WHILE PLC MODERATES SEEK LIBERAL UNITY, HARDLINERS

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