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### Viewing cable 07MANAGUA1622, ORTEGA ADMINISTRATION AT SIX MONTHS

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
07MANAGUA1622 | 2007-07-02 17:35 | 2011-04-25 19:00 | CONFIDENTIAL | Embassy Managua

Appears in these articles:
http://www.nacion.com/2011-04-25/Mundo/NotaPrincipal/Mundo2743916.aspx
http://www.nacion.com/2011-04-25/Mundo/Relacionados/Mundo2743919.aspx
http://www.nacion.com/2011-04-25/Mundo/Relacionados/Mundo2743922.aspx
http://www.nacion.com/2011-04-25/Mundo/Relacionados/Mundo2752792.aspx

`

    VZCZCXRO1304
    PP RUEHLMC
    DE RUEHMU #1622/01 1831735
    ZNY CCCCC ZZH
    P 021735Z JUL 07
    FM AMEMBASSY MANAGUA
    TO RUEHC/SECSTATE WASHDC PRIORITY 0686
    INFO RUEHMU/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
    RUMIAAA/CDR USSOUTHCOM MIAMI FL
    RUEAIIA/CIA WASHDC
    RHEFDIA/DIA WASHINGTON DC
    RHEHNSC/NSC WASHINGTON DC
    RUEHLMC/MILLENNIUM CHALLENGE CORP WASHDC
    RUEKJCS/SECDEF WASHDC
    RHEHAAA/WHITE HOUSE WASHDC

` `

    C O N F I D E N T I A L SECTION 01 OF 05 MANAGUA 001622

    SIPDIS

    SIPDIS

    DEPT FOR WHA/CEN

    E.O. 12958: DECL: 06/18/2017
    TAGS: PGOV PREL PINR ECON NU
    SUBJECT: ORTEGA ADMINISTRATION AT SIX MONTHS

    REF: A. MANAGUA 1566
         ¶B. MANAGUA 1562
         ¶C. MANAGUA 1537
         ¶D. MANAGUA 1318
         ¶E. MANAGUA 1311
         ¶F. MANAGUA 1273
         ¶G. MANAGUA 1067
         ¶H. MANAGUA 1495

    Classified By: Ambassador P. Trivelli for reasons 1.4 (b and d)

    ¶1. (C) Summary:  During his first six months in office,
    President Daniel Ortega has expanded executive powers and
    used them to destroy or give away pieces of Nicaragua's
    cultural patrimony; to threaten opposition media and freedom
    of expression; to fire large numbers of government officials
    and replace them with party loyalists; and to centralize the
    powers of the ministries under the Presidency. He has also
    reoriented Nicaragua's foreign policy by reestablishing ties
    with ideological bedfellows from the 1980's and other leaders
    of anti-American bent. Although "national sovereignty" is a
    favorite leitmotif of Ortega's, he continues deferring to his
    Venezuelan counterpart. The lack of transparency and open
    disregard for legal limitations point to an administration
    that relies increasingly on promising popular democratic
    reforms while taking significant steps towards
    authoritarianism and a blending of party and state.  Recent
    polls indicate that the Nicaraguan people are not happy with
    Ortega's management of the country.  End Summary.

    Ortega Strengthens and Forms Alliances with Fellow Ideologues
    - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

    ¶2. (C) Eager to reap the benefits of oil-rich Venezuela's
    largesse, over the past six months, Ortega has followed
    Venezuelan President Hugo Chavez' lead on almost every issue
    of importance (ref F). When Chavez refused to renew the
    contract of RCTV (ref E), Ortega voiced support for Chavez's
    decision and strongly criticized counter-protests by
    Venezuelan students. First Lady Rosario Murillo, head of the
    increasingly influential Council of Citizenship and
    Communications, correspondingly began the process to convert
    Nicaragua's state-owned Channel 6 to a source of
    Venezuela-friendly media by partnering with Telesur. Ortega
    has also followed in Chavez's footsteps outside of the
    Americas, visiting many of Chavez's allies in Africa and the
    Middle East. On July 19 the President will reportedly
    announce the "Five Pillars" of the FSLN strategy, which are
    modeled directly on Chavez's "Five Motors" of 21st Century
    socialism. (Septel)

