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INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RUEHCV/AMEMBASSY CARACAS PRIORITY 0762
RHEHNSC/NSC WASHINGTON DC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY

S E C R E T MANAGUA 002044 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR WHA/CEN, WHA/USOAS, NSC FOR DAN FISK 
 
E.O. 12958: DECL: 09/18/2026 
TAGS: PREL PGOV PINR KDEM NU
SUBJECT: NICARAGUA: ENSURING DEMOCRATIC CONTINUITY IN THE 
NOVEMBER ELECTIONS 
 
REF: MANAGUA 0433 
 
Classified By: Ambassador Paul A. Trivelli. Reasons 1.4 (B,D). 
 
¶1.  (S) INTRODUCTION:  Our election priorities in Nicaragua 
have not changed since our February 24 update (Ref. D): 
support clean, fair, credible, and inclusive national 
elections; keep Nicaragua on the democratic path; and, end 
the Ortega-Aleman pact's control of the political system. 
Our four-point strategy to achieve these objectives -- unite 
the democratic opposition; point out the past and present 
shortcomings of both Ortega and Aleman; use our voice and 
assistance to ensure fair elections; and, convince 
Nicaraguans of the positive value of the bilateral 
relationship -- has met with mixed results.  An assessment 
follows of the current political arena, efforts to achieve 
our objectives, as well as recommendations to remedy 
weaknesses in our strategy.  END INTRODUCTION. 
 
STATUS QUO AND INSTITUTIONAL CONTROL FAVOR ORTEGA 
- - - - - - - - - - - - - - - -- - - - - - - - - - 
 
¶2.  (S) Polls still show that most Nicaraguans seek political 
change and reject the current leadership of Nicaragua's two 
dominant political parties.  Early polls pegged Nicaraguan 
Liberal Alliance (ALN) candidate Eduardo Montealegre and 
Sandinista Renovation Movement (MRS) leader Herty Lewites as 
the clear front-runners.  However,  since then, a fifth 
presidential candidate, Alternative for Change (AC) candidate 
Eden Pastora, entered the race; MRS candidate Herty Lewites 
passed away, replaced by relatively unknown Edmundo Jarquin; 
and, Sandinista Front (FSLN) candidate Daniel Ortega pulled 
ahead in the polls.  Recent polls suggest the following range 
of support for the candidates:  Ortega: 27%-31%; Montealegre 
21%-28%;  Liberal Constitutional Party (PLC) candidate Jose 
Rizo and Jarquin vie for third place with 12%-17%; and, 
Pastora 1%-2%. 
 
¶3.  (SBU) According to an M and R poll released September 11 
(poll conducted on September 7-8, sample size 802 nationwide, 
3.5% error), 35.2% of the respondents believe Montealegre 
will be the next president of Nicaragua; 22.3% think Ortega 
will win; 18.6% are uncertain or did not respond; 12.5% 
believe Jarquin will win; 11.1% think Rizo will be the next 
president; and, only .1% think Pastora has a chance. 
Regarding voter preference, Montealegre gained 36.2%, Jarquin 
19.2%, Ortega 16.7%, Rizo 11.1% and Pastora .1%. 
Undecided/no response totaled 16.2%.  (COMMENT: 
Historically, voters' views on who will win an election in 
Nicaragua tend to track more closely with electoral outcomes 
than voter intentions, which most polls measure.  However, 
this particular M and R poll did not reach truly rural voters 
and thus does not reflect the inclinations of that segment of 
the population.) 
 
¶4.  (S) Even though approximately 70% of Nicaraguans reject 
Ortega, he could still win the November 5 election because a 
candidate can claim victory win with only 35% of valid votes, 
with a margin of 5% or greater above the closest competitor. 
While we expect Jarquin to shave off some traditionally 
Sandinista voters, the difference might not suffice to 
prevent a first-round Ortega victory -- especially 
considering the real possibility that Ortega will attempt to 
steal up to 5% of the first-round votes, as he knows well he 
would likely lose a second round, except perhaps to Rizo. 
The FSLN dominates the electoral and judicial branches of 
government and will not hesitate to use its control to tilt 
the election outcome in Ortega's favor.  CSE cabinet director 
Rodrigo Barreto, who privately claims he favors Montealegre, 
has told us that the CSE leadership -- meaning CSE VP Emmet 
Lang (FSLN), the real power behind the CSE -- has not 
budgeted for a second round "because Ortega will win on the 
first round." 
 
