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DE RUEHMU #1839/01 2342152
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P 222152Z AUG 06
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RHEFDIA/DIA WASHINGTON DC
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C O N F I D E N T I A L MANAGUA 001839 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR WHA/CEN 
DOD PLEASE PASS TO OSD FERNANDO GONZALEZ 
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E.O. 12958: DECL: 08/16/2016 
TAGS: PGOV KDEM SOCI NU
SUBJECT: NICARAGUA ELECTIONS UPDATE 
 
REF: A. MANAGUA 1731 
 
     ¶B. MANAGUA 1572 
 
Classified By: Ambassador Paul Trivelli for reasons 1.4 (b and d) 
 
¶1. (C) Summary: With only two an a half months left before 
the Nicaraguan national elections on November 5, the Liberals 
remain divided and the Sandinista dissidents are running low 
on funds.  Five parties continue to contest the elections 
with the following candidates: Daniel Ortega (Sandinista 
Front - FSLN); Eduardo Montealegre (Nicaraguan Liberal 
Alliance - ALN); Jose Rizo (Liberal Constitutional Party - 
PLC); Edmundo Jarquin (Sandinista Renovation Movement - MRS); 
and Eden Pastora (Alternative for Change - AC).  Recent polls 
show Ortega in the lead with Montealegre close behind (with 
about 25-29 percent), followed by Rizo and Jarquin (14-19 
percent), with Pastora trailing at 1-2 percent.  If 
Montealegre can force Ortega into a runoff, polls indicate 
that he would defeat the FSLN candidate.  End Summary. 
 
Elections Background 
- - - - - - - - - - - 
 
¶2. (U) Since the inception of democratic rule in Nicaragua in 
1990, political power has been contested between two majority 
forces: the Liberals on the right, and the Sandinistas on the 
left.  The civil war and economic mismanagement in the 1980s, 
and the Sandinista giveaway of government property to party 
leaders in 1990 (the "pinata"), turned a significant majority 
of the population against the Sandinista Front (FSLN), 
preventing the FSLN from winning national elections. 
Recognizing demographic realities, the Sandinistas since 1990 
have methodically promoted divisions on the right and worked 
to maximize their voting strength by building a large and 
disciplined party structure. 
 
¶3. (U) Nicaragua's opposition forces came together under the 
United National Opposition (UNO) to win the 1990 elections, 
but soon splintered.  The Liberal Constitutional Party (PLC), 
a minor UNO partner, eventually emerged as the dominant 
Liberal force, in large part due to the energetic and 
charismatic leadership of party president Arnoldo Aleman. 
The balance of UNO broke apart, with the political scene 
populated by an alphabet soup of minor Liberal parties, the 
traditional Conservative Party (PC) -- reduced to a small 
minority except in a few strongholds -- the Nicaraguan 
Resistance (PRN) formed by ex-Contra fighters, and parties 
formed to represent the evangelical population, such as the 
Nicaraguan Christian Path Party (CCN), and the Christian 
Alternative (AC). 
 
¶4. (U) Discontent has also grown within the FSLN after the 
1990 "pinata" of FSLN leader Daniel Ortega and Ortega's 
continued electoral defeats during that decade.  Indeed, some 
 elements broke away from the FSLN during the 1990s, most 
notably the Sandinista Renovation Movement (MRS) under the 
leadership of revolutionary activist Dora Maria Tellez.  The 
FSLN was, however, able to maintain its core using threats, 
coercion and discipline.  Despite repeated defeats, Ortega 
pledged to "rule from below" using residual Sandinista 
influence in governmental institutions such as the police, 
armed forces, and the court system. 
 
¶5. (SBU) The PLC and Arnoldo Aleman emerged victorious in the 
1996 national elections, but were unable to gain a 
supermajority (56 votes) in the National Assembly, which 
would have allowed the party to name Supreme Electoral 
Council (CSE) and Supreme Court (CSJ) magistrates without 
Sandinista votes.  This balance led to a political "pact" 
between the PLC and FSLN to divide control of the 
institutions of government between the two parties, an 
arrangement which has continued to the present.  Hence, 
virtually all employees of governmental institutions that are 
controlled by appointments by the National Assembly are 
affiliated with the PLC or FSLN and serve the interests of 
those parties. 
 
