78252 O N F I D E N T I A L SANTO DOMINGO 002941

C O N F I D E N T I A L SANTO DOMINGO 002941
SIPDIS
SIPDIS
DEPARTMENT FOR WHA/CAR SEARBY
E.O. 12958: DECL: 09/13/2016
TAGS: CVIS, KJUS, KCOR, DR
SUBJECT: DOMINICAN SUPREME COURT PRESIDENT SUBERO ISA
CONFIRMS CORRUPTION, COMPLEMENTS COOPERATION
Classified By: Classified by Political-Economic Counselor Michael Meigs
for reasons 1.4 (b) and (d)
1. (U) Summary. In a wide-ranging recent call by Ambassadors
Hertell and Bullen (DCM) on Jorge Subero Isa, President of
the Supreme Court of Justice (SCJ), the latter confidently
delineated plans for a further strengthening of the judicial
sector, detailed the fight against judicial corruption, and
expounded on some of the most pressing reform issues
currently facing the Dominican Republic.

2. (C) After the departure of State and USAID personnel that
had accompanied the ambassadors, Subero revealed to Hertell
and Bullen that SCJ Vice-President Rafael Luciano Pichardo
appears to be deeply involved in official corruption and is
possibly attempting to subvert the ongoing trial of
individuals implicated in the 2003 fraudulent collapse of
Banco Intercontinental (Baninter). Nevertheless, Subero
suggested that no action would be taken against Pichardo by
the Dominican government. The Embassy is investigating
whether revocation of Pichardo’s non-official visa would be
appropriate. End Summary.

——————-
I’ve Got Good News…
———————

3. (U) Subero began the meeting in a clearly expansive mood,
directly attributing the rebounding Dominican economy (GDP
growth rate of 9%) to judicial sector improvements brought
about by USAID programming. He went on to suggest that, but
for the support of the U.S. Government, there would have been
little measurable progress in the fight against judicial
corruption during the last nine years. His ultimate
conclusion was that “moral assistance” provided by the United
States is, in fact, more valuable than monetary assistance,
finding it to be of “incalculable worth.”

The Future of Dominican Justice
——————————-
4. (U) Counting on continued, extensive support from USAID,
Subero Isa laid out his plans for the future of the Dominican
justice sector. A hoped-for “second wave” of projects and
programming would include:

– The establishment of a mediation center, building on what
he termed as the great “success” of a USAID-sponsored family
mediation center in Santo Domingo. According to Subero, the
Dominican commitment to mediation is evidenced by the recent
certification of an additional 69 family mediators and is
justified by a 90% success rate for all cases currently
brought to family mediation.

– The creation of a “judicial observatory.” As previously
established in other Latin American countries, this would
provide a forum for debate by political decision-makers,
members of the judiciary, civil society, and members of the
international community regarding both public policy options
and judicial reform.

– Reorganization of the judiciary’s administrative functions
to promote transparency and efficiency. This would include
significant decentralization of the multiple powers currently
held by the SCJ President.

– The strengthening and increased utilization of the
Dominican Freedom of Information Act (Libre Acceso al
Publico) as a measure to promote transparency and counter
corruption; and

– The spread of judicial management and tracking programs
throughout the Republic (replicating a current USAID-model
program in the province of La Vega.)

5. (U) Subero also foresaw preservation of the 2004 revisions
to the Criminal Procedures Code. Subero suggested that,
despite the recent press linkage of rights guarantees for
criminal defendants and a rise in the overall crime rate, the
country’s transition to the revised Code was far less
traumatic than that experienced by other countries. He
dismissed assertions by some of a link between rights for
criminal defendants and crime, noting that pushback against
the Code is based on confusion between the concepts of
“individual security” and “individual rights.” Initial
hesitancy from members of the Dominican bar is now resolved,
according to Subero, as older attorneys, initially fearful of
competition from their younger, more nimble colleagues, have
grown more comfortable in the Code’s application.

