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Central American University - UCA  
  Number 330 | Enero 2009



Abuse as Usual Means Many Accounts to Settle

Neither apologizing nor accounting for the massive fraud committed in last November’s municipal elections, the Ortega government has started this new year Hell-bent on imposing its long-term project. In what promises to be an uncertain and certainly economically harsh year, that project has already racked up many debts.

Nitlápan-Envío team

The crisis triggered by last November’s fraudulent municipal elections monopolized the political scene in Nicaragua for over two months. Then on January 16, President Daniel Ortega revealed in greater detail the cards he’s had up his sleeve for 2011, when his current term in office ends. He began by exonerating former President Arnoldo Alemán of all responsibility for the crimes he was convicted of over five years ago. That act raised the curtain on a new phase of the decade-long pact between these two political strongmen: a constitutional reform to change Nicaragua’s political system into a parliamentary one that will perpetuate both men and their respective parties in power and exclude any other political alternative. Even though Nicaragua has effectively always been a two-party system, the goal is a forced bipartite system limited to Ortega’s Sandinista National Liberation Front (FSLN) and Alemán’s Constitutionalist Liberal Party (PLC). The culmination of their dream may well be yet another nightmare for the country.

The long-expected
dropping of the first shoe

On the afternoon of Friday, January 16, Supreme Court Justice Sergio Cuarezma read out the Penal Bench’s decision on the sentencing of Alemán to 20 years in prison for the crimes of money laundering, fraud, embezzlement, association and instigation to commit a crime and electoral crimes, all against the state. The Court ruled that the sentence should be definitively quashed on the grounds that no evidence was found to ratify either the original sentence in December 2002 or the Appeals Court’s 2007 decision to uphold it. All other people related to this case and the crimes listed were also freed of any responsibility. The bench that issued this ruling was made up of four Liberal justices plus Rafael Solís, one of President Ortega’s key political operators and thus abreast of all the negotiations behind the overturning of Alemán’s conviction. Justice Solís issued a dissenting argument for the sole purpose of clouding the FSLN’s responsibility for this ruling.

Justified by a handful of chronic illnesses he claims to suffer, Alemán never spent more than a few days confined to a cell in the five years following his original conviction. By the time of his final release he was under “country arrest”—meaning his only restraint was the inability to travel abroad.

Alemán will still have
to answer to Ortega

By reminding people that he still has a money laundering case pending in Panama and several others awaiting trial in Nicaragua, Attorney General Hernán Estrada made it clear that Alemán will still be an Ortega hostage. The cases in Nicaragua that Estrada’s office will continue pushing are the Mayco case, the “Narcojet” case, the case of the Rural Development Institute calves, at least one land case and the “Taiwan donation” case, all reported in these pages over the years.

Estrada also announced that the government will open a museum “to show future generations the corruption of the Alemán-Bolaños and Bolaños-Alemán governments” and demonstrate the two greatest “holdups in national history.” Contrary to what one might expect, the half-century amassing of wealth by the Somocista government was not one of those holdups. Estrada was referring to what came to be known as the Guaca case, from which Alemán has just been freed of all responsibility, and the still-open case of the illicit CENI bank bonds, which the government wants to pin exclusively on banker-turned-politician Eduardo Montealegre. If the government can successfully pull that off, it would eliminate the only credible alternative to Alemán’s leadership of the Liberal camp. Montealegre claims to have proof he was already cheated of his electoral victory as mayor of Managua by the FSLN’s alleged electoral fraud last November.

Ortega also dropped
the other shoe

With the electoral fraud put to rest by both official declarations and silences, Daniel Ortega began the year putting in place everything required to fulfill his aspirations for 2011. By that date, the constitutional reforms that will change our political system to a parliamentary one and permit him to be reelected must have been approved in two consecutive legislative years.

Things are moving apace. The PLC and FSLN electoral magistrates announced that they have already drafted a text of the reforms, and it has even been vetted by the Supreme Court justices, all of whom answer to either Ortega or Alemán.

