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Cablegate: Ambassador Meets with Santos On Bilateral Issues

VZCZCXRO9857
OO RUEHLMC
DE RUEHMU #1275/01 2941908
ZNY CCCCC ZZH
O 201908Z OCT 08
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3275
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RHEHNSC/NSC WASHINGTON DC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY
RUMIAAA/CDR USSOUTHCOM MIAMI FL PRIORITY
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 MANAGUA 001275

SIPDIS

STATE FOR WHA/CEN, OFM, DRL
NSC

E.O. 12958: DECL: 10/16/2018
TAGS: PREL PHUM AMGT KREC NU
SUBJECT: AMBASSADOR MEETS WITH SANTOS ON BILATERAL ISSUES
AND DEMOCRACY CONCERNS

REF: MANAGUA 1183

Classified By: Ambassador Robert J. Callahan, reasons 1.4 (b) and (d)

1. (C) On October 13, Ambassador met with Foreign Minister
Samuel Santos to express concern over a series of GON actions
that appear to be targeted at the Embassy, including
continued refusal to issue a tax exemption letter for
gasoline taxes and a new rule that revoked airport access
badges. Santos replied that the Foreign Ministry (MINREX) is
studying the tax issue and reported that he had spoken with
the Finance Minister to seek a resolution. On the airport
badges, Santos agreed to seek additional passes for the
Embassy, but noted that the final decision is in the hands of
the Airport Administration. Ambassador also expressed
concern over the harassment of civil society, especially the
International Republican Institute (IRI) and the Prosecutor's
Office's request for IRI's financial records for the last
five years. Santos presented a letter from the Prosecutor
granting a two week delay in IRI's case, but emphasized that
IRI had violated its agreement with MINREX and Nicaraguan law
in its "partisan" activities. He further asserted that the
Embassy continued to fund groups seeking to undermine the
Ortega government. When pressed on the Ortega Government's
view on what is democracy, Santos retorted that democracy
means "compliance with the law," an ominous note for the
future of Nicaraguan civil society. End Summary.

TREATMENT OF U.S. EMBASSY -- GASOLINE TAX AND AIRPORT BADGES
--------------------------------------------- ---------------

2. (C) Ambassador expressed concern that the continued
anti-American rhetoric, Santos' implicit support in his UNGA
speech for the independence of Puerto Rico, attacks on NGOs
and new obstacles to the Embassy's ability to conduct its
daily operations reinforce the view that there is a policy of
hostility by the Ortega administration towards the USG. It
remains the USG's desire to avoid conflicts with the GON and
to resolve differences amicably, yet the GON's words and
actions are making that effort more difficult.

3. (C) Ambassador raised the Nicaraguan Government's
continued refusal to provide an exoneration letter to Chevron
exempting the Embassy of payment of taxes for gasoline
purchases. The continued failure of the GON to comply with
its Vienna Convention requirements could cost the Embassy an
estimated USD 40,000 per year. In addition, Chevron is
seeking payment of back taxes, under pressure from the
Ministry of Finance, for the last ten years worth
approximately USD 300,000. Ambassador emphasized that the
GON's obligations are clear and that Nicaraguan diplomats in
the U.S. would be treated on a reciprocal basis if the
exoneration is not provided in a timely manner. Santos
replied that he is aware of the issue and has raised it with
the Finance Minister. MINREX is studying this issue in
further detail, but noted that the issue is complicated
because only the U.S. Embassy is seeking exoneration from the
gasoline tax.

4. (C) Ambassador also called Santos' attention to a recent
change in procedure by Managua airport authorities to cancel
all existing airport security passes and, after nearly a
month's delay, the issuance of a new ruling that permits only
three passes per mission to be obtained on a daily basis.
The new rule only permits use of the day badges for picking
up diplomatic pouches. The effect of this new rule will be
borne disproportionately by the U.S. Embassy, as we have the
largest mission and therefore need more than three badges.
Further, limiting their use to the diplomatic pouch only
could inhibit our ability to facilitate military and
humanitarian cooperation, a planned upgrade of the airport
security camera system, and prohibit our ability to enter the
airport to facilitate visits by officials. Santos responded
that he was aware of the change and understood the Embassy's
concerns and the impact the new rule could have. As the new
rule was an administrative matter and did not involve a law,
he reported it might be possible to obtain more passes for
the Embassy and promised to look into the issue further.
(Note: Embassy will submit a formal request via diplomatic
note requesting additional passes for the Embassy. End Note.)

FSLN VIEW OF DEMOCRACY -- COMPLIANCE WITH THE LAW
--------------------------------------------- ----

5. (C) Turning to the GON's ongoing campaign against civil
society, Ambassador expressed our deep concern about the
treatment the resident director of the International
Republican Institute (IRI) had received when he appeared
before the Prosecutor on October 10 and was ordered to
present the past five years of IRI's financial records by
October 13 or face arrest on contempt of court charges. The
cumulative effect of these actions against NGOs has been to
create a climate of fear and will likely draw further
negative attention from the international community. Santos
proudly announced that, in response to the Ambassador's
earlier request, the Prosecutor's Office had granted a two
week delay in IRI's case, to allow them additional time to
collect the requested documents. However, he asserted that
IRI had violated its agreement with MINREX by inviting
speakers, including former Mexican President Fox, without
advance notice to MINREX and in pursuing unspecified
"partisan" activities. Santos complained that the U.S., at
one level, wants to talk with and engagethe GON while quietly
"financing groups that seek to destabilize" the government.

6. (C) When pressed for what the FSLN's view of democracy and
the role of civil society is, Santos replied democracy means
"compliance with the law." The Ortega government, he
explained, is in the "process of making the country comply
with the law." Previous governments had not applied the law
and "abuses" were made by NGOs and government officials. Now
the FSLN will bring order to the country. The NGOs that are
facing hearings, such as Carlos Fernando Chamorro's Center
for Investigations and Communiactions (CINCO) and Sofia
Montenegro's Autonomous Women's Movement (MAM), failed to
present their financial records, are in violation of the law,
and are "in clear rebellion." We will give civil society
space, he warned, but there must be clarity in the source and
use of funding and respect for the law. In conclusion, he
added, it is impossible to talk of democracy in Nicaragua
"when a majority of the country is ignorant," referring to
Nicaragua's high illiteracy and poverty rates. Ambassador
responded that there are many examples of countries with
poverty and development challenges that have strong
democracies as well as countries with nearly 100 percent
literacy, such as Honecker's East Germany (whose widow was
the national Order of Ruben Dario award in July in
recognition of her husband's support for the Nicaraguan
people), Ceaucescu's Romania and Castro's Cuba that were
ruled by some of the world's most ruthless dictators.
Ambassador emphasized that there must be space for civil
society, that the USG would remain transparent in our use of
funding to support civil society, and that the international
community will watch to see whether the law is applied
impartially.

COMMENT
-------

7. (C) The Nicaraguan Government continues to assert that it
is simply applying "the law" in its ongoing campaign of
harassment of civil society, opposition political parties,
and even the Embassy's daily operations. We have emphasized
in our response to the GON that it is the interpretation and
selective application of the the law that is most worrisome
to the international community. It is clear that the law is
not applied impartially but rather remains a tool to be used
at the Ortega government's convenience to excuse its actions
or repress its foes. We will continue to press the GON on
both the gasoline tax and airport badge issues but expect
more problems like these to surface in the future.
CALLAHAN

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