Identifier
Created
Classification
Origin
06MANAGUA2180
2006-10-03 17:43:00
CONFIDENTIAL
Embassy Managua
Cable title:  

ALN PLANNING FOR A ROUGH ROAD AHEAD

Tags:  KDEM NU PGOV PINR 
pdf how-to read a cable
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PP RUEHWEB

DE RUEHMU #2180/01 2761743
ZNY CCCCC ZZH
P 031743Z OCT 06
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC PRIORITY 7761
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC
C O N F I D E N T I A L MANAGUA 002180 

SIPDIS

SIPDIS

E.O. 12958: DECL: 10/02/2026
TAGS: KDEM NU PGOV PINR
SUBJECT: ALN PLANNING FOR A ROUGH ROAD AHEAD

REF: A. A. MANAGUA 002160


B. B. MANAGUA 002158

C O N F I D E N T I A L MANAGUA 002180

SIPDIS

SIPDIS

E.O. 12958: DECL: 10/02/2026
TAGS: KDEM NU PGOV PINR
SUBJECT: ALN PLANNING FOR A ROUGH ROAD AHEAD

REF: A. A. MANAGUA 002160


B. B. MANAGUA 002158


1. (C) SUMMARY: Drawing on Emboffs' recent meetings with
various members of the Nicaraguan Liberal Alliance (ALN),
this cable provides a comprehensive view of where the party
stands five weeks before election day. Although most local
polls continue to show Eduardo Montealegre as the
second-strongest candidate after Daniel Ortega, his ALN
faces real obstacles to expanding its base. Internal
communication and organization problems undermine the
party's efficiency and unless additional resources pour in,
the ALN may not be able to make significant inroads against
the Liberal Constitutional Party (PLC) in the all-important
rural sector. Given these challenges, the deciding factor
in the election may not be how strong/popular the ALN is,
but how vehement the anti-Ortega sentiments run. Contacts
in the ALN, Sandinista Renovation Movement (MRS),the
private sector, and from various NGOs maintain that a
significant portion of voters will vote not for their
preferred candidate, but for whichever candidate seems
best placed to defeat Ortega on election day. END SUMMARY.


2. (C) Over the last two weeks Emboffs have met with
several members of the Nicaraguan Liberal Alliance (ALN) to
guage where the party stands now, what it plans to do in
the remaining five weeks of the campaign, and how it will
respond to the challenges posed by opponents in the Liberal
Constitutional Party (PLC) and Sandinista National
Liberation Front (FSLN). Among those we met with were
Eduardo Montealegre's uncle and ALN legal adviser Mauricio
Montealegre, Azucena Castillo (a former Cabinet minister
who is running as the first substitute deputy on the ALN's
National Assembly ticket),ALN campaign chief of staff
Edmundo Leal, and campaign consultant Mario Elgarresta (Ref
A). This cable also draws on Eduardo Montealegre's recent
meeting with Congressman Burton (Ref B) and the Ambassador,
and on Emboffs' conversations with an array of contacts in
the private sector and from various NGOs.

A TIGHT RACE ACCORDING TO THE POLLS
- - - - - - - - - - - - - - - - - -


3. (C) According to an M&R poll released on 29 September,

Daniel Ortega (30.9%) and Montealegre (26.4%) are the two
leading candidates, followed by Jose Rizo (16.3%),Edmundo
Jarquin (15.9%) and Eden Pastora (0.9%). The percentage of
people who will not vote or are still undecided stands at
9.6%. The poll was conducted between September 15 and 21,
with a sample size of 4,204, and a margin of error of
1.5%. According to the poll, 66% of voters declared
themselves "anti-Ortega." (Comment: In this poll,
Montealegre is gaining on Ortega, and the most likely
outcome is that these two candidates will compete in a
second round. In a second round, Montealegre would win
with 44.2% of the vote - 9 points over Ortega's 35%. The
surprise in this poll is that Jarquin's numbers appear to
be slipping and Rizo is now in third place. End Comment.)