¶5.  (C) Low voter turnout is likely to favor Ortega and his 
disciplined mass of Sandinista militants; high turnout is 
more likely to favor the anti-FSLN vote, and the 
anti-caudillo vote more generally.  According to polls and 
what we know from voter patterns in previous elections, most 
independent voters reject Ortega and tend to vote for the 
candidate they believe can beat him.  Vigorous international 
monitoring, combined with robust Nicaraguan observation can 
minimize pact-driven fraud.  Even with observation, we expect 
the FSLN and PLC will use their influence in the CSE to 
attempt to commit fraud, especially to in the selection of 
Assembly deputies. 
 
 
LIBERALS IN DISARRAY, "BORN-AGAIN" ORTEGA ABOVE THE STORM 
- - - - - - - - - - - - - - - -- - - - - - - - - - - - -- - 
 
¶6.  (S) Convincing Liberals to unite behind a single 
candidate has not been possible, in large part because PLC 
leader Arnoldo Aleman still controls the party; PLC candidate 
Rizo's blind ambition prevents him from acknowledging he 
cannot beat FSLN rival Ortega; and, the PLC's smear campaign 
against rival Montealegre has so far spoiled the efforts of 
moderates to forge an alliance.  On September 7, the lid blew 
off on an FSLN-PLC cabal to besmirch Eduardo Montealegre so 
that he would withdraw from the race or cave to Rizo and 
rejoin the PLC.  Norlan Moncada (Assembly Deputy Oscar 
Moncada's nephew), who was involved in a PLC scheme, with 
apparent FSLN collusion, denounced the plot a press 
conference, mentioning the direct threats he received from 
those involved when they realized he would speak out. 
 
¶7.  (S) According to Moncada, Carlos Ulvert, Gilberto Wong, 
and Alvaro Somoza (all three PLC/Rizo supporters), and 
Francisco Mayorga (FSLN sympathizer loosely associated with 
the PLC and owner of one of the failed banks) created a 
foundation (Pro-Verdad, or "for truth") to smear Montealegre, 
falsely accusing him of wrongdoing in the CENIs case (debt 
bonds to resolve the failed banks' debt).  The "Pro-Verdad" 
plan also included circulating false rumors that Rizo is 
polling right behind Ortega while Montealegre has slipped. 
The PLC and FSLN were hoping that the CENIs scandal would so 
weaken Montealegre that a poll (reportedly to be fielded via 
an Argentine firm connected with Rizo's Argentine campaign 
adviser Felipe Noguera) would "demonstrate" that Rizo is the 
only option capable of beating Ortega.  Moncada drafted a 
full sworn statement and provided copies to Embassy and the 
Permanent Commission for Human Rights (CPDH). 
¶8.  (S) The CENIs confabulation represents a microcosm of how 
the PLC-FSLN Pact works, and demonstrates clear connections 
between the Rizo camp, Aleman, and the Sandinistas (in 
addition to Mayorga, FSLN Contralor Montenegro was involved). 
 What were the motives?  Ortega probably believes his chances 
of winning the election are improved if his opponents remain 
divided; besmirching Montealegre could help lower the support 
for his closest competitor.  While there is much speculation 
regarding his accord with Ortega, Aleman appears to be 
willing to let Ortega win the election in exchange for his 
freedom and Assembly seats for his party hacks.  Rizo's 
motive is likely his blind ambition to don the presidential 
sash. 
 
¶9.  (S) At this juncture, we believe Rizo and his running 
mate Jose Antonio Alvarado (who in late May decided to cast 
his fate with Rizo rather than Montealegre) should be pressed 
to withdraw from the race and admit that their allegations of 
corruption against Montealegre are unfounded.  With Rizo out 
of the picture, support for the PLC would further erode, and 
Montealegre could emerge as the Liberal option best poised to 
beat Ortega.  Further, independent and undecided voters, who 
largely reject the Ortega-Aleman pact, are more likely to 
back Montealegre once it is clear that Rizo has broken with 
the PLC and left the political stage.  Montealegre's 
anti-pact focus will then resonate more with voters who were 
confused about talk of an eventual PLC-ALN alliance. 
 
¶10.  (S) One possible way to convince Rizo to resign and to 
encourage a broader Liberal unity is through a poll that 
would determine whether Montealegre or Rizo is best poised to 
beat Ortega.  According to President Bolanos' chief of staff 
Leonardo Somarriba and senior political adviser Frank Arana, 
President Bolanos has convinced candidates Eduardo 
Montealegre and Jose Rizo to participate in such a poll. 
However, the candidates have yet to iron out the details, 
including what "benefits" will be accorded to the loser.  The 
poll would poll roughly 2,000 people in each of Nicaragua's 
17 departments.  (Note: We understand that the Taiwanese are 
backing the poll effort, expected to cost around $200,000). 
 
