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DE RUEHMU #2615/01 3351814
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P 011814Z DEC 06
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC PRIORITY 8331
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RUEHCV/AMEMBASSY CARACAS PRIORITY 0840
RUEAIIA/CIA WASHDC PRIORITY
RHEHNSC/NSC WASHINGTON DC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY

C O N F I D E N T I A L MANAGUA 002615 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR WHA A/S SHANNON, WHA/CEN 
 
E.O. 12958: DECL: 12/01/2016 
TAGS: PREL PGOV PINR KDEM NU
SUBJECT: MONTEALEGRE TO A/S SHANNON: I WILL GIVE ORTEGA THE 
BENEFIT OF THE DOUBT, BUT NO ROOM FOR EXCUSES 
 
Classified By: Ambassador Paul A. Trivelli. Reasons 1.4 (B,D). 
 
¶1.  (C) Summary:  On November 28, Assistant Secretary Tom 
Shannon discussed with former Nicaraguan Liberal Alliance 
(ALN) presidential candidate Eduardo Montealegre the election 
outcome, the future of bilateral relations, and Montealegre's 
future role in ensuring Nicaragua remains on a democratic 
path.  Montealegre, who assured Shannon he will "give Ortega 
the benefit of the doubt, but no room for excuses," noted 
that Nicaragua has changed, and Ortega's powers are now 
limited.  As the leader of a "constructive opposition," 
Montealegre will honor his campaign commitments to defend 
human liberties and help Nicaragua's most needy, and will 
support the Ortega government so long as it remains within a 
democratic framework.  The Assistant Secretary noted our 
commitment to working with the new government and our 
determination not to abandon the Nicaraguan people, its 
democracy, and civil society -- including helping the ALN and 
its allies who represent Nicaragua's future.  End Summary. 
 
GIVE ORTEGA THE BENEFIT OF THE DOUBT, BUT NO BLANK CHECK 
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¶2.  (C) Over breakfast, Assistant Secretary Tom Shannon and 
former Nicaraguan Liberal Alliance (ALN) presidential 
candidate Eduardo Montealegre discussed the election outcome, 
the future of bilateral relations with an Ortega government, 
and Montealegre's future role in ensuring Nicaragua remains 
on a democratic path.  Montealegre assured A/S Shannon he 
will "give Ortega the benefit of the doubt, but no excuses," 
noting that Nicaragua has changed and Sandinista National 
Liberation Front (FSLN) Daniel Ortega's powers will now be 
more limited.  He explained that a series of checks and 
balances that have emerged over the past 15 years will 
restrict Ortega.  Montealegre added that as a minority 
president, Ortega must learn to negotiate with those who did 
not support him, meet high expectations of those who did, and 
inform a savvier populace of his plans.  Further, Ortega -- 
who must operate within the framework of international 
financial institution (IFI) limitations -- realizes his 
relations with the United States will be determinant in his 
success or failure. 
 
¶3.  (C) The Assistant Secretary noted the U.S. commitment to 
work with the new government and our determination not to 
abandon the Nicaraguan people, its democracy, and civil 
society -- including helping the ALN and its allies who 
represent Nicaragua's future.  A/S Shannon ventured that 
Ortega will attempt to fragment the ALN and civil society; to 
counter these efforts, the ALN and civil society must 
strengthen and build leadership.  Montealegre lauded the 
USG's constructive posture towards Ortega, opining that 
neither "cornering Ortega nor giving him a blank check" would 
be productive at this juncture.  Montealegre said he will 
lead a "constructive opposition" and honor his campaign 
commitments to defend human liberties and help Nicaragua's 
most needy, and remarked that he will support Ortega's 
government efforts so long as it remains within a democratic 
framework. 
 
