On his TV program La Respuesta yesterday, lawyer Marino Vinicio (Vincho) Castillo revealed that the Mejia government paid RD$11,750,000 to the Fundacion Economia y Desarrollo (FED) and its representative, former presidential economic advisor Andy Dauhajre, for a US$120,000 two-month contract for professional services just four days after then-President Hipolito Mejia lost his bid for re-election, as reported in the Listin Diario. Castillo said the payment was made as per a contract with the CDEEE, the governmental electricity company, and was disbursed by Edenorte, one of the two bankrupt power distribution companies the Mejia administration bought back from Union Fenosa.
The terms established that the FED was responsible for preparing financial models to incorporate the hidden costs of the contracts for the purchase of energy from the private power generators that had not been renegotiated. The FED was similarly responsible for providing recommendations on the power rates and, in the event of any decision to subsidize these rates, design mechanisms to ensure the necessary fiscal contributions so that the power distribution agents would receive the resources. Dauhajre was also responsible for assessing the feasibility of the electricity sector in different macroeconomic scenarios.
Castillo debated the need for the CDEEE to contract Dauhajre’s assistance and observed that Dauhajre actually shared the responsibility of negotiating the buyback of the distributors with Cesar Sanchez, the executive vice-president of the CDEEE, and Hernani Salazar Simo, the executive director of the Public Works Supervisory Office of the Executive Branch. As reported in the Listin Diario, Castillo described that the buyback contract as one of the most “ignominious acts that have been committed against the country in all of its history.”
By the terms of the buyback contracts, the country committed to pay US$12 million plus interest, thereby designating the income from the distributors’ better clients to guarantee the payments.
The Listin Diario today publishes the contract with the CDEEE.