This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 SANTO DOMINGO 005135 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: DR EFIN EPET ETRD PGOV PREL VE
SUBJECT: DOMINICAN REPUBLIC ELECTIONS: LEONEL FERNANDEZ ON 
US, VENEZUELA, DOMESTIC ISSUES 
 
REF: A. (A) SANTO DOMINGO 4915 
     ¶B. (B) SANTO DOMINGO 5003 (NOTAL) 
 
¶1. (SBU) Summary: Former president and presidential 
pre-candidate Leonel Fernandez (PLD) emphasized to the 
Ambassador September 9 the importance of the Dominican 
Republic's relations with the United States, commented on the 
Dominican Republic's bumpy relations with Venezuela and the 
recent interruption of oil supplies from there, and claimed 
to be the front runner in voter preferences for the May 2004 
elections.  Fernandez reiterated opposition concerns about 
the GODR's election preparations, fiscal problems that he 
believes will be left for the next administration to solve, 
and free trade negotiations.  The Ambassador stressed the 
USG's interest in a free and fair election, with 
international observers, in strengthening democratic 
institutions, and in completing negotiations quickly on a 
free trade agreement that would integrate the Dominican 
Republic with the Central America Free Trade Agreement 
(CAFTA). End summary. 
 
Relations with the United States 
- - - - - - - - - - - - - - - - - 
 
¶2. (SBU) Former president (1996-2000) and declared opposition 
presidential candidate in elections next May, Leonel 
Fernandez, discussed international and domestic issues with 
the Ambassador on September 9 at the spacious new 
headquarters building of Fernandez's NGO, Global Foundation 
for Democracy and Development (www.funglode.org).  Fernandez 
declared that he considers the United States the most 
important foreign country for the Dominican Republic's 
future.  The Ambassador expressed appreciation for the 
Dominican Republic's participation in the Coalition of the 
Willing in Iraq.  Fernandez replied that he strongly supports 
the war on terrorism, but quipped, "President Mejia's 
administration doesn't have a monopoly on good relations with 
the United States" and cited his own prior record in this 
regard.  Fernandez also reviewed various projects that are 
planned or underway between his "Global Foundation" and U.S. 
universities and NGOs, mainly in Florida and New York. 
 
Venezuelan-Dominican Relations 
- - - - - - - - - - - - - - - - 
 
¶3. (SBU) Fernandez dismissed as "exaggerated" Venezuelan 
President Chavez's recent accusation that the GODR was 
condoning local activity by coup plotters seeking to 
overthrow the GOV.  The Venezuelan had based his charges on 
"inaccurate intelligence," and in any case President Mejia 
would have no interest in actions that might jeopardize 
DR-Venezuela relations.  Fernandez characterized former 
Venezuelan president Carlos Andres Perez as a "very active" 
anti-Chavez expatriate in Santo Domingo, but claimed that 
Perez is making numerous enemies here and has "no capacity to 
harm Venezuela."  "I'm the only friend he has left here," 
Fernandez claimed.  Another Chavez adversary, Venezuelan 
businessman Gustavo Cisneros, stirs suspicions in Caracas 
every time he has a meeting at the Casa de Campo resort (in 
La Romana, Dominican Republic), according to Fernandez, but 
Cisneros, he claimed, has limited political clout.  Fernandez 
recalled that Chavez had been "very upset" with President 
Mejia for granting political asylum to two Venezuelan 
military officers. 
 
