VZCZCXYZ0005
PP RUEHWEB

DE RUEHMU #1972/01 2501915
ZNY SSSSS ZZH
P 071915Z SEP 06
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC PRIORITY 7499
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC

S E C R E T MANAGUA 001972 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR WHA/CEN, WHA/USOAS 
 
E.O. 12958: DECL: 09/07/2026 
TAGS: PREL PGOV PINR KDEM NU
SUBJECT: WHILE PLC MODERATES SEEK LIBERAL UNITY, HARDLINERS 
DESTROY CHANCES OF RAPPROCHEMENT 
 
Classified By: Ambassador Paul A. Trivelli. Reasons 1.4 (B,D). 
 
¶1.  (C) SUMMARY: While some Liberal Constitutional Party 
(PLC) Assembly moderates continue to seek a PLC alliance with 
Eduardo Montealegre's Liberal Nicaraguan Alliance (ALN), PLC 
hardliners have ratcheted up their party's smear campaign 
against Montealegre to the point that an alliance is likely 
neither tenable nor advisable.  Although claiming he seeks 
Montealegre's reunification with the PLC as the sure way to 
beat Sandinista Front (FSLN) candidate Daniel Ortega, PLC 
candidate Jose Rizo appears to be complicit in the PLC's 
attacks against Montealegre.  While Rizo's apparent 
complicity can likely be attributed to his blind ambition to 
don the presidential sash, Aleman's intentions appear to be 
much darker.  END SUMMARY. 
 
¶2.  (C) PLC National Assembly candidate/former Contra 
Maximino Rodriquez acknowledged to polcouns on September 1 
that Rizo cannot win without Montealegre's support, fretting 
that a divided Liberal camp will pave the way for an Ortega 
victory in the November election.  However, he still holds 
out hope that PLC-ALN unification is feasible - but under the 
PLC umbrella.  According to Rodriquez, Arnoldo Aleman, whom 
he claimed does indeed have cancer, Aleman and his family 
might be willing to withdraw from the PLC, Aleman's Assembly 
candidates could be convinced to resign, and the party's 
leadership "reformed" if it meant unifying the Liberals. 
Acknowledging the incongruence between the PLC spokesperson's 
vitriolic attacks on Montealegre and Rizo's stated efforts to 
shepherd Montealegre back into the PLC fold, Rodriguez also 
concurred that Liberal infighting hurts both PLC and ALN.  To 
polcouns' suggestion that both sides should cease and direct 
their attention towards challenging the FSLN, Rodriguez said 
he would recommend the PLC halt its attacks against the ALN. 
 
¶3.  (C) In a September 4 meeting, PLC supporter/AMCHAM board 
member Terencio Garcia asserted to polcouns that Liberal 
unity is still possible and the only path to beating Ortega. 
Asserting that Rizo is closing in on rival Montealegre in the 
latest polls, Garcia argued that Montealegre should join the 
PLC and run as Rizo's VP.  Polcouns countered that all 
credible polls thus far show Montealegre in the lead and the 
candidate most likely to beat Ortega in a second round. 
Garcia next suggested Rizo and Montealegre measure their 
relative strengths in a jointly approved poll.  Polcouns 
observed that while Montealegre has offered to participate in 
such a poll, to date, Rizo has not.  Garcia agreed that the 
ugly squabbling between the PLC and ALN only serves to 
advance Ortega's fortunes.  He promised he would urge Rizo to 
call off the hounds on Montealegre's trail. 
 