    ¶3. (C) During a recent 15-day marathon tour, Ortega visited
    Venezuela, Cuba, Iran, Libya, Algeria, and Senegal on a
    private jet provided for the occasion by Libyan dictator
    Moammar Gadhafi. (Note: A visit to Italy to meet with a group
    of investors was canceled at the last minute, while Senegal
    was added to the agenda. A senior MFA official, in a meeting
    coinciding with Ortega's visit to Senegal, joked that "not
    even we know where he might go next," and admitted that the
    MFA -at the office director level at least- had received
    virtually no updates or reports from the President's party
    during his trip. Contacts reported that Alvaro Robelo,
    Ortega,s choice for ambassador to the Vatican, bungled the
    Italy visit and forced its cancellation -- a further
    humiliation for Robelo, a banker implicated in various
    financial scandals, who earlier failed to gain agrement as
    ambassador to the Vatican. End Note)

    ¶4. (C) Since returning to Nicaragua on June 18, Ortega has
    been sharply criticized by National Assembly deputies for not
    publicly discussing the results of his 15-day trip. Thus far,
    Ortega has only commented publicly on a possible energy deal
    with Iran.  Deputies from the Liberal Constitutional Party
    (PLC) and Sandinista Renovationist Movement (MRS) decry the
    President's silence and insist that the public has a right to
    know what issues were discussed and what agreements or
    accords were signed.  In addition, legislators are
    questioning why Ortega did not visit Rome after having
    announced meetings with Italy's president and Italian
    business leaders prior to his departure from Nicaragua.
    Foreign Minister Samuel Santos weakly (and falsely, according
    to the Italian Ambassador in Managua) justified the decision
    by stating that Rome was simply a "stopover for the pilots to

    MANAGUA 00001622  002 OF 005

    rest" and was never part of the official agenda.

    ¶5. (C) In the month leading up to his recent trip, Ortega was
    also visited by the Vice Chancellor of the Russian National
    Assembly Serguei Kislyak. During the visit, Ortega expressed
    his desire to revitalize relations, stating that, "when we
    speak of cooperation with Russia, we are speaking of taking
    into account the relation that we had with the Soviet Union,
    when Russia was one of our supporters."

    Allies in Asia
    - - - - - - - -

    ¶6. (C) Not content to hobnob only with dictators in Latin
    America and the Middle East, Ortega decided to reinforce ties
    to North Korea and Laos.  In regard to Korea's nuclear arms,
    Ortega has declared "that it isn't fair," that some countries
    continue to be armed, "then want to prohibit others from
    arming themselves in self-defense" (ref D) In meetings with
    Laotian officials,  he recalled that, "In the 1980s we had
    exceptional relations with Laos and with all the peoples of
    Indochina."

    ¶7. (C)  The possibility of adding yet another ally, mainland
    China, is still on the table. In early June, Costa Rica's
    announcement of the cessation of its 60-year formal
    diplomatic relationship with Taiwan in favor of mainland
    China created uncertainty in Nicaragua.  For the moment, the
    official line is that all ties are firm; however, the Free
    Trade Agreement between Nicaragua and Taiwan remains stalled
    in its final stage because the Ortega government claims not
    to have the $5,000 necessary for publication, which would put
    it into legal effect. Dollar diplomacy may ensure Taiwan's
    continued presence in the medium term as the Taiwanese have
    pledged to send multiple energy plants, scheduled to go
    online in January 2008, to assist Nicaragua in addressing its
    chronic electrical power crisis.  Thousands of Nicaraguans
    are also employed in Taiwanese-owned maquilas in Nicaragua's
    Free Trade Zones.

