH POLOFFS)

P. SD 0039 (RHETORIC HEATS UP)

Q. SD 0090 (VIEW FROM SANTIAGO)

Classified By: Ambassador P. Robert Fannin, Reasons 1.4(b),(d)

Summary
--------------


1. (C) In his January 16 meeting with the Ambassador, PRD
party presidential candidate Miguel Vargas Maldonado
expressed concerns regarding the fairness of the election
process; warned of possible Venezuelan support for his
opponent; cited the importance of election observation; and
explained his proposed electricity policy. The Ambassador
expressed our interest in a free and fair election and
offered to assist with Vargas' upcoming visit to Washington.

Introduction
--------------


2. (U) Vargas Maldonado was joined by Orlando Jorge Mera, the
PRD's Secretary-General; Peggy Cabral, the party's
international relations director; Carlos Guzman,
international relations officer; Hugo Rivera, economic
director; and Jose Joaquin Puello, a medical doctor working
on the campaign.


3. (C) The Ambassador said that we maintain close contact
with all political parties, noted that U.S.-Dominican
relations were good during the PRD administration of
President Hipolito Mejia (2000-2004),and cited the DR-CAFTA
treaty as a noteworthy success during Mejia's term in office.
Vargas replied that, once in office, he would seek close
relations with the U.S., which is the most important country
to the Dominican Republic. To cite just one example, the
candidate said, remittances from Dominicans in the U.S. are
now greater than income from the tourism sector.

Election Concerns
--------------


4. (C) Vargas discussed the PRD primary process, saying that
the ordered and transparent vote marks a "before and after"
in the Dominican party system. His large margin of victory
has helped consolidate PRD supporters for the general
election, something which cannot be said of the rival PLD
party. The candidate said that his campaign's polls show him
4 percent ahead of Fernandez, which matches the recent CID
Latinamerica survey. Vargas said that other polls, which
show the President ahead by 10-15 points, are simply PLD
propaganda. This data should not be trusted, considering
that the same firms predicted Fernandez would win 92 percent
in the PLD primary and in the end he only received 72 percent.


5. (C) Vargas listed a series of concerns regarding the
fairness of the election process, first and foremost the use
of government resources to favor the incumbent, President
Fernandez. Second, comments by senior PLD official Franklin
Almeyda, who is also Minister of Interior and Police, about
voter rolls and party affiliation can be considered a threat
against PRD supporters. Third, Vargas alleged that
"countries in the Caribbean region" may support the PLD
candidate, as happened during the 2004 election. Finally,

the PRD is concerned about the government's handling of the
funds generated by Venezuela's Petrocaribe financing program
for petroleum imports.


6. (SBU) Vargas said that because of these concerns,
international electoral observation was important. The
Dominican Central Elections Board (JCE) cannot handle this
task on its own, partly because the government has not
provided it with a sufficient budget. The key point is that
observation should be carried out not only on election day,
but also in the weeks prior to the May 16 vote. Jorge added
that the PRD wanted the JCE to send its invitations to
observers as soon as possible, and asked that the U.S. to
encourage the JCE to do so. The Ambassador expressed our
interest in a free and fair election and assured Vargas that
we would do all that we can to ensure that the vote is judged
as such. (Note: The press reported January 23 that the JCE
has sent the invitations.)

Economic Issues
--------------


7. (SBU) The Ambassador asked Vargas what his proposals were
for addressing the country's electricity problem. Vargas
described the sector as "very complicated," and said that it
needed vertical integration in generation, transmission,
distribution, and sales. A more coherent system would put
the private sector in charge of running the system. Some
contracts with foreign firms will need to be renegotiated,
while at the same time respecting the rights of investors.
With only 50 percent of electricity bills being collected,
the government must do more to enforce the new law
criminalizing the theft of electrical power.


8. (SBU) Regarding the government's possible purchase of
Shell Oil's stake in the country's only petroleum refinery,
Vargas said that the "government has not yet revealed its
real intentions" and expressed concern that the purchase
would put the Dominicans in a "dependent position." (Note:
The government's rationale for the purchase of the refinery
is to increase oil imports under Petrocaribe, which will
amplify the Dominican Republic's dependence on Venezuelan
energy -- at the expense more diversified sources of supply.)
Vargas also commented on the importance of the Dominican
Republic maintaining its IMF program, particularly during the
election when the government may "fritter away" state funds.

Washington Visit
--------------


9. (SBU) Vargas described his upcoming trip to Washington,
where he will attend an event at the Inter-American Dialogue
and meet with, among others, WHA A/S Shannon, other USG
officials, and the Dominican community. The Ambassador said
that he wanted Vargas to have a successful visit and offered
to provide whatever assistance we could to facilitate the
travel.

Comment
--------------


10. (C) The PRD's allegations regarding the fairness of the
election process have become one of their central campaign
themes in a race which has seen little discussion of concrete
policy proposals. Nevertheless, some of the PRD's concerns
have merit, and we will be interested to see electoral
observers' comments on the use of government resources to
favor the incumbent. We understood Vargas' comment about the
possibility of "countries in the Caribbean region" supporting
the PLD to be a reference to Venezuela; however, we have no
information indicating that any such support has been
provided. Regarding the PRD's concern about the government's
handling of the funds generated by Petrocaribe, Vargas'
comments match those of other, more independent commentators.

(U) This report and additional information can be found on
Embassy Santo Domingo's SIPRNET site,
http://www.state.sgov.gov/p/wha/santodomingo/

FANNIN