As in the past, voters will only be able to elect parliamentary representatives from closed slates presented by the parties. The difference is that those legislators will then elect both the head of state and the prime minister. The model must guarantee a bipartite system, with the alternation of the two caudillos and their two parties in power. The prevailing assumption is that Ortega would be head of state, responsible for international relations and national defense, while Alemán would be prime minister or president of the National Assembly. An issue of total conjecture at this point is whose vision of the nation and national socioeconomic development project would prevail, not to mention whether the parties even have such a vision or what differences they might contain.

Political challenges and debts

New political and economic challenges and debts await President Ortega in his attempt to turn this project into a reality. While the economic challenges will be the hardest to deal with, he will also have to help beef up Alemán’s eroded leadership because he will need to guarantee enough of the PLC bench’s 25 votes to push the reforms through the National Assembly. Constitutional-rank changes need 56 of the Assembly’s 92 votes. The FSLN bench has 38, while another 11 legislators (6 from what was formerly Montealegre’s National Liberal Alliance bench plus 5 “independents”) are vulnerable to blackmail, pressure or perks, leaving a minimum of 7 to be won over from the PLC’s 25. Although all are currently adamant that they will never vote for either Ortega’s reelection or his parliamentary system, such protests are always more than a little suspect.

Now that he has been “absolved” of at least some of his wrongdoing, Alemán will be politically more dynamic. Ortega needs him not only to deliver the votes from the members of his party’s legislative bench, which still see him as a factor of power, but also to whip up the Liberal grass roots that still respect and even admire him, thus putting a damper on the emerging leadership of Montealegre and his group. Pro-Alemán Liberals are now touring the country to both hide Alemán’s responsibility for November’s electoral fraud and attribute the PLC’s defeats in the past two elections to Montealegre for having “split” the Liberals into two parties.

Settling political accounts

Ortega won’t have any trouble handling Alemán, who will remain a minority partner in the pact as Ortega has acquired continually more institutional power for the FSLN than Alemán has been able to negotiate for the PLC and still holds the key to the other corruption cases pending against his fellow caudillo. To square the political accounts, Ortega has to annihilate the opposition, leaving only the Alemán-controlled PLC Liberals in the political scene.

In hopes of putting the international scandal over the electoral fraud to rest, there’s been a hiatus in Ortega’s attacks against critical media, journalists, civil society organizations and personalities—which reached a peak of daily stridence between June and November 2008. Since the start of this year the pro-government media have abandoned their ongoing defamation campaigns to concentrate on publicizing the government’s economic achievements and social projects. But if critical voices from the media and civic organizations persist, the war will almost certainly heat up again. The field is still mined.

Montealegre, who won stature, credibility and leadership through his documented charges of electoral fraud, is a threat to both Ortega and Alemán. In light of the post-electoral crisis and the new phase of Alemán’s pact with Ortega, Montealegre pulled out of the alliance that he and his We’re Going with Eduardo Movement made with the PLC for the municipal elections. While Enrique Quiñónez, Montealegre’s running mate in last year’s mayoral race, decided to stay in the PLC and organize a critical current that he claims will be able to undermine Alemán’s leadership, Montealegre has found a new legal home in the Independent Liberal Party (PLI), founded in 1944 when its dissident members broke with the then decade-old Somocista Liberal Party. The PLI has conserved its honest trajectory, although it has largely become irrelevant in recent years. From there, Montealegre has been calling for a new Liberal unity.

Ortega is doing his part to help asphyxiate Montealegre with plans to have him tried for the CENI bonds case and to cancel the PLI’s legal status. Given Ortega’s control in both the judicial and electoral branches, which he has shown no reticence in manipulating, pushing through either plan will be a piece of cake.