Election Prospects 
- - - - - - - - - - 
 
¶4. (SBU) Fernandez confirmed what we had heard from other 
leaders of his Dominican Liberation Party - PLD (ref B) that 
recent presidential preference polls conducted by the party 
showed Fernandez leading the pack of pre-candidates with some 
60 percent of voter intentions -- far ahead of President 
Mejia (PRD) or Eduardo Estrella (candidate of the Reformist 
Social Christian Party - PRSC).  However, Fernandez repeated 
concerns we have heard from other opposition contacts 
(reftels) that the Central Electoral Board may be biased in 
favor of Mejia's reelection bid and is moving too slowly to 
resolve problems with electoral registration and 
organization.  He echoed his party's charges that Dominican 
Army chief of staff Radhames Zorrilla Ozuna is illegally 
meddling in the election campaign.  Some opposition critics, 
according to Fernandez, are saying that Mejia believes the 
USG will let him get away with such irregularities because of 
his administration's support in Iraq.  The Ambassador 
stressed the USG interest in a free, fair, and transparent 
election and in the strengthening of democratic institutions. 
 
Financial and Trade Issues 
- - - - - - - - - - - - - - 
 
¶5. (SBU) The Ambassador raised his concern about the economic 
impact of the BANINTER bank corruption scandal and the USG's 
interest in judicial independence and due process in the 
resolution of this case.  Fernandez replied that the PLD 
platform advocates judicial reform, but asserted it would 
have to start "from zero" because of lower-level judges' 
susceptibility to improper influence.  He commented that the 
Central Bank's quasi-fiscal deficit resulting from the bank 
collapse would impose a "terrible" crunch on government 
finances within a year and that the only solution would be an 
international bond issue.  Fernandez predicted that GODR 
would fail to meet the IMF-imposed deadline of July 2004 for 
a tax reform, which he expected to slip until one to three 
months after a new administration takes office.  When the 
Ambassador asked about prospects for legislative approval for 
the GODR to negotiate a bilateral free trade agreement to 
"dock" with the Central American Free Trade Agreement (CAFTA) 
and reiterated strong U.S. interest in this proposal, 
Fernandez expressed support, but complained that the PLD's 42 
members in the Chamber of Deputies needed to be better 
informed about the talks.  Fernandez also raised agricultural 
subsidies, which he said should be dealt with in technical 
committees (e.g., the Trade and Investment Committee).  He 
said the GODR's recent announcement of a 5 percent tax on 
exports and a 2 percent tax on imports should be rescinded to 
boost the nation's competitiveness and prepare it for free 
trade.  (Comment: The Senate has subsequently voted against 
the 5 percent export tax, and it is likely to be shelved. 
End comment.) 
 
Comment 
- - - - 
 
¶6. (SBU) As a former president, remembered favorably by many 
Dominicans for the nation's greater prosperity during his 
tenure, Fernandez appears to be the front-running 
presidential candidate -- but he will meet a tough match 
when, as seems likely, President Mejia settles current 
quarrels within his own PRD and secures the nomination. 
Fernandez also faces unresolved allegations of his financial 
ties to Ramon Baez Figueroa, the imprisoned kingpin of the 
BANINTER scandal, including speculation that the Global 
Foundation's lovely new headquarters was built with 
siphoned-off bank funds. 
 
¶7. (SBU) Fernandez attended elementary and junior high school 
in New York City in the 1960s and feels close ties to the 
United States, despite his leadership of a historically 
leftist party.  He showed little sympathy for Venezuelan 
President Chavez and took a nationalist line against Chavez, 
while also criticizing the Mejia administration for provoking 
the Venezuelan in the handling of the asylum cases.  Now that 
Chavez has publicly confirmed his intention to continue the 
measures he took against the Dominican Republic last month -- 
the oil embargo and withdrawal of the Venezuelan ambassador 
-- opposition leader Fernandez may have little choice but to 
show solidarity with the current GODR on this matter. 
 
¶8. (SBU) Fernandez's comments on financial and trade issues 
may foreshadow the line he will take during the campaign -- 
charges of financial mismanagement against Mejia, who is 
particularly vulnerable during the current economic slump, 
and skepticism on specific aspects of a free trade agreement. 
 His comments on the election campaign are staple rhetoric of 
the PLD -- the leading opposition to President Mejia and the 
PRD -- but also reflect a need for the Central Electoral 
Board to do more to build public confidence in what will 
probably be a generally free and fair electoral process. 
HERTELL