4. (C) In a recent meeting with Poloff, Edmundo Leal was
optimistic that Montealegre will win the November 5
elections, claiming that the ALN receives more and more
support with each poll bolstering Montealegre as the only
serious challenger to Ortega. He claimed that, unlike any
other party, the ALN has registered enough party poll
watchers (fiscales) to provide 100% coverage of the voting
tables (JRVs) on election day - putting to rest the PLC
assertion that only that party has the "machinery to defend
the democratic vote." That said, the ALN faces some tough
obstacles that could undermine the party's efforts to
expand its base or even erode some of its support.

ORGANIZATION REMAINS A CHALLENGE
- - - - - - - - - - - - - - - - - -


5. (C) Emboffs have heard from several sources that the
ALN still suffers from problems of internal organization
and communication problems, although ALN campaign
consultant Maria Elgarresta believes that ALN has recently
tightened up its organization. Public statements by
various party members occasionally appear uncoordinated or
contradictory, and members of the alliance have told us
that they often do not receive clear communication from
party headquarters. In a meeting on 29 September with Pol
TDYer, Azucena Castillo described the ALN's central
campaign coordination efforts as weak and reported that
people often go about their activities without first
talking with colleagues or checking to see whether the work
has already been done, or really needs to be done at all.

6. (C) Castillo said that much of the problem lies with
the party's poor management structure. Castillo accused
some Assembly candidates of not working hard enough to back
the campaign and finds that party structure in some places
around the country to be lacking. She said that while the
ALN has campaign chiefs in both Matagalpa and Managua, the
ALN needs someone in each department to take on a more
hands-on role in coordinating the party's local efforts --
something akin to a chief executive officer. She blamed
campaign manager Adolfo Arguello for much of the management
difficulties. A former bank manager, he does not have a
strong political background and comes across as
uncharismatic and demanding, she claimed.


7. (C) To reinforce her point about the ALN's internal
problems, Castillo cited a 25 September meeting of senior
party members. Called in part to improve internal
communication, Castillo said the group broke down several
times in arguments over strategy. The chief "propaganda"
officer spoke up saying that regional campaign offices feel
"abandoned" because they lack resources and materials.
Castillo reported that Arguello essentially told these
people to 'deal with it' because "we are out of money."
This standoffish attitude came across as disrespectful,
according to Castillo, and many attendees began to
grumble. The meeting was saved in large part thanks to
Mario Rapacciolli's intervention. He took the floor,
delivering an animated speech that went a long way toward
lifting morale.


8. (C) Castillo cited the ALN's strategy in the Atlantic
Coast region as an example of how poor planning and
resource constraints have undermined the effectiveness of
the campaign. She claimed that right after the Atlantic
Coast elections in March, the ALN closed its campaign
offices in the area, ostensibly because it lacked funds to
remain. Castillo said the move showed a lack of
forethought that has proven detrimental to the campaign.
She noted that the ALN lost much of the inroads the party
had made in this area and has had to work almost from
scratch. (COMMENT: The fact that Castillo has been
frustrated because she does not comprise Montealegre's
inner circle when she believes she should be included may
have colored her views on the ALN campaign. Early in the
campaign, she was talked about as a potential running mate
for Montealegre, but was passed over. END COMMENT.)


9. (C) Nevertheless, Castillo ended on a somewhat
optimistic note, saying that the ALN still has time to
turn things around and get its house in order. She
mentioned that the return to the campaign of Mario
Elgarresta could have a positive effect. An astute
campaign adviser with longstanding ties to Nicaragua,
Elgarresta served the campaigns of Arnoldo Aleman and
Enrique Bolanos. Castillo said that Elgarresta - a Cuban
living in Miami - has the trust of Montealegre, with whom
he worked on the Bolanos campaign, and could have a
positive impact on Arguello's management of the campaign.


