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Cablegate: National Assembly Passage of Bills Points to Pacto

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C O N F I D E N T I A L SECTION 01 OF 03 MANAGUA 001141

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E.O. 12958: DECL: 2019/12/15
TAGS: PGOV PHUM KDEM NU
SUBJECT: National Assembly Passage of Bills Points to Pacto

REF: A) MANAGUA 1065; B) MANAGUA 1035; C) MANAGUA 96

CLASSIFIED BY: RobertJCallahan, Ambassador, State, Embassy Managua;
REASON: 1.4(B), (D)

1. (C) Summary: On December 3, the National Assembly approved a
fiscal reform bill, the 2010 national budget, and a non-binding
resolution against Ortega's re-election efforts. The manner in
which these three bills passed lead many to believe that the
corrupt power-sharing agreement ("pacto") between President Daniel
Ortega and former President Arnoldo Aleman continues to dominate
Nicaraguan politics and governance. Every partisan bloc in the
Assembly voted as expected on the economic measures (in favor or
opposition), but Aleman's Constitutional Liberal Party (PLC)
abstained and a few PLC deputies voted with the governing
Sandinista National Liberation Front (FSLN) on the budget. This
again makes the opposition parties and the general public wonder if
the PLC truly is part of the opposition or an associate of the
FSLN. End Summary.

PLC Helps Set the Stage

2. (C) On December 3, the National Assembly approved a fiscal
reform bill, the 2010 national budget, and a non-binding resolution
that annulled the Supreme Court's (CSJ) ruling that allows Ortega's
re-election (ref B). The 2010 budget was based on the passage of
the fiscal reform. (Note: We will report on the substance of the
budget and fiscal reform septel.)

3. (C) In the weeks leading up to the votes on the budget and the
fiscal reform, all opposition political parties described Ortega's
proposed economic measures as bills that would worsen the country's
economic situation. The Nicaraguan Democratic Bloc (BDN, a
combination of right-of-center parties in the Assembly led by
Eduardo Montealegre), the Sandinista Renovation Movement (MRS,
left-of-center), and independent deputies all stated their
opposition to the budget and fiscal reform, and demonstrated their
opposition by voting against the measures on December 3. The PLC
also had publicly stated their opposition to the measures prior to
the vote. On November 25, National Assembly Secretary and PLC Vice
President Wilfredo Navarro stated that his party would oppose the
budget in the Economic Committee because it was based on an
uncertain fiscal reform.

4. (C) However, on November 26 the Economic Committee reported out
favorably the 2010 budget with the FSLN votes and those of the
Nicaraguan Liberal Alliance (ALN). (Note: The Economic Committee
is comprised of deputies from the following parties: 7 FSLN, 4 PLC,
2 ALN, and 1 independent. The PLC members are Navarro, Francisco
Aguirre Sacasa, Freddy Torrez, and Oscar Moncada - all Aleman
loyalists.) The committee's PLC deputies did not sign the report,
but neither did they vote against it. Moreover, the PLC deputies
did not issue a minority report (dictamen de minoria), a common
mechanism in the Assembly and other state institutions to
officially record dissent. In the case of Torrez, he openly
supported the budget.

5. (C) President Ortega submitted the fiscal reform bill to the
National Assembly November 30. That afternoon the Assembly's
Executive Committee (EC) met and decided on the bills that would
pass to a floor vote on December 3. (Note: The EC is comprised of
deputies from the following parties: 2 FSLN, 2 PLC, 2 ALN, and 1
independent; the independent usually votes with the FSLN. The PLC
members are Navarro and Moncada.) Contrary to opposition deputies'
suggestions that the fiscal reform bill be referred to committee
for review (and to slow down its passage), the EC unanimously
decided that the reform bill should pass straight to a floor vote
without going first to committee. The PLC argued that in exchange,
they were able to place on the agenda the non-binding resolution on
the CSJ ruling that permits Ortega's re-election. As one
opposition deputy stated, the PLC gave the FSLN fiscal reform for
something that has no effect. In the end, both the fiscal reform
bill and the 2010 budget went to a floor vote unimpeded (and
basically facilitated) by the PLC.

