VZCZCXYZ0000
OO RUEHWEB

DE RUEHDG #1912/01 1581518
ZNY CCCCC ZZH
O 071518Z JUN 06
FM AMEMBASSY SANTO DOMINGO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5064
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEHMU/AMEMBASSY MANAGUA 0516
RUEHME/AMEMBASSY MEXICO 1061
RUEHZP/AMEMBASSY PANAMA 0677
RUEHPU/AMEMBASSY PORT AU PRINCE 4264
RUEAIIA/CIA WASHINGTON DC
RUCNDT/USMISSION USUN NEW YORK 0071
RHEFDIA/DIA WASHDC
RHEHAAA/WHITEHOUSE WASHDC
RUMISTA/CDR USSOUTHCOM MIAMI FL

C O N F I D E N T I A L SANTO DOMINGO 001912 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR D, WHA, WHA/CAR, WHA/CEN,WHA/EPSC, EB, 
EB/TPP/BTA/EWH, EB/TPP/IPE, EB/ESC/IEC/EPC, INL, INR/IA, 
IO, IO/UNP; DEPT PASS AID/LAC; SOUTHCOM ALSO FOR POLAD 
DEPT, WHITE HOUSE PASS USTR 
 
E.O. 12958: DECL: 06/06/2016 
TAGS: ENRG PREL PGOV KCRM KIPR KUNP HA DR
SUBJECT: DEPUTY SECRETARY,S TOUR D,HORIZON WITH PRESIDENT 
FERNANDEZ JUNE 4 
 
Classified By: AMBASSADOR HANS H. HERTELL FOR REASON: 1.4(b) and (d) 
 
¶1.  (C)  Summary.  Dominican President Fernandez used a 
wide-ranging meeting with the Deputy Secretary June 4 to 
elicit support from within his own implementation team to 
take the steps needed to bring CAFTA-DR into force by August. 
 Urged by the Deputy Secretary to support Guatemala for a 
seat on the UN Security Council, President Fernandez 
explained that his government had been waiting to see how 
support develops; he suggested that the Dominican Republic 
would make a good consensus candidate if one were needed.  On 
Haiti, President Fernandez called President Rene Preval "the 
only potentially effective leader Haiti has" and urged 
international support to ensure Preval demonstrated 
effectiveness before time ran out on him.  President 
Fernandez listened carefully to the Deputy Secretary,s 
description of the importance of the Aleman money laundering 
case and the desirability of Dominican cooperation in the 
lead-up to the November 2006 Nicaraguan elections. In energy, 
President Fernandez described the Mexico-Central American 
Mesoamerica Initiative as being of significant utility for 
Central America, but of more limited benefit to the Dominican 
Republic.  Back in the Dominican Republic, President 
Fernandez said he planned to use his party,s recent 
electoral mandate to build a democracy based on institutions 
rather than personalities and, with the help of the team 
organized by his Technical Secretary, work to bring the 
Dominican Republic up to standard on the objective indicators 
used to guide selection of assistance recipients by the 
Millennium Challenge Corporation (MCC). End summary. 
 
¶2.  (C)  The Deputy Secretary, accompanied by Ambassador 
Hertell, WHA PDAS Shapiro, and staff met June 4 with 
Dominican President Leonel Fernandez in the Presidential 
Palace.  Fernandez was accompanied by the Secretary of 
Industry and Commerce, Francisco Javier Garcia; the Dominican 
Ambassador to Washington, Flavio Dario Espinal, and the head 
of the Dominican implementation team for CAFTA-DR, Vilma 
Arbaje.  The meeting took place on the margins of the OAS 
General Assembly. 
 
-------- 
CAFTA-DR 
-------- 
 
¶3.  (C)  President Fernandez began by noting that the 
Dominican Republic is in the final stages of the effort to 
bring CAFTA-DR into effect in his country and that he hoped 
to have it fully implemented by August.  (Note: When 
Secretary Rice telephoned him on June 3, Fernandez stated 
 
SIPDIS 
that he hoped CAFTA-DR "would be put into force by late July 
or early August." End note. )  At his request, Vilma Arbaje, 
the head of the team working with USTR on implementation, 
briefly presented the Dominican positions on dealer 
protection ("Law 173") and data protection in terms similar 
to the ones used in the May review talks with USTR.  After 
some back and forth, Fernandez concluded that the Dominican 
Republic was making progress on Law 173.  On data protection, 
and after some dialogue in which Arbaje started to argue that 
CAFTA language does not obligate the Dominican Republic to 
protect data, Fernandez elicited an opinion from her that the 
best course of action for the Dominicans was to do in fact 
what CAFTA says and bring Dominicans on board with the 
agreement,s requirements. 
 