MODEST SUCCESS IN EXPOSING ALEMAN AND ORTEGA SHORTCOMINGS 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - 
 
¶11.  (S) Our efforts to erode Aleman have not sufficed to 
convince him to cede his hegemony over the PLC -- even though 
we have convinced some PLC militants to leave the party and 
endorse Montealegre.  Other efforts: 
 
--When Norlan Moncada approached the Embassy in early 
September with his denouncement against the PLC-FSLN CENIs 
 
scam, we encouraged him to do the right thing for his 
country.  The PLC's fingerprints are on the scam. 
 
--The Embassy has distributed its "rap sheet" on Aleman's 
corruption and continues to engage PLC militants and 
lawmakers on the damaging effects of Aleman's undemocratic 
leadership. 
 
--The Embassy continues to engage, with mixed success, 
Nicaraguan and third country financiers to disassociate 
themselves from Aleman.  Our embassies in neighboring 
countries furthered President Bolanos' efforts to persuade 
the presidents and capital of these countries to distance 
themselves from Aleman and support Montealegre.  Montealegre 
is now receiving some financial backing from El Salvador, 
Guatemala, and Honduras. 
 
-- Progress on the case against Aleman in Panama has eroded 
his reputation; however, concrete progress on the U.S. 
criminal indictment against Aleman - likely the most powerful 
tool in convincing Aleman followers to leave his side -- has 
not materialized.  Nor has there been progress in the 
Dominican Republic case against Aleman. 
 
-- The RLA is working with our Customs and Border Inspection 
office in Panama to request that the U.S. Attorney's office 
in Southern Florida file a criminal complaint against 
Aleman's wife Maria Fernanda for failing to appear for a 
border inspection regarding her U.S. permanent residency 
status.  The last time she entered the United States, Maria 
Fernanda was flagged for inspection to determine whether or 
not she was still a lawful permanent resident.  The 
inspection was deferred and she was given a date to appear, 
but she did not. 
 
ORTEGA'S "BORN-AGAIN" IMAGE CHALLENGES EFFORTS TO REVEAL 
HIS SINISTER PAST AND PRESENT PERSONA 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - 
 
¶12.  (S) We have met with modest success in our efforts to 
reveal Ortega's abysmal human rights record.  Ortega's 
"born-again Catholic" image, and his ability to stay removed 
from the media's harsh scrutiny -- preferring instead to 
undertake "pilgrimages" to convert voters to his "peace, love 
and reconciliation" campaign -- has complicated somewhat the 
efforts to challenge him.  An update of our efforts: 
 
--Embassy continues to support Nicaragua's Permanent Human 
Rights Commission (CPDH) work to help the Miskito Indians 
document and submit FSLN era human rights abuse cases before 
the Inter-American Human Rights Commission (IAHRC) and other 
international organizations.  DRL funds were granted to help 
CPDH (via Creative Associates) to continue the work and 
computerize and publicize its extensive archives on 
Sandinista abuses throughout the country in the 1980s.  CPDH 
has submitted over 100 cases before the Nicaraguan judicial 
system for review (given the dominance of the FSLN and PLC in 
the judiciary, predictably, no decision has been issued). 
CPDH has held press conferences denouncing the abuses and a 
public forum on genocide.  It will hold another forum in 
October, featuring a number of the Ortega-era victims and 
will issue a bulletin containing their testimonies.  The CPDH 
is also preparing cases to present before the IAHRC and a 
Spanish court. 
 
--Embassy arranged for a Miskito survivor of the Leimus 
massacre to receive an artificial limb through the OAS 
demining program in Managua. 
 
--Embassy helped facilitate Ortega's stepdaughter Zoilamerica 
Narvaez's trip to Washington in June, where she discussed her 
case before the Inter-American Human Rights Commission, met 
with State Department officials, contacted pro bono lawyers' 
associations who might be able to help her advance her sexual 
abuse case against her stepfather, and interviewed with 
Univision in Miami.  The release of part of her Univision 
interview was scheduled for late August in Miami and via 
Channel 10 in Managua; however, Ortega reportedly "persuaded" 
Channel 10 to quash the interview.  Ortega's efforts to 
censure Zoilamerica stirred up a public outcry and drew 
criticism from the ALN and MRS.  Center-right daily La Prensa 
printed the text of the interview; bootleg copies of the 
interview are now circulating, and the IAHRC has expressed 
concern to Zoilamerica over Ortega's censorship.  We are 
helping facilitate private sector support for Zoilamerica to 
travel to Washington in October for her IAHRC hearing. 
 
 
--Embassy updated and disseminated "rap sheets" on the 
excesses and failures of the Sandinista Era and Ortega to 
share with appropriate audiences.  Embassy successfully 
encouraged MRS leadership -- FSLN-dissident Herty Lewites and 
successor Edmundo Jarquin -- to maintain their independence 
from Ortega.  Jarquin has made it one of his key objectives 
to publicly slam Ortega, as has Lewites' widow Carmen, who 
recently rebuffed Ortega's referring to Lewites as a 
"brother." 
 
