2008 SCORECARD - ORTEGA'S CITIZENS' COUNCILS 1,

C O N F I D E N T I A L SECTION 01 OF 04 MANAGUA 000130

SIPDIS

SIPDIS

DEPT FOR WHA/CEN GREENE AND NYMAN
DEPT FOR DRL G. MAGGIO
NSC FOR V ALVARADO
SOUTHCOM FOR FPA

E.O. 12958: DECL: 01/30/2018
TAGS: PGOV PHUM ECON KDEM NU
SUBJECT: 2008 SCORECARD - ORTEGA'S CITIZENS' COUNCILS 1,
OPPPOSITION 0

REF: A. 2007 MANAGUA 2516

B. 2007 MANAGUA 2562

C. MANAGUA 49

Classified By: Ambassador Paul A. Trivelli for reasons 1.4(b,d)


1. (C) SUMMARY: In a legal shell game, Nicaraguan President
Daniel Ortega folded his embattled Citizens' Power Councils
(CPCs) into the Council of Economic and Social Planning
(Conpes),an existing body which advises the GON on public
policy matters, and placed his wife, First Lady Rosario
Murillo at the helm of Conpes. This move, coupled with the
Supreme Court of Justice's (CSJ) January 10 decision to
uphold President Ortega's veto of legislation that would have
ended the CPCs, has severely restricted the opposition
legislative bloc's options to sideline the CPCs. As the
scope of CPC meddling in civil society and the public sector
continues to expand, the private sector is getting
increasingly nervous. Recent opinion polls demonstrate that
the public is solidly against the CPCs (65.6 percent oppose
them) and support opposition attempts to block their
formation. The challenge for civil society organizations
will be to harness and shape public discontent into an issue
for the 2008 municipal elections. END SUMMARY.


Presidential End-Run Secures CPCs
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2. (C) On November 29, President Ortega issued presidential
decrees that placed the CPCs under the control of Conpes and
that named his wife as Conpes' Executive Secretary. Conpes
was established by the National Assembly (NA) as a
bi-partisan organization to advise the president on public
policy. By folding the CPCs into Conpes, Ortega won a
measure of protection because any changes to Conpes' charter
-- including its dissolution -- would require 56 votes in the
Assembly, 4 more votes than the opposition bloc controls. By
placing Murillo at the helm, Ortega ensures that his pet
social project will continue according to his and Murillo's
vision. (BACKGROUND NOTE: These decrees followed a ten-day
stand-off between Ortega and the 52-deputy opposition bloc in
the National Assembly over the deputies' override of a
presidential veto of legislation forbidding the formation of
the CPCs (Law 630). After the Managua Appellate Court (TAM)
approved an injunction to block the NA's override decision a
scant 63 minutes after that vote, the opposition bloc
boycotted the Assembly and Ortega threatened, on November 26,
to "rule by decree" (ref A). END BACKGROUND NOTE)

Supreme Court Upholds Constitutional Court Decision on CPCs
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3. (C) On January 10, 2008, just over one month after the
Constitutional Chamber of the CSJ upheld Ortega's veto of Law
630 (ref B),the CSJ issued its final decision, ruling that
Ortega indeed enjoys the right to create the CPCs. Ortega
himself announced the court's decision in his State of the
Union address to the National Assembly, in a session
boycotted by the opposition bloc. While the CSJ's decision
came as no surprise -- deputy Jose Pallais, President of the
Judiciary Committee, had predicted the outcome in a December
6 meeting (ref B) -- it is a set back for the opposition bloc
which fought tenaciously to strike the CPCs from the law, and
for civil society whose role is slowly being subsumed by the
ever-expanding CPCs. (NOTE: A study recently published by
the Due Process of Law Foundation (DPLF) on corruption in
Central American legal systems found that the Nicaraguan
judicial system was perceived as the most corrupt and
politically-influenced in the region by a factor of nearly
two. Demonstrating the political nature of the CSJ, the
study revealed that 79 percent of judges believed that their
appointments depended on having a close relationship with a
CSJ Magistrate. END NOTE)

More Cases of CPC Meddling
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4. (U) In the first 2 weeks of 2008, the CPCs have made the
news on several occasions by inserting themselves into a
variety of private and public situations:

- In Leon, the CPC allegedly urged the mayor's office to
accept concessions from local transportation providers to end
a standoff and accused the mayor of corruption.

- In the municipality of Solingalpa, Matagalpa, CPC members
reportedly attacked a cellular tower installation team,
claiming that the tower would negatively affect the health of
pregnant women in the area.

- Six female members of a CPC in Managua's District Five
filed slander charges against the daily newspaper "La Prensa"
after the paper compared CPCs with "gang members" and
"delinquents" following the December 19 attack on "La Prensa"
journalist Jorge Loaisiga by Ortega's "blue shirt" personal
security unit, originally believed to have been CPC members
(ref C). These women were not directly involved in the
incident and none of the attackers were identified by name in
the article.

- In mid-January, CPC representatives unexpectedly showed up
to a meeting between private sector representatives and
Venezuelan President Hugo Chavez, prompting the president of
the Higher Private Enterprise Council (Cosep) to get up and
leave.

CPCs Penetrating Public Institutions?
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5. (C) According to both private and public sources, CPCs
are gaining more influence -- and in some cases are being
installed -- in government ministries and other public
institutions:

- Sources reported that the Ministry of Agriculture and
Forestry (MAGFOR) sent out a memo in December requesting that
all employees who had studied in current or former communist
countries attend an orientation session to form an in-house
CPC. (Apparently, turnout was very low.)

