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
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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?
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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"
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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"
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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
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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?
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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?
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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
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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
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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