Settling accounts with
dissident Sandinistas

On the Sandinista side of the aisle, the 2011 project requires asphyxiating the Sandinista Renovation Movement (MRS), which won more legitimacy and sympathies for the way it dealt with the Supreme Electoral Council’s illegal annulling of its legal status, starting with Dora María Téllez’s awareness-awakening hunger strike. While some leftists question the MRS decision to join forces with the right wing in protest against what both see as the incipient institutional dictatorship being forged by the Ortega family, it has gained prestige among a wider range of people thanks to media coverage of the coherent and independent positions of its three National Assembly representatives. Those in the MRS are confident that they will recover their legal status by 2011.

Montealegre aspires not only to give Alemán a run for his money over leadership of the Liberal ranks, but also to head up a national coalition that can successfully confront Ortega’s anti-democratic tendencies and defeat him in 2011, to which he is inviting MRS Sandinistas as well as anti-pact and anti-caudillo Liberals, Conservatives and former contras. Ironically, such a lineup looks much like what was known as the Convergence, which allied with the FSLN between 2000 and 2006.

The Montealegre group’s discourse no longer speaks critically of Sandinismo, but rather of “Orteguismo,” a less informal version of the “Danielismo” concept the MRS has worked to sow among critical Sandinistas. Both these linguistic changes express a changing political reality, distinguishing and legitimating the original Sandinista values and political philosophy in contrast to where the Ortega family and its backers have taken the party.

And who shall
lead the flock?

A political leadership crisis is evident in Nicaragua today. Grassroots indignation at the electoral fraud was just the latest and most intense expression, but despite various dispersed efforts, that anger did not find the outlet it deserved. There are no credible leaders heading just and urgent causes such as the country’s democratization and a shared commitment to build a society with social equity. And more importantly there are none effectively and convincingly linking the two.

Ortega is pitting these two causes against each other, trying to sell the idea that the price for a certain social improvement for the poorest population—what he calls “revolution”—is restricted liberty. Meanwhile, the opposition’s struggle for democratic institutionality often appears far removed from the long-postponed aspirations of the poor and is never accompanied by any self-critical recognition that the long years of social insensitivity, waste and corruption by the three governments of the “democratic forces” that preceded Ortega’s are part of the reason he is where he is and can do what he’s doing today.

This lack of credibility among the opposition leaders is favoring Ortega, despite his own errors and low showings in the polls. The most recent poll, conducted by M&R after the crucial January 16 announcements, shows Ortega with 34.1% approval and 59.7% disapproval, an improvement over his approval ratings in the low 20s of last September and October. With 31.6% approval and. 61.4% disapproval, the ratings of First Lady Rosario Murillo, the person some call the de facto President, have also improved from the teens of that period, despite the antipathy she has engendered in her handling of her all-embracing government powers.

Montealegre’s evenly balanced 46.7% approval and 45.7% disapproval rating is newly outshined by Edmundo Jarquín, coordinator of the MRS Alliance and its 2006 presidential candidate following Herty Lewites’ untimely death, who pulled 59.5% vs. 28.4%, a meteoric climb from his single-digit showing last September. This effectively puts Jarquín in the running against Montealegre for leadership of any anti-Ortega opposition alliance.

The public figure with the highest rating is outgoing FSLN mayor of Managua Dionisio Marenco (87.2% positive and only 5.8% negative). Because he has publicly differed with FSLN leader Ortega on occasion, this former close friend of the President and member of his inner circle has been totally isolated within his party despite such well-earned popularity, making his political future one of the major open questions of the moment.

The now-freed Alemán has unabashedly declared himself a presidential hopeful for the 2011 elections. His standing in the polls (13.9% positive vs. 79.5% negative) is the worst of any the list, and the opposition to him running for president two years down the road (87%) even exceeds that overall negative opinion. If he can’t turn that around, his only hope is to be indirectly elected by the National Assembly representatives in the new parliamentary scheme.

More important than popularity ratings, however, was the following question in the M&R poll: “In your opinion, which political leader represents the opposition in Nicaragua?” The answers contrast markedly with the sympathies mentioned above. Montealegre came in first with 34%, followed by none (23.1%), Alemán (17.4%), no response (16.4%), Jarquín (3.9%), Marenco (3.9%) and others (1.3%). As has been the case for way too long, it is a sad state of affairs when only a third of the population perceives the top-ranking opposition leader as such and another quarter of the population finds no one deserving of such recognition.