6. (U) There was also a prediction for increased confidence
in the judiciary following the retirement of five Supreme
Court Justices in the coming four months. Subero described
this as placing the Court in a “stage of re-legitimization,”
noting that while some Justices are clearly “resisting
retirement,” it is necessary to open spaces for younger
justices. “It is healthy to have changes.”

7. (U) CAFTA-DR, too, will figure prominently in the life of
the judiciary. Accordingly, general classwork on economic
crimes/issues and specific classwork on CAFTA-DR is featured
in judicial training for all entry-level judges.

8. (U) In terms of the current debate regarding
constitutional reform, Subero was confident that reform will
ultimately occur, but was less confident that this will be a
good thing. “The problem is not the Constitution,” he
bluntly declared, suggesting that the problem instead is with
the application of existing law.

9. (U) Overall, the picture painted during this initial
meeting was of Subero as a proactive leader with a great
affinity for due process, public debate, and use of
technology in the judicial sector.

—————
And Bad News…
—————
10. (C) While the rump meeting to follow did little to take
away from this perception, it did reveal Subero’s Achilles
heel — an unwillingness to directly challenge corruption in
the highest reaches of government.

11. (C) Embassy had received, unrequested, illegal wiretaps
that appeared to be part of a smear campaign against
Pichardo, with the suggestion that others were attempting to
influence his votes at the Court. A partial transcript was
also apparently delivered to the Internet investigative
journal Clave Digital. While Pichardo’s own comments as
recorded contain nothing signaling either illegal or
judicially unethical activity, the subsequent Clave Digital
article was sufficiently damaging that Embassy thought it
prudent to ask Subero’s opinion of the affair.

12. (C) In response, Subero indicated that Pichardo had
acknowledged to him, as well as other SCJ Justices, that he
had accepted $40,000 USD from an unnamed party, but that
there was no quid pro quo, explicit or implicit. Subero
further related that two of Pichardo’s sons were also
involved in accepting large sums of money and that Pichardo
is known to have asked the judge in the Baninter criminal
trial to “have some flexibility” in regard to defense
motions.
13. (C) Subero further believes, but cannot prove, that
Baninter defense attorney and presidential advisor Vinicio
“Vincho” Castillo is attempting to orchestrate the
substitution of Pichardo for Subero at the helm of the SCJ,
in an attempt to improve the Court’s disposition toward
Baninter defendants on appeal.

14. (C) Despite Pichardo’s acknowledgment and the existence
of other indications, Subero insisted to Hertell and Bullen
that nothing could be done. His explanation: a lack of
concrete evidence of wrongdoing.

15. (C) Given what Subero has told the Embassy, embassy
officials are currently investigating whether a visa
revocation for Pichardo would be appropriate.

16. (U) Similar reporting and extensive other material can be
consulted on our SIPRNET site,

#08SANTODOMINGO1371

Cable que habla de corrupción en un proyecto de elaboración de etanol.
Disfrútenlo

ID: 167936
Date: 2008-08-29 15:08:00
Origin: 08SANTODOMINGO1371
Source: Embassy Santo Domingo
Classification: CONFIDENTIAL
Dunno: 08SANTODOMINGO1353 08STATE85047
Destination: VZCZCXYZ0001
RR RUEHWEB

DE RUEHDG #1371/01 2421508
ZNY CCCCC ZZH
R 291508Z AUG 08
FM AMEMBASSY SANTO DOMINGO
TO RUEHC/SECSTATE WASHDC 1359
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEHPU/AMEMBASSY PORT AU PRINCE 4854

C O N F I D E N T I A L SANTO DOMINGO 001371

SIPDIS

E.O. 12958: DECL: 08/27/2018
TAGS: ECON, ENRG, KCOR, EINV, DR
SUBJECT: FORBES ENERGY CITES CORRUPTION IN ETHANOL PROJECT
DELAYS

