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COHA, ALBA and the propaganda war in Nicaragua

Prospero's baloney : COHA, ALBA and the propaganda war in Nicaragua

by Toni Solo

To answer the question why the United States stumbles from one foreign policy disaster to another, one has only to consider the disinformation its intellectual classes feed into public policy debate. Latin American intellectuals from Rodó to Retamar have used motifs from Shakespeare's Tempest to frame discussion of Latin America's identity in relation to Europe and the United States. Following their example, the motif of purposeful enchantment confounding people's ability to discern fact from narcissistic, self-serving and often downright dishonest fantasy sits well when it comes to the neocolonial propaganda output of US NGOs like the Council on Hemispheric Affairs (COHA).

On August 13th this year, COHA published the article “Nicaragua & ALBANISA: The Privatization of Venezuelan Aid” by their research associate Brendan Riley. The article purports to be an independent analysis of Venezuelan development cooperation to Nicaragua under the ALBA framework. But, relying on mendacious, disingenuous Nicaraguan media reports, it gives an erroneous and inaccurate account of the way ALBA's programs in Nicaragua work. On the basis of that failure Riley then offers tendentious moral-political judgements in line with the standard US State Department themes taken up constantly by the internally discredited Nicaraguan opposition, namely corruption, democracy and good governance.

COHA, CINCO , Dyncorp

The whole article is self-evidently cribbed directly – complete with identical innuendo and factual mistakes - from sources in the US funded Nicaraguan opposition. The very title of Brendan Riley's article is one used also by Carlos Fernando Chamorro, unscrupulous self-promoting scion of Nicaragua's oligarchic Chamorro family. The Chamorros enjoy a virtual monopoly of Nicaragua's Press media through their ownership of the “El Nuevo Diario”, “La Prensa” and “Hoy” newspapers. Chamorro uses a literal Spanish translation of the title of COHA's article in a Nicaraguan opposition slideshow at this URL.

The obvious conclusion is that COHA worked closely with Carlos Fernando Chamorro in recent months to produce a coordinated propaganda attack on ALBA, specifically ALBA in Nicaragua. COHA produced a propaganda piece in English written by Riley. Chamorro, director of the USAID and Dyncorp supported CINCO media NGO in Nicaragua, produced the slideshow presentation in Spanish. Both pieces of propaganda use the same material, making the same arguments and sharing the same factual mistakes.

Carlos Chamorro's CINCO NGO operates as an umbrella for various smaller organizations associated directly with his family and political cronies. CINCO willingly accepts support from the notorious Dyncorp private military contractor to the US government via the Camtransparencia program. COHA's collaboration with CINCO via its attack piece on ALBA in Nicaragua consolidates the disinformation feedback cycle that starts from the US State Department. In line with US government propaganda themes, US allies in the local political opposition and their media outlets in Nicaragua, then feed disinformation and downright untruth into the international corporate media (Wall Street Journal, McClatchy News, the New York Times and their foreign counterparts).

COHA's disinformation article on ALBA in Nicaragua reveals how deep the collusion goes between the rich country progressive managerial classes that control intellectual production for their sector of international opinion and foreign NGOs funded by US government sub-contractors like Dyncorp. What the State Department's strategists have achieved with this subtle breakthrough is a kind of organic osmotic networking to feed their message into rich country liberal and progressive information NGOs, think tanks and web sites. Those organization's intellectual production then flows into the mainstream corporate disinformation directed back into the Central American region as “news” or “independent analysis” to reinforce the local propaganda onslaught against, in this case, Nicaragua's Sandinista-led government. The technique is the very same everywhere else in Latin America.

This means that when supposedly radical web sites publish anti-Sandinista propaganda like, for example, Roger Burbach's article in early 2009 for NACLA or COHA's anti-FSLN article by Brendan Riley, they are integrating themselves into a disinformation process designed in the US State Department with support from powerful subcontractors like Dyncorp and other similar multinational corporations. That should come as no surprise to anyone sceptical of the role of the progressive managerial classes that control intellectual production in North America and the countries of the European Union.

