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S E C R E T MANAGUA 000432 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR WHA, A/S THOMAS SHANNON, WHA/CEN 
 
E.O. 12958: DECL: 02/24/2016 
TAGS: KDEM NU PGOV PINR PREL ECON ETRD MARR
SUBJECT: SCENESETTER FOR VISIT OF STATE DEPARTMENT 
ASSISTANT SECRETARY THOMAS SHANNON 
 
REF: MANAGUA 0394 
 
Classified By: Ambassador Paul A. Trivelli. Reasons 1.4 (B,D). 
 
¶1.  (S) Summary: Your visit to Nicaragua allows you to 
reiterate U.S. opposition to the PLC-FSLN pact and assure the 
Nicaraguan people we share their desire for free, fair, 
credible, and inclusive elections.  Your engagement will also 
facilitate progress on CAFTA-DR implementation and MANPADS 
destruction.  We can conclude from the Sandinistas' (FSLN) 
fraudulent tactics and its dominance over the Supreme 
Electoral Council (CSE) that the outcome of the Atlantic 
Coast regional elections will likely favor the Sandinistas. 
Robust civil society and international pressure on the CSE to 
cease its partisan actions may improve the odds that the 
November elections will have a more credible  outcome.  A 
four-way presidential race remains the most likely scenario, 
but a unified Liberal alliance, not necessarily under the 
PLC, remains a possibility if political stakeholders can 
agree on joint primaries independent from Liberal caudillo 
Arnoldo Aleman's control.  President Bolanos' decision to 
endorse Liberal dissident Edua 
rdo Montealegre and our continued pressure on Alvarado to 
ally with Montealegre could swing the pendulum in his favor. 
End Summary. 
 
Bolanos Likely to Complete Term -- But No Carte Blanche 
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¶2.  (C) President Bolanos is reasonably certain of completing 
his term.  Nonetheless, the political machinations of the 
Sandinistas (FSLN) and the Liberal Constitutional Party (PLC) 
under the clutches of caudillos Daniel Ortega and Arnoldo 
Aleman, respectively, continue to hinder Bolanos' ability to 
push through important security and economic legislation in 
the National Assembly.  In retaliation for President Bolanos' 
call in his January 18 State of the Union message for a 
referendum on the Ortega-Aleman pact-driven constitutional 
changes eroding the Executive authority, Ortega launched 
crippling and costly nation-wide medical and Managua 
transport strikes in January and February.  The 
transportation strike was temporarily resolved, at the cost 
of tacit GON acceptance of a confiscatory tax on oil company 
profits, but could resurface (reftel); the medical strike 
continues in some areas.  While there were economic reasons 
for the transport strike, the timing and methods used clearly 
indicate that Ortega is trying to milk the stoppage for his 
political advantage. 
 
¶3.  (SBU) Nicaragua missed the February 24 deadline to pass 
the legislative package of CAFTA-DR, which would have allowed 
Nicaraguan entry into force on March 1.  The Assembly's next 
plenary sessions will be held during the second and third 
weeks of March.  The Nicaraguan government (GON) and a number 
of Assembly lawmakers expect the CAFTA-DR legislative 
packages will pass during the second and third weeks of 
March, the Assembly's next plenary cycle.   The National 
Assembly continues to drag its feet on MANPADS destruction, 
while the military and Defense Ministry's efforts have thus 
far been ambiguous.  Ambassador met recently with Armed 
Forces Commander General Moises Omar Halleslevens and 
impressed upon him that the success, or not, of his upcoming 
visit to Washington following the fourth MPC meeting in 
April, is tied to progress on MANPADS destruction. In 
addition, President Bolanos needs reminding that destroying 
all the MANPADS (as per his commitment to President Bush in 
2002) could allow financing furth 
er military programs and training. 
 
¶4.  (S) President Bolanos has confided that PLC dissident 
Eduardo Montealegre is his most appropriate successor, and 
that he will endorse him at the "right moment."  Firm 
encouragement on your part could prompt Bolanos to act. 
Although Bolanos realizes that the U.S. will not publicly 
endorse a particular candidate, he desires both our "visto 
bueno" before he proceeds and our engagement with the private 
sector to encourage them to support a Montealegre campaign. 
Some financiers, like Carlos Pellas, have contributed to 
Montealegre's campaign, but contributions thus far have been 
paltry, while we hear that Pellas is lending Montealegre 
rival Jose Rizo his helicopter.  We can expect Pellas and 
others -- most of whom would prefer any Liberal candidate, 
even Aleman, over Daniel Ortega -- to continue hedging their 
bets and funding all political factions until they witness 
"white smoke" from the Presidency and our tacit approval of a 
Montealegre candidacy. 
 
