Cablegate: Nicaragua: Ensuring Democratic Continuity in The


DE RUEHMU #2044/01 2611945
P 181945Z SEP 06

S E C R E T MANAGUA 002044




E.O. 12958: DECL: 09/18/2026


Classified By: Ambassador Paul A. Trivelli. Reasons 1.4 (B,D).

1. (S) INTRODUCTION: Our election priorities in Nicaragua
have not changed since our February 24 update (Ref. D):
support clean, fair, credible, and inclusive national
elections; keep Nicaragua on the democratic path; and, end
the Ortega-Aleman pact's control of the political system.
Our four-point strategy to achieve these objectives -- unite
the democratic opposition; point out the past and present
shortcomings of both Ortega and Aleman; use our voice and
assistance to ensure fair elections; and, convince
Nicaraguans of the positive value of the bilateral
relationship -- has met with mixed results. An assessment
follows of the current political arena, efforts to achieve
our objectives, as well as recommendations to remedy
weaknesses in our strategy. END INTRODUCTION.

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2. (S) Polls still show that most Nicaraguans seek political
change and reject the current leadership of Nicaragua's two
dominant political parties. Early polls pegged Nicaraguan
Liberal Alliance (ALN) candidate Eduardo Montealegre and
Sandinista Renovation Movement (MRS) leader Herty Lewites as
the clear front-runners. However, since then, a fifth
presidential candidate, Alternative for Change (AC) candidate
Eden Pastora, entered the race; MRS candidate Herty Lewites
passed away, replaced by relatively unknown Edmundo Jarquin;
and, Sandinista Front (FSLN) candidate Daniel Ortega pulled
ahead in the polls. Recent polls suggest the following range
of support for the candidates: Ortega: 27%-31%; Montealegre
21%-28%; Liberal Constitutional Party (PLC) candidate Jose
Rizo and Jarquin vie for third place with 12%-17%; and,
Pastora 1%-2%.

3. (SBU) According to an M and R poll released September 11
(poll conducted on September 7-8, sample size 802 nationwide,
3.5% error), 35.2% of the respondents believe Montealegre
will be the next president of Nicaragua; 22.3% think Ortega
will win; 18.6% are uncertain or did not respond; 12.5%
believe Jarquin will win; 11.1% think Rizo will be the next
president; and, only .1% think Pastora has a chance.
Regarding voter preference, Montealegre gained 36.2%, Jarquin
19.2%, Ortega 16.7%, Rizo 11.1% and Pastora .1%.
Undecided/no response totaled 16.2%. (COMMENT:
Historically, voters' views on who will win an election in
Nicaragua tend to track more closely with electoral outcomes
than voter intentions, which most polls measure. However,
this particular M and R poll did not reach truly rural voters
and thus does not reflect the inclinations of that segment of
the population.)

4. (S) Even though approximately 70% of Nicaraguans reject
Ortega, he could still win the November 5 election because a
candidate can claim victory win with only 35% of valid votes,
with a margin of 5% or greater above the closest competitor.
While we expect Jarquin to shave off some traditionally
Sandinista voters, the difference might not suffice to
prevent a first-round Ortega victory -- especially
considering the real possibility that Ortega will attempt to
steal up to 5% of the first-round votes, as he knows well he
would likely lose a second round, except perhaps to Rizo.
The FSLN dominates the electoral and judicial branches of
government and will not hesitate to use its control to tilt
the election outcome in Ortega's favor. CSE cabinet director
Rodrigo Barreto, who privately claims he favors Montealegre,
has told us that the CSE leadership -- meaning CSE VP Emmet
Lang (FSLN), the real power behind the CSE -- has not
budgeted for a second round "because Ortega will win on the
first round."

5. (C) Low voter turnout is likely to favor Ortega and his
disciplined mass of Sandinista militants; high turnout is
more likely to favor the anti-FSLN vote, and the
anti-caudillo vote more generally. According to polls and
what we know from voter patterns in previous elections, most
independent voters reject Ortega and tend to vote for the
candidate they believe can beat him. Vigorous international
monitoring, combined with robust Nicaraguan observation can
minimize pact-driven fraud. Even with observation, we expect
the FSLN and PLC will use their influence in the CSE to
attempt to commit fraud, especially to in the selection of
Assembly deputies.

