CODEL ENGEL VISIT TO ST. VINCENT HIGHLIGHTS SUMMIT

UNCLAS SECTION 01 OF 03 BRIDGETOWN 000249 SENSITIVE SIPDIS STATE FOR WHA/CAR AND H E.O. 12958: N/A TAGS: PREL EFIN IR XL SUBJECT: CODEL ENGEL VISIT TO ST. VINCENT HIGHLIGHTS SUMMIT OF AMERICAS, SECURITY, TAX HAVENS, KOSOVO, AND IRAN -------------- Summary -------------- ¶1. (SBU) During an April 19-20 visit to St. Vincent and the Grenadines (SVG),a CODEL chaired by New York Congressman Eliot Engel met with Prime Minister Ralph Gonsalves, Foreign Minister Sir Louis Straker, and a host of local dignitaries. The just-concluded Summit of the Americas, new directions in U.S. foreign policy, tax havens, regional security, and Iran headlined the CODEL's conversation with PM Gonsalves. Gonsalves spoke glowingly about the outcome of the Summit of the Americas and apprised the CODEL of his planned trip to Portugal, the Holy See and Tehran. Also during the visit, FM Straker confirmed that St. Vincent had agreed to join ALBA at the meeting hosted by Hugo Chavez in Venezuela prior to the Summit, but assured the CODEL that his country would not participate in any military aspects of the association. End summary. -------------- St. Vincent Hosts CODEL Engel -------------- ¶2. (SBU) Foreign Minister Straker, a college classmate of Congressman Engel, hosted the CODEL, whose other members were Congressman Gregory Meeks and Congresswoman Yvette Clarke. St. Vincent's MFA provided excellent support throughout, and hosted a lunch for the CODEL with Cabinet members and other senior officials. In the course of the visit, The CODEL visited Peace Corps projects targeting youth at risk and seeking to create new employment opportunities, saw the country's showpiece new tourism developments, and were driven through the construction site for the proposed new $220 million airport, which Straker said was slated for completion in 2012. The second day the delegation met the Prime Minister, the Governor General and accepted Straker's personal hospitality at his home, where he proudly displayed several finds from his recent official visit to Iran. -------------- Gonsalves Holds Forth -------------- ¶3. (SBU) On April 20, the CODEL met with PM Gonsalves, who, like the CODEL, had just returned from the Summit of the Americas in Trinidad. Gonsalves expressed satisfaction with the dialogue at and outcome of the Summit, noting that a solid foundation had been laid at the bilateral meetings between CARICOM leaders and President Obama to improve relations and expand cooperation in security, trade, development, migration, and on the issue of tax havens. Gonsalves told the CODEL that, while in Venezuela just prior to the Summit, he had told Hugo Chavez that although U.S. policy toward Cuba had been a failure to date, he sensed a new mood and advised Chavez to give Obama a chance to explore new ground with the Cuban government. The CODEL agreed that Cuba was ripe for change and welcomed Raul Castro's apparent willingness to put a broad range of issues on the table, but Chairman Engel also noted that the Castro regime would need to take some responsible steps to defrost the relationship, notably on human rights. Looking further afield, Gonsalves said the depiction of Nicaragua as the "Soviet and Cuban beachhead in the 1980s" was still fresh in the mind of President Ortega, and expressed concern that the U.S. does not fully grasp the impact of this historical baggage on its relationship with Nicaragua. "It requires time for men to get things out of their system," Gonsalves explained. "It is a catharsis." The CODEL assured Gonsalves that the Administration does understand the history in the hemisphere, adding that President Obama wants to move forward beyond the arguments of the past to bring greater prosperity and security throughout the Hemisphere. ¶4. (SBU) Gonsalves also shared his perspectives on Bolivian President Evo Morales, who, he claimed, personified the whole history of repression of the indigenous people and whose ability to control the pent-up historical frustrations was limited. He described Morales as a leader for whom normal tactical considerations play little role, and who acts on emotions rather than political reason. Chairman Engel noted that Morales' decision to declare our Ambassador persona non BRIDGETOWN 00000249 002 OF 003 grata on charges that were demonstrably false had unfortunately set back relations. Responding to a question from the CODEL, FM Straker confirmed that St. Vincent had joined Hugo Chavez' Bolivian Alternative for the Americas (ALBA),but assured the CODEL that St. Vincent would not be a part of any of the military aspects of the organization. -------------- Tax Havens -------------- ¶5. (SBU) Turning to financial issues, Gonsalves argued that the Caribbean has received a "bad rap" when it comes to the topic of tax havens. By way of illustration, he expanded on the recent case of the Millennium Bank in St. Vincent, which had come under investigation by the SEC and had generated negative headlines about St. Vincent. Acknowledging that the bank may have been a front for a ponzi scheme, Gonsalves maintained that the St. Vincent bank's role was substantially less than the U.S. banks with which it was affiliated. He described how the bank collected funds from customers in the U.S. and then immediately forwarded the funds back to the U.S. for deposit in a U.S. bank. Very little of the money ($4 million) actually stayed in St. Vincent, he noted, but when the news broke that the Millennium bank was coming under investigation, all eyes looked at St. Vincent as the catalyst instead of focusing on the U.S.