The Votes Point to a Pacto Deal

6. (C) The fiscal reform bill passed on December 3 with 47 votes
in favor, 23 against, and 15 abstentions. The 2010 budget passed
with 52 votes in favor, 20 against, and 15 abstentions. In both
votes the BDN (with 17 deputies), MRS (with 2 deputies), and one
independent (Salvador Talaverra) all cast a negative vote. The PLC
as a bloc did not vote against the fiscal reform bill nor the 2010
budget. Only three PLC deputies voted against the fiscal reform
(Aguirre Sacasa, Jose Pallais and Carlos Gadea). However, no PLC
deputies voted against the budget (which is based on the fiscal
reform). PLC Deputies Aguirre Sacasa, Freddy Torrez, and two
others voted for the budget. During the floor debate prior to the
vote, opposition deputies and others introduced several amendments
to the fiscal reform bill. Of these only two passed - both were
sponsored jointly by Economic Committee members Walmaro Gutierrez
(FSLN) and Aguirre Sacasa (PLC). For both the fiscal reform bill
and the budget, the 15 abstentions were all PLC deputies.
Subsequent to the votes, the PLC deputies defended their votes
stating that the fiscal reform was agreed to by the private sector
and that the passage of the budget was a requirement of the IMF.
However, other deputies attribute the PLC abstentions to one of two
factors. One explanation was that the FSLN threatened not to
deliver the funds earmarked for PLC-aligned NGOs if the PLC voted
against the economic measures. Another explanation was that the
PLC needed to abstain to provide cover to the ALN who voted for the
bills and so the ALN deputies would not feel pressured to join the
votes against the measures. (Note: The ALN is suspected of being a
facilitator for the PLC-FSLN arrangements, ref A). A few ALN
deputies (but not all) voted on the non-binding resolution
regarding the CSJ ruling, but the day after an ALN deputy
highlighted to the media that the resolution was non-binding and
had no effect.

One Ray of Light

7. (C) The votes on fiscal reform and the budget were
disappointing in that the PLC was unwilling to demonstrate its true
opposition and independence from the Ortega-Aleman pacto. However,
the vote on the resolution on the CSJ re-election ruling provided a
glimpse that the FSLN bloc in the legislature is not unbreakable.
Two deputies who are part of the FSLN alliance in the Assembly
removed themselves from the vote on the resolution. Deputies
Miriam Arguello and Augustin Jarquin (from minor parties formally
aligned with the FSLN) argued that the CSJ ruling was illegal and
the sentence non-existent, therefore they did not want to lend
legitimacy to the ruling by voting on the measure. This was not
technically a vote in favor of the resolution, but by removing
themselves from the vote the number of deputies needed to reach a
simple majority (and pass the measure) was lowered. Seen from a
different angle, the FSLN's ability to block this resolution was
weakened. This appears to be the first time since Ortega entered
the presidency in 2007 that members from his FSLN bloc have broken
with the party on a legislative vote.

Comment

8. (C) The PLC's position as an opposition party in the National
Assembly has been increasingly less convincing throughout the year.
They began the year voting in favor of an EC that gave
administrative control of the legislature to the FSLN (ref C), and
concluded the year facilitating partisan economic legislation.
They did the latter despite signing an agreement earlier in the
year with the other opposition parties stating they would not
approve any legislation that worsened the country's economic woes.
The FSLN/government news website El 19 characterized the December 3
legislative votes accurately in stating that the majority won, and
that majority included the FSLN, ALN, and PLC. The PLC's inability
in the Assembly to support its opposition rhetoric with its actions
has disenchanted the political opposition as well as the general
public. For this reason the widespread belief remains that the PLC
is more an associate of the FSLN than a true opposition force.
CALLAHAN

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