REF: A. STATE 85047
B. SANTO DOMINGO 1353

Classified By: Ambassador PRFannin for Reasons 1.4 (b) and (d)

1. (C) SUMMARY. Executives with Forbes Energy met with the
Ambassador regarding the company,s planned USD 700 million
sugarcane ethanol project straddling the Dominican
Republic-Haiti border. They said that while they have
already obtained all needed permits for the project, which
will be based in Manzanillo, Montecristi, Dominican Republic,
they continue to face unnecessary delays and moving goalposts
that they interpret as prompts for bribes from government
officials. They also described two overt solicitations from
high-level officials for cash payments. The project is
currently held up due to delays in finalizing a negotiated
land swap with a state entity; the Ambassador has sent a
letter to the top official of this entity requesting a status
update. END SUMMARY.

2. (U) On August 28, the Ambassador met with Forbes Group CEO
Lucien Forbes, Director of External Relations Josh Fenton,
and Chief Legal Counsel D. Edward Wilson . Also present were
DCM Bullen, EconChief, PAO, EconOff and FCSO. The meeting
followed a July 31, 2008 meeting between the company and WHA
Assistant Secretary Shannon (ref A).

3. (U) The Forbes executives said that the company has been
working since 2006 to establish operations in the northern
border region to produce ethanol from sugarcane stock
primarily for export to the U.S. market. Initially, the
plant would denature Brazilian &wet8 ethanol for the United
States. Subsequently, the company will produce ethanol from
locally-grown sugarcane stock for the domestic and export
markets as well as generate 50 MW of electricity from bagasse
(sugarcane waste) for sale to the Dominican electricity grid.
The major part of the project will operate under the Special
Duty-Free Zone tax incentive regime. The local affiliate of
the company, Forbes Energy Dominicana, S.A., has already
received a 20-year renewable permit for a duty-free zone.
The executives said that this will be one of the largest
private investments ever in the country and the largest
commercial venture of its kind in the world.

4. (U) The project would also impact Haiti. While the ethanol
and electricity production will all take place in the
Dominican Republic, Forbes plans to either cultivate land
that it buys or else buy feedstock from Haitian producers
directly across the border from its Dominican assets. Forbes
said he aims to make the project fully operable with an
entirely Haitian-Dominican workforce within five years of
launch.

5. (SBU) Although the Forbes executives said that the company
has obtained all necessary permits to begin the project and
negotiated a Power Purchase Agreement (PPA) for the sale of
electricity to the local grid, they are awaiting the
signature of Radhames Segura, the executive vice president of
the Dominican Corporation of State Electrical Companies
(CDEEE), on a land-swap agreement. Although Segura has told
Forbes that &It,s done8, weeks have passed without a
signed agreement.

6. (C) The executives said they feel that Segura is moving
the goalposts in an attempt to prompt a personal payment for
him to facilitate the project,s completion, but noted that
he has never directly solicited a bribe. &He knows this is
costing me money,8 Forbes said. Fenton said that the
company would absolutely not pay any bribes and asked the
Ambassador to support this position. The executives also
mentioned two overt requests for bribes from senior GoDR
officials. Forbes said that at the end of 2007 the former
Minister of Tourism Felix Jimenez offered to get all
necessary permits in exchange for USD 10 million. (Note:
Jimenez was removed from his post on August 16 in the
inauguration cabinet reshuffle (ref B ). However, Jimenez
recently told the CONGEN that he was going to be the next
Ambassador to Washington after he improves his English. End
Note.) They also noted a similarly explicit request for cash
from an assistant to the Secretary of Defense whose name they
did not recall.

7. (C) Forbes also described the project as a victim of a
political rivalry between Segura and Juan Temistocles Montas,
the Secretary of Economy, Development and Planning. He
criticized the Fernandez administration,s inability to
transcend the personal impasse between these two officials,
both of whom are rumored to have presidential ambitions. He
said that while &the problem is Radhames Segura8, he
wondered whether the true holdup lies with the President
himself. He urged the Ambassador to make contacts with key
GoDR officials on the company,s behalf.