The greatest risk of all

Daniel Ortega decided to risk political capital in his extreme move on January 16, granting Alemán freedom in exchange for the votes he can muster to ensure the future of the pact’s maximum expression—a parliamentary system designed to keep both men in power. With the possible exception of the Army of Nicaragua and to an ever less extent the National Police, the National Assembly is the only arena that escapes Ortega’s command.

In 1998, when Alemán was President and Ortega headed the “opposition,” they hammered out a plan to share the institutional spaces of the state equally and guarantee an ongoing alternation in power by imposing a PLC-FSLN bipartite system on Nicaragua. The Bolaños government represented a parenthesis to those pretensions that reduced Alemán—convicted of corruption during a political blip in that parenthesis—to the lesser of equals in that partnership. It did not, however, mean an end to the pact, which has produced constitutional and electoral reforms, the ongoing multiplying and divvying up of top government posts, and a whole new structure of personal links and common political and business interests and relationships.

With the pact now ten years old, Ortega and Alemán are still after more privileges and power, but they’re coming up against obstacles created by the changes on the political stage over the years. During the five dark Bolaños years, the authoritarian Left, represented by the pro-Ortega bloc within the FSLN, witnessed the growth of a democratic Left, both independent and organized in the MRS. Likewise the authoritarian Right, controlled by the pro-Alemán bloc of the PLC, saw the growth of a democratic Right, both organized into the ALN by Montealegre and independent but sympathetic to him. The continued existence and possible growth and consolidation of these two groupings, which have caused splits on both sides of the political spectrum and have already successfully participated in electoral races, represent the greatest risk to the pact.

The big loser

The “denouement” of the political crisis was as expected: the Ortega-Alemán pact is still in effect. Ortega has lost little of the political control he had over Alemán’s legal cases and Alemán continues to exercise influence over a majority of his party’s legislative representatives.

If Ortega risked political capital by releasing Alemán, it wasn’t from the FSLN rank-and-file, which showed no reaction to this ominous finale to the Alemán case. “Another great play by the comandante” is how the majority of his loyal followers appraised the final act of this five-year farce. Could it be any other way? Alemán’s ultimate release by his jailer has been expected for so long that the reactions of an exhausted Nicaraguan society did not match the seriousness of the event when it finally happened.

Ortega was the evident winner of this “play,” because the new National Assembly board, elected on January 16 with the votes facilitated by Alemán, has guaranteed him control of the legislative body for the next two years. The FSLN will also control 11 of the 15 legislative commissions organized by the new board for the next two years and will have the only members on the economic commission—which is the most strategic in settling all the new accounts the President has before him.

Although he’s now free, Alemán is the big loser of this game. Herrera’s claims to the contrary notwithstanding, Alemán’s leadership is increasingly discredited among the Liberal grass roots, which now have yet more proof to blame him for having let Ortega back in government and then given him everything he’s asked for. To anyone willing to see it, Alemán is the big villain of the electoral fraud because he allowed Liberal wins—albeit those strengthening Montealegre—to be chalked up to the Sandinistas. He was clearly only acting when he echoed Montealegre in denouncing the fraud in the difficult days of November. If that fraud cost Ortega dear, this new episode of the pact will cost Alemán much more.

Economic accounts to settle

The government apparently didn’t expect the international community to react with such consistency to the electoral fraud. The two most significant economic measures imposed by the international political circle in response to the electoral fraud that has so discredited the Nicaraguan government are the freezing of US$95 million promised by the Budgetary Support Group (the European Union, specific European governments, Japan, etc.) for the 2008 and 2009 budgets, and the US$63 million still in the pipeline from the US government-financed Millennium Challenge Account.

