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Council On Hemispheric Affairs |
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Monitoring
Political, Economic and Diplomatic Issues Affecting the Western Hemisphere |
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Memorandum to the Press 04.22 |
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Word Count: 3,600
Mejía
vs. Fernández in Sunday’s
MR.
ALMOST CLEAN DOMINICAN PRESIDENT
vs.
MR.
NOT CLEAN AT ALL
·
President Hipolito Mejía, by luck or design, has avoided
the kind of major corruption scandal that has plagued previous Dominican
administrations, but his administration hasn’t been squeaky clean either. Unlike former President Leonel Fernández,
whose administration had a near 100 percent rating in its tolerance of
corruption and a near zero in terms of improving living standards of the poor,
Mejía’s social programs genuinely aided the fight against poverty. The return
of Fernández to the Presidential Palace would mean the same corrupt elite that
was guilty of grossly plundering social funds and betrayal of pubic trust which
was witnessed during his first presidency would, without question, be back in
business.
·
While meekly subordinating the country’s foreign policy
to Washington’s agenda, including joining the coalition of the “unwilling” and
even sending troops to Iraq (who are now being withdrawn), President Mejía made
some progress in establishing the nation’s international reputation by
improving the nation’s human rights record and respecting and expanding its
democratic institutions.
·
However, Mejía committed a serious act of misjudgment by
deciding against investigating and bringing charges against Fernández and those
in his administration who were alleged to be involved in the embezzlement of
public and quasi-public funds.
·
Fernández and a number of officials in his PLD party
should have been tried and sentenced, if found guilty, for their role in the
Temporary and Minimal Employment Program (PEME) scandal.
·
Despite serious economic challenges and a hugely expanded
foreign debt, Mejía has weathered the crash of his nation’s three largest banks
and a global recession without curbing democratic rights.
Mejía’s
In a region of the world where the fatal afflictions of
corruption and elitism are institutionalized in the political process and
practice in government offices, the
Fernández’s party, the Dominican Liberation Party (PLD),
was voted out of office in 2000 in a remarkably free and fair election, by
Dominican standards. At that time,
voters were eager to express their mounting distaste over the corruption that
permeated throughout the Fernández administration, which was fortunate enough
to be in office during years of unprecedented economic growth and
development. In the 2000 election, in
spite of relatively good times, Dominicans rejected the PLD candidate and
replaced Fernández with Hipólito Mejía and his Dominican Revolutionary Party
(PRD) in convincing fashion, giving the latter control of the executive branch,
a majority in the upper house legislature, and near control of the lower
house. Throughout the 1990s and into
2001, tourism and manufacturing—principal assembly industries—sustained the
economy’s impressive seven percent average annual growth. The expansion of the assembly sector was also
buttressed by substantive remittances coming from overseas Dominicans mainly
living in
The Skidding Economy
One year ago, the international community witnessed the
implosion of the Dominican Republic’s third largest private financial
institution, Banco Internacional (better known as Baninter), due to colossal fraud engineered by the bank’s owners
and administrators. The impact on the
Dominican economy was devastating. By
January 2004 – seven months after the bank’s collapse – the peso’s exchange
rate had fallen to 50-1 against the dollar and has yet to significantly
recover. The economy looked like it would surrender all of the gains won during
the 1990s, one of the most sustained economic surges in the history of
Despite a stagnant economy and a then existing
constitutional provision prohibiting the president from seeking a second term,
Mejía boldly sought re-election. He
maneuvered his PRD party’s 29-3 absolute majority in the Senate and
near-majority of 73 of 150 seats in the lower chamber in order to successfully amend
the constitution in order to allow him to run for a second term. In the wake of this virtual coup, Mejía’s
party rivals, Vice President Ortiz Bosch, Tourism Minister Rafael Subervi
Bonilla, and former PRD party president Emmanuel Esquea, pulled their support
from Mejía after he announced his intention to seek re-election. They claim that Mejía had manipulated the
primary elections in order to purge 475,000 votes from the party’s membership
list. This action has caused a simmering schism within the PRD party. Nonetheless,
Mejía’s run in the party’s primary went relatively unchallenged, as he received
95 percent of the vote. However,
ironically enough, the same constitutional amendment that made Mejía’s
re-election bid possible also created an opportunity for one of the country’s
most controversial figures, former president Leonel Fernández, to attempt a
comeback.