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6. (S) Convincing Liberals to unite behind a single
candidate has not been possible, in large part because PLC
leader Arnoldo Aleman still controls the party; PLC candidate
Rizo's blind ambition prevents him from acknowledging he
cannot beat FSLN rival Ortega; and, the PLC's smear campaign
against rival Montealegre has so far spoiled the efforts of
moderates to forge an alliance. On September 7, the lid blew
off on an FSLN-PLC cabal to besmirch Eduardo Montealegre so
that he would withdraw from the race or cave to Rizo and
rejoin the PLC. Norlan Moncada (Assembly Deputy Oscar
Moncada's nephew), who was involved in a PLC scheme, with
apparent FSLN collusion, denounced the plot a press
conference, mentioning the direct threats he received from
those involved when they realized he would speak out.

7. (S) According to Moncada, Carlos Ulvert, Gilberto Wong,
and Alvaro Somoza (all three PLC/Rizo supporters), and
Francisco Mayorga (FSLN sympathizer loosely associated with
the PLC and owner of one of the failed banks) created a
foundation (Pro-Verdad, or "for truth") to smear Montealegre,
falsely accusing him of wrongdoing in the CENIs case (debt
bonds to resolve the failed banks' debt). The "Pro-Verdad"
plan also included circulating false rumors that Rizo is
polling right behind Ortega while Montealegre has slipped.
The PLC and FSLN were hoping that the CENIs scandal would so
weaken Montealegre that a poll (reportedly to be fielded via
an Argentine firm connected with Rizo's Argentine campaign
adviser Felipe Noguera) would "demonstrate" that Rizo is the
only option capable of beating Ortega. Moncada drafted a
full sworn statement and provided copies to Embassy and the
Permanent Commission for Human Rights (CPDH).
8. (S) The CENIs confabulation represents a microcosm of how
the PLC-FSLN Pact works, and demonstrates clear connections
between the Rizo camp, Aleman, and the Sandinistas (in
addition to Mayorga, FSLN Contralor Montenegro was involved).
What were the motives? Ortega probably believes his chances
of winning the election are improved if his opponents remain
divided; besmirching Montealegre could help lower the support
for his closest competitor. While there is much speculation
regarding his accord with Ortega, Aleman appears to be
willing to let Ortega win the election in exchange for his
freedom and Assembly seats for his party hacks. Rizo's
motive is likely his blind ambition to don the presidential

9. (S) At this juncture, we believe Rizo and his running
mate Jose Antonio Alvarado (who in late May decided to cast
his fate with Rizo rather than Montealegre) should be pressed
to withdraw from the race and admit that their allegations of
corruption against Montealegre are unfounded. With Rizo out
of the picture, support for the PLC would further erode, and
Montealegre could emerge as the Liberal option best poised to
beat Ortega. Further, independent and undecided voters, who
largely reject the Ortega-Aleman pact, are more likely to
back Montealegre once it is clear that Rizo has broken with
the PLC and left the political stage. Montealegre's
anti-pact focus will then resonate more with voters who were
confused about talk of an eventual PLC-ALN alliance.

10. (S) One possible way to convince Rizo to resign and to
encourage a broader Liberal unity is through a poll that
would determine whether Montealegre or Rizo is best poised to
beat Ortega. According to President Bolanos' chief of staff
Leonardo Somarriba and senior political adviser Frank Arana,
President Bolanos has convinced candidates Eduardo
Montealegre and Jose Rizo to participate in such a poll.
However, the candidates have yet to iron out the details,
including what "benefits" will be accorded to the loser. The
poll would poll roughly 2,000 people in each of Nicaragua's
17 departments. (Note: We understand that the Taiwanese are
backing the poll effort, expected to cost around $200,000).

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11. (S) Our efforts to erode Aleman have not sufficed to
convince him to cede his hegemony over the PLC -- even though
we have convinced some PLC militants to leave the party and
endorse Montealegre. Other efforts:

--When Norlan Moncada approached the Embassy in early
September with his denouncement against the PLC-FSLN CENIs

scam, we encouraged him to do the right thing for his
country. The PLC's fingerprints are on the scam.

--The Embassy has distributed its "rap sheet" on Aleman's
corruption and continues to engage PLC militants and
lawmakers on the damaging effects of Aleman's undemocratic

--The Embassy continues to engage, with mixed success,
Nicaraguan and third country financiers to disassociate
themselves from Aleman. Our embassies in neighboring
countries furthered President Bolanos' efforts to persuade
the presidents and capital of these countries to distance
themselves from Aleman and support Montealegre. Montealegre
is now receiving some financial backing from El Salvador,
Guatemala, and Honduras.

-- Progress on the case against Aleman in Panama has eroded
his reputation; however, concrete progress on the U.S.
criminal indictment against Aleman - likely the most powerful
tool in convincing Aleman followers to leave his side -- has
not materialized. Nor has there been progress in the
Dominican Republic case against Aleman.