In any case, the subservience to broad State Department propaganda requirements of COHA - and other similar organizations like the Washington Office on Latin American Affairs or Inter-American Dialogue - could not be clearer. They all operate from the absurd Americanist propaganda premise that the United States offers legitimate global benchmarks for democracy, justice, human rights and good governance in general. The words of Malcolm X to an audience in Accra forty five years ago still echo loud and clear :

“...I just try to face the fact as it actually is and come to this meeting as one of the victims of America, one of the victims of Americanism, one of the victims of democracy, one of the victims of a very hypocritical system that is going all over this earth today representing itself as being qualified to tell other people how to run their country when they can’t get the dirty things that are going on in their own country straightened out. “

Facts about ALBA in Nicaragua

In summary, the facts about ALBA in Nicaragua are straightforward. In 2006, Venezuela began assisting Nicaragua with fuel and oil derivatives on preferential terms. The original agreement was between the Sandinista-led Nicaraguan Association of Municipalities and a subsidiary of Venezuela's State oil company PDVSA. When the Frente Sandinista de Liberación Nacional took office in 2007, a more far-reaching agreement was signed between PDVSA and Nicaragua's State oil company Petronic. That agreement was superseded through 2007 and 2008 with the formation of a joint venture company ALBANISA, majority-held by PDVSA with Petronic as the minority partner.

All these agreements have operated within the framework of Petrocaribe which is made up of 19 countries in Central America and the Caribbean. The standard agreement under Petrocaribe is for member countries to receive a given amount of Venezuelan oil, fuel and other oil derivatives of which 50% is paid within 90 days and 50% paid over 20 years with highly preferential interest rates of as little as 2%. The agreements usually stipulate that the 50% to be repaid over 20 years should be used for social investment programs via entities approved by PDVSA and the ALBA Social Fund.

In Nicaragua, because the opposition political parties are so hostile to the Venezuelan government, those agreements have never been via the Nicaraguan State but through private-sector companies ultimately controlled by PDVSA. Both COHA and CINCO argue that the funds are public. But they are not. Both COHA and CINCO argue the funds are ultimately controlled by Daniel Ortega and his family circle. That is completely false also. The funds are ultimately controlled by PDVSA and other ALBA institutions like BANDES, Venezuela's development bank.

In Nicaragua, 50% of the price of oil, fuel and other oil derivatives due to PDVSA is split into 25% to be managed directly by a national savings cooperative called CARUNA and 25% to be supervised by the ALBA Social Fund, also through CARUNA. Riley gets this flat out wrong, insisting, incorrectly, that ALBANISA directly administers one of those two blocks of social investment funds. That is not the case, as officials of both ALBANISA and CARUNA have made clear in interviews readily accessible on the web (via a simple search for “nicaragua entrevista francisco lopez albanisa” or “nicaragua entrevista alba caruna”). COHA prefers to cite dishonest opposition glosses over the factual account available from officials of the organizations concerned.

Repayments under the Petrocaribe and ALBA frameworks can be made in kind with, for example, agricultural produce, a barter arrangement effectively reducing the role of US dollars in intra-regional trade. In recent years, Petrocaribe has extended its remit to assist with food security. That has been especially important for member countries which experienced great difficulties during 2008 when oil and food prices spiked dramatically higher, prior to the collapse of the US and European financial system later that year.

More ambitious than Petrocaribe, the ALBA framework currently has eight member countries. ALBA includes far-reaching economic, social, cultural, educational, technical and scientific components. ALBA's literacy programmes have dramatically reduced illiteracy in Nicaragua, Venezuela and Bolivia. Its health care programs, like Misión Milagro, and numerous ALBA-funded Cuban medical brigades have made possible previously inaccessible health care for millions of people in the region.

ALBA supplements the social investment resources derived from Petrocaribe with low interest credits from Venezuela's National Development Bank and other funding that has become available as ALBA has developed. As part of the ALBA framework, PDVSA and its subsidiaries help set up intra-regional companies to engage in commercial operations across various sectors, from oil refinery construction and petrochemical facilities to agribusiness and pharmaceuticals. ALBA has also established its own regional development bank and the SUCRE clearing system of compensation payments freeing countries and companies from the need to conduct intra-regional commercial transactions in foreign currency.