8. (SBU) The Ambassador told Forbes that he appreciated the
corruption-related challenges that the company is facing in
the Dominican Republic, and described USG efforts to combat
the government corruption at the institutional level through
USAID programs and other efforts. The Ambassador agreed to
write a letter to Segura inquiring into the status of the
land swap agreement. The letter was sent on August 28.

9. (C) COMMENT. While the corruption issues that Forbes
raised are not new or surprising, it was disturbing to hear
of the audacity of certain GoDR officials in offering their
assistance in exchange for large bribes. It is even more
worrisome that Post has now heard from two different sources
that Jimenez could be appointed as the next Ambassador to the
U.S. Post will consider whether to request a revocation of
Jimenez's visa for corruption and looks forward to
coordinating with the Department on whether to accept
agreement for the former minister if he is nominated as
Ambassador to the U.S. END COMMENT.
FANNIN

#09SANTODOMINGO570

La Cruzada por la informacion ha llegado a mi blog!

Aquí les pongo el Cable extraído de Wikileaks. Nuestro querido país figura en esto, no por su posición Geopolítica, sino mas bien por su manera de NEGOCIAR!
Léanlo!

ID: 207587
Date: 2009-05-18 17:29:00
Origin: 09SANTODOMINGO570
Source: Embassy Santo Domingo
Classification: CONFIDENTIAL
Dunno: 08SANTODOMINGO141 08SANTODOMINGO1456
Destination: VZCZCXYZ0008
PP RUEHWEB

DE RUEHDG #0570/01 1381729
ZNY CCCCC ZZH
P 181729Z MAY 09
FM AMEMBASSY SANTO DOMINGO
TO RUEHC/SECSTATE WASHDC PRIORITY 2771
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RUEHLP/AMEMBASSY LA PAZ MAY 0569
RUEHME/AMEMBASSY MEXICO PRIORITY 1158
RUCPDOC/USDOC WASHDC PRIORITY 1793
RHEFDIA/DIA WASHDC PRIORITY
RUEAIIA/CIA WASHINGTON DC PRIORITY

C O N F I D E N T I A L SANTO DOMINGO 000570

SIPDIS

STATE FOR WHA/CAR,
LA PAZ FOR A/DCM C LAMBERT

E.O. 12958: DECL: 05/17/2019
TAGS: EAIR, KCOR, EINV, ECON, DR
SUBJECT: DOMINICAN REPUBLIC IS BAD FOR BUSINESS, SAYS
ADVENT INTERNATIONAL

REF: A. 08 SANTO DOMINGO 141
B. 08 SANTO DOMINGO 1456

Classified By: Richard Goughnour, Charge d'Affaires, Reasons 1.4(b), (d
)

1. (C) Summary: Managers from U.S. investment company Advent
International told EconOffs that they have faced numerous
barriers to their conduct of business since acquiring the
airport concessionaire Aerodom Dominicana Siglo XXI in
October 2008. Among these is a GODR official who has
harassed, threatened and sought bribes from the company.
Also, President Fernandez issued a decree directly
undercutting Aerodom revenue, in direct violation of the
company's concession. As a result of this difficult business
environment, the Aerodom CEO told EconOff that Advent plans
to turn around the Aerodom asset within five to seven years
and has nixed earlier plans to broaden its investments in the
Dominican Republic. End Summary.

----------------------------------
Never again, says Advent executive
----------------------------------

2. (C) The CEO of airport concessionaire Aerodom Dominicana
Siglo XXI, a subsidiary of the U.S. investment fund Advent
International, told EconOffs that he has become disillusioned
with the Dominican Republic as a target for investment.
Shortly after Advent purchased Aerodom in October 2008, CEO
Rodolfo Salgado told the Ambassador that this would be the
first of many Advent investments in the Dominican Republic.
Just seven months later, however, Salgado confided to EconOff
that Advent would make no further investments in the country
and sought to turn around Aerodom within five to seven years.
He expressed grave misgivings about a government that
succeeds in attracting investment through good public
relations, pro-business rhetoric and even signing contracts
with favorable terms for investors when in reality the
panorama for foreign investors is muddled with corrupt
intermediaries and a legal framework that is bent to satisfy
the whims of public officials.

