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Cablegate: Ambassador Visits Mining Triangle - Uncertainty

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PP RUEHLMC
DE RUEHMU #0416/01 0991926
ZNY CCCCC ZZH
P 081926Z APR 08
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC PRIORITY 2390
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RUEKJCS/JOINT STAFF WASHINGTON DC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY
RHEHNSC/NSC WASHINGTON DC PRIORITY
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHDC PRIORITY
RUMIAAA/CDR USSOUTHCOM MIAMI FL//J2\J3\J5// PRIORITY

C O N F I D E N T I A L SECTION 01 OF 05 MANAGUA 000416

SIPDIS

SIPDIS

DEPT PLS PASS TO USAID LAC
DEPT FOR WHA/CEN GREENE AND NYMAN
DEPT FOR DRL G. MAGGIO
DEPT FOR INR/IAA - EMERSON
DEPT FOR USOAS
NSC FOR V ALVARADO
SOUTHCOM FOR FPA

E.O. 12958: DECL: 04/08/2018
TAGS: PGOV PHUM ECON KDEM NU
SUBJECT: AMBASSADOR VISITS MINING TRIANGLE - UNCERTAINTY
PREVAILS

REF: A. MANAGUA 105

B. MANAGUA 209
C. MANAGUA 212
D. MANAGUA 297

Classified By: Ambassador Paul A. Trivelli for reasons 1.4(b,d)

1. (C) SUMMARY: The Liberal Constitutional Party (PLC) and
"Vamos Con Eduardo" -- former members of the Nicaraguan
Liberal Alliance (ALN) loyal to Eduardo Montealegre -- are
running on unified tickets in November's Municipal elections
in the Mining Triangle towns of Bonanza, Rosita, and Siuna in
the interior of Nicaragua's Northern Atlantic Autonomous
Region (RAAN). However, in all three municipalities they
lack clear campaign strategies or visions for the future,
believing that popular dislike for their archival Sandinista
National Liberation Front (FSLN) -- fueled by mismanagement
and politicization of hurricane relief supplies -- will
guarantee victory. Suspension of elections in the
neighboring municipalities of Puerto Cabezas, Waspam, and
Prinzapolka by the President Ortega-controlled Supreme
Electoral Council (CSE), according to local leaders, is
motivated more by the potential loss of lucrative logging
contracts for trees felled by Hurricane Felix than by strict
political concerns.

2. (C) Transparent and free elections in November in the
region are threatened. Political leaders fear that the CSE
will facilitate changes of address for FSLN supporters from
the three election-suspended municipalities, enabling them to
vote in Liberal-controlled Siuna and Rosita. An influx of as
few as 1,000 voters into these municipalities would virtually
guarantee Liberal losses given the towns' relatively small
voter bases. Leaders are also worried about voters being
listed in other municipalities, the high percentage of
eligible voters without "cedulas" (national ID), and the
steep reduction in the number of independent election
observers assigned to the region. END SUMMARY.

3. (SBU) On a recent three day (March 31-April 2) trip to
the RAAN's "Mining Triangle" towns of Siuna and Rosita, the
Ambassador met with mayors, Liberal mayoral candidates,
community leaders, and civil society organizations to assess
the reality of Liberal unity at the local level, to discuss
how well the region is recovering from the affects of
Hurricane Felix, and to understand the potential impact of
possible election delays in the neighboring municipalities of
Puerto Cabezas, Waspam, and Prinzapolka. The Ambassador also
visited USAID-funded health projects in each town, breaking
ground on a much needed well for a hospital in Rosita, and
inaugurating an ultrasound diagnosis system at he health
clinic in Siuna that allows doctors in Managua to remotely
view ultrasound results of expectant mothers and discuss
their cases in real-time with local doctors. This system is
expected to sharply reduce maternal mortality rates in the
municipality which are the highest in Nicaragua.