ALN BROKE THE PACT BUT DID NOT KILL IT 
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¶4.  (C) For Montealegre, the ALN's participation in the 
November election broke the Aleman-Ortega pact, or at least 
"detoured" it, but the cost was Ortega's victory. 
Nonetheless, the pact is not dead and Aleman will do his 
utmost to continue it, predicted Montealegre.  He suggested 
that the USG can capitalize on Ortega's desire to maintain 
positive relations with the United States by driving a wedge 
between Ortega and Aleman.  According to ALN legal advisor 
Mauricio Montealegre, the election outcome "would have been 
worse if the PLC had won."  Now no party will represent the 
simple majority in the National Assembly required to pass 
most legislation (47 votes) and the FSLN can seek support 
from the ALN to pass legislation and will no longer be forced 
to rely exclusively on the PLC. 
 
BREAKING THE PACT IN THE SUPREME COURT 
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¶5.  (C) Regarding the appointments of three Supreme Court 
justices whose terms expire, the ALN legal advisor explained 
that the FSLN, PLC, and ALN will each put forth one 
candidate.  However, the ALN is considering "sacrificing" its 
candidate by eliminating the position, which would reduce by 
 
one the number of judges (currently 16) and break the tie 
between the PLC and FSLN.  Under this scenario, the FSLN 
would have 8 CSJ magistrates and the PLC only 7, and the FSLN 
could no longer use the excuse that it cannot rule on any 
case -- e.g., PLC caudillo Arnoldo Aleman --- without PLC buy 
in.  Moreover, PLC designated Judge Edgar Navas now 
sympathizes with the ALN, claimed Mauricio Montealegre. 
 
PLC HAS ONE MASTER - ALEMAN 
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¶6.  (C) To A/S Shannon's comment that he would meet with 
former PLC presidential and vice presidential candidates Jose 
Rizo and Jose Antonio Alvarado (septel), Montealegre replied 
that Rizo may be well intentioned, sharing that he had called 
Rizo to congratulate him for challenging Aleman's misguided 
leadership of the PLC.  However, Alvarado cannot be trusted, 
warned Montealegre, adding that Alvarado's wife Gloria was 
instrumental in convincing Rizo and her husband to stay in 
the race.  As for Aleman, he treats the PLC as his property 
and the party is no longer democratic. 
 
CENIS -- THE ISSUE THAT WON'T QUIT 
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¶7.  (C) Mauricio Montealegre next raised the debt bonds 
(CENIs) issue, which the PLC (and the FSLN) held over Eduardo 
Montealegre's head to lower voter support for the ALN 
candidate.  He warned that the PLC will continue hammering 
the CENIs case to erode the ALN and remove Eduardo 
Montealegre from Aleman's path to the presidency in 2011. 
(Note: Aleman has publicly implied he will run for the 
presidency in 2011.  End Note.)  Eduardo Montealegre added 
that if the CENIs issue resurfaces, a number of FSLN leaders, 
including International Affairs Secretary Samuel Santos, 
could be dragged into the quagmire, as he was a member of 
failed Interbank's board of directors.  He said that Santos 
and other Sandinistas might halt the CENIs case to protect 
their own hides, noting he had warned Santos and FSLN 
Assembly Deputy Edwin Castro that if the CENIs issue becomes 
a crisis, it could trigger an investor stampede and capital 
flight. 
 
HELPING THE MOVIMIENTO POR NICARAGUA WILL HELP US 
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¶8.  (C) Eduardo Montealegre ventured that civil society will 
be his party's and democracy's best ally, noting that the ALN 
could be best boosted by our continued support for the 
Movimiento por Nicaragua (MpN).  Specifically, enabling the 
MpN to open departmental and municipal branches would help 
the ALN compete in the 2008 municipal elections. 
 