WEAK PUBLIC STANCE
- - - - - - - - - -


10. (C) Eduardo Montealegre's efforts to attack his
opponents have been erratic at best and counterproductive
at worst, according to Castillo. While early in the
campaign Montealegre vowed to focus his energies against
Ortega, he has recently allowed himself to be dragged into
lashing out at the PLC, which he continues to publicly
maintain as an entity that has no chance of winning.
Meanwhile Montealegre only takes an occasional swing at
Ortega and is doing an inadequate job of defending himself
against the attacks of his opponents. Castillo asserted
that Montealegre's failure to take a strong public stance
on the CENIS issue and his lack of attacks against Ortega
have earned him a weak public image - "he always appears on
the defensive." Moreover, Montealegre's attacks against
the Liberals have often been misguided and clumsy. Instead
of taking direct aim at Aleman, Montealegre on the campaign
trail has several times broadened his critique to include
Liberals in general - a tactic that alienates many voters
who would consider voting for Montealegre, but who consider
themselves as Liberals. Castillo argued that Montealegre
shares the same Liberal ideology of many voters, including
herself, so his anti-Liberal message comes across as
confusing and schizophrenic. Castillo said that she has
told Montealegre, "Liberalism is your flag and you need to
carry your flag."


11. (C) Despite facing a number of legal hurdles with the
Supreme Electoral Council (CSE),the ALN has taken a
relatively quiet approach to dealing with the body rather
than attempting to call public attention to what are
blatantly politicized decisions. Mauricio Montealegre told
Pol TDYers on 27 September that the ALN will seek to work
with the CSE to "iron out" disagreements. In those cases
where the CSE has ruled against the ALN, Montealegre said
they would exhaust all the means of appeals. He argued
that the alliance needed to avoid prematurely antagonizing
the CSE so that the ALN will be freer to take a more
critical approach at crucial later stages in the election
process. Part of this hesitance also stems from the desire
to avoid scaring voters away from the polls. Montealegre
explained that one of the reasons for taking a toned-down
approach toward the CSE on the issue of potential vote
fraud is to prevent voters from getting the idea that fraud
will be inevitable, which might prompt some not to vote.


12. (C) COMMENT: The desire to work within the confines of
the system for now makes sense. However, calling out the
CSE with allegations of favoritism and the possibility of a
manipulated vote is unlikely to alienate many voters. For
one thing, this dialogue has now become a constant part of
the political din in Nicaragua. Also, strong statements
linking CSE mismanagement to the interests of the PLC-FSLN
pact probably help to stoke anti-establishment (and thus
pro-ALN or pro-MRS) sentiments. END COMMENT.


13. (C) Castillo also criticized Eduardo Montealegre's
toned-down persona and aloof image, which she says hurt the
party's outreach efforts. Castillo told Pol TDYer that
Montealegre is something of an introvert and that he has a
very "mathematic and exact" personality that makes him seem
uncomfortable around people. She said, for example, that
when on the campaign trail he does not engage in the
traditional prolonged embrace, often pulling away from such
encounters to move on to the next person. According to
Castillo, this is not intentional, but a reflection of an
inability to understand why it is so important to spend
more time with individuals. His stance is akin to 'ok, I
have greeted this person, time to move on.' He thus comes
across as uptight and aloof.


MONEY REMAINS AN ISSUE
- - - - - - - - - - - -


14. (C) Most of our ALN contacts have complained about a
lack of campaign finances . While Post recognizes that
these comments are made in part to solicit USG support, it
is obvious that the party is truly hurting for resources.
Montealegre told Congressman Burton and the Ambassador
during their meeting on 23 September that the ALN has only
spent about one-third of what was spent on the Bolanos
candidacy at the same point in its 2001 campaign. While
admitting to having received support from private sector
sources in Guatemala and El Salvador, Montealegre and his
campaign advisers noted that most Nicaraguan donors are
only giving in small amounts. Post has heard the same
thing from our private sector contacts. One member of the
Nicaraguan-American Chamber of Commerce (AMCHAM) told Pol
TDYer on 25 September that many wealthy Nicaraguans have
been hesitant to donate to Montealegre's campaign out of
fear of prompting reprisals from the Sandinistas.
(Comment: The candidates are required to declare all thei
r donations and their sources. Businesses fear that the
FSLN could use their muscle in the courts to 'punish' those
who give significant amounts to Sandinista opponents. End
Comment.)