¶6. (U) Before the 2001 election, the PLC was able to corral 
most of the smaller democratic parties into an alliance. 
Aleman personally selected Enrique Bolanos as the alliance's 
presidential candidate as well as many of the National 
Assembly and Central American Parliament deputy candidates. 
This process is known as the "dedazo" ("finger" or 
hand-picking).  Bolanos won the election and instituted an 
anti-corruption campaign. 
 
¶7. (SBU) In 2003, Aleman, who stole tens of millions of 
dollars from state coffers, was convicted of fraud and money 
laundering, stripped of his parliamentary immunity (which he 
enjoyed as an ex-President) and sentenced to 20 years in 
prison.  This process caused a great upheaval in the Liberal 
ranks.  When the dust settled, a small number of Liberal and 
Conservative deputies broke from the PLC alliance to form a 
new political caucus to support Bolanos, but the vast 
majority remained loyal to Aleman (owing their power to 
Aleman's dedazo) and condemned the President as a traitor. 
The Conservatives and Liberals, unhappy with Aleman's 
continued influence in the PLC, formed the Alliance for the 
Republic (APRE), a party loyal to and supported by the 
Bolanos administration. 
 
¶8. (U) Aleman and Ortega manipulated the pact and Sandinista 
control of the judiciary to allow greater degrees of freedom 
for Aleman (he began his sentence in a prison cell, was moved 
to a hospital, then to house arrest, and now is allowed to 
move freely about Managua under "medical parole") in exchange 
for concessions to the FSLN in the CSE and CSJ.  (Comment: 
The pact has provided obvious benefits to Aleman and Ortega 
but alienated Liberals and Sandinistas disgusted with their 
leaders' concessions to the enemy and anti-democratic and 
corrupt manipulation of the powers of state.  End Comment.) 
The pact has consistently attacked and undermined the Bolanos 
administration, at times threatening the stability of the 
country. 
 
¶9. (U) As part of the pact agreements, Aleman supported a 
change in the Electoral Law that allows the front-running 
candidate to win the election in the first round with 40 
percent of the vote or 35 percent with a five percent lead 
over the next most popular contender.  This modification 
clearly favors the FSLN's Ortega, whose electoral support 
since the country's return to democracy has averaged about 40 
percent. 
 
¶10. (U) Having won comfortable majorities since 1990, the 
Liberals lost badly in the 2004 municipal elections.  The 
Sandinistas won 88 of 152 municipalities, the PLC 58, APRE 
five, and the PRN one.  The Sandinistas claimed victory with 
a plurality of the vote in most of their 88 municipalities, 
with the PLC, APRE and other minor parties dividing the 
anti-Sandinista vote.  The abstention rate was also slightly 
higher than normal, which many people blamed on the voters' 
unhappiness with the pact. 
 
The 2006 Elections 
- - - - - - - - - - 
 
¶11. (U) Three candidates emerged in 2005 to challenge the 
Aleman-Ortega pact.  Excluded from the majority parties by 
the two caudillos, Sandinista dissident Herty Lewites broke 
from the FSLN to head the MRS ticket, and Liberal dissident 
Eduardo Montealegre formed the Nicaraguan Liberal Alliance 
(ALN) composed of PLC dissidents, the PC, PRN, and other 
small democratic parties.  PLC outcast and prominent Bolanos 
Administration official Jose Antonio Alvarado won the APRE 
party nomination.  Daniel Ortega was once again the 
pre-ordained candidate of the FSLN, and Bolanos' vice 
president Jose Rizo was chosen as the PLC candidate in April 
¶2006. 
 
¶12. (SBU) The CSE deadline to register party candidates at 
the end of May 2006 drove both a consolidation and division 
amongst the political parties.  The Christian Alternative 
(AC) party left Lewites' alliance, changed its name to 
Alternative for Change (same initials) and chose the erratic 
Eden Pastora as its presidential candidate.  Jose Antonio 
Alvarado became Jose Rizo's running mate in the PLC, but APRE 
joined the ALN.  Arnoldo Aleman again imposed several 
unpopular PLC deputy candidates by dedazo, causing Jose Rizo 
to threaten to resign his candidacy (he backed down). 
 