COHA's factual inaccuracies

In that context, the COHA article gets things factually wrong right from the start. Contrary to Brendan Riley's account, FSLN leader Daniel Ortega had made clear his intention to incorporate Nicaragua into Petrocaribe and ALBA months before he took office as President in January 2007. ALBA's extensive practical operations are far from “symbolic opposition to the free trade agreements”. It is insanely counterfactual to suggest, as COHA's article does, that ALBA suffers from a “a lack of concrete results”. Support from ALBA made it possible within twelve months to eliminate the 12 hour power cuts that had become a routine daily feature in Nicaragua under the previous incompetent neoliberal Bolaños administration. Nicaragua has already met several of the UN Millenium Development Goals thanks directly to ALBA.

COHA's article attempts to suggest that ALBA's role in promoting Nicaragua's economic development is somehow compromised by Nicaragua's membership of the Central American Free Trade Agreement. But the FSLN has always advocated a mixed economy ever since its participation in the National Reconstruction Government. President Hugo Chavez too has repeatedly acknowledged the importance of a mixed economy for Venezuela. Contrary to false Nicaraguan opposition propaganda, the FSLN did oppose CAFTA on the terms imposed by then US Trade Representative Robert Zoellick and his team. But they do not necessarily oppose trade agreements as such.

Despite those facts, Riley writes “Nicaragua’s simultaneous membership in the Central American Free Trade Agreement (CAFTA) suggests that ALBA does not quite play the revolutionary role to which its proponents initially aspired.” In writing that, Riley is merely reassuring his North American audience that he too is suitably sceptical of ALBA's achievements and its radical region-changing logic. His irrelevant posturing contradicts Riley's own contention that “ALBA has proved a destabilizing force in an already polarized political environment.”

So, in one paragraph Riley suggests that ALBA probably has very little impact and really is not especially radical. Then, in the next paragraph, we find ALBA is in fact a very real force and one that is “destabilizing”, an adjective copied straight out of the US State Department regional screenplay. Riley immediately goes on to demonstrate he has completely failed to ascertain the facts about how ALBA's programmes are implemented in Nicaragua.

He writes, “Venezuelan cooperation through ALBA led to the creation of a private company called ALBANISA (ALBA de Nicaragua, S.A) to manage the anticipated investment funds.” This is completely incorrect. ALBANISA's contractual agreement with PDVSA stipulates that ALBANISA has to pay the 50% of payments (due for oil and oil derivatives provided by PDVSA) assigned to social investment funds in two 25% tranches to management entities specified by PDVSA. In fact, for both the 25% social investment components, the PDVSA approved management entity in Nicaragua is the national savings cooperative Caja Rural Nacional R.L. (CARUNA)

There is no excuse for Riley's crass error of fact. Interviews with the relevant officials of ALBANISA and CARUNA are readily accessible in both English and Spanish. COHA's article misleads its readers as to the basic facts of how ALBA works in Nicaragua by stating incorrectly that a private commercial company is responsible for managing large social investment funds. Riley compounds that factual error by clearly arguing the funds are managed without adequate oversight. That is not true either. Riley's article on this issue is based on false Nicaraguan opposition propaganda rendered into digestible disinformation via COHA's Americanist baloney machine.

Institutional controls

Out beyond Riley's fact-free baloney-feast, the regulatory framework in which ALBA's development cooperation programmes work in Nicaragua operate conforms to standard practice in countries around the world. ALBANISA and its subsidiaries as private commercial companies are all subject to Nicaraguan company law and obliged to comply with the relevant tax, customs and excise, employment law and other obligations as well as satisfying reporting requirements to Nicaragua's Companies Register. This general institutional framework also applies to various other companies set up by ALBANISA, mostly in the energy and transport sector.

ALBANISA's minority shareholder Petronic is subject to periodic audit by Nicaragua's Comptroller General's office. It was subject to such audit in the first semester of 2010 – an audit, which according to one of Nicaragua's State auditors in a presentation to journalists, made only minor technical recommendations. ALBANISA itself may be subject to audit in future, depending on a determination yet to be made by the relevant authorities. ALBANISA and Petronic report occasionally to the Economic Committee of Nicaragua's National Assembly and have also provided information to the IMF.

CARUNA, as well as having to file reports with the national Tax Office and the National Cooperative Institute, is also overseen by Nicaragua's bank and financial institutions supervisory body. Apart from managing ALBA's social investment funds, CARUNA, as it has done for many years, also manages very large funds of other foreign aid and development cooperation organizations. As well as reporting to the various relevant State insitutions, CARUNA has to report both internally to its members and externally to the entities on whose behalf it manages funds. In the case of the ALBA funds it is obliged to report to PDVSA and other ALBA entities like the Venezuelan Development Bank, BANDES.