-based perpetrators of the fraud. Gonsalves pointed out that, while tax havens may be an issue of concern and fairness in the U.S., most of them are closely connected with or run out of the U.S., and that tarring the entire Caribbean offshore financial sector for the illegal acts of a few American criminals or tax evaders was unfair. -------------- Security: "We're Doing You a Favor" -------------- ¶6. (SBU) Turning to regional security, Gonsalves provided his assessment of challenges facing the region, though his comments betrayed a lack of understanding of some current arrangements. Gonsalves averred that the U.S., in its preoccupation with Iraq and Afghanistan, had shifted most of its funds and assets out of the Caribbean. He commented that before the September 11 terrorist attacks, the U.S. supported two C-26 aircraft in the region for drug interdiction and other security purposes, but that the funding had been taken away and the aircraft were just sitting and needed to be mothballed. (COMMENT: This depiction is largely inaccurate. The C-26s, which were donated by the U.S. to Barbados on behalf of the Regional Security System, are still flying with funding coming primarily from Barbados with some new U.S. support from JIATF-S. According to the RSS Coordinator, the primary limitation on the C-26's operational abilities is the failure of St. Vincent, Dominica and Antigua to pay their share of the operating costs. END COMMENT) Gonsalves went on to describe the Regional Security System as very costly, and said he believes Caribbean nations are doing the U.S. a favor by stemming the flow of drugs through the Caribbean. The decision to cut the C-26 aircraft funding, he said, just didn't make sense. -------------- --- CODEL Registers Concern Over Relations with Iran -------------- --- ¶7. (SBU) On the margins of the meetings and discussions, the CODEL registered its concerns with both PM Gonsalves and FM Straker about St. Vincent's recent decision to open diplomatic relations with Iran and the PM's visit to Iran to seek support for his new airport project. Chairman Engel noted Iran's continued defiance of UN resolutions and unwillingness to work with the international community constructively. He also expressed concern about the motives behind Iran's expanding interest in the Caribbean and Latin America. FM Straker acknowledged the risks involved, but said that St. Vincent needed international support if it was to be able to complete its signature airport project, which the government believes is vital to the nation's development. He said the government would welcome U.S. involvement as well. BRIDGETOWN 00000249 003 OF 003 -------------- Recognition of Kosovo -------------- ¶8. (SBU) Chairman Engel also urged the FM and PM to move ahead with recognition of Kosovo. He noted the progress Kosovo had made in meeting goals established by the UN in ensuring minority rights, the strong support of international financial institutions, and the expanding number of states that have recognized Kosovo. Both Gonsalves and Straker took on board the case for recognition and promised to review the issue. -------------- Recapitalization of the IDB -------------- ¶9. (SBU) Congressman Meeks, who chairs the House Sub-Committee on International Monetary Policy and Trade, asked PM Gonsalves how the recapitalization of the IDB would benefit St. Vincent. Gonsalves noted that the cost of subscription for individual OAS countries had made IDB membership prohibitive for St. Vincent, which received funds from the Caribbean Development Bank. Meeks indicated to Gonsalves that the region need to develop a unified approach to its borrowing from the IDB. -------------- Appeal on UNGA Votes -------------- ¶10. (SBU) In side meetings with FM Straker, Chairman Engel appealed to the Foreign minister to re-examine St. VIncent's voting pattern on some key UNGA issues. He urged St. Vincent to move from "yes" to abstaining, or at least absenting form the votes, on The Committee on the Exercise of the Inalienable Rights of the Palestinian People, the Special Committee to Investigate Israeli Human Rights Abuses, and the Division on Palestinian Affairs in the Office of the Secretary General. Straker agreed to look into these issues and to consider a new approach to voting, adding that a visit of OECS foreign ministers to Israel might provide an opportunity for decision makers in the Eastern Caribbean to gain fresh perspective on these issues. -------------- Comment -------------- ¶11. (SBU) Gonsalves was in good spirits following a successful Summit of the Americas, and was clearly looking for ways to engage the U.S. in positive fashion. That said, he is still looking for the U.S. to do most of the work, whether in funding improvements to security, strengthening regulation of banks, or in regard to Cuba. The CODEL's tour of the future airport site revealed a project long on ambition but, so far short on results. A massive engineering exercise will be needed to literally move mountains and fill in valleys just to prepare the ground for development - this on top of the over $100 million already spent to purchase homes and land to relocate families living in the path of this Caribbean Three Gorges Dam equivalent. If the project comes together, we will be in a good position to assist SVG in meeting international standards on airport management and security. ¶12. (U) CODEL Engel has cleared this message. HARDT