Mejía’s first Mistake
It was Mejía’s own reluctance to prosecute Fernández and
other accused PLD officials after he was inaugurated that has permitted
Fernández and his associates to survive politically and avoid the consequences
of their administration’s blatant misuse of government funds while he was
President. If Mejía desired to
effectively challenge his predecessor’s purported legacy of embezzlement and
deception, he should have begun by establishing a precedent whereby malfeasant
officials would be held accountable for any crimes they committed while in
office. Instead, Mejía lost an opportunity to demonstrate real conviction in
his fight against the corrupt traditions of his nation, and in so doing,
neglected his duty to the Dominican people and democratic principles as well as
damaged his future political prospects.
At best, Mejía may have been acting out of respect for the presidential
office, which Fernández had held; or at worst, he may have flinched in the face
of possible reprisals by Fernández’ powerful allies in both the public and
private sectors. No matter what Mejía’s motivations may have been, it is he who
inadvertently has provided the means for Fernández’ political resurgence.
The Fernández Legacy
Although he left office in 2000 amid major allegations of
bribery and corruption, Fernández and his PLD party are running against Mejía
to retake the presidency. A very wealthy
and small establishment of corrupt, privileged elites is now guiding the
Fernández campaign in hopes of rekindling the status quo in existence prior to
the Mejía administration.
According to last month’s Schoen and Berland poll, Fernández
led with 65 percent of the popular vote, while Mejía trailed far behind with
a paltry 13 percent. However, in the
political vacuum that now exists in the country, even the polls are suspect
and both candidates popularity lacks depth or real conviction. More recent
polls reveal that Mejía has stormed back to within 5-10 percent of Fernández.
There have been claims that Fernández’ cronies may have even tainted the polls
so as to favor the PLD candidate. Previous
polls have always found Fernández and his party to be leading comfortably
before elections were held, even when they eventually lost. Following in the footsteps of his predecessors,
primarily General Rafael Trujillo and Joaquín Balaguer, in 1996 Fernández
edged into office with a bare minimum of the vote, unquestionably stealing
the victory from the PRD’s most distinguished leader, the late Francisco Peña
Gomez. As soon as the Fernández administration had been inaugurated, accusations
began to be made of public funds being siphoned off.
Fernández’ 1996 election occurred in the midst of an
economic boom that ran from 1993 to 2000, occasioned by an upsurge in
productivity and exports. This came as a welcome relief to Dominicans after a
devastating period of acute poverty precipitated by a free-trade blow to the
all important local sugar industry in the 1980s. However, most specialists attribute the
With the economic slowdown which began in 2000, Dominicans
slowly began to discover the full scale of the Temporary and Minimal Employment
Program, (PEME) scandal. In one of the most grandiose abuses of public trust
in Dominican history, millions of dollars in public funds were diverted from
targeted low income families to the private accounts of Fernández’ confederates.
Many former officials in his administration were arrested in connection with
corruption charges including embezzlement, contract kickbacks, and outrageously
large pensions for retiring officials. The Corruption Prevention Department alleges
that PEME did not account for how funds were being raised or dispersed, and
how it was looted of over $100 million. There was also mounting evidence of
fraud involving the construction of public projects and the privatization
of the two major formerly state-owned electricity distribution facilities.
As a result of its flagrant exploitation of public resources, the venality
of the PLD eventually helped bring on its ruinous defeat in 2000, despite
blatant attempts to intimidate opposing candidates and their supporters, buy
voters’ registration cards, and cheat on vote counts.
The PLD lost because the Dominican people had enough of Fernández and
were eager for reform.
Fernández’ afterlife
Nevertheless, even in defeat, Fernández could prosper. This
was a period when he made frequent trips to
Bribes in All Directions
Historically, allegations of bribery are not surprising
to those familiar with Dominican politics, especially when Leonel Fernández is
involved. What is disappointing are
allegations of similar if much smaller lootings by top officials in the Mejía
government. Mejía was elected on a
platform of anti-corruption and increased spending on education, welfare, food,
and low income housing. But the core of
his campaign was based upon his unquestionable integrity. If it can be established that his integrity
was also compromised, it will undermine the main strength of Mejía’s campaign
platform and in the next few days could bring on the defeat that he would in
that case deserve. There is also the foolish act of self indulgence wherein
Mejía accepted two SUV’s given by Baninter
executives as gifts, only to
quickly return them in order to avoid the appearance of impropriety.
Once elected, Mejía promised an era of substantive
democracy and high accountability. He was then almost immediately confronted
with the task of dealing with the legacy of an all-pervasive corruption in the
state bureaucracy engineered by a string of previous Dominican officials who
served the Fernández administration and it’s predecessors, a deep economic
downturn, and a country burdened with a history of human rights abuses. Mejía declared upon taking office that he
would “govern in a glass house” and insisted that money would be spent where it
was most needed. However, recent
accusations brought on by the upcoming election beg the question of whether
Mejía’s administration has been built of glass or perhaps entirely of mirrors.