¶5.  (S) Your meeting with President Bolanos will enable you 
to reiterate our support for his government; thank him for 
his government's support in international fora; congratulate 
him for supporting CAFTA-DR and urge him to do all he can to 
get the Assembly to pass remaining legislation so Nicaragua 
can implement CAFTA-DR by April 1; press him to act on his 
commitment to destroy all remaining 1,051 MANPADS in the 
Nicaraguan Army's inventory; and urge him to decide on and 
make known his successor.  You can expect President Bolanos 
and Foreign Minister Norman Caldera to thank your for yet 
another extension of Temporary Protective Status (TPS) for 
some 4,500 Nicaraguans residing in the United States. 
 
Media Opportunities 
- - - - - - - - - - 
 
¶6.  (SBU) You will have two media opportunities during your 
visit: a press conference following your meeting with 
President Bolanos and an exclusive interview with 
right-of-center daily La Prensa.  A media "blackout" will be 
in place vis a vis political campaigning for the March 5 
Atlantic Coast elections (the blackout is in effect starting 
five days before the election).  While general comments 
urging people to express their views at the ballot box are 
acceptable, no comments supporting or opposing candidates or 
parties are theoretically permitted. 
 
Serious Concerns about CSE Remain 
- - - - - - - - - - - - - - - - - 
 
¶7.  (SBU) After much foot dragging, CSE president Roberto 
Rivas extended a written invitation on January 27 to U.S. 
Embassy Managua to participate as international observers in 
the March regional and November national elections.  Rivas, 
who reassured Ambassador February 10 that he would allow IFES 
to provide technical assistance to the CSE, invited IFES on 
February 16 to participate in the national elections. 
 
¶8.  (SBU) After robust pressure by non-FSLN political 
parties, civil society, and the international community, CSE 
Sandinista magistrates retracted their suppression of 
Electoral Law articles 41 and 116 for the Atlantic Coast 
elections.  Thus, voters may vote in a voting table (JRV) 
even if they are not listed there, so long as their cedulas 
or supporting documents demonstrate they reside in the area. 
Notwithstanding the FSLN's change in heart over articles 41 
and 116, their agreement to abide by these articles applies 
only to the regional elections for the moment, and how they 
will apply these articles remains dubious. 
 
¶9.  (SBU) Also disconcerting was the CSE's February 17 
decision to replace absent PLC magistrates with Sandinista 
substitutes, a decision upheld by a Sandinista-controlled 
constitutional tribunal of the Supreme Court.  Non-Danielista 
parties are challenging these decisions.  Additionally, Herty 
Lewites' followers denounced on February 23 what they term a 
deliberate manipulation of the South Atlantic Coast 
Autonomous Zone's (RAAS) ballot by not including Lewites 
candidates on the ballot.  (Comment:  If all political 
parties enjoyed representation on the CSE, this type of snafu 
would be highly unlikely.  As it stands, it is unclear 
whether the error was an act of feigned incompetence to 
further a particular political interest, or mere human 
error.) 
 
Status of OAS, U.S./CEPPS and Civil Society Participation 
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¶10.  (C) USG/Embassy: Our support for free, fair, inclusive 
and transparent elections is crucial, but achieving this 
objective will be difficult with the current PLC and FSLN 
control over the National Assembly, the courts and the 
Supreme Electoral Council (CSE).  Aleman and Ortega benefit 
from the current crisis; it distracts Bolanos and the 
international community from focusing on the 2006 elections, 
which Aleman and Ortega seek to "fix" for their respective 
benefits.  Timely international technical assistance and 
monitoring are essential to stemming the efforts of the 
Sandinistas, and to a lesser degree, the PLC, to fraudulently 
manipulate election results. 
 
¶11.  (C) OAS Mission: In mid-January the CSE belatedly issued 
invitations for the OAS to observe the March and November 
elections.  The OAS sent a technical team in January, 
followed by a technical-political team led by Gustavo 
Fernandez in mid-February.  Fernandez concurred with our 
assessment that the March Atlantic Coast regional elections 
 
are "lost," but they will serve as an object lesson to press 
the Supreme Electoral Council (CSE) to correct it 
shortcomings for the November national elections.  He pledged 
total information sharing with us and will ask Insulza for at 
least a pair of additional "notables," so that all the local 
pressure is not concentrated on him.  OAS consultant Patricio 
Gajardo is directing the technical components of the OAS 
March elections effort.  The team arrived too late to deal 
effectively with ongoing voter identification and voter 
registry manipulation by the FSLN on the Atlantic Coast. 
 