¶4.  (S) In Ambassador's meeting with Garcia on September 5, 
Garcia stuck to his assertions from the earlier meeting, 
insisting that a new Cid Gallup poll places Ortega at 34%, 
Rizo at 29% and Montealegre trailing with 16%.  The 
Ambassador clarified that we are unaware of any such poll, 
that to our knowledge, the next Cid Gallup poll will be 
fielded later in the month.  The Ambassador alerted Garcia to 
our assessment that if Ortega wins, the responsibility will 
fall squarely on Rizo and his followers.  Downplaying 
Garcia's argument that if Montealegre rejoins the PLC the 
party can win the election, the DCM noted that independent 
voters are largely anti FSLN/PLC pact and are likely to 
migrate from the ALN towards Jarquin or abstain -- not/not 
the PLC.  Rizo faces the choice between becoming a hero by 
withdrawing his candidacy or risking going down in history as 
the man who lost Nicaragua's democracy -- a position that 
would place him clearly out of favor with the United States, 
asserted the Ambassador. 
 
¶5.  (U) On Channel 2's September 5 morning talk show, PLC 
moderate/Assembly candidate Carlos Noguera suggested a 
"dQtente" between Rizo and Montealegre, concurring with ALN 
Assembly candidate Yamileth Bonilla that the two candidates 
should compete in a poll to determine who can beat Ortega. 
 
¶6.  (S) While some moderate PLC members appear genuinely 
interested in a broad Liberal alliance, hardliners are taking 
extreme measures to remove Montealegre from the competition. 
On September 4, the ALN denounced the PLC's plan to intensify 
its smear campaign against it through ads and other 
propaganda cobbled together by a "truth commission" that 
seeks to besmirch and discredit Montealegre by blaming him 
for the CENIs (debt bonds to shore up bank failures in 2000) 
issue.  According to a dismayed and disgruntled PLC insider 
who alerted us to the PLC cabal, the FSLN is also complicit 
and Rizo has endorsed the plot -- whose ringleaders include 
 
Carlos Ulvert, Francisco Mayorga, Gilberto Wong, and 
Francisco Aguirre Sacasa.  (Note: Former PLC mayor of Boaco 
Armando Incer resigned from the "commission" on September 6, 
stating he will not be involved in a dirty campaign.) 
 
¶7.  (U) Another piece of the PLC-FSLN campaign to reduce 
popular support for Montealegre was the National Assembly 
Ethics and Transparency Committee's September 6 decision 
requesting that the Public Ministry investigate Montealegre 
for his involvement in CENIs irregularities in the 
reclassification of the debt, public auctions, and augmenting 
Nicaragua's domestic debt by over USD 500 million.  Leading 
the accusatory pack, committee leader Donald Lacayo (PLC), 
who lost his U.S. visa on grounds of corruption, claimed 
that, in light of the committee findings, Montealegre should 
be sent to prison.  Countering Lacayo's accusations, 
Montealegre claimed that the Committee's recommendations were 
part of a joint FSLN-PLC effort to discredit him. 
 
¶8.  (U) ALN advisor/Assembly candidate Eliseo Nunez lambasted 
the cabal on Channel 2's September 7 morning talk show, 
criticizing Rizo for his incongruent messages -- calling for 
Liberal unity on the one hand, while doing his utmost to 
malign and discredit Montealegre on the other.  Nunez also 
attacked the FSLN, asserting its complicity in the efforts to 
guarantee that Montealegre cannot win the presidential race. 
He also claimed that Aleman's wife Maria Fernanda Flores de 
Aleman had met with FSLN supporter Alvaro Baltodano in 
Guatemala, where they agreed that, in exchange for 
guaranteeing Aleman's freedom, 200 lucrative government 
positions for PLC loyalists, and National Assembly seats, the 
PLC (Aleman) would allow an Ortega victory.  The joint 
FSLN-PLC smear campaign against Montealegre is part of this 
accord, asserted Nunez. 
 
COMMENT 
- - - - 
 
¶9.  (C) While Rizo's apparent complicity in the PLC's efforts 
to smear Montealegre can likely be attributed to his blind 
ambition to don the presidential sash, Aleman's intentions 
appear to be much more sinister.  In a country where fiction 
is often given more credence than fact, it is hard to 
determine how far the FSLN-PLC pact is willing to go to 
ensure it holds on to the reins of power.  Clearly, it is in 
neither Aleman's nor Ortega's interest that Montealegre wins 
the November election. 
TRIVELLI