BUSH STRONGARMS DOMINICANS FOR CONTRIBUTOR
Shamelessly playing the global bully, Bush whomps the Dominican Republic up side the head for the sake of a firm that is under investigation for fraud in the California energy swindles:
msnbc.com
Bush backs El Paso Corp. in battle
GOP booster in contract dispute in Dominican Republicc
By Chip Cummins
THE WALL STREET JOURNAL
June 24 — The Bush administration has stepped into a long-simmering legal dispute in the Dominican Republic, threatening to discourage investment there if the dispute isn’t resolved in favor of a significant Republican political contributor.
THE Overseas Private Investment Corp.-a U.S. agency that provides financing and political-risk insurance to corporations investing overseas-sent a letter to the government of the Caribbean country pointing out that El Paso Corp. hasn’t yet received recognition for an international arbitration award stemming from a contract dispute. At the same time, the Houston energy concern faces a potentially hefty damage award from a lawsuit in the Dominican Republic based on the same dispute.
The OPIC letter, sent in March and addressed to the president of the Dominican Republic, said the agency wouldn’t support further private-sector investment in that country if the dispute isn’t resolved.
OPIC “is concerned generally about the type of situation that El Paso is currently experiencing in the Dominican Republic,” wrote Peter S. Watson, president and chief executive of the agency. “Accordingly, it is crucial that the current situation with El Paso be resolved prior to OPIC, in substance, proceeding with further Dominican Republic supported investment.”
The apparent threat is significant because an imprimatur from OPIC can be an important consideration for U.S. corporations considering investing in developing countries like the Dominican Republic.
El Paso , affiliated companies and their employees have been dependable Republican donors, contributing just shy of $1 million-including about $560,000 in soft money-to Republican candidates and causes in the 1999-2000 fund-raising cycle, far outstripping similar contributions to Democrats, according to the Center for Responsive Politics. So far, the companies and their employees have contributed about $690,000 to Republicans last year and this year.
OPIC routinely intervenes on behalf of client companies, especially when a corporation’s assets have been improperly seized or a big investment project is threatened. But in this instance, El Paso hadn’t specifically taken out insurance with the agency to cover the contract that is at the center of the dispute, though it does have other investments that are covered by OPIC policies.
An OPIC spokesman said the agency, a part of the government’s executive branch, wrote the letter after taking into account El Paso’s long association with OPIC and the broader repercussions of El Paso’s dispute in the Dominican Republic. OPIC was especially concerned about how future arbitration and legal disputes might affect other corporations considering investing in the country, the spokesman said, adding that its decision to intervene had nothing to do with political contributions from El Paso. “This is something we do for all our clients,” he said.
The case stems from a contractual dispute between two Caribbean companies and Coastal Corp., which El Paso bought last year. Nicor International, a Panamanian concern, and Carib Consult of the Dominican Republic allege Coastal breached a consulting contract signed in the early 1990s.
Last year, a Dominican Republic court of appeals ruled against Coastal in a lawsuit stemming from the dispute. Plaintiffs have presented the court a request for $57 million in damages. No award has been granted yet, and El Paso has appealed to the country’s top court. Just a month before that decision, however, Coastal won a $900,000 award in international arbitration, in which the company charged the lawsuit was itself a breach of contract.
“We believe this is a groundless suit,” said an El Paso spokeswoman, adding that the company didn’t raise the issue of its political contributions when it sought assistance from OPIC in the matter. The spokeswoman said El Paso would have raised the issue with the government no matter which party was in the White House. “That’s what the U.S. government is there for,” the spokeswoman said.
Earlier this month, attorneys for Nicor and Carib Consult filed a separate lawsuit in the U.S. citing the OPIC letter and alleging El Paso and OPIC conspired to sabotage the Dominican court decision. El Paso “exercised its significant political power and influence” in asking for help from the agency, according to their complaint, filed in U.S. District Court in Florida. El Paso says it hasn’t yet been served with the Florida lawsuit and couldn’t comment on it.
In April, a month after OPIC sent its letter, the Dominican Republic officially began the process of ratifying a United Nations convention recognizing arbitration awards like the one awarded El Paso . The Dominican Republic will begin enforcing that convention next month.
The Dominican Republic’s ambassador to the U.S., Roberto Saladin Selin, said the country had already taken preliminary steps toward adopting the arbitration convention well before receiving the OPIC letter. As for the pending court case against El Paso, he said his government is powerless to intervene. The court will rule “according to the merits of the case,” he said. |