IN SEARCH OF A FEW SALVAGEABLE PLC DEPUTIES 
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¶9.  (C) Montealegre shared his party's plans to convince six 
to seven PLC lawmakers to join the ALN.  He asserted that PLC 
National Assembly Deputy Enrique Quinonez is not one of them, 
as Quinonez' short-lived call for PLC reform and his 
overtures to the ALN were probably decoys sent to confuse the 
ALN.  Montealegre suggested that Freddy Torrez, Maximino 
Rodriguez, Porfirio Castro (all representing Matagalpa 
department); Rodolfo Jose Alfaro Garcia (Madriz); Gabriel 
Rivera (Esteli); Luis Ortega Urbina Ortega; and, possibly 
Francisco Aguirre Sacasa,  (national level deputy) are 
salvageable, although Aguirre's ambitions to become president 
might cloud his decision-making.  Montealegre argued that 
weakening Aleman is crucial to this effort and the U.S. can 
play a vital role.  However, Montealegre said the U.S. needs 
to use "actions and not words."  He asserted that the verbal 
attacks have enhanced Aleman and the lack of substantive 
steps against him has eliminated any fear he might have had 
of the United States.  He said that Aleman has called the 
U.S. a "paper tiger" that talks tough but does not act. 
 
WE NEED TO KEEP THE PRESIDENTIAL SYSTEM 
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¶10.  (C) Montealegre does not support nor trust Daniel 
Ortega's interest in installing a parliamentary system of 
government, starting with allowing five constitutional 
reforms to enter into force on January 20, 2007 -- reforms 
that would erode executive powers and bolster the power of 
the legislature.  Rather, Nicaragua should improve on its 
presidential system, opined Montealegre, and he has proposed 
 
that the constitutional reforms be suspended for another year 
to allow time for further deliberation within the incoming 
National Assembly and public debate.  (Note: The reforms -- a 
result of the Aleman-Ortega crusade to limit President 
Bolanos' executive powers and bolster the PLC-FSLN pact -- 
include the establishment of a new property, public utility, 
and social security entities, allowing the legislature to 
partially modify a presidential veto, and requires Assembly 
approval of presidential cabinet and other senior-level 
appointments.  The National Assembly's approval of a 
"framework law", or Ley Marco, in fall 2006, postponed to 
January 20, 2007 the implementation of these laws.  End 
Note.) 
 
A PUSH FOR JUDICIAL AND ELECTORAL REFORMS 
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¶11.  (C) In addition to plans to consolidate his party and 
prepare for the 2008 municipal elections, Montealegre will 
advocate for profound judicial and electoral reforms.  He 
said he will start his electoral reform initiative based on a 
2004 draft that the Conservative Party had supported. 
Objectives include raising the threshold to win the 
presidential election back to 45%, or perhaps even higher, 
requiring all parties to conduct primaries, and the direct 
election of Assembly candidates.  (Note: On the afternoon of 
November 28, Montealegre announced the ALN's proposal to 
reform Nicaragua's electoral law, which would include raising 
the percentage required to elect the president to 51%.  End 
Note.) 
 
RELATIONS WITH VENEZUELA AND TAIWAN 
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¶12.  (C) Montealegre predicted that Ortega will maintain 
close ties with Venezuelan President Hugo Chavez.  However 
Chavez' support to his government will be limited by legal 
parameters requiring direct foreign assistance to pass 
Assembly approval.  Regarding relations with Taiwan, 
Montealegre predicted that Ortega will continue to recognize 
the Taiwanese for now, but in exchange for a hefty "fee." 
Eventually, however, Ortega will recognize Mainland China to 
Taiwan's detriment. 
 
¶13.  (U) Participants: 
 
Nicaragua: 
Eduardo Montealegre 
Azalea Aviles (president of ALN-allied Conservative Party) 
Mauricio Montealegre (ALN legal adviser, former CSE 
magistrate) 
 
U.S.: 
Assistant Secretary Tom Shannon 
Ambassador Paul Trivelli 
DCM Peter Brennan 
Political Counselor/notetaker Victoria Alvarado( notetaker) 
 
¶14.  (U) This cable was cleared by A/S Shannon. 
TRIVELLI