-- The RLA is working with our Customs and Border Inspection
office in Panama to request that the U.S. Attorney's office
in Southern Florida file a criminal complaint against
Aleman's wife Maria Fernanda for failing to appear for a
border inspection regarding her U.S. permanent residency
status. The last time she entered the United States, Maria
Fernanda was flagged for inspection to determine whether or
not she was still a lawful permanent resident. The
inspection was deferred and she was given a date to appear,
but she did not.

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12. (S) We have met with modest success in our efforts to
reveal Ortega's abysmal human rights record. Ortega's
"born-again Catholic" image, and his ability to stay removed
from the media's harsh scrutiny -- preferring instead to
undertake "pilgrimages" to convert voters to his "peace, love
and reconciliation" campaign -- has complicated somewhat the
efforts to challenge him. An update of our efforts:

--Embassy continues to support Nicaragua's Permanent Human
Rights Commission (CPDH) work to help the Miskito Indians
document and submit FSLN era human rights abuse cases before
the Inter-American Human Rights Commission (IAHRC) and other
international organizations. DRL funds were granted to help
CPDH (via Creative Associates) to continue the work and
computerize and publicize its extensive archives on
Sandinista abuses throughout the country in the 1980s. CPDH
has submitted over 100 cases before the Nicaraguan judicial
system for review (given the dominance of the FSLN and PLC in
the judiciary, predictably, no decision has been issued).
CPDH has held press conferences denouncing the abuses and a
public forum on genocide. It will hold another forum in
October, featuring a number of the Ortega-era victims and
will issue a bulletin containing their testimonies. The CPDH
is also preparing cases to present before the IAHRC and a
Spanish court.

--Embassy arranged for a Miskito survivor of the Leimus
massacre to receive an artificial limb through the OAS
demining program in Managua.

--Embassy helped facilitate Ortega's stepdaughter Zoilamerica
Narvaez's trip to Washington in June, where she discussed her
case before the Inter-American Human Rights Commission, met
with State Department officials, contacted pro bono lawyers'
associations who might be able to help her advance her sexual
abuse case against her stepfather, and interviewed with
Univision in Miami. The release of part of her Univision
interview was scheduled for late August in Miami and via
Channel 10 in Managua; however, Ortega reportedly "persuaded"
Channel 10 to quash the interview. Ortega's efforts to
censure Zoilamerica stirred up a public outcry and drew
criticism from the ALN and MRS. Center-right daily La Prensa
printed the text of the interview; bootleg copies of the
interview are now circulating, and the IAHRC has expressed
concern to Zoilamerica over Ortega's censorship. We are
helping facilitate private sector support for Zoilamerica to
travel to Washington in October for her IAHRC hearing.

--Embassy updated and disseminated "rap sheets" on the
excesses and failures of the Sandinista Era and Ortega to
share with appropriate audiences. Embassy successfully
encouraged MRS leadership -- FSLN-dissident Herty Lewites and
successor Edmundo Jarquin -- to maintain their independence
from Ortega. Jarquin has made it one of his key objectives
to publicly slam Ortega, as has Lewites' widow Carmen, who
recently rebuffed Ortega's referring to Lewites as a

--Embassy is investigating probable links between the FSLN
and narcotrafficking on the Atlantic Coast, specifically
Yatama candidates running on the FSLN ticket and
FSLN-affiliated judges who release suspected narcotraffickers.

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13. (C) Our outreach to ensure a fair election outcome and
to strengthen Nicaragua's democracy continues to be robust
and unequivocal. The Ambassador and other senior officials
employ every opportunity available in Managua and during
frequent trips throughout the country to highlight our policy
interests, feature our programs, and to speak out clearly and
forcefully on behalf of the legitimate, democratic
aspirations of the Nicaraguan people. While the FSLN and PLC
have criticized the Ambassador's role because it hits a raw
nerve, the ALN and MRS have largely supported his words and
actions. And, while polls suggest that Nicaraguans are
divided in their views regarding outside interference in
Nicaragua's internal affairs, most Nicaraguans, especially
rural voters, appear to expect the U.S. to speak its mind.
Ironically, rural voters are those who still are most
inclined to back Arnoldo Aleman, as they are far removed from
exposure to his pact with Ortega and how it has hurt the
country's development.