In addition to this institutional framework regulating the operations of ALBANISA, other ALBA companies and CARUNA, the ALBA framework itself has planning and evaluation structures to ensure adequate use of ALBA's resources. ALBA has developed similar kinds of planning, policy and evaluation stuctures to those developed by the European Economic Community before that regional body turned into the European Union. ALBA bodies like the Economic Council, the Social Council, the Political Council and others exercise an effective supervisory role over the use of funds.

This is the overall commercial and institutional context in which ALBANISA and its subsidiary companies operate. Opposition corporate media in Nicaragua have tried desperately to portray ALBA's arrangements as a web of corruption to benefit the family clique of President Daniel Ortega. Their fake reports rely overwhelmingly on innuendo they would never apply to the private companies of political allies like the Chamorro family itself or of Eduardo Montealegre, currently indicted for massive fraud of public funds. COHA has joined the hypocritical Nicaraguan opposition chorus.

COHA/CINCO double act

The double-standards are particularly apparent when it comes to Carlos Chamorro's personal fiefdom, the CINCO mutant media octopus-tit squirting out succour to Chamorro's family, friends and political associates like women's activist Sofia Montenegro. Over the years CINCO's resources have derived from various sources including USAID, countries of the European Union and intermediaries including European NGOs and US corporations like Dyncorp, currently via the USAID funded Camtransparencia programme. Self evidently, those entities support CINCO on political criteria to strengthen the centre-right corporate-friendly Nicaraguan opposition of which CINCO board members like Carlos Chamorro and Sofia Montenegro are leading actors.

COHA/CINCO's combined assault on ALBA in Nicaragua depends on downright misreporting, falsely claiming that the ALBA funds are ultimately corruptly managed in an entirely discretional way by Daniel Ortega and his family. In fact, the resources derived from ALBA have to be accounted for to their sources in ALBA's steadily developing institutions, PDVSA, BANDES, the various ALBA Councils, the ALBA Bank. What COHA/CINCO seem to be complaining about is that the corrupt politicians whom they prefer – whose shameful record has been damningly recorded by Nicaragua's State audit body - cannot get their own corrupt hands on ALBA's resources.

The local media assault – led by the centre right Chamorro family's press monopoly – amounts to little more than local oligarchs tearing their garments and gnashing their teeth at being unable to crush a dynamic challenge to their accustomed economic dominance and that of their foreign corporate masters. They hate ALBA because it renders them irrelevant. The local media assault in Nicaragua feeds the infinite disinformation feedback loop in North America, across the political spectrum from the Wall Street Journal and McClatchy News to Counterpunch and Znet.

COHA's article helps complete the disinformation feedback loop by adding the questionable prestige of North America's intellectual classes to the bogus arguments of tendentious political players like Carlos Chamorro and his clique. For example, COHA's Riley writes : “Opposition members allege that the Ortega government has been embezzling these funds. Although this accusation remains difficult to prove, the state must acknowledge what could be the legitimate fears and suspicions of the public. Therefore, it should begin by including these funds in the national budget.”

Riley's neocolonial cant begs the question of why Nicaragua should be urged to have incomparably higher standards than the United States with regard to private entities involved in financial relations with the State. The day Congress audits the Federal Reserve, Riley might begin to have a plausible case. Until then, it is reasonable to apply the same criteria to Nicaragua as those that apply in the US. Nicaragua's company law is probably more robust than the woeful US crony regulatory framework. There, for example, the Federal Accounting Standards Board and the Federal Deposit Insurance Corporation cut crony-capitalist backroom deals with corporate financial institutions enabling them to keep multi-billion dollar liabilities off their balance sheets so as to be able to continue paying out massive bonuses to incompetent executives.

COHA and Brendan Riley would have more credibility taking on the issue of corruption in Nicaragua if they paid equal attention, for example, to corruption involving opposition politicians and their families and supporters, or to the history under Nicaragua's neoliberal governments of egregious cosy tax holidays enjoyed by corporations like ESSO brought to light under the Sandinista government. The Chamorro family's media empire vehemently supported ESSO in that dispute. Now they hypocritically team up with COHA attempting, without success, to pin corruption on the FSLN government led by Daniel Ortega.