    Mixed Messages
    - - - - - - - -

    ¶8. (C) While Ortega visited allies abroad, publicly
    criticizing "American imperialism", his Vice President, Jaime
    Morales Carazo, was at the Americas Competitiveness Forum in
    Atlanta assuring the business elite that Nicaragua was an
    ideal setting for investment. (Note: For a two-day period,
    while the President and Vice President were out of the
    country, there was no acting Head of State named, a further
    indication of the improvisation and secretive nature of the
    Ortega regime.) On June 19, President Ortega met with members
    of the private sector for the second time since his
    inauguration.  The private sector repeated its concerns
    regarding the sanctity of private property, the lack of
    support for foreign and local private investment, the need to
    fight corruption, and the lack of a coherent economic
    plan/direction from the government.  The meeting launched a
    series of public-private working groups to develop strategies
    addressing the energy, infrastructure, and tourism sectors
    and the sustainable management of the environment

    ¶9. (C) These efforts have not received as much publicity and
    Presidential support as Ortega,s proposed "citizen
    councils."  According to Ortega and Murillo, any plans which
    the citizen councils develop will become GON policy and must
    be advocated by Ministers before the National Assembly. In
    contrast, the work of these public-private groups has not
    been given any such political weight, and will most likely be
    contradicted by the more populist economic pronouncements
    likely to come out of the Sandinista-dominated citizen
    councils. (Comment: Since his election, Ortega has stated
    several times that he welcomes foreign investors because they
    are the engines which will create the jobs to help raise the
    country out of poverty. In reality, however, the FSLN
    government has displayed a cavalier attitude toward
    contracts, particularly in the energy sector. On three
    different occasions the GON claimed that contracts with
    private sector energy companies were "injurious" to Nicaragua
    and would be canceled. This hardline forced the companies to
    the negotiating table.  End Comment.)

    Citizens' Councils

    MANAGUA 00001622  003 OF 005

    - - - - - - - - - -

    ¶10. (C) The newly established "Citizen Empowerment Councils"
    ("Counsejos de Poder Cuidadano") have been a source of much
    opposition concern in recent weeks. These Councils, which are
    a direct evolution of the "Sandinista Defense Committees" of
    the 1980's, while officially not party-affiliated, are widely
    considered to favor hard-line Sandinistas and exclude all
    others with questionable ideological affiliations. Their
    stated goal is to increase citizen participation within the
    system by encouraging active debate within small, local fora.
    Charges of FSLN bias are rejected by members of that party,
    who say that positions are often filled with FSLN
    representatives because they are unpaid; therefore, there
    have been very few volunteers for the job. The same logic
    applies to the location of the council offices, many of which
    are run out of FSLN campaign houses, apparently for lack of
    another, more neutral space.  More moderate Sandinistas have
    declined to participate in (or been excluded from) the
    councils, which they regard as usurping existing civil
    society groups nurtured over the years by the Sandinistas
    themselves (ref B).  Whatever the origin of the divide, the
    result is that the councils are composed primarily of Ortega
    loyalists.

    First Lady, First Citizen
    - - - - - - - - - - - - -

    ¶11. (C)  With her allegedly illegal appointment (according to
    Nicaragua's nepotism laws) to Executive Secretary of the
    Council of Citizenship and Communications, First Lady Rosario
    Murillo has become an integral part of the Presidential
    powerhouse. Murillo has centralized under her control all
    official communication from the government, often writing
    press announcements for specific ministries, then ordering
    the ministry to issue them unedited.  She personally approves
    all travel abroad for government officials, a policy which
    has generated considerable confusion and often caused
    Nicaragua to be absent at regional meetings related to the
    Sistema para la Integracion Centroamericana (SICA) and CAFTA,
    as well as several USG-funded workshops that are part of
    long-running programs.  She controls the entire government
    budget for publicity, and has co-opted the professional
    journalist association in Nicaragua, even reviewing the
    weekly schedules for the VP, all Ministers and Vice-Ministers
    to decide which events should be publicized and who will
    cover them (ref A). Any ministers who dare to speak publicly
    without her explicit permission are quickly removed.  In
    addition, the First Lady reportedly siphons $11 million
    monthly from state airport revenues, Free Trade Zones, and
    Immigrations and Customs charges. This money is supposed to
    fund FSLN-sponsored aid projects, but as of yet none have
    been announced.  (Comment: One project possibly funded by
    this illicit capital is the series of billboards reading
    "Arise the Poor of the World!" alongside a prominent photo of
    Ortega, which have recently popped up around Managua. The
    billboards bear the government's logo, but the government
    claims that the funds to erect them were not drawn from
    national coffers. End Comment.)