¶13. (U) The political upheaval did not end in May -- MRS 
candidate Lewites died from heart complications in early 
July.  Lewites' running mate Edmundo Jarquin assumed the 
candidacy and MRS leadership convinced popular Sandinista 
revolutionary songwriter Carlos Mejia Godoy to accept the 
vice presidential nomination.  Post-Lewites polls indicate 
that Jarquin has been able to prevent the bulk of MRS 
supporters from defecting to the ALN or FSLN by capturing 
public approval and promoting the continuation of Lewites' 
ideals.  The Liberals have continued their constant 
infighting, resulting in an ongoing shift of Liberal 
politicians back and forth between the PLC and ALN, depending 
on their calculation of personal benefit, although most of 
the defectors have left the PLC for the ALN. 
 
Recent Polls 
- - - - - - - 
 
¶14. (U) A Borge y Asociados poll released on August 3 showed 
the following results for the candidates and their parties: 
 
Candidate               Party 
---------               ----- 
 
Ortega: 31.4%           FSLN: 33.4% 
Montealegre: 29.1%      ALN: 23.0% 
Rizo: 15.7%             PLC: 17.3% 
Jarquin: 15.2%          MRS: 13.6% 
Pastora: 1.1%           AC: 0.7% 
None: 7.6% 
 
This poll was financed by the ALN and has been criticized by 
the PLC and FSLN for asking "leading questions" about how 
respondents felt about the PLC-FSLN pact. 
 
¶15. (SBU) A M&R poll released on August 20 presented the 
following figures: 
 
Candidate 
--------- 
 
Ortega: 32.1% 
Montealegre: 25% 
Rizo: 13.7% 
Jarquin: 19.9% 
Pastora: 1.3% 
None: 8.0% 
 
The M&R poll also projected the percentage of votes the 
candidates would receive if the 8 percent of undecided voters 
abstained.  The projection showed: Ortega (34.9%), 
Montealegre (27.2%), Jarquin (21.6%), Rizo (14.9%), Pastora 
(1.4%).  "La Prensa" sensationalized this projection by 
announcing that Ortega was 0.1% away from winning the 
election in the first round.  Analysts and candidates agreed, 
however, that the undecided voters would not likely abstain 
en masse. 
 
¶16. (C) A private Borge y Asociados poll commissioned by IRI 
and passed to emboffs on August 21 had the following results: 
 
Candidate               Party 
---------               ----- 
 
Ortega: 27.5%           FSLN: 30.0% 
Montealegre: 24.8%      ALN: 21.6% 
Rizo: 18.6%             PLC: 20.5% 
Jarquin: 17.1%          MRS: 17.9% 
Pastora: 1.0% 
None: 11.1% 
 
¶17. (SBU) Although Ortega consistently leads in the recent 
polls, 60-65 percent of Nicaraguans hold very unfavorable 
opinions of him, according to surveys.  Montealegre is 
consistently chosen as the second-choice candidate of Rizo 
and Jarquin supporters, and would easily defeat Ortega in a 
second round.  Rizo and Jarquin would also gain extra votes 
in a second round, but not as many as Montealegre, and their 
ability to defeat Ortega is less assured. 
 
Current Status of the Four Major Candidates 
- - - - - - - - - - - - - - - - - - - - - - 
 
¶18. (C) ORTEGA: The FSLN is clearly by far the most 
organized, disciplined, and best financed party.  Flashy FSLN 
propaganda promoting the party, Ortega, and Vice Presidential 
candidate Jaime Morales is evident nationwide, but especially 
in Managua, which is blanketed with pastel billboards 
promising "peace and reconciliation," "an end to hunger," and 
"unity and progress."  Ortega has pursued a strategy of 
"unity" by choosing a Liberal running mate, and rapprochement 
with the Catholic Church via Cardinal Miguel Obando y Bravo, 
the retired Archbishop of Managua.  He has even sent 
emissaries to promise us that the FSLN will not rock the 
macroeconomic boat if Ortega is elected and that the party 
would like to have friendly relations with "everyone," 
including the USG (Ref A).  Ortega was widely criticized for 
his July 19 "Anniversary of the Revolution" speech when he 
appeared before the crowd wearing a Nicaraguan flag as a cape 
and promised widespread subsidies to producers and a "mixed 
economy." 
 