Although even in his year-end message the President assured that Nicaragua will be able to dodge the world crisis with the support of its new associates—Venezuela, Iran and Russia—and because it is “well positioned in the new multi-polar world,” that triumphal stance has been wilting under the weight of reality. On January 20, Ortega announced his plans for sidestepping the crisis. Fiscal law expert Julio Francisco Báez offers a biting commentary in the pages of this issue on the limitations of the government’s austerity plan and a desolate panorama of public finances.

Millions down the black hole

Although the stage was decked with its normal abundance of flowers for the President’s announcement of his anti-crisis plan, the faces of those accompanying him were unusually serious and taciturn. And it was not for nothing. The economic accounts will be the most complex ones to settle.

It won’t be easy to thaw out the freely usable resources provided by the Budgetary Support Group to sustain a significant portion of the national budget. The government announced that it will plug up the hole by requesting loans of $300 million from the Inter-American Development Bank and $200 million from the Central American Bank for Economic Investment, as well as issuing new bonds, dipping into its international reserves and trusting that the extreme flexibility the International Monetary Fund has so far granted Ortega will allow him to implement these heterodox measures while the Fund disburses the $100 million agreed to in the three-year program signed before the fraud. None of these three multilateral financing institutions has publicly criticized the electoral fraud, nor are they expected to, as they only seem interested in macroeconomic figures. The government is also trusting, probably rightly, that some European countries will not pull out their bilateral cooperation with important government social or public investment projects, while some that already have will reestablish it. There are already signs of this from Italy and Spain.

Feeling the crisis

The country is already feeling the international crisis. The flow of foreign investment is drying up, in part because the government’s record for acting against companies such as Tropigás or the Barceló hotel chain and strong accusations of extortion in tourist land deals has triggered distrust and extreme caution in both national and international private enterprise.

The international prices of Nicara¬gua’s traditional export products—beef, peanuts and coffee—have fallen and the export of shellfish has plummeted. Only dairy products and gold are holding firm. The export of textiles from maquilas (sweatshop assembly plants for re-export) stationed in our country has dropped month after month, with the loss of 22,000 jobs so far due to closure or layoffs.

Remittances from emigrants in the United States and Costa Rica, which sustain the daily consumption of so many poor families, are shrinking and expected to drop even more as the crisis in those two countries worsens, although migration itself is unlikely to stop. The growth in Nicaraguan migration to Costa Rica in the first half of 2008 increased from between 6% and 11% in the last two years to 215% in the first half of 2008. Convinced that it’s better to be poor in any other country than their own, over half of all Nicaraguans admit that emigration is their top priority.

In December, Daniel Ortega announced that he felt “freer” without the frozen cooperation of the “European colonialists” and bragged that he would replace it with Venezuelan cooperation. However, in the current climate, Venezuelan aid cannot be as generous as President Chávez has so often promised, making matters even worse for Nicaragua. Ortega has yet to rectify his fantasy publicly, but several top-level officials now recognize that they will no longer have such freedom or more petrodollars.

Although the government has never given verifiable information about what it receives or spends of the oil and non-oil funds contributed by Venezuela, and has offered no figures in its anti-crisis plan about what it will receive or spend this year, the drop in Venezuelan oil production and drastic fall in international oil prices should be telling Ortega that the petrodollars have also disappeared down a black hole.

Owner of it all?

This year will be very tough economically. The executive branch calculated 4.2% growth for this year in the 2009 budget bill it presented in October of last year. This was extremely optimistic, since the international crisis and its obvious consequences in Nicaragua were already sufficiently clear. Even today, government economic adviser Bayardo Arce continues to announce a 2.5% growth, while other well-informed voices warn that the figure is more likely to be zero.

Surely Nicaragua’s small economy won’t collapse, but the social malaise caused by hunger, unemployment, desperation, drugs and delinquency could well grow. And in addition to trying to recover the international community’s support, the government will face organized, spontaneous or even chaotic grassroots protests and economic demands. The patronage system will have to suffer cuts and won’t be able to provide answers to everything. And the sub-surface conflicts and “settling of scores” between business sectors and “revolutionaries” within the FSLN will become more acute.