    ¶12. (C) Despite the apparent illegitimacy of her position,
    Murillo personally signed an agreement with Telesur,
    Chavez,s propaganda channel, to develop the Nicaraguan
    Channel 6, which had remained dormant since 2002. The station
    will require approximately $30 million to be reopened,
    according to Education Minister De Castilla. The stated goal
    of the partnership is to increase the "democratization" of
    the media.

    Poor Financial Planning
    - - - - - - - - - - - - -

    ¶13. (C) The Ortega administration is also running into
    difficulties in signing an accord with the IMF. The major
    sticking points are the IMF,s insistence on accounting for
    Venezuela's assistance in the budget and on Nicaragua,s lack
    of clarity on how it plans to achieve its economic and social
    goals.

    ¶14.  (C) Furthermore, it is becoming clear that due to
    paralysis and ineptitude at all levels, the current budget
    has been poorly managed. At the close of the first trimester
    only 12% of the capital spending allocated in the budget had

    MANAGUA 00001622  004 OF 005

    been spent. Delays are attributed in part to confusion caused
    by the investigations of corruption within some of the major
    infrastructure ministries during the previous administration,
    and by the wholesale firing of thousands of technical workers
    in the ministries by the current administration. As a result,
    the projects that capital expenditures are tied to have not
    gotten off the ground.

    Undermining Independent Institutions
    - - - - - - - - - - - - - - - - - - -

    ¶15. (C) As the opposition remains paralyzed, Ortega has used
    his power to attempt to consolidate security forces under
    executive control. Most recently, Ortega appointed Ruth Tapia
    Roa, a friend of the First Lady's with little background in
    defense or security, as "Secretary General with the rank of
    Minister" to head the Ministry of Defense, but he has so far
    preferred to run Ministry policy directly from the
    Presidency.  According to an internal memo, Tapia's primary
    goals are to purge the Ministry of the few remaining
    technical functionaries left from the previous administration
    and monitor the "ideological purity" of the armed forces.
    (ref C).

    ¶16. (C) The army has assumed the primary security
    responsibilities of the President's residence, a task which
    in the past has belonged to the National Police, an
    organization which Ortega feels is too "somocist" in origin.
    However, armed forces chief General Moises Omar Halleslevens
    has repeatedly stated that the army will remain apolitical
    and continue to support the constitution.

    Security Breaches
    - - - - - -  - - -

    ¶17.  (C) The Nicaraguan National Police continue to cooperate
    with the U.S. on counternarcotics efforts and resist efforts
    to be "co-opted" by Ortega.  The police continue to work with
    the Embassy, particularly through programs such as the vetted
    unit, the mobile inspection unit and the vehicle inspection
    station at Penas Blancas.  Chief of Police Aminta Granera
    told POL officers during a recent meeting that her
    relationship with Ortega is a "balancing act" and that she
    continues to push for police autonomy.  She claims that
    Ortega does not interfere with police operations.  However,
    she further elaborated that she is often required to attend
    events with Ortega where his rhetoric is "anti-gringo" and
    that this makes her "uncomfortable."

    ¶18.  (C) Even though airport security has been completely
    compromised and is regularly bypassed by the FSLN, the
    President has issued orders to give the appearance of
    security, heavily searching and double-checking documents on
    U.S. personnel who are likely to report that security
    measures are "in force."  One example that highlights the
    weakness in the system is the continued use of false "letters
    to board" provided by illegal immigrants arriving from "C
    class" countries that are regularly accepted by Nicaraguan
    immigration officials. Additionally, the Director and
    Assistant Director of Immigration no longer routinely share
    information with the Embassy regarding possible TIP cases.
    There are indications that these officials have also accepted
    payments from local Muslim organized crime figure Ismat
    Khatib for facilitating documents and visas and for
    permitting Iranian, Libyan and other Middle Eastern nationals
    to pass through the airport without documentation or
    registration.

