ORTEGA ANNOUNCES FSLN-LED GROUPS RESPONSIBLE FOR

C O N F I D E N T I A L SECTION 01 OF 02 MANAGUA 000802

SIPDIS

DEPT FOR WHA/CEN AND DRL
STATE PASS TO USAID
TREASURY FOR SENNICH

E.O. 12958: DECL: 08/11/2019
TAGS: PGOV ECON EAID NU
SUBJECT: ORTEGA ANNOUNCES FSLN-LED GROUPS RESPONSIBLE FOR
LOCAL BUDGETS

REF: A. MANAGUA 754

B. 08 MANAGUA 350

C. 08 MANAGUA 130

Classified By: Ambassador Robert J. Callahan, for reasons 1.4 (b & d)


1. (C) Summary: On August 6, and in the presence of the 109
FSLN mayors, President Daniel Ortega launched the "Great
National Consultation on Municipal Budgets." This program
calls on all Nicaraguans to participate in the party's
Citizen Power Council (CPC) system to develop (and even
"decide") local budgets. While Nicaraguan law does call for
citizen participation in the development of local budgets, it
does not (as Ortega is attempting) restrict Nicaraguans'
participation to the CPCs. Ortega's most recent statements
suggest he will make good on past promises to subordinate
local authorities to the FSLN's CPC structure and further
increase the role of the governing party in managing local
resources and governance. End Summary.

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The Great Consultation ... Within the Party Structure
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2. (SBU) On August 6, President Daniel Ortega and First Lady
(and head of the Citizen Power Councils) Rosario Murillo
launched the "Great National Consultation on Municipal
Budgets," which calls on Nicaraguans to participate in the
Sandinista National Liberation Front's (FSLN)-controlled CPC
structures for the development of municipal budgets.
Present at the event were the 109 FSLN mayors (of a total of
156 mayors in the country); 18 "opposition" party mayors were
also present. Matagalpa Mayor Sadrach Zeledon (FSLN) read
the proclamation calling for Nicaraguans to "mobilize,
organize, and participate in Assemblies, Cabinets, Congresses
and Town Halls of the Citizens Power to discuss, debate,
share, come to a consensus on and decide on the municipal
budget." This subordination of local governments to CPCs in
the development of the local budgets is a continuation of the
FSLN's plan to have CPCs dominate local affairs. Murillo
first announced the plan in March 2008 when the FSLN selected
its candidates for the municipal elections later that year
(ref B).


3. (SBU) Ortega referred to the Nicaraguan Constitution to
justify this consultative process, specifically citing
articles 48, 49 and 50. However, these articles are broad
principles referring to the rights of citizens to
"effectively participate in the political, economic, and
social life of the country" (Art.48),the right to organize
(Art. 49),and the right to participate in public matters
(Art. 50). Experts on local governance highlight the
illegality and arbitrary nature of this "Great Consultation."
They note this approach challenges the autonomy of local
governments by subordinating basic municipal authorities to
the CPCs (and ultimately the FSLN) and undermines the legal,
pre-established structures and institutions for the
consultative process. The Citizens Participation Law of 2003
calls for local governments to establish Municipal
Development Committees (CDMs) to provide consultation on
municipal budgets. The law, however, gives mayors ultimate
responsibility for local budgets.


4. (SBU) According to the law, CDMs are non-partisan,
pluralist organizations which should reflect the various
actors and organizations of the municipality. By contrast,
CPCs are pari-party entities controlled and managed by the
FSLN leadership that mirror the official government structure
at all levels - national, regional and local. Ortega
established the CPCs in 2007 by Presidential decree and
provoked a constitutional crisis when he sought public
funding for these groups, which the National Assembly twice
rejected as illegal. Ortega subsequently subverted the
legislature, again via Presidential decrees, by placing the
CPCs under the umbrella of the Council of Economic and Social
Planning (CONPES) and naming his wife as CONPES Executive
Secretary (ref C). In doing so he also violated the
Constitutional prohibition on immediate family members of the
president holding or seeking public office.

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Comment
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5. (C) The FSLN's attempt to control all levels of
government continues, even after the November 2008 electoral
fraud handed the party 109 of 156 municipalities. This
latest move further weakens the legal, pre-established and
non-partisan institutions for citizens participation in local
governance and replaces it with an FSLN structure that
facilitates the party's ability to direct resources for
partisan purposes. This "Great Consultation" also might
provide Ortega an opportunity to deflect criticism for the
country's fiscal woes (ref A). As presidential economic
advisor Bayardo Arce recently told reporters regarding the
third budgetary cut to come, "less tax revenue will result in
less funds for local governments." By giving the FSLN base
(through the CPCs) some ownership over how to direct or
prioritize local spending, the FSLN might diffuse possible
tensions within the party brought about by constantly
dwindling funds and resources.
CALLAHAN