¶12.  (C) CEPPS/Embassy Atlantic Coast Regional Elections: 
Embassy Managua will send 20 people to observe the March 5 
Atlantic Coast regional council elections.  The USG, through 
CEPPS, is also sponsoring larger observation efforts 
coordinated by the Institute for Democratic Development 
(IPADE), Etica y Transparencia, and the Movimiento por 
Nicaragua.  IRI and its partners are providing training for 
party poll watchers, sponsoring opinion polls, and organizing 
a civic education campaign.    NDI and IPADE conducted an 
audit of the official voting list on the Atlantic Coast, 
which revealed serious deficiencies. 
 
¶13.  (SBU) Donors:  Donors maintain close cooperation on 
election support activities.  In the traditional donor 
community, there is consensus in support of the democratic 
sector winning the election.  Although the German embassy 
hosts a bi-weekly coordination meeting of election donors, 
most missions have not yet defined their contribution.  The 
Danes are working through electoral NGO groups; Japan is 
providing equipment and plans a small observation mission for 
the regional elections.  Sweden, the Netherlands, and Denmark 
are working with UNDP to provide training for political party 
candidates; the EU is likely to provide funding now that the 
CSE has invited them to observe.  The UN has also offered to 
provide technical assistance and possibly observers for the 
November national election. 
 
¶14.  (C) Movimiento por Nicaragua (MPN):  USAID has channeled 
through IRI some $400,000 to MpN to help launch election 
activities.  The MpN's initial focus against the pacto lost 
some momentum in October after Bolanos and the FSLN signed 
the framework agreement.  The MpN has now set new priorities, 
including pressing for primaries, monitoring cedula issuance, 
reviewing voting registries, lobbying for voting abroad and 
observing elections.  IRI, working with MpN and Hagamos 
Democracia, has introduced the concept of inter-party 
political party primaries for the first time in Nicaraguan 
history.  However, to date, there is no concurrence on the 
form and timeline of primaries and they may not occur at all. 
 Your engagement with MpN will encourage them to continue 
efforts to increase public participation in the political 
process and clean up government.  Urging the MpN to continue 
its fine work by focusing on a few objectives and reiterating 
our commitment to support the organization according to our 
priorities wi 
ll reassure them. 
 
¶15.  (C) Meeting with Archbishop Brenes:  Unlike his 
predecessor Cardinal Miguel Obando y Bravo, Managua 
Archbishop Brenes has largely refrained from using his office 
to engage in politicking.  Instead, Brenes has urged dialogue 
and national consensus.  Your encouraging him to continue 
this constructive, apolitical role would be helpful.  You may 
clarify with him that our concern over a possible Ortega win 
in the elections stems from Ortega's anti-democratic 
rhetoric; his long record of complicity in human rights 
abuses - including against the Miskito Indians; and, his 
probable sexual abuse of his own stepdaughter. 
 
Four-Way Race Remains the Likely Scenario - For Now 
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¶16.  (C) A four-way presidential race remains the most likely 
scenario, as the rift between the PLC and Montealegre 
continues and Lewites refuses to rejoin the Ortega-controlled 
FSLN.  While many Liberals and other anti-Danielistas concur 
that the only certain way to prevent an Ortega victory and 
ensure a Liberal presidency is via a united Liberal ticket 
(not necessarily under the PLC), getting there is the 
problem.  So long as Aleman controls the PLC, Montealegre 
refuses to ally with the PLC, claiming, with justification, 
that while Aleman controls the PLC, Ortega controls Aleman. 
The National Assembly and the CSE remain beholden to the 
longstanding FSLN-PLC pact; the PLC maintains a false edge in 
the former and the FSLN holds a clear upper hand in the 
latter.  Ultimately, Ortega controls Aleman's freedom and 
 
 
will continue to do so unless the PLC garners the 47 votes 
required for Aleman's amnesty.  Thus, not only would a broad 
Liberal alliance under Aleman's thumb provide Ortega 
ammunition to discredit the 
Liberal alliance because of its corrupt leadership, Aleman 
could even conceivably permit an Ortega victory in exchange 
for his freedom and a sizeable number of Assembly seats. 
This arrangement would ensure the continuity of the 
Ortega-Aleman pact and sound a death knell for democratic 
reform. 
 
Montealegre-Alvarado Alliance Still Possible 
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¶17.  (C) Many political analysts believe that the only 
possible way around a split Liberal ticket is a 
Montealegre-Alvarado candidacy, which could attract a number 
of PLC affiliates and possibly persuade Aleman to reduce his 
grip on the party.  In early February, Alvarado presented 
Montealegre his terms for forming an alliance: Alvarado will 
run as Montealegre's VP, serve as his campaign manager, 
receive a share of the National Assembly seats, hold 
primaries to select departmental deputies; and, be 
Montealegre's successor.  Catching wind of the 
Montealegre-Alvarado rapprochement, the PLC offered Alvarado 
and Montealegre joint primaries among the presidential 
candidates of the three political groups.  Alvarado submitted 
his counter-offer, which expands the number of voters, moves 
the date to late April or early May, and includes 
departmental deputies.  Montealegre has declined any PLC 
primary proposal directed by Arnoldo Aleman. 
 