¶4.  (C)  The Deputy Secretary then explained his principal 
interest:  getting the agreement put into effect and helping 
the Dominican Republic within the context of the bilateral 
relationship and overall development assistance.  He praised 
Susan Schwab, the President,s nominee to be the next U.S. 
Trade Representative, as a good closer of agreements.  He 
encouraged Fernandez to use the political power earned in the 
May elections quickly to resolve the final issues, including 
in the areas of dealer protection, regulations on patents, 
data protection, and government procurement.  He urged 
Fernandez to find technical experts on data protection who 
understood the requirements and political experts who would 
 
make data protection a reality in the country.  He concluded 
by telling Fernandez that he had been impressed by 
Fernandez, strategic vision that CAFTA was important for the 
country.  Fernandez had been a great partner on CAFTA. 
"Let,s get this done," he urged.  Secretary of Industry and 
Commerce Garcia noted that all sectors now favored CAFTA. 
 
--------------------------------------------- -------------- 
The Guatemala-Venezuela Race for a UN Security Council Seat 
--------------------------------------------- -------------- 
 
¶5.  (C)  The Deputy Secretary highlighted the importance of 
the UN Security Council and of this seat for issues of 
international scope such as Iran.  Think what Venezuela as a 
member of the UN Security Council would do on Iran, for 
example, he urged.  He noted that there was strong support 
from the Central Americans for Guatemala, but less from 
Caricom.  Overall, there wasn,t much doubt that Guatemala 
was ahead, just a question of whether it could garner two 
thirds of the votes required for blocking Venezuela,s bid 
for the UNSC seat. 
 
¶6.  (C)  President Fernandez replied that the Dominican 
Republic was taking a "wait and see" approach on pledging its 
support for the seat.  The country had wanted to run for a 
UNSC seat in 1999, but dropped its bid at the request of 
Mexico, in the interest of bolstering stronger regional 
representation within the Council. It has already indicated 
interest in running next year.  If Guatemala didn,t succeed 
this time round, perhaps the Dominican Republic would be good 
candidate in its place, he offered. (Note: This discussion 
may foreshadow an attempt on the part of the Dominican 
Republic to shore up U.S. support for a future candidacy, in 
exchange for full-fledged support for Guatemala,s current 
bid.  Regardless of this development, IO reports that the 
Dominican Republic has been an active supporter of Guatemala 
in the current UNSC seat race.  End note.) 
 
-------------------------------------------- 
Haiti and Haitians in the Dominican Republic 
-------------------------------------------- 
 
¶7.  (C)  The Deputy Secretary noted that President Fernandez 
had taken important steps in Haiti and invited the 
President,s views on the current situation. 
 
¶8.  (C)  President Fernandez said that with President 
Preval,s election, Haiti has another chance to overcome its 
democratic difficulties.  Preval did well in his first term, 
and he is the only potentially effective leader Haiti has, 
Fernandez thought.  However, time is running out on him, and 
the international community can ) and needs to -- help him 
demonstrate effectiveness. 
 
¶9.  (C) The conversation turned to Haitians in the Dominican 
Republic.  President Fernandez estimated that there were some 
700,000 in the country.  Whereas traditionally they had been 
the country,s sugarcane workers, now they worked in many 
areas of agriculture (rice, tomatoes, and other crops in 
addition to sugarcane) and in construction. 
 