Liberal Unified, but Lack Energy and Vision
- - - - - - - - - - - - - - - - - - - - - -

4. (C) Despite the turmoil created last month when ALN
President Eduardo Montealegre was stripped of his control
over the party just weeks before the candidate inscription
deadline (ref B) and significant disagreement between
Montealegre's supporters and local PLC leaders over candidate
lists, the two parties successfully struck alliances in
Rosita, Bonanza, and even Siuna where, only one month ago, it
appeared such compromise was impossible (ref C). However,
although now unified, the new "Liberal Alliance" in Rosita
and Siuna have no clear campaign strategy or messages, and
presented no concise visions for the future of these
municipalities. When asked directly by the Ambassador to
define their visions and strategies, the reactions were the
same: the candidates shuffled uncomfortably in their chairs,
exchanged glances, and after a half minute of silence,
produced generic answers about transparency and not stealing

MANAGUA 00000416 002 OF 005


money. We repeatedly heard the mantra that Siuna and Rosita
are Liberal strongholds and, therefore Liberal candidates
will win. (COMMENT: The exception was the vice-mayoral
candidate from Bonanza -- representing Vamos Con Eduardo --
who displayed an impressive grasp of the regions issues and
challenges and painted a clear vision for regional
development. END COMMENT)

5. (C) In place of outlining campaign strategies, Liberal
candidates complained that the FSLN is well-financed with
money from the central government and outside assistance from
Venezuela, enabling FSLN candidates to mount sizable
campaigns while the Liberals have nothing. Liberal
candidates repeatedly asked the Ambassador for direct
campaign financing on the order of USD 50,000 for Siuna, USD
30,000 for Mulukuku, USD 30,000 for Rosita, and USD 15,000
for Bonanza. The Ambassador reminded them that the USG
cannot finance political campaigns, but pledged to put them
in contact with the Republican and Democratic Institutes (IRI
and NDI, respectively) to discuss possible training
opportunities. He also recommended that Liberal-affiliated
NGOs in the region apply for USAID democracy funds.

Hurricane Relief Mismanagement - An FSLN Weak Spot?
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6. (C) Candidates -- and members of civil society --
universally agreed that the FSLN has grossly mismanaged
hurricane relief efforts by politicizing the distribution of
assistance, strong-arming residents in affected communities
to join President Ortega's Citizen Power Councils (CPC) or
withholding assistance. Examples of directly affected
communities that did not receive assistance because they
would not acquiesce to the CPCs are still fresh in people's
memories. However, Liberal candidates failed to articulate
strategies to actively exploit this FSLN weakness. Instead,
they appeared to take it on faith that people recognize the
FSLN's poor performance and would automatically vote for
Liberal candidates as a result.

The Politics of Wood - The Real Story Behind the Election
Suspension
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - -

7. (C) Civil society, political candidates, and mayors all
agreed that FSLN and their Yatama allies' mismanagement of
the Hurricane Felix situation as well as the regional
government's failure to deliver on promised social and
economic development programs virtually guarantee that the
FSLN and Yatama would lose if elections were held in the
hurricane-affected municipalities of Puerto Cabezas, Waspam,
and Prinzapolka. However, they insisted that election loss,
per se, is not Ortega and Yatama's principal reason for
pushing to suspend elections (reftel A, C, D) in these three
municipalities. Instead, our contacts universally agreed
that Ortega and Yatama leaders fear that election loss would
cause them to lose control over very lucrative concessions to
remove an estimated one million hectares in timber downed by
Hurricane Felix. While the mayors themselves do not control
concession approval, the future composition of the Regional
Council -- which does control the concessions -- would
inevitably shift towards greater Liberal control of the
Council's 45 seats. (NOTE: Liberals currently control 16
seats.)

