Cablegate: While Plc Moderates Seek Liberal Unity, Hardliners

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PP RUEHWEB

DE RUEHMU #1972/01 2501915
ZNY SSSSS ZZH
P 071915Z SEP 06
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC PRIORITY 7499
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC

S E C R E T MANAGUA 001972

SIPDIS

SIPDIS

DEPARTMENT FOR WHA/CEN, WHA/USOAS

E.O. 12958: DECL: 09/07/2026
TAGS: PREL PGOV PINR KDEM NU
SUBJECT: WHILE PLC MODERATES SEEK LIBERAL UNITY, HARDLINERS
DESTROY CHANCES OF RAPPROCHEMENT

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

1. (C) SUMMARY: While some Liberal Constitutional Party
(PLC) Assembly moderates continue to seek a PLC alliance with
Eduardo Montealegre's Liberal Nicaraguan Alliance (ALN), PLC
hardliners have ratcheted up their party's smear campaign
against Montealegre to the point that an alliance is likely
neither tenable nor advisable. Although claiming he seeks
Montealegre's reunification with the PLC as the sure way to
beat Sandinista Front (FSLN) candidate Daniel Ortega, PLC
candidate Jose Rizo appears to be complicit in the PLC's
attacks against Montealegre. While Rizo's apparent
complicity can likely be attributed to his blind ambition to
don the presidential sash, Aleman's intentions appear to be
much darker. END SUMMARY.

2. (C) PLC National Assembly candidate/former Contra
Maximino Rodriquez acknowledged to polcouns on September 1
that Rizo cannot win without Montealegre's support, fretting
that a divided Liberal camp will pave the way for an Ortega
victory in the November election. However, he still holds
out hope that PLC-ALN unification is feasible - but under the
PLC umbrella. According to Rodriquez, Arnoldo Aleman, whom
he claimed does indeed have cancer, Aleman and his family
might be willing to withdraw from the PLC, Aleman's Assembly
candidates could be convinced to resign, and the party's
leadership "reformed" if it meant unifying the Liberals.
Acknowledging the incongruence between the PLC spokesperson's
vitriolic attacks on Montealegre and Rizo's stated efforts to
shepherd Montealegre back into the PLC fold, Rodriguez also
concurred that Liberal infighting hurts both PLC and ALN. To
polcouns' suggestion that both sides should cease and direct
their attention towards challenging the FSLN, Rodriguez said
he would recommend the PLC halt its attacks against the ALN.

3. (C) In a September 4 meeting, PLC supporter/AMCHAM board
member Terencio Garcia asserted to polcouns that Liberal
unity is still possible and the only path to beating Ortega.
Asserting that Rizo is closing in on rival Montealegre in the
latest polls, Garcia argued that Montealegre should join the
PLC and run as Rizo's VP. Polcouns countered that all
credible polls thus far show Montealegre in the lead and the
candidate most likely to beat Ortega in a second round.
Garcia next suggested Rizo and Montealegre measure their
relative strengths in a jointly approved poll. Polcouns
observed that while Montealegre has offered to participate in
such a poll, to date, Rizo has not. Garcia agreed that the
ugly squabbling between the PLC and ALN only serves to
advance Ortega's fortunes. He promised he would urge Rizo to
call off the hounds on Montealegre's trail.

4. (S) In Ambassador's meeting with Garcia on September 5,
Garcia stuck to his assertions from the earlier meeting,
insisting that a new Cid Gallup poll places Ortega at 34%,
Rizo at 29% and Montealegre trailing with 16%. The
Ambassador clarified that we are unaware of any such poll,
that to our knowledge, the next Cid Gallup poll will be
fielded later in the month. The Ambassador alerted Garcia to
our assessment that if Ortega wins, the responsibility will
fall squarely on Rizo and his followers. Downplaying
Garcia's argument that if Montealegre rejoins the PLC the
party can win the election, the DCM noted that independent
voters are largely anti FSLN/PLC pact and are likely to
migrate from the ALN towards Jarquin or abstain -- not/not
the PLC. Rizo faces the choice between becoming a hero by
withdrawing his candidacy or risking going down in history as
the man who lost Nicaragua's democracy -- a position that
would place him clearly out of favor with the United States,
asserted the Ambassador.

5. (U) On Channel 2's September 5 morning talk show, PLC
moderate/Assembly candidate Carlos Noguera suggested a
"dQtente" between Rizo and Montealegre, concurring with ALN
Assembly candidate Yamileth Bonilla that the two candidates
should compete in a poll to determine who can beat Ortega.

6. (S) While some moderate PLC members appear genuinely
interested in a broad Liberal alliance, hardliners are taking
extreme measures to remove Montealegre from the competition.
On September 4, the ALN denounced the PLC's plan to intensify
its smear campaign against it through ads and other
propaganda cobbled together by a "truth commission" that
seeks to besmirch and discredit Montealegre by blaming him
for the CENIs (debt bonds to shore up bank failures in 2000)
issue. According to a dismayed and disgruntled PLC insider
who alerted us to the PLC cabal, the FSLN is also complicit
and Rizo has endorsed the plot -- whose ringleaders include

Carlos Ulvert, Francisco Mayorga, Gilberto Wong, and
Francisco Aguirre Sacasa. (Note: Former PLC mayor of Boaco
Armando Incer resigned from the "commission" on September 6,
stating he will not be involved in a dirty campaign.)

7. (U) Another piece of the PLC-FSLN campaign to reduce
popular support for Montealegre was the National Assembly
Ethics and Transparency Committee's September 6 decision
requesting that the Public Ministry investigate Montealegre
for his involvement in CENIs irregularities in the
reclassification of the debt, public auctions, and augmenting
Nicaragua's domestic debt by over USD 500 million. Leading
the accusatory pack, committee leader Donald Lacayo (PLC),
who lost his U.S. visa on grounds of corruption, claimed
that, in light of the committee findings, Montealegre should
be sent to prison. Countering Lacayo's accusations,
Montealegre claimed that the Committee's recommendations were
part of a joint FSLN-PLC effort to discredit him.

8. (U) ALN advisor/Assembly candidate Eliseo Nunez lambasted
the cabal on Channel 2's September 7 morning talk show,
criticizing Rizo for his incongruent messages -- calling for
Liberal unity on the one hand, while doing his utmost to
malign and discredit Montealegre on the other. Nunez also
attacked the FSLN, asserting its complicity in the efforts to
guarantee that Montealegre cannot win the presidential race.
He also claimed that Aleman's wife Maria Fernanda Flores de
Aleman had met with FSLN supporter Alvaro Baltodano in
Guatemala, where they agreed that, in exchange for
guaranteeing Aleman's freedom, 200 lucrative government
positions for PLC loyalists, and National Assembly seats, the
PLC (Aleman) would allow an Ortega victory. The joint
FSLN-PLC smear campaign against Montealegre is part of this
accord, asserted Nunez.

COMMENT
- - - -

9. (C) While Rizo's apparent complicity in the PLC's efforts
to smear Montealegre can likely be attributed to his blind
ambition to don the presidential sash, Aleman's intentions
appear to be much more sinister. In a country where fiction
is often given more credence than fact, it is hard to
determine how far the FSLN-PLC pact is willing to go to
ensure it holds on to the reins of power. Clearly, it is in
neither Aleman's nor Ortega's interest that Montealegre wins
the November election.
TRIVELLI

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