Ortega is confident he can avoid the economic crisis because he believes that for better or worse, international cooperation will return to the fold sooner or later, unable to totally abandon Nicaragua. As he has already demonstrated, he’s also confident he can settle all political debts, maintain control of the institutions and the local CPC network, and monopolize the streets and street violence against any opposition that challenges him.

Despite the crisis, he feels like a winner. He has already taken ownership of everything—except the hearts and minds of a good part of the Nicaraguan population. The M&R poll of late November shows 63.5% of those polled opposed both to a reform that would permit continual reelection in general and to Ortega’s aspiration to run again in the next presidential elections. That’s why he had to turn to fraud and why much remains to be seen.

A curious media debate about what happened in the elections
On January 23, the rightwing newspaper La Prensa engaged in a curious media debate with itself. On its op-ed page it ran an article by René Herrera, a Supreme Electoral Council magistrate and intimate adviser to Alemán, titled “Catastrophe due to a wrong-headed dream,” offering his “insider’s explanation” of what supposedly happened in the municipal elections. On its own editorial page La Prensa blasted Herrera’s argument out of the water.

Herrera claimed that on two tours through the country to do political training in the past two years he “discovered” that many Liberals held Montealegre responsible for the split into two Liberal parties that paved the way for Ortega’s victory in 2006, and that these angry Liberals “would not vote for those who had caused the defeat.” The implication was that they would abstain. When he apprised Alemán of this, Herrera wrote, they agreed to join forces with Montealegre in a show of unity in the municipal elections so Alemán would not appear responsible for continuing the split: “Arnoldo knew Eduardo would lose again and, risking that, he let him select the candidates, reserving an unde¬featable trench of 40 mayoral candidacies” for PLC loyalists. Elsewhere in the same article he acknowledges that “what was at stake was not the municipal elections, but the continuation of 2006, a fierce struggle for control of the opposition power.”

Herrera ended his article stating that “in politics results speak,” a point La Prensa’s editorial led its rebuttal with, agreeing that, “Of course results speak; they even say falsities and cover up electoral frauds. It’s facts that tell the truth.” It then proceeds to list the salient facts:

“First: strip Eduardo Montealegre of his party, the ALN, so that the posts in the intermediary and base-level electoral bodies that by law correspond to the party that took second place in the national elections could be occupied by FSLN accomplices who would endorse the fraud. Second: cancel the legal status of the Conservative Party and the MRS to induce the democratic citizenry to distrust the elections and abstain. Third: manipulate the voter registration card process in favor of the FSLN. Fourth: prevent independent national and foreign electoral observation so there would be no well-trained witnesses at the scenes of the fraud. Fifth: hide the results of the voting at 625 voting tables of Managua, equivalent to 30% of the totality of this municipality. Sixth: report only general results based on percentages rather than specific numbers [including abstention and annulled ballot figures]. Seventh: commit the notorious irregularities that, according to Ethics and Transparency, took place in 32% of the voting places…, etc., etc.” The editorial then contrasts Herrera with another Liberal CSE magistrate, Luis Benavides, who “put his honor and personal dignity over political commitments, loyalties and deals” to “charge that the November 9 elections ‘developed in an obscure and muddy environment’ and ‘were plagued with annulments and stratagems.’”

Several years ago the brilliant Liberal writer León Núñez described Herrera to envío as a “a very intelligent man named by Alemán to the Supreme Electoral Council with the mission of carrying out a subtle electoral fraud in Daniel Ortega’s favor” in the 2006 presidential elections. While Herrera has obviously never owned up to that mission, it has been rumored that Ortega did not get the 35% with a 5% lead over the runner-up required to win the presidency on the first round in 2006, and that some “subtle electoral fraud” was indeed committed in keeping with the alleged agreement between Alemán and Ortega. Herrera has struggled to obtain Alemán’s release ever since he took his seat in the CSE, and is now enthusi¬astically backing the constitutional reforms, stating that they will offer Nicaragua “economic and political stability for 50, 60, 70 years.”

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