3. (C) Salgado echoed a growing refrain that the Embassy is
hearing from U.S. investors in the Dominican Republic. "The
Dominican Republic needs to realize that it is becoming
integrated into the global economy and it needs to start
behaving as such," Salgado said. He noted that Advent has
been investing in Latin America for over 20 years and has
never faced this level of government resistance to the
uninhibited operation of its business. Salgado noted two
particular issues that the company is facing. One is the
harassment by Andres Van Der Horst, the director of the
Airport Department, who has sought to disrupt Aerodom
operations in an apparent attempt for personal gains. The
other is a presidential decree that directly violates
Aerodom's concessionary contract, the terms of which were
ratified by the Fernandez government at Advent's request last
October.

4. (SBU) Aerodom has completed Foreign Commercial Service
advocacy forms but has not requested Embassy advocacy as of
this time.

--------------------------------------------- --
Aviation official pressures Aerodom for a bribe
--------------------------------------------- --

5. (C) Aerodom CEO Rodolfo Salgado and Advent executive Luis
Solorzano told EconOffs that Van Der Horst has harassed,
threatened and even explicitly solicited a bribe from the
company. The Airport Department, which manages the
state-owned airports not included in the Aerodom concession,
has no direct supervisory role over the Aerodom-operated
facilities. The only legal relationship between the Airport
Department and Aerodom is the fact that Van Der Horst sits on
the Airport Commission, the government agency that oversees
the concession and is chaired by Secretary of Public Works
Victor Diaz Rua.
Salgado noted that although the Airport Commission had not
met for five years prior to Advent's purchase of Aerodom in
October 2008, it has already met twice since the purchase.
The content of the meetings has focused on what Salgado
described as Van Der Horst's nitpicky complaints about

out-of-order toilets or damage to a non-essential wall
surrounding the perimeter fence at Las Americas International
Airport (SDQ) in Santo Domingo.

6. (C) These complaints and other similar attcks, contained
in what Van Der Horst presented a an official audit of Las
Americas operations autored by the Airport Department (even
though the irport Department has no authority or oversight
f that airport), gained wide coverage in many Domiican
daily newspapers, particularly in late Janury and early
February. At first, Salgado said, h did not understand why
Van Der Horst was attackng his firm. Then, Van Der Horst
asked Salgado o provide free storage space at the airport
for gricultural exporters, a business area where Van Dr
Horst has personal and family interests. When algado
refused this request, Van Der Horst escalated the attacks.
According to Salgado, General Jaime Osas entered Aerodom
executive offices, placed a firearm on a desk and said he had
come "to settle a score between you and my boss." Osas
served in the military as an at-large general at the time but
made clear that he was representing Van Der Horst during that
hostile encounter. Advent executives complained vehemently
about the incident and Osas was recently retired by President
Fernandez. Aerodom has succeeded in calming the media
attacks by hiring a media relations specialist to explain the
situation to press representatives and correct the claims
made by Van Der Horst.

7. (C) Salgado also told EconOffs about an incident that took
place at a recent gala dinner for the travel industry.
Talking over cocktails with a small group of people,
including Salgado and Solorzano, Van Der Horst made the
comment that "For 5 million pesos (about USD 143,000), I
could go away." While Salgado said Van Der Horst,s tone was
joking, he turned abruptly to face Salgado and Solorzano when
he made this comment. Also present at the time were Arturo
Villanueva, the Vice President of the National Association of
Hotels and Restaurants, and Pablo Lister of the Civil
Aviation Board (JAC). Salgado said that although his tone
was lighthearted, Van Der Horst's message was clear and
pointed.

