EVIDENCE SUGGESTS SECRET TAIWAN PAYMENTS TO

C O N F I D E N T I A L MANAGUA 000213 SIPDIS SIPDIS DEPARTMENT FOR WHA/CEN AND INR/I E.O. 12958: DECL: 01/25/2031 TAGS: PINR EAID CH TWI PREL ECIN EINV ETRD PM GT CS, NU SUBJECT: EVIDENCE SUGGESTS SECRET TAIWAN PAYMENTS TO EX-PRESIDENT ALEMAN (C-AL5-01181) REF: STATE 6661 Classified By: AMBASSADOR PAUL TRIVELLI. REASONS 1.4 (B,D). ¶1. (C) On January 25, poloff and RLA met Attorney General for Criminal Affairs Ivan Lara and Economic Crimes investigator Mario Diaz of the Nicaraguan National Police (NNP) to discuss Taiwan's use of foreign aid funds in Nicaragua in recent years. Lara and Diaz did not have any evidence of Taiwanese payments to individual politicians since the Bolanos administration took office in January 2002, but they do have evidence of such payments to ex-President Arnoldo Aleman in 2000-2001. ¶2. (C) Diaz told emboffs that credible sources have told the NNP that the Government of Taiwan paid 6 million USD to ex-president Arnoldo Aleman in 2000 in return for Nicaraguan promotion of Taiwanese membership in the United Nations. According to the NNP's sources, 2 million USD was given directly to Aleman in cash, while 4 million USD was channeled through U.S. banks (mostly Citibank in New York) and then into the accounts of the Nicaraguan Democratic Foundation (FDN) in Panama, the same private account through which Aleman funneled most of the stolen GON funds in his various money laundering schemes. Once funds (whether from Taiwan or the GON treasury) went into the FDN account, Aleman and his associates then transferred them into the accounts of Panamanian shell companies they had established for the sole purpose of further laundering the funds. Diaz noted that Aleman's father-in-law (and partner in his money laundering schemes),Jose Antonio Flores Lovo, was the Nicaraguan consul in New York (and substitute Nicaraguan ambassador to the U.N.),at the time, and the NNP believes that Flores Lovo played some part in facilitating transfer of the Taiwanese money to Aleman. ¶3. (C) Lara added that his office has documentation of at least some of the Taiwanese transfers into the FDN account. Financial routing documents provided to the GON by the government of Panama show that between June 2000 and October 2001, at least 1.5 million USD was transferred from Taiwanese banks into the FDN account. The transaction records list such names as "Fortuna Co., Ltd.", "Honguo Co., Ltd.", and "Wei Keh Wu" as the companies or persons paying money into the FDN account. Lara told emboffs that the GON was never sure whether all these names represented companies or individuals, and they could not document that the government of Taiwan was the original source of the funds. ¶4. (C) In order to investigate the transactions further, in 2003, the GON, through its Embassy in Taipei, sent a formal diplomatic request to the GOT to investigate the questionable transactions and provide the GON information on the sources of the money. According to Lara, as of January 2006, the GON has never received any Taiwanese reply to its request for information, despite multiple follow-up requests. The lack of a response from Taipei, combined with the circumstantial evidence and the information given to the NNP by its sources, leads Lara to conclude that Taiwan was indeed the source of the payments to Aleman. Lara believes that the Taiwanese "companies" listed on the transaction documents were simply dummy companies of the same sort that Aleman set up in Panama and elsewhere to disguise all of his illicit transactions. Lara provided emboffs copies of several of the documents showing transactions from Taiwanese banks into Aleman's Panamanian accounts, and, if the Department wishes, post can send copies of the documents to Washington. TRIVELLI