NICARAGUA: ENSURING DEMOCRATIC CONTINUITY IN THE

S E C R E T MANAGUA 002044 SIPDIS SIPDIS DEPARTMENT FOR WHA/CEN, WHA/USOAS, NSC FOR DAN FISK E.O. 12958: DECL: 09/18/2026 TAGS: PREL PGOV PINR KDEM NU SUBJECT: NICARAGUA: ENSURING DEMOCRATIC CONTINUITY IN THE NOVEMBER ELECTIONS REF: MANAGUA 0433 Classified By: Ambassador Paul A. Trivelli. Reasons 1.4 (B,D). ¶1. (S) INTRODUCTION: Our election priorities in Nicaragua have not changed since our February 24 update (Ref. D): support clean, fair, credible, and inclusive national elections; keep Nicaragua on the democratic path; and, end the Ortega-Aleman pact's control of the political system. Our four-point strategy to achieve these objectives -- unite the democratic opposition; point out the past and present shortcomings of both Ortega and Aleman; use our voice and assistance to ensure fair elections; and, convince Nicaraguans of the positive value of the bilateral relationship -- has met with mixed results. An assessment follows of the current political arena, efforts to achieve our objectives, as well as recommendations to remedy weaknesses in our strategy. END INTRODUCTION. STATUS QUO AND INSTITUTIONAL CONTROL FAVOR ORTEGA - - - - - - - - - - - - - - - -- - - - - - - - - - ¶2. (S) Polls still show that most Nicaraguans seek political change and reject the current leadership of Nicaragua's two dominant political parties. Early polls pegged Nicaraguan Liberal Alliance (ALN) candidate Eduardo Montealegre and Sandinista Renovation Movement (MRS) leader Herty Lewites as the clear front-runners. However, since then, a fifth presidential candidate, Alternative for Change (AC) candidate Eden Pastora, entered the race; MRS candidate Herty Lewites passed away, replaced by relatively unknown Edmundo Jarquin; and, Sandinista Front (FSLN) candidate Daniel Ortega pulled ahead in the polls. Recent polls suggest the following range of support for the candidates: Ortega: 27%-31%; Montealegre 21%-28%; Liberal Constitutional Party (PLC) candidate Jose Rizo and Jarquin vie for third place with 12%-17%; and, Pastora 1%-2%. ¶3. (SBU) According to an M and R poll released September 11 (poll conducted on September 7-8, sample size 802 nationwide, 3.5% error),35.2% of the respondents believe Montealegre will be the next president of Nicaragua; 22.3% think Ortega will win; 18.6% are uncertain or did not respond; 12.5% believe Jarquin will win; 11.1% think Rizo will be the next president; and, only .1% think Pastora has a chance. Regarding voter preference, Montealegre gained 36.2%, Jarquin 19.2%, Ortega 16.7%, Rizo 11.1% and Pastora .1%. Undecided/no response totaled 16.2%. (COMMENT: Historically, voters' views on who will win an election in Nicaragua tend to track more closely with electoral outcomes than voter intentions, which most polls measure. However, this particular M and R poll did not reach truly rural voters and thus does not reflect the inclinations of that segment of the population.) ¶4. (S) Even though approximately 70% of Nicaraguans reject Ortega, he could still win the November 5 election because a candidate can claim victory win with only 35% of valid votes, with a margin of 5% or greater above the closest competitor. While we expect Jarquin to shave off some traditionally Sandinista voters, the difference might not suffice to prevent a first-round Ortega victory -- especially considering the real possibility that Ortega will attempt to steal up to 5% of the first-round votes, as he knows well he would likely lose a second round, except perhaps to Rizo. The FSLN dominates the electoral and judicial branches of government and will not hesitate to use its control to tilt the election outcome in Ortega's favor. CSE cabinet director Rodrigo Barreto, who privately claims he favors Montealegre, has told us that the CSE leadership -- meaning CSE VP Emmet Lang (FSLN),the real power behind the CSE -- has not budgeted for a second round "because Ortega will win on the first round." ¶5. (C) Low voter turnout is likely to favor Ortega and his disciplined mass of Sandinista militants; high turnout is more likely to favor the anti-FSLN vote, and the anti-caudillo vote more generally. According to polls and what we know from voter patterns in previous elections, most independent voters reject Ortega and tend to vote for the candidate they believe can beat him. Vigorous international monitoring, combined with robust Nicaraguan observation can minimize pact-driven fraud. Even with observation, we expect the FSLN and PLC will use their influence in the CSE to attempt to commit fraud, especially to in the selection of Assembly deputies. LIBERALS IN DISARRAY, "BORN-AGAIN" ORTEGA ABOVE THE STORM - - - - - - - - - - - - - - - -- - - - - - - - - - - - -- - ¶6. (S) Convincing Liberals to unite behind a single candidate has not been possible, in large part because PLC leader Arnoldo Aleman still controls the party; PLC candidate Rizo's blind ambition prevents him from acknowledging he cannot beat FSLN rival Ortega; and, the PLC's smear campaign against rival Montealegre has so far spoiled the efforts of moderates to forge an alliance. On September 7, the lid blew off on an FSLN-PLC cabal to besmirch Eduardo Montealegre so that he would withdraw from