8. (C) There is already strong suspicion that the pro-FSLN
Yatama-controlled Council is granting -- or facilitating --
timber concessions to companies outside the region that have
Sandinista ties while local timber companies and landowners
are unable to harvest their own timber. Several contacts --
including three Liberal members of the Regional Council --
mentioned that the Council, in its last session, had granted
a 60-year concession to a previously unknown company called
Raya Ka Raya. While media reports claim it is a U.S.
company, one of the Liberal Council members revealed, by

MANAGUA 00000416 003 OF 005


name, several partners affiliated with the FSLN and Yatama.
(COMMENT: Ironically, despite the fact that the Regional
Council had recently voted on the concession, none of the
three Liberal members we met with had a clear or complete
understanding of concession terms, raising doubts about, at
best, their active participation in the discussions and, at
worse, their active collusion in the deal. END COMMENT)

Threats to November's Municipal Elections
- - - - - - - - - - - - - - - - - - - - -

9. (C) Over the course of meetings with the candidates and
civil society leaders, several issues were raised that could
clearly threaten the transparency and fairness of November's
Municipal elections in the largely rural municipalities of
Rosita, Siuna, and Bonanza:

-- Reduction in number of accredited observers:
Representatives from Ethics and Transparency (EyT) in Rosita
and Siuna warned that their observer numbers had been cut in
half for November's election due to a lack of funding,
leaving Rosita with 28 observers (down from 45 in 2006) and
Siuna with 70 observers (down from 114 in 2006).

-- Political affiliation of ALN voting table members: As the
winner of the second largest number of votes in the 2006
Presidential elections, the ALN has the legal right to fill
the presidency or first member position of each voting table
in November's election. However, with control over the ALN
reverting back to Eliseo Nunez Sr. -- who has reportedly
struck a deal with Ortega -- members of the Liberal Alliance
in Siuna, Rosita, and Bonanza fear that the ALN's voting
table positions will be filled by FSLN members because most
of the already small base of ALN supporters in these
municipalities left the party for Vamos Con Eduardo, leaving
the legal ALN party with very few bodies to fill the
positions.

-- Influx of voters from municipalities where elections were
suspended: Political leaders fear that if elections in
Puerto Cabezas, Waspam, and Prinzapolka were suspended (NOTE:
A fear later confirmed the evening of April 5 when the CSE
announced that elections would be suspended in these three
municipalities. END NOTE), the FSLN -- through its control of
the CSE -- will encourage the influx of a large number of
FSLN supporters into Liberal-controlled Siuna and Rosita by
quickly facilitating changes of address, a normally lengthy
step required to appear on voter lists. Liberals reported
that an influx of less than 1,000 voters into either
municipality would tip the scales in favor of FSLN
candidates. (NOTE: This change of address scheme could be
most easily accomplished in Puerto Cabezas, the most
populated city in the RAAN and also the location of the CSE's
regional office, making it very easy for FSLN supporters to
complete the necessary paperwork. END NOTE)

-- Unverified Voter Lists: EyT representatives and Liberal
candidates also expressed concern about the "raton loco"
(crazy rat) phenomenon that affected rural voters in the 2006
Presidential elections in which voters' names appear on voter
lists in other communities or municipalities far from home.
Given the generally poor level of infrastructure, limited
public transportation, little knowledge of their electoral
rights, and high poverty levels of rural populations, most
voters in such situations simply go home without voting.
They are unable to argue their right to vote in their
traditional voting center and find it is too difficult and
expensive to travel to the location where their name appears.

-- Lack of documentation: Given that some 85 percent of the
Mining Triangle's residents are rural, contacts warned that a
significant portion (while exact figures were not available,
estimates ranged from 30-50 percent) of the voting-age
population lack either a "cedula" or a birth certificate
(required to obtain a cedula). Getting a cedula is difficult
because residents must travel to Puerto Cabezas -- 5 hours by

MANAGUA 00000416 004 OF 005


bus at a cost of nearly USD 25 -- and wait several days for
the documents to be issued. With the regional CSE under the
control of the FSLN, contacts complained that
Liberal-oriented voters are often sent away empty-handed with
the excuse of missing documents, technical problems, etc. or
are made to wait for long periods of time. As a result, many
residents simply do not bother to get a cedula (SEPTEL). In
contrast, contacts insisted that the FSLN is facilitating the
issuance of cedulas for FSLN or pro-FSLN Yatama members.