    A Battle of Symbols
    - - - - - - - - - -

    ¶19. (C)  In what has become ground zero for a back-and-forth
    battle of symbols between administrations, the musical
    fountain that had been installed by former president Arnoldo
    Aleman on the old "Plaza de la Revolucion" (actually just an
    old parking lot) was removed by order of the First Lady.
    According to Aleman,s detractors, the fountain was intended
    to block FSLN protests in front of the Presidential Palace.
    In the face of public outcry, the Ortega Administration
    announced plans to relocate the fountain, but then scrapped
    them.  Besides being a deplorable use of public funds, the
    fountain's removal was allegedly illegal, as no one bothered
    to obtain a permit from the Mayor's office as is required by

    MANAGUA 00001622  005 OF 005

    law, prompting criticism by the Sandinista Mayor of Managua,
    Dionoso Marenco. (Comment: This episode is reminiscent of
    Ortega's previous faux pas with Nicaragua's cultural
    patrimony, the gift of two original manuscripts by Ruben
    Dario, Nicaragua's most well-known and beloved poet, to Hugo
    Chavez. End Comment.)

    The Honeymoon Is Over
    - - - - - - - - - - - - -

    ¶20. (C) The shenanigans of the Ortega-Murillo family have not
    been well received by Nicaraguans, including certain segments
    of the Sandinista party.  A CID/Gallup poll published on June
    20 indicated that Ortega,s popularity has dropped
    exponentially since his inauguration, from a 51% approval
    rating to -10%. A majority feels that Ortega has not governed
    democratically or in the best interests of the people.
    Nevertheless, most respondents were still optimistic about
    the country's future (a more thorough analysis will follow
    septel).

    Opposition Still Divided
    - - - - - - - - - - - - -

    ¶21. (C)  With a corrupt judiciary and an electoral authority
    increasingly packed with FSLN hacks, the National Assembly is
    increasingly pointed to as the last stronghold for democracy
    in Nicaragua. Although Ortega's erratic and authoritarian
    behavior has frightened the opposition, there are still
    several factors that continue to impede a united front
    against the FSLN. In the PLC, the continued influence of
    former President and party caudillo Arnoldo Aleman isolates
    the party from other segments of the opposition. The
    Sandinista Renovation Movement (MRS) has the difficult
    position of wanting to oppose Ortega without risking the loss
    of core supporters by appearing to submit too much to the
    Liberals. There is, however, a general agreement among all
    parties on certain issues; for example, condemnation of First
    Lady Rosario Murillo's role within the government; Ortega's
    poor fiscal policy; his slavish following and allegiance to
    Chavez; and the removal of the fountain in front of the
    presidential palace. The organization of unions and other
    labor groups in their struggle to raise the minimum wage
    could also be a point of unity for the Liberals (ref H).

    Authoritarianism with a Facade of Democracy
    - - - - - - - - - - - - - - - - - - - - - -

    ¶22. (C) Ortega,s primary goal remains the destruction of the
    ALN and the election of the majority of mayors in the
    November 2008 Municipal elections. So focused has this effort
    been that the only expenditure outside of these objectives
    has been propaganda costs to cover their remarks and maintain
    political support amongst the populace. For example, the
    administration has been dropping hints about a new plan to be
    announced July 19, but a leaked document revealed that the
    "Five Pillars of the FSLN strategy", (SEPTEL) contains no
    significant changes, merely an alternative presentation of
    the same objectives and rhetoric that the FSLN has utilized
    consistently throughout the last 6 months.

    ¶23. (C) A group of four political analysts speaking with
    embassy representatives on June 13, 2007 commented on what
    Ortega's actions over the last six months might indicate for
    the future. One described the likely arrangement as
    "authoritarianism with a facade of democracy". They
    pinpointed the source of FSLN power to three party
    characteristics: organization, devotion, and experience in
    harnessing the system to its advantage.  These are all
    characteristics that the opposition parties regrettably lack.
    TRIVELLI

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