the race or cave to Rizo and rejoin the PLC. Norlan Moncada (Assembly Deputy Oscar Moncada's nephew),who was involved in a PLC scheme, with apparent FSLN collusion, denounced the plot a press conference, mentioning the direct threats he received from those involved when they realized he would speak out. ¶7. (S) According to Moncada, Carlos Ulvert, Gilberto Wong, and Alvaro Somoza (all three PLC/Rizo supporters),and Francisco Mayorga (FSLN sympathizer loosely associated with the PLC and owner of one of the failed banks) created a foundation (Pro-Verdad, or "for truth") to smear Montealegre, falsely accusing him of wrongdoing in the CENIs case (debt bonds to resolve the failed banks' debt). The "Pro-Verdad" plan also included circulating false rumors that Rizo is polling right behind Ortega while Montealegre has slipped. The PLC and FSLN were hoping that the CENIs scandal would so weaken Montealegre that a poll (reportedly to be fielded via an Argentine firm connected with Rizo's Argentine campaign adviser Felipe Noguera) would "demonstrate" that Rizo is the only option capable of beating Ortega. Moncada drafted a full sworn statement and provided copies to Embassy and the Permanent Commission for Human Rights (CPDH). ¶8. (S) The CENIs confabulation represents a microcosm of how the PLC-FSLN Pact works, and demonstrates clear connections between the Rizo camp, Aleman, and the Sandinistas (in addition to Mayorga, FSLN Contralor Montenegro was involved). What were the motives? Ortega probably believes his chances of winning the election are improved if his opponents remain divided; besmirching Montealegre could help lower the support for his closest competitor. While there is much speculation regarding his accord with Ortega, Aleman appears to be willing to let Ortega win the election in exchange for his freedom and Assembly seats for his party hacks. Rizo's motive is likely his blind ambition to don the presidential sash. ¶9. (S) At this juncture, we believe Rizo and his running mate Jose Antonio Alvarado (who in late May decided to cast his fate with Rizo rather than Montealegre) should be pressed to withdraw from the race and admit that their allegations of corruption against Montealegre are unfounded. With Rizo out of the picture, support for the PLC would further erode, and Montealegre could emerge as the Liberal option best poised to beat Ortega. Further, independent and undecided voters, who largely reject the Ortega-Aleman pact, are more likely to back Montealegre once it is clear that Rizo has broken with the PLC and left the political stage. Montealegre's anti-pact focus will then resonate more with voters who were confused about talk of an eventual PLC-ALN alliance. ¶10. (S) One possible way to convince Rizo to resign and to encourage a broader Liberal unity is through a poll that would determine whether Montealegre or Rizo is best poised to beat Ortega. According to President Bolanos' chief of staff Leonardo Somarriba and senior political adviser Frank Arana, President Bolanos has convinced candidates Eduardo Montealegre and Jose Rizo to participate in such a poll. However, the candidates have yet to iron out the details, including what "benefits" will be accorded to the loser. The poll would poll roughly 2,000 people in each of Nicaragua's 17 departments. (Note: We understand that the Taiwanese are backing the poll effort, expected to cost around $200,000). MODEST SUCCESS IN EXPOSING ALEMAN AND ORTEGA SHORTCOMINGS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ¶11. (S) Our efforts to erode Aleman have not sufficed to convince him to cede his hegemony over the PLC -- even though we have convinced some PLC militants to leave the party and endorse Montealegre. Other efforts: --When Norlan Moncada approached the Embassy in early September with his denouncement against the PLC-FSLN CENIs scam, we encouraged him to do the right thing for his country. The PLC's fingerprints are on the scam. --The Embassy has distributed its "rap sheet" on Aleman's corruption and continues to engage PLC militants and lawmakers on the damaging effects of Aleman's undemocratic leadership. --The Embassy continues to engage, with mixed success, Nicaraguan and third country financiers to disassociate themselves from Aleman. Our embassies in neighboring countries furthered President Bolanos' efforts to persuade the presidents and capital of these countries to distance themselves from Aleman and support Montealegre. Montealegre is now receiving some financial backing from El Salvador, Guatemala, and Honduras. -- Progress on the case against Aleman in Panama has eroded his reputation; however, concrete progress on the U.S. criminal indictment against Aleman - likely the most powerful tool in convincing Aleman followers to leave his side -- has not materialized. Nor has there been progress in the Dominican Republic case against Aleman. -- The RLA is working with our Customs and Border Inspection office in Panama to request that the U.S. Attorney's office in Southern Florida file a criminal complaint against Aleman's wife Maria Fernanda for failing to appear for a border inspection regarding her U.S. permanent residency status. The last time she entered the United States, Maria Fernanda