Most of the accusations against the current president
stem from the arrest of media mogul Baez Figueroa, who has been indicted on
charges related to the Baninter
scandal. Baez Figueroa contends through his attorneys that Agricultural
Minister Eligio Jaquez, Treasurer Pastora Mendez, and the Director of the Pro Comunidad, Ana Maria Acevedo,
pressured him and other bank administrators into making illegal payments to
Mejía allies.
Figueroa’s holdings have been seized, including his
numerous media properties. The Inter-American Press claims that some of these
outlets are now being used to promote pro-Mejía political goals.
The Art of Feeding the Wolf
Both Fernández and Mejía have found it politically
convenient to appease the
Mejía was initially critical of the costs of such rapid
privatization and voiced his opposition during his 2000 election campaign.
However, when he came into office he soon revealed the same tendencies when he
formed a controversial duty-free zone between the Dominican Republic and Haíti,
the deal was backed by one of the Dominican Republic’s richest men for the
express purpose of attracting foreign shoe and textile manufacturers. Just last month he signed a free trade pact
with the United States, agreeing to lower trade barriers in such areas as feed
grains, rice, beef, pork, poultry, horticultural products and processed
consumer-ready products, which could very well precipitate a financial blow to
some Dominican farmers as cheap U.S. subsidized produce like rice floods the
market.
Controversy still surrounds Mejía’s permission for Haítian
rebels to train as well as gather under
The Media Wars
Fernández isn’t lacking media support. He also is able to
manipulate his powerful ties to the press through a strategic hub of his own
media moguls who dominate an important sector of
In the wake of
Baninter’s collapse, two more major Dominican banks also declared
bankruptcy. The government had fully insured the deposits of all citizens, even
those of off-shore accounts, at a price of $5 billion. This bailout mostly benefited a small
minority of privileged elite who receive three-fourths of the dispersed government
compensatory payments. This increased the national debt to $7.6 billion, a colossal
sum for such a small country, hence further enraging the populace against
Mejía. Currently, the
Fernández’ confidantes have been traveling to this
country and elsewhere, whispering about a possible crisis in governance if
Mejía is re-elected. They cite human rights abuses involving police brutality,
as well as possible violations of democratic processes. In reality, the human
rights situation has improved significantly relative to what it was before
Mejía took power. Mejía’s party has yet to tamper with electoral processes,
whereas Leonel Fernández’ PLD was a world class operator in attempting to do
this in recent balloting. Because of
this history of abuse, 160 accredited observers sponsored by the National
Council for Private Business (CONEP), will
oversee the coming election along with other observers.
The flare of the economic boom during the Fernández
administration blinded many, but not all, to the human rights abuses that were
occurring under Fernández’ presidency, most notably affecting Haítians. All of Mejía’s predecessors have egregiously
discriminated against Haítians, beginning with General Trajillo’s murder of thousands
of them along the border between the two countries, who share the
The Upcoming Vote
There is some concern regarding how the Dominican
electoral process is being conducted. Such concern, while somewhat warranted,
should not be focused on Mejía. It
certainly is true that Mejía attempted to legally force a change in his favor
through the controversial Ley de Lamas,
which would have allowed any party to come up with as many as five candidates
for a presidential election. The most
popular candidate from this list would be able to collect all of the votes
across the board for the party’s victorious candidate, even if they were
earmarked for others on the list. The PRD dominates the legislature, yet
refused to pass it. However politically
charged this attempt may have been, Mejía used democratic procedures to attempt
the change, and respected the legislature’s stand when it refused to cave
in. Mejía has yet to show that he is prepared
to unlawfully mar a democratic election or institution. On the other hand,
Leonel Fernández and his PLD party have previously demonstrated that they are
prepared to go some lengths to see to it that opposing votes are not always
cast or counted.
Economically, most of Mejía’s decisions have been made
under the austere shadow of those measures demanded by the IMF
Stand-by-Agreement. One would be greatly underestimating the gravity of the country’s
current financial obligations to say that the decisions made by the president
(outside of corruption) could readily affect the pain caused by the
President Mejía has weathered a difficult time in recent
Dominican history, but at the price of voter alienation and menacingly low poll
ratings. Remarkably, his own personal
reputation has remained relatively intact in spite of the fact that the Baninter debacle has implicated several members
of his administration and in the business community who are close to him. It must be acknowledged that his credibility
with the international community has been a major factor in securing foreign
aid and loans in times of economic hardship, as well as some foreign
investments. On the other hand, if
Fernández were to be re-elected, Mejía’s somewhat reduced credibility would be
replaced by the graft and corruption that seems to be synonymous with the
Fernández administration.
This analysis was prepared by Sam Goble, COHA Research Associate
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