CONCERN GROWING OVER GOVERNMENT'S CAMPAIGN RULES

C O N F I D E N T I A L SANTO DOMINGO 000418

SIPDIS

SIPDIS

STATE FOR WHA/CAR

E.O. 12958: DECL: 03/27/2028
TAGS: PGOV PHUM KDEM DR
SUBJECT: CONCERN GROWING OVER GOVERNMENT'S CAMPAIGN RULES
VIOLATIONS


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


1. (C) Summary: On March 24, the Government and ruling PLD
party suffered a setback when a Central Elections Board (JCE)
decision found that a special government payroll existed to
pay party members who did no work, and ordered that the
practice be ceased. The ruling follows a damning report by a
local election observing NGO, which cited a number of ways in
which government spending is used to favor incumbent
presidential candidate Leonel Fernandez. The visiting chief
of the OAS's Electoral Observation Mission (EOM) spent most
of a recent meeting with the diplomatic corps discussing
inappropriate government spending, and said that the EOM was
considering issuing a preliminary report to comment on this
important issue. The U.S., OAS, and others who will be asked
to comment on the fairness of the election face a challenge
in quantifying the effect of the government's unfair actions,
while not inviting an inappropriate response by the
opposition. End summary.

Special Payroll Revealed
--------------


2. (SBU) In reports broadcast on March 8 and 15 on the Color
Vision channel, respected investigative reporter Nuria Piera
revealed the existence, since 2005, of the so-called "Special
Payroll CB." The payments, which are not available to the
public at-large, are made to members of the Committee of the
Base (CB),which is the PLD party's organization at the
village and neighborhood level. CB members, which number 1.2
million, receive US$90-120 monthly directly from a variety of
government ministries by simply presenting a letter from the
party stating that they are unemployed. Piera reported that
from four government agencies alone, the cost to the
government of supporting PLD party officials was US$1.95
million per month. In dramatic footage, Piera showed CB
members admitting that they receive monthly payments and
being unable to explain the location where they performed
work for the government in return for their salaries.


3. (C) The Government's initial response was that those
receiving special salaries constitute a pool of workers that
can be called upon for periodic tasks such as clean up after
natural disasters; however, this explanation was received
poorly here. The respected democracy and governance NGO
Participacion Ciudadana described the Government's response
as "unacceptable," given that, to receive their salaries, CB
members simply have to present a letter from the party. The
NGO termed the special payroll a "clear and illicit use of
state resources to benefit a political party," and called on
the JCE to withhold delivery of the PLD's public campaign
financing until the special payroll issue was resolved.


4. (U) Predictably, opposition presidential candidate Miguel
Vargas Maldonado, of the PRD party, was scathing in his
reaction to Piera's reports. Vargas linked the issue to tax
increases during the Fernandez Administration, saying, "Now
we know what the destination of these (taxes) was. They take
it from companies, the people, and consumers and engross
themselves on the clientalism of re-election."

JCE Rules Against Government
--------------


5. (U) On March 24, the JCE issued its ruling, which read in
part:

-- "Considering that the information received by the
Administrative Chamber (of the JCE) revealed that since 2005
several public institutions have been paying a series of
payrolls to benefit an appreciable number of persons; and
that these salaries are different and independent from the
payroll destined for the payment of regular services carried
out by officials and public employees of these (same)
institutions;

-- "Considering that (this payroll could give) a benefit
favoring one of the candidates, it is necessary to adopt a

cautionary measure for the good of the electoral process and
the equality of party competition;"

-- "(The JCE) rules for the immediate cessation of the
payment of the payrolls that do not comprise the salaries and
remunerations for regular services by officials and public
employees of (six Government agencies) and any other state
institution making these payments...."

-- "Orders that the National Treasury, Controller of the
Republic, and Reserve Bank of the Dominican Republic take all
measures necessary, in coordination with officials from the
relevant agencies, to implement the measures indicated."


6. (C) On March 25, the PLD's Secretary-General, Reinaldo
Pared Perez, responded to the JCE ruling by arguing that, "It
is not certain that a 'Special Payroll CB' exists." This
Orwellian denial was followed, on March 26, by a statement by
the President's judicial adviser, Cesar Pina Toribio, who
said that the Government would observe the JCE's decision.
Pina added that the Government regretted that party members
would be denied these funds "as a consequence of a political,
foolish, and insolent attitude," without elaborating on
whether he was referring to the JCE, opposition parties, or
both.