--------------------------- 
Aleman and Money Laundering 
--------------------------- 
 
¶10.  (C)  The Deputy Secretary praised the Dominican Republic 
for having established a new anti-money laundering office. 
He then highlighted U.S. and Panamanian concerns about the 
alleged involvement of former Nicaraguan president Arnoldo 
Aleman in money laundering (i.e., movement of millions of 
dollars to bank accounts in the Dominican Republic while he 
was President.).  Spain and the other 14 Schengen countries 
have recently blocked Aleman,s entry into their territories. 
 The united States has revoked his U.S. visa and the visas of 
his family members, and also undertaken forfeiture 
proceedings against hundreds of thousands of dollars worth of 
illicit assets that he has stowed in the U.S.   Panama was 
 
investigating.  The Deputy Secretary urged Dominican 
cooperation on the money laundering issue, particularly since 
the investigative trail led to the Dominican Republic.  There 
were two key issues here:  fighting corruption and sending a 
message that Aleman,s day was past, that democratic 
governments would not support corrupt officials even if the 
alternative was a leftist government.  In this case, a strong 
position could even send a message to other candidates to 
come forward in this race, another positive. 
 
¶11.  (C)  President Fernandez said he had not been aware of 
this case, but took note of the issue as the Deputy Secretary 
described it.  (Note: the Attorney General,s 
anti-money-laundering unit interviewed a prominent Dominican 
businessman on May 31, responding to a request from the 
Panamanian authorities; an officer from the Embassy,s DHS 
unit participated in the questioning.) 
 
 
---------------------------------------- 
Energy:  Mesoamerica Initiative, Ethanol 
---------------------------------------- 
 
¶12.  (C)  Conversation touched briefly on the just-concluded 
Mesoamerica energy summit meeting of the presidents of 
Belize, Colombia, Costa Rica, El Salvador, Guatemala, 
Honduras, Mexico, Nicaragua, Panama, and the Dominican 
Republic held in La Romana, Dominican Republic.  President 
Fernandez noted that the projects supporting the initiative 
were largely focused on Central America, but that Dominican 
Republic might get a safety cushion of oil financing from 
Mexico (Note: Mexico will supply 65 percent of the crude at a 
discount, with small volumes from Belize and Guatemala and 
the rest from international markets.  End note). Although an 
observer to the La Romana meetings, a U.S. delegation headed 
by WHA DAS Patrick Duddy reported to the Mesoamerica plenary 
that the USG supports the initiative through ongoing 
USTDA/EPA/AID clean energy work. 
 
¶13.  (C)  Asked about sugarcane and ethanol, President 
Fernandez said the Dominican private sector had looked at 
ethanol production.  Ethanol development would have to be a 
private sector initiative, he said, but that the private 
sector was not yet excited.  They were deterred because of 
the 5-6 year lead time raised concerns about profitability. 
--------------------------------------- 
Dominican Development:  What Comes Next 
--------------------------------------- 
 
¶14.  (C)  The Dominican Republic had a great economic year, 
President Fernandez said:  9 percent growth in 2005 and an 
even higher figure "12 percent annualized" for the first few 
months of 2006.  Services (banking, trade, tourism, and 
finance) were growing fastest, though traditional agriculture 
(sugar and tobacco) remained part of the mix. 
 
¶15.  (C)  President Fernandez,s Dominican Liberation Party 
(PLD) had just won control of both houses of the legislative 
and nearly half of the municipalities.  President Fernandez 
said he wanted to use this mandate to continue the country,s 
march toward democratic modernization, i.e., toward creating 
a democracy rooted in institutions rather than in 
personalities.  Fernandez explained that he hoped to organize 
a grassroots discussion that would identify reforms the 
people wanted and lead to the development of a new 
constitution.  The Deputy Secretary noted that Fernandez, 
goal dovetailed with the focus of the OAS private dialogue 
held between foreign ministers earlier that day, which had 
been on strengthening institutions. 
 
-------------------------------- 
Millennium Challenge Corporation 
-------------------------------- 
 
¶16.  (C)  At the end of the meeting, the Deputy Secretary 
reminded President Fernandez about the Millennium Challenge 
Corporation and described its philosophy of giving aid to 
 
 
countries who invest in their people and fight corruption. 
The program fit naturally with President Fernandez own 
current efforts.  Thus, if the Dominican Republic could be 
brought to the point of qualifying, it could receive a big 
infusion of funds that can help the country enormously to 
carry out its dreams.  President Fernandez noted that with 
CAFTA, the Dominican Republic might qualify on some of the 
objective indicators and said his Technical Secretary, 
Temistocles Montas, was leading a team of experts working to 
bring the country up to standard in each of the indicators. 
HERTELL