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Viewing cable 06KINGSTON1298, PETROCARIBE SAVINGS NOT (YET) A SLUSH FUND

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Reference ID Created Released Classification Origin
06KINGSTON1298 2006-06-30 14:10 2011-06-13 09:30 CONFIDENTIAL Embassy Kingston
VZCZCXYZ0000
RR RUEHWEB

DE RUEHKG #1298 1811410
ZNY CCCCC ZZH
R 301410Z JUN 06
FM AMEMBASSY KINGSTON
TO RUEHC/SECSTATE WASHDC 3127
INFO RUCNCOM/EC CARICOM COLLECTIVE
RUEHCV/AMEMBASSY CARACAS 0426
RUEHDG/AMEMBASSY SANTO DOMINGO 5698
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMFISS/HQ USSOUTHCOM J7 MIAMI FL
RHEFDIA/DIA WASHDC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
C O N F I D E N T I A L KINGSTON 001298 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR WHA/CAR (BENT), EB/ESC/IEC/EPC (MCMANUS), 
WHA/EPSC (CORNEILLE) 
STATE PASS FOR DEPARTMENT OF ENERGY 
 
E.O. 12958: DECL: 06/29/2016 
TAGS: ENRG EPET ETRD EINV ECON PREL JM
SUBJECT: PETROCARIBE SAVINGS NOT (YET) A SLUSH FUND 
 
REF: KINGSTON 925 
 
Classified By: CDA Ronald Robinson, reasons 1.4 (b) and (d) 
 
1. (SBU) In an informal discussion with Ruth Potopsingh, 
Chairwoman of the Petroleum Corporation of Jamaica Group of 
Companies (PCJ Group) on June 27, Potopsingh offered some 
clarification of the mechanism through which PetroCaribe 
Agreement savings are held, as well as the uses to which the 
savings from the Agreement with Venezuela might be put. 
 
2. (SBU) Potopsingh noted that the PetroJam refinery which 
receives the oil remits 60 percent payment of the market 
price to PdVSA, and the remaining 40 percent to the PCJ. 
That money is then held in trust and cannot be touched, 
except by Cabinet decree. 
 
3. (SBU) In February, the administration tabled: "A Bill to 
Amend the Petroleum Act," which will establish a separate 
entity under the PCJ Group, known as the PetroCaribe 
Development Fund, with a Board whose members will identify 
social development and poverty alleviation projects 
"appropriate to the spirit of the Agreement," she stated. 
Potopsingh expected that bill to pass some time this summer, 
but added that the composition of the Board had not yet been 
discussed. 
 
4. (SBU) According to Potopsingh, thus far Cabinet has 
instructed that PetroCaribe funds be used for only two 
projects, both under the direction of the Ministry of 
Transport and Works/National Works Agency (NWA).  Although 
she claimed ignorance when asked to specify the amounts and 
the projects, she agreed that the end result was almost 
certainly for road repair, under the NWA's Damaged Road 
Program. 
 
5. (U) The Opposition Jamaica Labor Party (JLP) has made much 
of the ruling People,s National Party,s (PNP) lack of 
transparency regarding the use of PetroCaribe funds. 
Opposition leader Bruce Golding has also been vocal in 
worrying that PC is making Jamaica too beholden to the wishes 
of Venezuela.  Speaking about the upcoming vote for 
non-permanent members of the United Nations Security Council, 
for example, Golding said: "I worry that our vote has been 
forced through PetroCaribe." 
 
------- 
Comment 
------- 
 
6. (C) Post has engaged the GOJ repeatedly on PetroCaribe, 
but in the absence of a clear USG alternative, traction is 
proving difficult.  It is heartening that the funds are being 
protected for the time being, as many suspected they would 
become the PNP's election year "slush fund," but Potopsingh 
was clearly anxious that the Board be established, so that 
she would no longer be responsible for fund oversight. 
Moreover, despite Golding's rhetoric, it must be remembered 
that an election is imminent, and the JLP itself underpinned 
its proposed GOJ budget using funds secured through 
PetroCaribe (ref. B), so there is little evidence to conclude 
that the JLP would cancel or amend the agreement.  End 
comment. 
ROBINSON