FSLN FOREIGN AFFAIRS CHIEF: "JUDGE US BY OUR

C O N F I D E N T I A L MANAGUA 000632 SIPDIS C O R R E C T E D COPY (ADDED TEXT TO PAR 6) SIPDIS DEPARTMENT FOR WHA/CEN, NEA/I E.O. 12958: DECL: 03/21/2016 TAGS: KDEM NU PGOV PINR PREL KCOR SUBJECT: FSLN FOREIGN AFFAIRS CHIEF: "JUDGE US BY OUR DEEDS, NOT OUR RHETORIC" REF: MANAGUA 0579 Classified By: Ambassador Paul A. Trivelli. Reasons 1.4 (B,D). ¶1. (C) Summary: Sandinista (FSLN) foreign affairs advisor Samuel Santos holds up the FSLN's recent support for CAFTA implementation legislation as evidence of his party's interest in constructive relations with the United States. He suggests that the FSLN might also be willing to vote to destroy 651 MANPADS and eventually the remainder if such disarmament would lead to more benefits for the Nicaraguan military. He continues to excuse Daniel Ortega's anti-USG public rhetoric, insisting that Ortega realizes he needs good relations with the United States if he is to successfully govern. He fretted to polcouns and TDY poloff on March 16 that USG influence in Nicaragua could cost Ortega the November national election and is particularly alarmed by our cordial relations with Sandinista-dissident Herty Lewites. End Summary. Strange Bedfellows Rally around CAFTA - - - - - - - - - - - - - - - - - - - ¶2. (C) In his March 16 meeting with polcouns and TDY poloff, analyst, FSLN foreign affairs advisor Samuel Santos held up the FSLN's recent support for CAFTA implementation legislation as evidence of the Sandinista party's interest in constructive relations with the United States (septel). Santos explained that in light of the Liberal Constitutional Party's (PLC) "no amnesty, no CAFTA" pledge, the Nicaraguan government negotiated with the bloc of 38 Sandinistas and Eduardo Montealegre's seven member ALN-PC caucus, plus a few lawmakers from smaller blocs, to muster support for pending CAFTA reforms. The Sandinistas agreed to the reforms in exchange for minor textual changes. ¶3. (C) Note/Comment: On March 16, this odd CAFTA "alliance" passed both the 29 articles associated with the copyright law reform and the six articles related to the law of satellite broadcast signals. The remaining reforms, to be considered March 21, include the 26 articles of the trademark law, 15 articles of the patent law, the Budapest Treaty and an anticorruption law. We had an inkling that the Sandinistas might support the CAFTA-related votes after Santos told us on March 13 (Reftel) that the FSLN supports CAFTA in principle and would be willing, with assurances that help Nicaraguans better compete, to support implementing legislation. End Note/Comment. MANPADS Next? - - - - - - - ¶4. (C) Taking advantage of the FSLN's support for CAFTA implementing legislation, polcouns raised the issue of MANPADS destruction, suggesting that a favorable vote on MANPADS would help demonstrate the FSLN's commitment to eliminating weapons that are of little use but to terrorists. Santos explained that some three years ago he had discussed MANPADS destruction with Embassy officials, who suggested that perhaps in recognition for the destruction the USG would contribute helicopters or other items to the Nicaraguan military. However, this initiative had fizzled. Polcouns clarified that, although there is no agreement on the table that would directly link MANPADS destruction with the donation of specific items, clearly further MANPADS destruction would open the way for increased mil-mil engagement and assistance. Santos replied that he will relay this message to his party leadership. (Note: President Bolanos' senior political adviser, Frank Arana, told us March 20 that he will also broach the subject wi th the Sandinistas.) "Pacts Are How We Do Politics" - - - - - - - - - - - - - - - ¶5. (C) Elaborating on the GON-FSLN CAFTA effort, Santos asserted that the GON-FSLN pact is more productive than the much maligned Ortega-Aleman pact. "Pacts are how we do politics. They help maintain governability," argued Santos. He confided that before Aleman offered to pact with Ortega in 1997, the Sandinistas were floundering and flailing. "We seized on Aleman's offer and turned it to our advantage," beamed Santos, who added that Aleman's blind personal hunger for power had made him vulnerable. This was not the first or last pact, continued Santos, noting that early in President Bolanos' term, Bolanos had "pacted" with Ortega to remove Aleman's immunity. The pact continued until Secretary Powell visited Managua in fall 2003 and "ordered" President Bolanos to break the pact, and was revitalized after the OAS brokered a new deal between Bolanos and Ortega in fall 2005 to restore governability, said Santos. "Watch What We Do, Not What We Say" - - - - - - - - - - - - - - - - - - ¶6. (C) Santos resorted to his usual line of "heed our actions, not our rhetoric" to polcouns' query over Ortega's March 16 verbal