¶19. (C) MONTEALEGRE: The ALN is slowly pulling together its 
disparate parts to conduct a unified campaign (with the help 
of more than a dozen foreign advisors).  Montealegre has been 
forced to defend himself against trumped-up PLC charges that 
he illegally benefited from the 2000-2002 banking crisis -- 
charges that even Jarquin and Pastora agree are unfounded. 
He recently toured the country in an effort to gain support 
and change his image as the candidate of the wealthy 
oligarchy.  Nevertheless, ALN contacts continue to report 
problems of voter perceptions of Montealegre's "arrogant and 
distant" personality.  With few exceptions, the ALN has not 
yet received the level of support it expected from the 
Nicaraguan private sector, although the party has been more 
successful with foreign donors.  ALN deputy candidates 
complain that Montealegre is spending virtually all of the 
money on the national campaign while leaving them to their 
own devices. 
 
¶20. (C) RIZO: Once the premier political force in Nicaragua, 
the PLC has been weakened by internal divisions and an 
unmotivated party base.  Several local PLC leaders have 
confided to us that they are unhappy with the deputy 
candidate lists imposed by Aleman.  A determined group of 
northern PLC mayors has started a movement to force Aleman 
from the party.  Aleman once promised to distance himself 
from the campaign, but he and his wife consistently attend 
Central Committee strategy meetings.  The recent issuance of 
a Panamanian arrest warrant for Aleman and some of his 
relatives dealt a further blow to party morale.  Contacts 
report that Jose Antonio Alvarado has privately criticized 
Rizo and campaign manager Enrique Quinonez for incompetent 
management of the PLC campaign.  While Rizo is struggling to 
energize his supporters, he remains stubbornly resistant to 
ALN overtures inviting him to leave the PLC, claiming that 
Montealegre should join with the PLC under his leadership. 
 
¶21. (C) JARQUIN: Jarquin and the MRS seemed to have weathered 
the death of Lewites by emphasizing Lewites' legacy and 
taking advantage of sympathy for the former mayor of Managua 
and frustration with the FSLN.  Jarquin recently made a 
tactical mistake, however, by expressing his support for 
legalizing elective abortions, a procedure opposed by a large 
majority of Nicaraguans and the Catholic Church, which 
publicly denounced his position (the other candidates quickly 
announced their opposition).  Contacts report that several 
sources of funding brought to the MRS by Lewites (from Jewish 
communities in Panama and Europe, for example) have run dry. 
Jarquin himself admits that the MRS receives minimal support 
from the Nicaraguan private sector, and the party has been 
forced to essentially cut off local candidates in 
lower-priority departments -- basically everywhere but the 
Pacific region, which contains the majority of MRS 
supporters.  Jarquin realizes that his chances of winning the 
presidential election are remote, but he is committed to 
winning a significant number of seats for the MRS in the 
National Assembly and working with the ALN to reform 
government institutions (Ref B). 
 
Comment: Can Ortega Win in the First Round? 
- - - - - - - - - - - - - - - - - - - - - - 
 
¶22. (C) The persistent split and infighting in the Liberal 
ranks has benefited Ortega and could conceivably hand him a 
first-round victory -- although we do not judge such an 
outcome likely.  Montealegre has always claimed that Rizo 
will join forces with him once he realizes that his candidacy 
is hopeless, but the ALN's disorganization, financial 
difficulties, and Montealegre's own foibles have prevented 
him from dominating Rizo in the polls as quickly as he 
planned.  Nevertheless, the polls consistently demonstrate 
that Montealegre is the only serious challenger to Ortega. 
The "conventional wisdom" is that Rizo will jump to the ALN 
sometime in September and take enough anti-Arnoldo PLC 
supporters with him to push Montealegre to a first-round win, 
or at least guarantee a runoff with Ortega.  At this point, 
however, Rizo has not arrived at the same conclusion. 
Further negative poll results (for Rizo) and pressure from 
various interlocutors could possibly prompt a Rizo defection 
before the CSE prints the electoral ballots in early October. 
TRIVELLI