15. (C) The lack of funding also appears to have forced
the ALN to rely increasingly on borrowed money. Edmundo
Leal told Poloff recently that the ALN is operating in the
red, having failed to receive the promised level of support
from the Nicaraguan private sector. The ALN is probably
hoping to repay its debts from monies earned from a strong
showing in the elections. The government sets aside a fund
equal to 1% of the ordinary budget to distribute to those
political parties who gain more than 4% of the vote - to be
disbursed after the elections. These parties then split
this pot in amounts proportional to the number of votes
they receive. The AMCHAM member said that this has
prompted the parties to approach banks for loans based on
how many votes they think they will be able to receive.
However, Montealegre and his advisers hinted during their
meeting with Congressman Burton that they were now having
trouble persuading banks to lend them more money. In the
meantime the ALN will continue to appeal to international
sources as well as domestic ones. Castillo said that
Rapacciolli and Montealegre were headed to El Salvador over
the weekend of 30 September in order to drum up additional
contributions.


16. COMMENT: Despite its financial challenges, the ALN
appears to have been able to spend more than any other
party other than the Sandinistas. According to an Etica
and Transparencia study published in the press (El Nuevo
Diario) on 30 September, the ALN spent 3,153,571 cordobas
on its campaign between 1 July and 15 August, compared with
2,622,635 spent by the PLC during the same period. The
FSLN was listed as having spent 7,858,120. END COMMENT.


ALN CONCERNED ABOUT ELECTORAL FRAUD
- - - - - - - - - - - - - - - - - -


17. (C) Mauricio Montealegre told POL TDYers and POL FSN
that the ALN is aware that Sandinista influence in the CSE
and judicial sectors put that party in a strong place to
commit fraud. He listed four ways the Sandinistas could
steal up to 5% of the election and avoid a second round:

--Annul a handful of votes from each JRV: Montealegre said
that if the FSLN can use its clout at the JRV to annul 3
votes in each JRV around the country, this could void as
much as 30,000 votes overall, potentially throwing out up
to 1% of the total vote.

--Raton Loco: The FSLN-controlled electoral authorities
can change the registered address of some voters, forcing
them to have to vote in other polling centers at the last
minute. This strategy has unfolded in previous elections,
and could prompt between 1-2% of the electorate to abstain
(i.e. people will give up and decide not to vote rather
than go through the hassle of having to travel to another
polling place). This result would favor Ortega as a high
voter turnout improves the chances of the anti-Ortega vote.

--Voiding entire JRVs: FSLN clout over the three-member
JRVs would give them an upper hand to challenge the results
in particular polling centers - where they are losing.
Through the challenge process, the entire results from each
JRV (up to 400 votes) can be negated.

--Virtual fraud: Montealegre warned that FSLN influence
over the CSE gives them control over the means by which the
vote tallies will be transmitted (mostly by fax) to local
vote tally centers. He offered few specifics, but Embassy
officers will follow up on this.


THE OAS VIEW ON THE GROUND
- - - - - - - - - - - - - -


18. (C) POL TDYers met on 29 September with OAS official
Patricio Gajardo to discuss the latest numbers of JRVs and
the size of the voter list. According to Gajardo, the CSE
has said there will be 11,274 JRVs and that the total voter
list numbers 3.6 million. Gajardo, however, says this is
likely inflated and expects that the number of voters will
be between 2.6-2.8 million. Assuming a voter base of 2.7
million, each 1% of the vote is 27,000 votes, or
approximately 68 JRVs (assuming that each of the JRVs
contains the maximum of 400 votes).


FENDING OFF ATTEMPTS BY OPPONENTS TO LURE, SCARE PARTY
MEMBERS
- - - - - - - - - - - - - - - - - - - - - - - - - - -


19. (C) Over the course of the last few weeks the ALN has
suffered several high-profile defections from within its
ranks. It is clear that the FSLN and PLC are attempting to
seed chaos within the ALN in an attempt to undermine the
public's confidence in the alliance as a viable political
entity. Most notable of these has been the decision in
mid-September by former Contra and Nicaraguan Resistance
Party (PRN) leader Salvador Talavera - who is the third
candidate on the ALN's slate of national-level Assembly
deputies - to publicly announce his support for the FSLN.
Despite an ongoing appeals process, the CSE has so far
prevented the ALN from replacing Talavera. The damage this
could cause to the ALN's Assembly slate is significant as
Talavera will almost certainly win a spot in the Assembly
given his senior spot on the slate. While he would
continue to be counted among the ALN bank of supporters, he
would probably vote with the FSLN.