Economic Situation is Mixed
- - - - - - - - - - - - - -

10. (U) Cattle ranching is the dominant economic activity
between Rio Blanco -- the border town between the RAAN and
the department of Boaco -- and Rosita, leading the mayor of
Siuna to dub the area the "milk triangle" instead of the
mining triangle. Along the 5-hour drive between the two
towns, there is a nearly unbroken string of barbed-wire
fences strung between a collage of painted fence posts, and
cattle-hauling trucks lumbering past farmers sitting by the
side of the road, waiting for the milk truck to collect their
few battered canisters of milk. Basic agriculture and
largely informal mining are the other primary activities in
the region.

11. (U) There is wide-spread recognition that most
cattle-farming operation are inefficient due to ranchers'
ignorance about intensive land-use techniques and the
availability of relatively cheap land. This rapid spread in
cattle farming has caused an alarming loss in forest land,
threatening watersheds and pressuring near-by bio-reserve
Political and community leaders want to see vocational
programs to teach ranchers better land-use practices,
including more intensive cattle-raising practices and
economic diversification that would restore tree cover such
as growing cacao, citrus fruits, and even coffee in some
areas. The main obstacle to re-orienting ranchers is a lack
of resources in municipal governments and local community
groups. The Ambassador encouraged contact with Rainforest
Alliance and other organizations with similar expertise.

Community Property is a Common Source of Conflict
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12. (U) Immigration from surrounding regions is driving the
growth in cattle raising as poor farmers (and rich land
speculators) look for cheaper land. According to Siuna's
police commissioner, one "manzana" (approximately 1.7 acres)
in Rosita or Siuna is USD 500 compared to USD 10,000 in the
neighboring department of Matagalpa. This influx of
immigrants has created serious tensions between the small
indigenous population and the growing number of "mestizo"
(mixed) from neighboring departments. By law, most land in
the RAAN is held communally, however, much of it is
unoccupied (and thus cheap). Given low indigenous population
densities, new immigrants simply take the land or buy it from
indigenous communities unfamiliar with property values. The
director of FADCANIC, an indigenous NGO promoting further
autonomy for the region, wryly captured the essence of the
clash between indigenous and mestizo land-use philosophies
when he commented that "(Indigenous peoples) use landmarks to
indicate the limits of their territory, mestizos use
barbwire."


Comment - Opportunities for Further US Assistance
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13. (C) A number of clear opportunities for continued USG
assistance through existing programs emerged from the trip
and we will make every effort to facilitate contacts between
our current partners and these various groups. Opportunities
include:

-- Scholarships: In light of the paucity of post-secondary

MANAGUA 00000416 005 OF 005


educational opportunities available in the region and its
high level of poverty, there was great interest in
scholarship opportunities. However, our contacts were
generally unaware of the full range of USG scholarship
programs. Our public affair section will follow-up and
provide further information.

-- Small business development: There is a great need (and
awareness) to diversify the region's economy. New crops such
as coffee, cacao, and citrus fruits as well as tourism in the
bioreserve have excellent potential in the region. USAID
will facilitate contact with existing U.S. partners including
Rainforest Alliance, Agora Partnership, Technoserve, and
others.

-- Capacity building for farmers: Cattle-ranching will
clearly remain the Mining Triangle's key economic driver for
the foreseeable future. Therefore, as many leaders pointed
out, working the ranchers to maximize usage of current
ranchland and limit clear-cutting of additional forestland
will essential to preserving potable water supplies in the
region. As capacity building efforts should also include
economic diversification as described above, USAID's outreach
efforts to existing partners will explore training options as
well.

TRIVELLI

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