14. (U) A summary of our use of over $12 million for
election technical assistance, outreach, and observation
(much of it channeled through the CEPPS IRI, NDI, and IFES
agreement and their local partners) follows:

--CSE support (technical assistance, training, and material
assistance): USD 2.9 million

--Domestic observation (March 2006 Atlantic Coast elections,
November national elections, possible run-off election
observation, and related studies): USD 3.1 million

--Civic education and vote promotion (Get out the Vote,
secondary school civic education, and citizen attention
centers): USD: 3.4 million

--Political party poll watcher (fiscales) training and
manuals: USD 600,000

--International observation (OAS Election Observation Mission
(EOM): USD 2 million

15. (C) We also draw on our weekly elections working group
sessions and regular Donor's Group meetings to coordinate our
efforts, maximizing limited resources, and developing
milestones and criteria in the electoral process required for
valid election results. We continue to press the group to
issue a joint communique calling on the CSE to ensure free,
fair, inclusive, and credible elections on November 5. Thus
far, the Canadians are on board, and the Europeans may be
willing to sign closer to the election.

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16. (C) We continue to appeal to the desire for most
Nicaraguans, including many Sandinistas, to maintain close
ties with the United States -- highlighting over $45 million
in USAID funding for FY 2006 and $175 million in Millennium
Challenge Account funds; IFIs and bilateral donors reliance
on our assessments; the sizable Nicaraguan population
(250,000-500,000, including over 4,500 benefiting from
Temporary Protective Status (TPS) in the United States, who
send over $500 million/yr. in remittances. The Ambassador's
message that these opportunities could disappear if Nicaragua
elects an undemocratic leader appears to have resonated.


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17. (S) Restrictions on funding uses have affected what we
can do an certain fronts, namely leveling the uneven
political playing field that pits a well-funded Ortega -- who
enjoys the backing and money of Venezuelan President Hugo
Chavez and of Nicaragua's lucrative FSLN-controlled court
system -- against Jarquin's cashless MRS and Montealegre's
under-funded ALN -- which is also constantly under attack by
the PLC. As the final stretch nears, a full court press is
in order:

--Clinch the Aleman indictment in the United States and a
decision on the civil case for forfeitures of at least some
of the Aleman family CDs.

--Announce/reveal the narco, and possibly terrorism-related,
money laundering indictment of Supreme Court Justices (U.S.
Court in Las Vegas) involved in a scam to take possession of
$609,000 in cash confiscated from a narcotrafficker connected
to Colombian and Mexican cartels.

--Encourage Nicaraguan and regional private sectors to
consider backing Eduardo Montealegre as the democratic
alternative that can beat Daniel Ortega. He tells us that at
this late date, the Nicaraguan private sector is still not
providing sufficient funds. The lack of funds has especially
hurt the ALN's campaign efforts in rural areas of the country
as campaigners to not have campaign materials to deliver nor
transportation to deliver them. Montealegre has visited El
Salvador and is considering visiting other neighboring
countries to seek additional campaign funds. U.S. embassies
could help facilitate meetings between Montealegre and the
local private sector, as Embassy El Salvador has done.

--Encourage Jarquin to remain in the race and continue our
public statements that the U.S. considers the MRS a viable
democratic alternative. The MRS has told us that they are
severely cash-strapped. Jarquin estimates he can shave off
several points from Ortega, but his lack of funds limits his
ability to do so. (NOTE: We believe Jarquin could but draw
at least 5-6% of the FSLN vote -- enough to make a
difference.) Herty Lewites' nephew Israel is considering
traveling to the United States to seek funds from the Jewish
community with whom Herty maintained contact.

--Draw on Republicans who maintained close ties with the PLC
starting in the 1980's to talk to the PLC camp and tell them
their game is over, that Montealegre is clearly the best
democratic choice to beat Ortega. If, as we expect,
Montealegre leads Rizo in a joint poll, use the information
to convince Rizo and his followers that it is clear he cannot
win the election.

--Ensure the OAS stays on top of the CSE, and quickly snuffs
out any/all attempts at chicanery. The latest concern
involves the new regulations that allow fiscales and voting
table (JRV) officials to annul the results of voting tables
with one missing signature. Encourage the OAS to make
statements responding firmly to Daniel Ortega's sharp
criticism of the OAS Election Observation Mission.

--Encourage/support a "remembrance campaign," combined with
reminders/tangible indicators of all the opportunities and
benefits that come from their close association with the
United States (CAFTA, MCC, remittances, Free Trade Zone jobs,
tourism), the risks of losing them if Ortega wins.

--Revoke the visas of FSLN/Yatama candidates/judges found
engaged in, or benefiting from, narcotrafficking activities;
show links between FSLN and narcotrafficking.

--Step up engagement with department capitals and rural
voters, especially those in the departments of Jinotega and
Matagalpa, who still revere Aleman and are unaware of his
alliance with Ortega and how it has hurt the country and
their welfare.

--Continue to encourage PLC mayors and other local leaders to
challenge Aleman's control of the party and encourage them to
withdraw in support of Eduardo Montealegre as the only viable
option to beat Ortega.

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