20. (C) Mauricio Montealegre told POL TDYers that the
slate system of electing Assembly deputies opens doors for
opponents to attempt to encourage defections. He argued
that low-ranking ALN supporters are unlikely to get a seat
in the legislature, and are prone to the temptations or
threats made by the PLC or FSLN. A party as new as the
ALN, which lacks strong resources, may find it hard to
maintain the loyalty of these people who would be tempted
by the opportunity to gain a stronger position with a more
established party. (COMMENT: Each party has a list of
twenty names to fill the twenty national-level seats in the
Assembly but that as no party has a chance of winning all
the seats, which are divvied up based on the proportion of
the vote, most of the nominees from a party slate will not
gain a position. Moreover, the number of likely
disappointed persons is actually 40 because with each
deputy candidate comes a spot for an alternate or
substitute candidate ("suplente"). END COMMENT.)


21. (C) Anecdotal evidence also suggests that the PLC and
FSLN have offered money and other incentives to entice
these 'weak links' away from the party. The ALN's
Department heads in Leon and Chontales publicly decried on
27 September that the PLC and FSLN are trying to lure,
bribe, or blackmail ALN members to join forces with the PLC
and FSLN. Both regional leaders said they had been offered
money from these parties to switch sides. Several PLC
figures disenchanted with party leadership and advocating
either liberal unification under Montealegre or outright
support for his candidacy have told Emboffs that they have
received personal threats. ALN Assembly deputy candidate
Ariel Montoya told Poloff on 28 September that leaders of
the internal PLC movement to support Montealegre's
candidacy (GANARAM) have received personal threats.


22. (C)The ALN has been able to weather Talavera's
departure, and that of several other "suplente" candidates
- at least for now. Edmundo Leal and Azucena Castillo have
told Poloffs that Talavera's defection was a 'wake-up call'
for the ALN, and that other PRN members have since rallied
around Montealegre. (Comment: Castillo has also said that
Talavera's defection took many by surprise, but that party
management had ignored warnings from four or five sources
within the ALN against choosing him as a candidate in the
first place due to his personal baggage. End Comment.)


LEGAL SHOALS AHEAD
- - - - - - - - - -


23. (C) The ALN is expecting the FSLN to exploit its
leverage in the CSE, National Assembly, and the courts to
lash out at the ALN to handicap, and possibly derail,
Montealegre's campaign. Castillo said that the likelihood
that the FSLN and PLC will try to undercut Montealegre's
campaign (or a Montealegre administration) through legal
cases is the ALN's "achilles heal." She said that
Montealegre received a message from Comptroller Arguello
Poessy in which Poessy told Montealegre that he regarded
the candidate as a friend, but that he could not permit him
to continue to divide the Liberals. She said that the
PLC-FSLN attacks on Montealegre tend to coincide with the
release of polls depicting Montealegre as the strongest
center-right candidate.


24. (C) To counter these efforts Mauricio Montealegre told
Poloffs that the ALN is attempting to work closely with the
CSE wherever possible. He said that they have contacted
former CSE employees to seek help on how best to work with
the institution. The ALN is also mounting an intense
effort to place as many party observers at the polls on
election day as possible. The specific legal cases facing
Montealegre - and some hypothetical ones - are listed
below:

--Removing Talavera from the party slate: Numerous ALN
contacts have told Poloffs that the CSE's refusal to allow
the ALN to replace Talavera is yet another example of how
politicized that body is. Mauricio Montealegre said that
because Nicaragua's system of electing representatives to
the Assembly via slate (vice voting for individual members)
should give the party the right to replace these members at
will. Montealegre says that jurisprudence points to
several legal precedents in which both the PLC and FSLN
have been able to switch out members as late as ten days
before the elections. Mauricio said that the party would
continue to appeal the case to the CSE knowing that "we do
not have the slightest hope [of winning]." (COMMENT: With
the suicide of one of the PLC's substitute Assembly deputy
candidates, the PLC has requested that the CSE allow the
PLC to replace him. If the CSE approves the request, the
ALN will have a bit of leverage to argue its appeal to
E
replace Talavera. However, the CSE is likely
to counter that the cases are very different. END
COMMENT.)