was flagged for inspection to determine whether or not she was still a lawful permanent resident. The inspection was deferred and she was given a date to appear, but she did not. ORTEGA'S "BORN-AGAIN" IMAGE CHALLENGES EFFORTS TO REVEAL HIS SINISTER PAST AND PRESENT PERSONA - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ¶12. (S) We have met with modest success in our efforts to reveal Ortega's abysmal human rights record. Ortega's "born-again Catholic" image, and his ability to stay removed from the media's harsh scrutiny -- preferring instead to undertake "pilgrimages" to convert voters to his "peace, love and reconciliation" campaign -- has complicated somewhat the efforts to challenge him. An update of our efforts: --Embassy continues to support Nicaragua's Permanent Human Rights Commission (CPDH) work to help the Miskito Indians document and submit FSLN era human rights abuse cases before the Inter-American Human Rights Commission (IAHRC) and other international organizations. DRL funds were granted to help CPDH (via Creative Associates) to continue the work and computerize and publicize its extensive archives on Sandinista abuses throughout the country in the 1980s. CPDH has submitted over 100 cases before the Nicaraguan judicial system for review (given the dominance of the FSLN and PLC in the judiciary, predictably, no decision has been issued). CPDH has held press conferences denouncing the abuses and a public forum on genocide. It will hold another forum in October, featuring a number of the Ortega-era victims and will issue a bulletin containing their testimonies. The CPDH is also preparing cases to present before the IAHRC and a Spanish court. --Embassy arranged for a Miskito survivor of the Leimus massacre to receive an artificial limb through the OAS demining program in Managua. --Embassy helped facilitate Ortega's stepdaughter Zoilamerica Narvaez's trip to Washington in June, where she discussed her case before the Inter-American Human Rights Commission, met with State Department officials, contacted pro bono lawyers' associations who might be able to help her advance her sexual abuse case against her stepfather, and interviewed with Univision in Miami. The release of part of her Univision interview was scheduled for late August in Miami and via Channel 10 in Managua; however, Ortega reportedly "persuaded" Channel 10 to quash the interview. Ortega's efforts to censure Zoilamerica stirred up a public outcry and drew criticism from the ALN and MRS. Center-right daily La Prensa printed the text of the interview; bootleg copies of the interview are now circulating, and the IAHRC has expressed concern to Zoilamerica over Ortega's censorship. We are helping facilitate private sector support for Zoilamerica to travel to Washington in October for her IAHRC hearing. --Embassy updated and disseminated "rap sheets" on the excesses and failures of the Sandinista Era and Ortega to share with appropriate audiences. Embassy successfully encouraged MRS leadership -- FSLN-dissident Herty Lewites and successor Edmundo Jarquin -- to maintain their independence from Ortega. Jarquin has made it one of his key objectives to publicly slam Ortega, as has Lewites' widow Carmen, who recently rebuffed Ortega's referring to Lewites as a "brother." --Embassy is investigating probable links between the FSLN and narcotrafficking on the Atlantic Coast, specifically Yatama candidates running on the FSLN ticket and FSLN-affiliated judges who release suspected narcotraffickers. ENSURING FAIR ELECTIONS - - - - - - - - - - - - ¶13. (C) Our outreach to ensure a fair election outcome and to strengthen Nicaragua's democracy continues to be robust and unequivocal. The Ambassador and other senior officials employ every opportunity available in Managua and during frequent trips throughout the country to highlight our policy interests, feature our programs, and to speak out clearly and forcefully on behalf of the legitimate, democratic aspirations of the Nicaraguan people. While the FSLN and PLC have criticized the Ambassador's role because it hits a raw nerve, the ALN and MRS have largely supported his words and actions. And, while polls suggest that Nicaraguans are divided in their views regarding outside interference in Nicaragua's internal affairs, most Nicaraguans, especially rural voters, appear to expect the U.S. to speak its mind. Ironically, rural voters are those who still are most inclined to back Arnoldo Aleman, as they are far removed from exposure to his pact with Ortega and how it has hurt the country's development. ¶14. (U) A summary of our use of over $12 million for election technical assistance, outreach, and observation (much of it channeled through the CEPPS IRI, NDI, and IFES agreement and their local partners) follows: --CSE support (technical assistance, training, and material assistance): USD 2.9 million --Domestic observation (March 2006 Atlantic Coast elections, November national elections, possible run-off election observation, and related studies): USD 3.1 million --Civic education and vote promotion (Get out the Vote, secondary school civic education, and citizen attention centers): USD: 3.4 million --Political party poll watcher (fiscales) training and manuals: