RULE OF LAW ROUND-UP MARCH 2009

C O N F I D E N T I A L SANTO DOMINGO 000308 SIPDIS STATE FOR WHA/CAR E.O. 12958: DECL: 03/08/2019 TAGS: PGOV KCOR KJUS ECON SNAR DR SUBJECT: RULE OF LAW ROUND-UP MARCH 2009 REF: A. 08 SDO 1959 ¶B. SDO 234 ¶C. 08 SDO 1513 Classified By: Roland W. Bullen, Charge d'Affaires, Reasons 1.4(b),(d) This is the second in a series of cables (ref A) summarizing developments in the rule of law field. In this edition of the round-up: 1-2. Officials Sacked ¶3. Fake Pharmaceutical Drugs ¶4. Got Milk? Parmalat Robbery ¶5. President Critiques Political Parties ¶6. Another Bank Fraud Case Conviction ¶7. Court of Accounts ¶8. Paya (Bani) Massacre ¶9. Quirino Case -- Officials Sacked: ¶1. (U) Following an Independence Day (Feb 27) speech in which President Fernandez called for fighting "without fear" against corruption and narco-trafficking, the head of the National Police, Guillermo Guzman Fermin recommended to the President that some 700 other officers be sacked. In the last 18 months, Guzman has let go over 1,100 police for indiscipline, corruption, or ties to narco-traffickers. Some were also simply allowed to "retire." All police personnel in Bonao and Puerto Plata were reportedly fired or transferred recently for alleged links to narco-trafficking. ¶2. (C) Comment: These actions come in the wake of several visa revocations by Post (ref B). At this time, it is unclear just what the criteria were for the removal of many of the officers. While thirty-one generals from the armed forces and National Police were also let go, the MinDef later said that their retirement was unrelated to the cleansing or "depuracion" of security forces. End Comment. -- Fake Pharmaceutical Drugs: ¶3. (U) Media reports in February said that several people died of tetanus after having been administered an ineffective drug called "Cloferin." Shortly thereafter health authorities closed two companies that distributed drugs allegedly involved in the scandal. While these two companies were in Santo Domingo, the closing of other "underground medical laboratories" in the town of Moca led to disturbances. Authorities reportedly burned fake or falsified medicines seized in Moca, La Romana, San Pedro de Macoris and Santiago. So far, it does not appear that anyone has been charged with any crime in connection with these developments. -- Got Milk? Parmalat Robbery: ¶4. (U) Several persons invaded the headquarters of dairy firm Parmalat in Santo Domingo and stole some 4 million pesos (over USD 112,000). Allegedly, the four robbers wore National Drug Control Directorate (DNCD) uniforms. A number of arrests have been made, and the National Police have variously said that seven or twelve others are implicated in the robbery. The alleged leader of the group, Jose Luis Vargas Cuello, was a major in the Air Force and media speculate that other members of that service are involved. -- President Critiques Political Parties ¶5. (U) In mid-February, President Leonel Fernandez gave an interview to the local newspaper El Caribe in which he declared that the "worst (thing) that can happen to a political party is corruption" and that it is necessary to have better controls over campaign financing. He also said that political parties in the Dominican Republic focus more on gaining power than on ideology, something that Post has also reported (ref C). Despite the existence of corruption in democratic systems, Fernandez noted that people prefer them to autocratic rule. He added that people will seek to improve their social standing through involvement in politics so long as other economic opportunities are limited. -- Another Bank Fraud Case Conviction: ¶6. (U) On March 6, the National District Court of Santo Domingo imposed a 10-year jail sentence on Pedro Martin Castillo Lefeld, ex-president of the Banco del Progreso for fraud - totaling some USD 400 million - and money laundering committed during Castillo's tenure at the bank (1999-2005). The court also ordered the former banker to pay approximately USD 340 million in fines and restitution. In November 2008, the 11th Circuit Court in Miami ordered Castillo to pay USD 79.6 million to Banco del Progresso. Previously Reported Cases (Updates) -------------- -- Court of Accounts (Camara de Cuentas): ¶7. (SBU) The Christmas bonuses that the Chamber of Accounts - the body charged with overseeing the use of public finances - had awarded themselves were returned, even though members insisted that they had the right to receive the bonuses. Separately, a study of the institution identified areas for the improvement of its procedures, human resources management and structures. Over 250 findings or recommendations were made. The results underscored the challenge the Camara de Cuentas faces to improve its legitimacy and image, as well as to become effective in the fight against corruption and mismanagement. -- Paya (Bani) Massacre: ¶8. (SBU) The investigation phase of this case is reportedly coming to an end. The commander of the Navy, ADM Julio Ventura Bayonet, was removed from office on February 27, no doubt partly as a result of the implication of Navy officers in the Paya case. A number of people are under arrest for murder and narcotrafficking. -- Quirino (Asset Forfeiture) case: ¶9. (SBU) As noted in reftel A, some USD 14.5 million in assets were seized in connection with this case. These funds were supposed to be distributed according to Dominican Law 72-02 (ref A). However, the assets were turned over to the Dominican Attorney General's Office by the Santo Domingo District Attorney, which has led to a series of ongoing discussions among DR agencies regarding the final disposition of the monies. Final Observations -------------- ¶10. (C) Comment: The return by the Court of Accounts of its self-authorized Christmas bonuses, as well as the conviction of a powerful banker are signs that public pressure and legal efforts can now sometimes produce results. The failure to allocate the assets seized in the Quirino case according to the law seems to reflect a culture permissive of excessive discretion in some quarters. This is why the final outcome over constitutional reforms affecting the judiciary (septels) will be so important: Only an independent, largely uncorrupt judiciary is likely to serve as effective check on executive power, until or unless the legislative branch is someday strengthened. End Comment. BULLEN