--The CENIS case: However convoluted the CENIS bank-buyout
scandal might be, the FSLN and PLC will almost certainly
continue to hold this case over Montealegre's head. To
summarize the issue, Montealegre has been accused of
personally profiting as part of a deal in 2000-2001 where
the government issued "Negotiable Indemnization
Certificates" (CENIS) to facilitate the takeover of failed
banks by other Nicaraguan banking institutions - including
one in which Montealegre may have had a personal stake as
he was General Director and minority shareholder.
Montealegre counters the accusation with the assertion that
he was not Finance Minister when these decisions were made
and was never in a position of authority to influence the
decision, the exception being when the CENI rates and time
periods were renegotiated in 2003 during his tenure as
Finance Minister. The lead agency in the renegotiations
was the Central Bank, where Montealegre was ex oficio
chairman. They negotiated lower interest rates for the
CENIs to the benefit of the Nicaraguan public. (COMMENT:
We suspect Montealegre's opponents will re-engage this
issue closer to the election when it can do more political
damage. END COMMENT.)

--Accusations over printing fake ballots: When asked
about the sample ballot issue currently before the CSE,
Leal explained that the ballots are blacked out except for
the ALN "casilla" and could never be mistaken for the real
thing. The whole "scandal" has been trumped up by the FSLN
and CSE, he claimed.

--Campaign finance allegations: A quick look at the law
also reveals potential Achilles' heels for some of the
campaigns. Article 177 of the Electoral Code states that
candidates found guilty of violating finance-related rules
laid out in Chapter 4 (articles 99-106) or any of the other
electoral violations cited in Title 14 (articles 173-178)
are required to renounce their candidacies and are
prohibited from exercising public functions for a period of
between one and three years. Should they be charged with
having committed these offenses during their campaigns
after they have already taken office, then they must step
down. This provides an obvious opening for the pactistas
to use their influence to hamstring opponents.


CHANCE OF LIBERAL ALLIANCE UNLIKELY
- - - - - - - - - - - - - - - - - -


25. (C) Eduardo Montealegre told Congressman Burton and
the Ambassador during their meeting in late September that
he was still open to offering Rizo a chance to join his
campaign, and has considered giving him the inducement of a
desirable ambassadorial position in Chile or Spain.
Nevertheless, as time gets short, Montealegre's firm
refusal to join a party controlled by Aleman, and Rizo's
inability or unwillingness to challenge his party leader,
make an alliance increasingly unlikely. Castillo said that
the idea is losing traction within the ranks of both the
PLC and the ALN.


ABILITY TO SUSTAIN STRONG NUMBERS KEY TO THE ELECTION
- - - - - - - - - - - - - - - - - - - - - - - - - - -


26. (C) Multiple contacts from both the ALN, MRS, and the
private sector have told Emboffs that the key to the
election will be the anti-Ortega vote. Many people may
consider voting for whichever candidate appears most
capable of defeating Ortega. According to the M&R poll
released on 29 September of the 66% of respondents who
described themselves as against Ortega, 74.7% said they
would consider voting for a candidate other than the one
they preferred in order to avoid an Ortega win. Thus, much
of the population may pay a high degree of attention to the
polls produced near election day, regardless of how
credible they might be.


27. (C) COMMENT: Despite its challenges, the ALN still
has a good shot of finishing the campaign at a strong
pace. Elgarresta, Leal, and Casillo all commented that the
campaign has identified its weaknesses and insist that they
are taking steps to address their shortcomings and
reinforce their strengths. Assuming the party stays strong
in the polls, the ALN can probably count on their numbers
receiving an additional boost from voters from other
parties who might see the ALN as the best chance of
E
defeating Ortega. END COMMENT.
TRIVELLI