USD 600,000 --International observation (OAS Election Observation Mission (EOM): USD 2 million ¶15. (C) We also draw on our weekly elections working group sessions and regular Donor's Group meetings to coordinate our efforts, maximizing limited resources, and developing milestones and criteria in the electoral process required for valid election results. We continue to press the group to issue a joint communique calling on the CSE to ensure free, fair, inclusive, and credible elections on November 5. Thus far, the Canadians are on board, and the Europeans may be willing to sign closer to the election. THE VALUE OF A POSITIVE BILATERAL RELATIONSHIP - - - - - - - - - - - - - - - - - - - - - - - - ¶16. (C) We continue to appeal to the desire for most Nicaraguans, including many Sandinistas, to maintain close ties with the United States -- highlighting over $45 million in USAID funding for FY 2006 and $175 million in Millennium Challenge Account funds; IFIs and bilateral donors reliance on our assessments; the sizable Nicaraguan population (250,000-500,000, including over 4,500 benefiting from Temporary Protective Status (TPS) in the United States, who send over $500 million/yr. in remittances. The Ambassador's message that these opportunities could disappear if Nicaragua elects an undemocratic leader appears to have resonated. WHAT MORE MUST WE ACCOMPLISH? - - - - - - - - - - - - - - - ¶17. (S) Restrictions on funding uses have affected what we can do an certain fronts, namely leveling the uneven political playing field that pits a well-funded Ortega -- who enjoys the backing and money of Venezuelan President Hugo Chavez and of Nicaragua's lucrative FSLN-controlled court system -- against Jarquin's cashless MRS and Montealegre's under-funded ALN -- which is also constantly under attack by the PLC. As the final stretch nears, a full court press is in order: --Clinch the Aleman indictment in the United States and a decision on the civil case for forfeitures of at least some of the Aleman family CDs. --Announce/reveal the narco, and possibly terrorism-related, money laundering indictment of Supreme Court Justices (U.S. Court in Las Vegas) involved in a scam to take possession of $609,000 in cash confiscated from a narcotrafficker connected to Colombian and Mexican cartels. --Encourage Nicaraguan and regional private sectors to consider backing Eduardo Montealegre as the democratic alternative that can beat Daniel Ortega. He tells us that at this late date, the Nicaraguan private sector is still not providing sufficient funds. The lack of funds has especially hurt the ALN's campaign efforts in rural areas of the country as campaigners to not have campaign materials to deliver nor transportation to deliver them. Montealegre has visited El Salvador and is considering visiting other neighboring countries to seek additional campaign funds. U.S. embassies could help facilitate meetings between Montealegre and the local private sector, as Embassy El Salvador has done. --Encourage Jarquin to remain in the race and continue our public statements that the U.S. considers the MRS a viable democratic alternative. The MRS has told us that they are severely cash-strapped. Jarquin estimates he can shave off several points from Ortega, but his lack of funds limits his ability to do so. (NOTE: We believe Jarquin could but draw at least 5-6% of the FSLN vote -- enough to make a difference.) Herty Lewites' nephew Israel is considering traveling to the United States to seek funds from the Jewish community with whom Herty maintained contact. --Draw on Republicans who maintained close ties with the PLC starting in the 1980's to talk to the PLC camp and tell them their game is over, that Montealegre is clearly the best democratic choice to beat Ortega. If, as we expect, Montealegre leads Rizo in a joint poll, use the information to convince Rizo and his followers that it is clear he cannot win the election. --Ensure the OAS stays on top of the CSE, and quickly snuffs out any/all attempts at chicanery. The latest concern involves the new regulations that allow fiscales and voting table (JRV) officials to annul the results of voting tables with one missing signature. Encourage the OAS to make statements responding firmly to Daniel Ortega's sharp criticism of the OAS Election Observation Mission. --Encourage/support a "remembrance campaign," combined with reminders/tangible indicators of all the opportunities and benefits that come from their close association with the United States (CAFTA, MCC, remittances, Free Trade Zone jobs, tourism),the risks of losing them if Ortega wins. --Revoke the visas of FSLN/Yatama candidates/judges found engaged in, or benefiting from, narcotrafficking activities; show links between FSLN and narcotrafficking. --Step up engagement with department capitals and rural voters, especially those in the departments of Jinotega and Matagalpa, who still revere Aleman and are unaware of his alliance with Ortega and how it has hurt the country and their welfare. --Continue to encourage PLC mayors and other local leaders to challenge Aleman's control of the party and encourage them to withdraw in support of Eduardo Montealegre as the only viable option to beat Ortega. TRIVELLI