¶18.  (C) According to IRI country director Gilberto Valdez, 
Alvarado's counterproposal is in line with the IRI-MpN 
primary offer, and he thinks that if the PLC accepts these 
new terms, Montealegre may be willing to participate.  While 
members of Montealegre's and Alvarado's teams continue 
negotiations, Alvarado's incessant flitting away from 
Montealegre and flirting with Aleman have caused Montealegre 
to doubt his sincerity.  Your meeting presents the 
opportunity to underscore U.S. support for a unified, 
democratic platform.  Conveying to Montealegre and Alvarado 
our support for the efforts of the "Third Way" to promote 
true democracy and rule of law in Nicaragua and recognizing 
that Montealegre, with Alvarado, are a ticket representing 
these principles, may encourage Montealegre and Alvarado to 
finalize their alliance.  Suggesting to Alvarado that he 
could be an excellent presidential candidate for the 2011 
elections would be helpful. 
 
The Herty Factor 
- - - - - - - - - 
 
¶19.  (C) Lewites has been effusive in his desire to maintain 
cordial, constructive, and cooperative relations with the 
United States.  He has requested that, if  elected, a 
high-level U.S. delegation attend his inauguration to 
demonstrate that the two governments will be strong allies. 
Lewites has also been supportive of  CAFTA, with the 
observation that small farmers and small business must in 
some way be assisted.  He also favors MANPADS destruction, 
asserting "they are of no good use to anybody."  On the other 
hand, some Embassy contacts do not trust Lewites' intentions, 
noting that members of Lewite's immediate circle are 
"orthodox" Sandinistas.  Others insist Lewites could 
eventually rejoin the Ortega fold; still others claim the bad 
blood between them is such that they will never form an 
alliance.  We believe that for now, encouraging the 
Sandinista division and focusing USG criticism on the FSLN 
specifically instead of "Sandinistas" as a group is 
appropriate. 
 
¶20.  (S) Your meeting with Lewites will allow you to 
reiterate that we have no election favorite.  Lewites also 
needs to know that we support democratic candidates who 
desire responsible government and constructive relations with 
the United States.  Encouraging Lewites to outline his 
political platform and querying him on where he stands in 
relation to Venezuela would be helpful. 
 
Private Sector Continues Hedging its Bets 
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¶21.  (S) Meeting with Nicaraguan Financiers:  Some 
financiers, like Carlos Pellas, have contributed to 
Montealegre's campaign, but their contributions thus far have 
been insufficient to truly advantage Montealegre.  Pellas, 
 
for example, is also supporting PLC competitor Jose Rizo.  In 
his heart of hearts, Pellas prefers any Liberal candidate, 
even Aleman or his designate, over Daniel Ortega.  A few 
financiers are also reportedly clandestinely supporting the 
FSLN in an effort to "cover the bases" no matter who wins the 
election.  Your message that supporting the anti-pact 
candidates is the only way to ensure a free, prosperous and 
democratic Nicaragua could encourage them to redirect their 
resources. 
 
¶22.  (C) Meeting with Foro Liberal:  The Foro Liberal is a 
group of liberal business executives and owners who meet 
informally to share political and economic ideas.  During 
election periods, the Foro facilitates fundraising for 
democratic candidates, sponsors debates among candidates, and 
funds polls.  While the Foro maintains ties with the PLC, 
some of its members have broken with the PLC.  Your meeting 
accords you the chance to reiterate our commitment to helping 
Nicaragua hold free, fair, credible, and inclusive elections. 
 You can also underscore our support for a presidential 
candidate and lawmakers who will shed Nicaragua's caudillo 
political culture, replace it with honest, democratic 
institutions, establish a truly representative balance among 
Nicaragua's political powers, and reinforce a productive 
bilateral working relationship. 
 
Meet and Greet 
- - - - - - - - 
 
¶23.  (U) Your meeting with the Embassy community will show 
USG support for their efforts to ensure Nicaragua holds free, 
fair, and transparent elections in 2006.  The Mission has 80 
American employees, 11 Family Member employees,  310 local 
engaged staff (LES), and 280 local guards.  In addition to 
State and USAID, DAO, Mil Group, DEA, OBO, RLA, 
USDA/FAS/APHIS, Peace Corps, and Millennium Challenge Account 
offices are present.  Construction began on the New Embassy 
Compound in February 2005.  The new embassy is situated on 13 
acres; the former Ambassador ("Casa Grande") and DCM 
residences (currently Marine offices) are on the site.  The 
expected date of completion of the Embassy is around spring 
¶2007.  The new USAID complex will be co-located on the land 
and completed in mid-2007. 
TRIVELLI