In fact, there was a corruption case involving ALBANISA which was dealt with by the Nicaraguan courts and documented by auditors from PDVSA. Even Riley takes note of it. But still manages to get the facts wrong. The case involved a relatively minor fraud involving around US$70,000. Auditors from PDVSA documented the fraud. The case went to court. The episode makes all the previous allegations of corruption at the highest levels and lack of oversight look ridiculous.

Riley alleges that the PDVSA auditors' report found “some 1.4 million córdobas (nearly US $70,000 of ALBANISA funds) had gone unaccounted for, though unofficial sources claim the figure could be much greater. As a result of the report, López Centeno was removed from his position.” Firstly, it is completely gratuitous innuendo to note baseless speculation by unattributed “unofficial sources”. Secondly, Francisco López was never dismissed from his position as Vice-President of Albanisa. Ever. Riley is completely misinformed because he has swallowed the jaundiced reports of his soulmates in the Nicaraguan opposition media without checking them.

Both Riley as the COHA dummy and Carlos Chamorro, his CINCO ventriloquist, use innuendo, factual error and the exaggeration of trivia to build their nonexistent case against ALBANISA and ALBA. But Riley spouts a special line in crocodile tears about the polarization of Nicaraguan politics, failing to note that the opposition should in theory enjoy a walkover in the National Assembly because the FSLN party, while controlling the Executive, only have 38 of the legislature's 92 seats.

Even so, the Nicaraguan opposition have dismally failed to act purposefully to use that majority to their advantage. Riley writes as though Nicaragua's polarized politics stem from antidemocratic failings of the FSLN in terms of governance – another false myth propagated by the absurdly incompetent Nicaraguan opposition. It is the bitter hatred of corrupt opposition political leaders like Eduardo Montealegre and Arnoldo Aleman and the endless meddling of cynical oligarchs like the Chamorro family that have poisoned Nicaragua's political life. Even the US embassy has finally been forced to acknowekledge that undeniable truth.

In the meantime, Daniel Ortega's FSLN government, thanks to ALBA, has dramatically reduced extreme poverty and reached several other of the UN Millenium Development Goals well ahead of time. Government policies have won praise from the UN Food and Agriculture Organization, the Panamerican Health Organization, UNESCO, the IMF and the Inter-American Developmnent Bank. That is the real news story in Nicaragua. Riley's wearisome regurgitation of the discredited and irrelevant litany of complaints from embittered Nicaraguan oligarchs has little to do with the reality of what is happening in Nicaragua.

The self evident purpose of COHA's intimate collaboration with CINCO is to try and discredit Nicaragua's Sandinista government. Articles like Riley's on Nicaragua serve to consolidate the Prospero baloney-spell that keeps people in the US hopelessly ill-informed about what is going on in Central America and Latin America generally. The accusation against COHA is the same as that against the rest of the neocolonial liberal, progressive and radical intellectual managerial classes in North America and Europe.

To Nicaragua they apply the kind of Americanist criteria Malcolm X and many others have criticised so eloquently. In practice, they collaborate propagating the anti-Sandinista propaganda message of the US State Department. It is worth asking why that should still be so when the success of the FSLN government in Nicaragua is now indisputable.

Not only have President Ortega and his team successfully defended Nicaragua's impoverished majority against the worst effects of the rich country provoked global recession. In that adverse economic context and at great political disadvantage in the country's legislature, they have increased the living standards of the worst off and made marked advances in implementing the historic programme of the FSLN.

Most North American progressive and radical opinion does not recognize that fact. Intellectuals and academics in moderately progressive bodies like COHA and NACLA and writers who publish in supposedly more radical outlets string along with counterfactual State Department and Nicaraguan opposition propaganda. For such a broad intellectual class to be so comprehensively wrong on Nicaragua is noteworthy.

For that class to let pass, never mind promote, the same disingenuous propaganda as the US State Department is conclusive proof that radical and progressive opinion in the United States represent a loyal opposition. Its members give the appearance of resisting government policy but are ultimately extremely comfortable with the status quo. Discussion of Nicaragua reveals that most progressive and radical opinion in the United States is still irremediably imbued with the very Americanism that Malcolm X denounced over forty years ago.


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