- A source at the National Tax Authority (DGI) reported that
DGI employees are required to participate in CPC events and
rallies and are authorized to use government resources.
(COMMENT: We can confirm that the DGI turned out in force at
the November 30 CPC rally. With offices located near the
rally site, nearly 200 employees paraded to the site carrying
CPC banners and sporting CPC tee-shirts which they allegedly
were required to purchase on an installment plan. END
COMMENT)

- Stating that "Constitutionally, it is the State that has
the responsibility to guarantee the social protection of the
family, something that has been violated during the past 16
years," the Minister of Family (MiFamilia) announced on
January 9 that she would reactivate a feeding program for
children (Painin) with help from municipal governments and
the CPCs, eliminating the role previously played by a number
of NGOs.

- In a January 30 press release Education Minister Miguel De
Castilla explicitly stated that information about the CPCs
(and ALBA) will be included in school curriculum under the
heading of "Cultural and Popular Organizations." This
initiative follows a December 7, 2007 announcement by De
Castilla in which he stated that CPCs would "play a more
visible role" in public education. A CPC education committee
member confirmed last week that education representatives
from neighborhood CPC cabinets and committees are ramping up
their direct presence in schools as advisors to school
directors, diminishing the traditional role and influence
played by parent councils.

Private Sector Fearful of CPCs
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6. (C) In a January 23 meeting with USAID AA/LAC Paul
Bonicelli, vegetable producers in Managua recounted how much
progress they had made over the past decade and shared their
goals of increasing exports to the U.S. and other
international markets. When asked about the role the CPCs
might play in their expansion plans, the producers shared
their fears that the CPCs will play a more direct and
heavy-handed role in their day-to-day business and ability to
market/distribute produce.


7. (C) The reaction was similar in a meeting Bonicelli held
with an outspoken participant in a USAID-funded Moot Court at
the National Autonomous University (UNAN) in Leon. In the
side meeting with Bonicelli, the participant was accompanied
by two other unidentified individuals. When Bonicelli asked
her about the role the CPCs were playing or could play, the
previously outspoken participant fell silent and the two
other individuals chimed in. They subsequently identified
themselves as members of the local CPC and said that
"everything was fine" and that "people," including the
students, supported the CPCs. The Moot Court participant
remained silent through-out the discussion.

Atlantic Coast Continues to Resist CPCs
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8. (C) Public and private sources report that strong
opposition to the imposition of CPCs continues in Nicaragua's
North Atlantic Autonomous Region (RAAN). Although he
represents the pro-Ortega YATAMA political party, RAAN
governor Reinaldo Watson has publicly voiced opposition to
the CPCs. According to press reports, Watson is concerned
that the CPCs will "alter the cultural and ethnic traditions"
of the indigenous populations. He also stated that the CPCs
are "not well-managed." Similar opposition has been voiced
by indigenous community and political leaders in the RAAN
over the past several months in meetings with Embassy
officers. In a meeting last week, ex-commandos in the RAAN
reported that the FSLN is pressuring hurricane Felix victims
and others in poor communities throughout the RAAN to join
CPCs with the tacit understanding that they will receive
relief supplies, which local leaders continue to insist have
been stockpiled by FSLN allies, such as Brooklyn Rivera.

CPC Staple Food Distribution Raises Financial Questions
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9. (U) Two months after the National Enterprise of Basic
Grains (ENABAS) began selling beans, rice, and cooking oil
through CPC-approved (and often run) neighborhood corner
stores and other points of sale (ref A, B),ENABAS Executive
Director Roger Romero Ali reported an uncollected balance of
300,000 Cordobas (USD 15,000) to the Controller's Office on
nearly seven million Cordobas (USD 368,000) in sales.
According to public comments made after the meeting,
Controller Guillermo Arguello Possey stated that Romero had
not provided any specifics on the outstanding balance or on
plans to ensure collection. The government, through ENABAS,
was also criticized for selling Taiwanese grain donated for
Hurricane Felix relief through this CPC-established network.

CPCs Unpopular in Recent Polls
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10. (U) Two recent public opinion polls (IRI/Datexco:
December 15-16 with 1,005 participants; M&R: December 26-30
with 1,600 participants) show that the CPCs are decidedly
unpopular. According to the IRI/Datexco research, 65.6
percent of Nicaraguans are opposed to the installation of the
CPCs and 62.5 percent indicated that they would not vote for
a candidate who supported the CPCs even if the CPCs offered
benefits their members. The M&R study revealed that 46.7
percent of respondents supported the opposition bloc's
override of Ortega's veto and that 50.6 percent opposed the
CSJ's decision to uphold Ortega's veto. Additionally, 88.7
percent of M&R respondents reported that they are not part of
a CPC and the majority indicated they have no intentions of
joining one.

Comment
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11. (C) With the CSJ's January 10 decision to uphold Ortega's
veto of Law 630 reforms it appears that opposition
legislators have reached a legal dead-end. Since the court's
decision, opposition leaders have been silent on the issue
and have not outlined a response strategy in private
meetings. While legislators remain silent, the media
continue to hammer away at the CPCs at every possible
opportunity. Neither of the two mainstream newspapers have
ever run a single positive story on the councils. As the
recent polls indicate, this constant haranguing has
undoubtedly helped to harden public opinion against the CPCs.
The looming question is whether this growing public
suspicion of and resentment towards the CPCs will spill over
into civic action and if civil society organizations can
harness, channel, and mold this resentment into an election
issue. Through our Democracy Initiatives programs we will
continue to engage with our democracy partners, civil society
actors, and the media to ensure there is active debate on the
CPCs and other issues of importance in the lead-up to the
2008 municipal elections.
SANDERS