assault on the United States when he accused the USG of infiltrating the Sandinista party with spies and of attempting to wrangle amnesty for PLC leader/convicted money launderer Arnoldo Aleman. Santos cited Ambassador John Negroponte's recent statement that the U.S. must monitor Nicaragua as the reason for Ortega's allegation. And, while Santos acknowledged that the U.S. is not seeking Aleman's amnesty, he argued that about three years ago the U.S. Ambassador had approached him on the idea. (Note: The Ambassador at the time clarified that she never supported Aleman's amnesty and never approached Santos on the matter or anyone else). At least the anti-U.S. lyrics are no longer in the Sandinista anthem, proffered Santos. Polcouns reiterated that Ortega's rhetoric is uncalled for and will certainly not lend to improving relations. Carter Is Our Friend and We Need U.S. Investment - - - - - - - - - - - - - - - - - - - - - - - - - ¶7. (C) Santos held up the Sandinistas' close friendship with former President Jimmy Carter as a model for bilateral relations. He said the Sandinistas look forward to Carter's visit in July and hope that Carter will be present for the November election. U.S. investment is also welcome, asserted Santos, who claimed that while the Bolanos government had supported Chinese investment in a canal project for Nicaragua, the Sandinistas oppose the project if the Chinese are the only foreign investors. Instead, the FSLN believes any eventual canal project should also include U.S. and/or European investment. (Note: Ortega is touting an ambitious canal project as part of his campaign platform.) What's This about You and Herty? - - - - - - - - - - - - - - - - - ¶8. (C) Visibly perturbed over our association with Herty Lewites, Santos complained that Lewites adviser Victor Hugo Tinoco is granted generous access to U.S. officials in Washington, while he, Santos, does not even have a U.S. visa. "Herty was a gun runner (for the Sandinistas) like me, but he seems to have no problem with his visa," grumbled Santos (Santos is ineligible for a U.S. non-immigrant visa under 212 (a) (3) (B) - - terrorism). Polcouns replied that we meet with political leaders from all parties, as evidenced by our meetings with him. (Comment: Santos' palpable consternation over our engagement with Lewites suggests that Herty does represent a real threat to Ortega and could draw enough votes from Sandinista sympathizers to prevent an Ortega victory. Indeed, the Borge/IRI poll suggests that, while sympathy for the FSLN as a party is 33 percent, only 25 percent of the respondents would vote for Ortega. End comment.) Why Ortega? - - - - - - ¶9. (C) Santos rationalized Ortega's continued leadership of the FSLN to the fact that he is the only one who can counter the USG's efforts to dismantle the party. When pressed, Santos could present no evidence of this accusation, nor could he prove, as Ortega asserts, that the USG is financing Ortega rival Lewites' campaign. (Note: According to the Borge/IRI mid-March poll, Alejandro Martinez Cuenca enjoys considerable internal Sandinista party support, with 27.7 percent favoring Martinez Cuenca versus 29.2 percent supporting Ortega as the FSLN's presidential candidate.) Biodata - - - - ¶10. (C) Samuel SANTOS Lopez was born December 13, 1938. His grandfather was Somoza's National Guard Chief of Operations and Intelligence. During the Sandinista era, Santos served as chief of the FSLN Finance Department and was a member of the FSLN Assembly. He also served as Mayor of Managua and Minister of Managua Reconstruction. Santos helped divert GON funds to arm the FMLN in El Salvador. Now an economist and wealthy businessman, Santos was a member of the failed Interbank and lost considerable money in the bank scandal. Santos owns a hotel in Managua and is the General Manager of Best Western, Nicaragua. He is a major proponent of building a canal through Nicaragua and is a close business partner of Bayardo Arce's. He has relatives in the United States, including a sister in Los Angeles and sons in San Francisco. Comment - - - - ¶11. (C) Santos once again sought our assurances that the U.S. will refrain from "unhelpful attacks" on Ortega and avoid meddling in Nicaragua's political deliberations. He asserted that it is now the Sandinistas' turn for power, given that the Liberal governments have failed to deliver prosperity to the Nicaraguan people. To Santos, an Ortega victory would close the circle on years of conflict and heal the nation. Once again, we reiterated that the USG maintains its reservations over Ortega -- given his track record and his continuing anti-U.S. rhetoric -- and rejects any political option that is a product of the Ortega-Aleman pact. An Ortega victory would likely spark a political spiral downward -- what Nicaragua needs is a leader who will break Nicaragua's vicious circle of caudillismo. TRIVELLI