VZCZCXRO0165
RR RUEHGR
DE RUEHWN #0249/01 1171926
ZNR UUUUU ZZH
R 271926Z APR 09
FM AMEMBASSY BRIDGETOWN
TO RUEHC/SECSTATE WASHDC 7346
INFO RUCNCOM/EC CARICOM COLLECTIVE
RUEHCV/AMEMBASSY CARACAS 1930
RUEHLP/AMEMBASSY LA PAZ 0243
RUEHMU/AMEMBASSY MANAGUA 0144
RUEHTG/AMEMBASSY TEGUCIGALPA 0167
RUMIAAA/HQ USSOUTHCOM J2 MIAMI FL
RUMIAAA/HQ USSOUTHCOM J5 MIAMI FL

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 
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¶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