7. (U) The Archbishop of Santiago, Monsignor de la Rosa y
Carpio, congratulated the JCE on its ruling "because in all
administrations (including those led by the PRD and PRSC)
so-called ghost workers have existed, those which are now
called 'special payrolls.'" An editorial in Listin Diario, a
leading daily newspaper, praised the JCE decision as "correct
and no doubt very important at this time," but warned that
the JCE must "offer guarantees to the people that this
resolution will be effective and complied with rigorously."

Additional Reports of Government Rules Violations
-------------- --------------


8. (SBU) The JCE's ruling follows a damning report by
Participacion Ciudadana, which cited a number of ways in
which government spending is used to favor President
Fernandez's campaign. The report noted that the same abuses
are being committed by opposition-controlled municipal
governments, but added that the scope of the violations are
vastly greater by the central government given the
concentration of resources in the presidency.


9. (SBU) The March 3 publication is Participacion Ciudadana's
"First Electoral Observation Report" and is part of a major
USAID grant for the NGO's election watchdog work. According
to the report, which was published before the story of the
Special Payroll CB broke:

-- "The most negative aspect of the electoral process to
date... has been the very excessive use of state resources,
including the incorporation into (Fernandez's) re-election
campaign of nearly all of the Government."

-- "Thirteen of the sixteen cabinet ministers are integrated
into the Campaign Command of the PLD (as are other government
officials).... It should be noted that many of these
officials are directing provincial campaigns, which requires
them to frequently travel (accompanied by numerous
assistants) with vehicles, gasoline, and per diems paid with
public resources."

-- "In many cases it is striking that assignments of PLD
officers in the political campaign coincide with their
government functions. For example, the director of the
Office of Metropolitan Bus Services is in charge of
transportation for the campaign, and in many cases campaign
and official functions are confused."

-- "The use of public resources for publicity that has a
clear electoral style is particularly relevant (to our
concerns).... The Government's spending on publicity has
increased to (US$5.5 million monthly).... The vast majority

of (these advertisements) do not consist of education
campaigns, nor do they seek to prevent illnesses or mitigate
natural disasters. Rather they consist of political
propaganda, accompanied by party slogans."

-- "To the government spending on publicity must be added the
hundreds of journalists (and their crews) incorporated into
the Government's payroll.... This has contributed to the
creation of (an openly pro-Fernandez group) "Journalists'
Network with Leonel," (which has at least) 600 members."

-- "Trucks from the Social Plan of the Presidency follow the
itineraries of the presidential candidate and distribute
large amounts of food, medicine, appliances, and construction
materials."

OAS Observers Consider Options
--------------


10. (C) On March 26, the chief of the visiting OAS Electoral
Observation Mission (EOM),Argentinean diplomat Jose Octavio
Bordon, briefed the Ambassador and other members of the
diplomatic corps. Bordon said that, based on meetings with
the PRD and civil society (he emphasized that he had not yet
met with the PLD),a consensus existed that the JCE is doing
a commendable job in organizing the election and that there
is high confidence in the vote count on election day.
However, Bordon noted, the PRD and civil society also both
expressed serious concerns about government spending being
used to favor Fernandez's candidacy. Bordon spent most his
meeting with the diplomatic corps discussing this issue,
lamenting that better legislation did not exist to
differentiate government spending from campaign outlays. He
said that the EOM was considering issuing a preliminary
electoral observation report, i.e. before the election, to
comment on this important issue.

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


11. (C) The issue of government spending favoring Fernandez's
candidacy has shifted in the past two weeks, from being a
concern raised primarily by opposition parties to one which
is now front and center in the minds of the OAS, JCE, and
important civil society organizations here. The U.S., OAS,
and others who will be asked to comment on the fairness of
the election face a challenge in quantifying the effect of
the government's actions. On the one hand, the government's
unfair actions clearly will have some effect on the final
vote count; on the other, similar abuses were committed by
the PRD in 2004 and the will of people nevertheless prevailed
and the incumbent party was defeated. We will also need to
be careful that any criticism of the electoral process not
invite an inappropriate response by the opposition. Finally,
our interests go beyond determining the fairness of this
election: We should also help correct weaknesses that
threatened the health of the democratic system here. The
JCE's ruling, and the Government's eventual acceptance of it,
was a sign of improved institutional strength; however,
follow-through will be important.


12. (C) If Fernandez wins the election by 10-15 percent, as
current polls suggest, then he will likely emerge with an
adequate mandate despite the stain of the JCE's ruling.
However, the President's carefully cultivated image as a
reformer has taken a strong hit. And there are more chapters
yet to be written in this story: The JCE will soon rule on a
broader complaint of inappropriate government spending, one
which will consider many of the irregularities cited in
Participacion Ciudadana's report.

(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