8. (C) In both of their meetings with EconOffs, the Aerodom
executives have reiterated their commitment to avoid corrupt
practices and assured the Embassy that they would not succumb
to Van Der Horst's solicitations. In addition to discussing
this issue with EmbOffs on various occasions, including
meetings with EconOffs on February 4 and April 22, Salgado
said he has broached this subject with Foreign Minister
Carlos Morales Troncoso, Deputy Foreign Minister Jose Manuel
Trullols, Dominican Civil Aviation Institute Director (IDAC)
Jose Tomas Perez, Defense Minister Pedro Pena Antonio, Public
Works Minister Diaz, and members of the JAC. The response
from these officials was all similar, Salgado said. Diaz
told him, "It's just Andres." Morales said, "That man is
corrupt."

9. (C) Advent Senior Partner Juan Carlos Torres came to the
Dominican Republic on April 23 to meet with President
Fernandez. According to Salgado, during the meeting, Torres,
Salgado and Aerodom advisor Jose Luis Abraham explained in
"polite" terms that they had trouble dealing with Van Der
Horst. After the meeting, Abraham, a close associate of
Fernandez, remained with the President and told him more
details of the Van Der Horst problems. President Fernandez
assured Abraham that he would instruct Van Der Horst to back
off, and noted that August 16 is typically a day when
personnel changes are announced. Salgado was not sure
whether President Fernandez was implying that he would remove
Van Der Horst in August or whether he would simply use this
possibility to exert control over Van Der Horst. Salgado
said that, so far, President Fernandez' intervention appears
to be helping.

--------------------------------------------- --------
Fernandez ratified Aerodom contract, then violated it
--------------------------------------------- --------

10. (SBU) Aerodom also complained of a different, though
related, affront on the company's business. In late
February, President Fernandez issued a decree eliminating a 4
cent fee charged on air cargo exports of vegetables. This
was a recommendation from the national economic summit that

Fernandez held in February to address the global crisis.
This fee represents one of the primary revenue generators for
Aerodom and is an integral component of the concession
contract. Solorzano said that this decree would cost Aerodom
millions of dollars per year, cutting profits by as much as
30 percent. Salgado told EconOffs he has spoken with
Economy, Planning and Development Minister Temistocles Montas
and Customs Director General Miguel Cocco about the decree.
They both acknowledged that the decree was illegal, but
neither was willing to inform the president that he had made
a mistake. Salgado said he was suspicious that Van Der Horst
may have had a hand in pushing the decree to the President's
desk without a diligent legal review; the decree is very
favorable to agricultural exporters.

11. (SBU) Salgado said that this decree was the primary
reason for Torres' visit and the meeting with President
Fernandez. He said that President Fernandez reacted "frankly
and openly" when they told him that the decree violated their
contract. But Fernandez stopped short of offering to rescind
the decree, instead asking Aerodom for help in strategizing a
solution that would allow him to "save face." Salgado said
that one possibility would be to impose the fee on airlines
that carry cargo and let them pass the costs on to the
exporters. Fernandez told the Aerodom executives that Montas
would contact them about the solution, but Salgado said he is
becoming impatient as three weeks have passed without any
visible progress.

-------
Comment
-------

12. (SBU) The Advent experience is unfortunately typical of
foreign investors who arrive in the Dominican Republic
enthused by a legal framework that, on paper, appears
favorable to business when in reality the investment climate
is much less certain. When asked in December about his
impression of the new Aerodom management, the general manager
of the privately owned and operated La Romana International
Airport told EconOff that the American company needs to
"aplatanarse", a term that refers to learning to behave like
a Dominican, in order to survive. Yet if Dominican
government officials wish to attract and retain foreign
investors, they cannot require these investors to participate
in the rampant corruption of "negocios aplatanados"
(Dominican-style business). It is the local business climate
that needs to reform, not the foreign investors.
End Comment.