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