--Embassy is investigating probable links between the FSLN 
and narcotrafficking on the Atlantic Coast, specifically 
Yatama candidates running on the FSLN ticket and 
FSLN-affiliated judges who release suspected narcotraffickers. 
 
ENSURING FAIR ELECTIONS 
- - - - - - - - - - - - 
 
¶13.  (C) Our outreach to ensure a fair election outcome and 
to strengthen Nicaragua's democracy continues to be robust 
and unequivocal.  The Ambassador and other senior officials 
employ every opportunity available in Managua and during 
frequent trips throughout the country to highlight our policy 
interests, feature our programs, and to speak out clearly and 
forcefully on behalf of the legitimate, democratic 
aspirations of the Nicaraguan people.  While the FSLN and PLC 
have criticized the Ambassador's role because it hits a raw 
nerve, the ALN and MRS have largely supported his words and 
actions.  And, while polls suggest that Nicaraguans are 
divided in their views regarding outside interference in 
Nicaragua's internal affairs, most Nicaraguans, especially 
rural voters, appear to expect the U.S. to speak its mind. 
Ironically, rural voters are those who still are most 
inclined to back Arnoldo Aleman, as they are far removed from 
exposure to his pact with Ortega and how it has hurt the 
country's development. 
 
¶14.  (U) A summary of our use of over $12 million for 
election technical assistance, outreach, and observation 
(much of it channeled through the CEPPS IRI, NDI, and IFES 
agreement and their local partners) follows: 
 
--CSE support (technical assistance, training, and material 
assistance): USD 2.9 million 
 
--Domestic observation (March 2006 Atlantic Coast elections, 
November national elections, possible run-off election 
observation, and related studies): USD 3.1 million 
 
--Civic education and vote promotion (Get out the Vote, 
secondary school civic education, and citizen attention 
centers): USD: 3.4 million 
 
--Political party poll watcher (fiscales) training and 
manuals: USD 600,000 
 
--International observation (OAS Election Observation Mission 
(EOM): USD 2 million 
 
¶15.  (C) We also draw on our weekly elections working group 
sessions and regular Donor's Group meetings to coordinate our 
efforts, maximizing limited resources, and developing 
milestones and criteria in the electoral process required for 
valid election results.  We continue to press the group to 
issue a joint communique calling on the CSE to ensure free, 
fair, inclusive, and credible elections on November 5.  Thus 
far, the Canadians are on board, and the Europeans may be 
willing to sign closer to the election. 
 
THE VALUE OF A POSITIVE BILATERAL RELATIONSHIP 
- - - - - - - - - - - - - - - - - - - - - - - - 
 
¶16.  (C) We continue to appeal to the desire for most 
Nicaraguans, including many Sandinistas, to maintain close 
ties with the United States -- highlighting over $45 million 
in USAID funding for FY 2006 and $175 million in Millennium 
Challenge Account funds; IFIs and bilateral donors reliance 
on our assessments; the sizable Nicaraguan population 
(250,000-500,000, including over 4,500 benefiting from 
Temporary Protective Status (TPS) in the United States, who 
send over $500 million/yr. in remittances.  The Ambassador's 
message that these opportunities could disappear if Nicaragua 
elects an undemocratic leader appears to have resonated. 
 
WHAT MORE MUST WE ACCOMPLISH? 
 
- - - - - - - - - - - - - - - 
 
¶17.  (S) Restrictions on funding uses have affected what we 
can do an certain fronts, namely leveling the uneven 
political playing field that pits a well-funded Ortega -- who 
enjoys the backing and money of Venezuelan President Hugo 
Chavez and of Nicaragua's lucrative FSLN-controlled court 
system -- against Jarquin's cashless MRS and Montealegre's 
under-funded ALN -- which is also constantly under attack by 
the PLC.  As the final stretch nears, a full court press is 
in order: 
 
--Clinch the Aleman indictment in the United States and a 
decision on the civil case for forfeitures of at least some 
of the Aleman family CDs. 
 
--Announce/reveal the narco, and possibly terrorism-related, 
money laundering indictment of Supreme Court Justices (U.S. 
Court in Las Vegas) involved in a scam to take possession of 
$609,000 in cash confiscated from a narcotrafficker connected 
to Colombian and Mexican cartels. 
 
--Encourage Nicaraguan and regional private sectors to 
consider backing Eduardo Montealegre as the democratic 
alternative that can beat Daniel Ortega.  He tells us that at 
this late date, the Nicaraguan private sector is still not 
providing sufficient funds.  The lack of funds has especially 
hurt the ALN's campaign efforts in rural areas of the country 
as campaigners to not have campaign materials to deliver nor 
transportation to deliver them.  Montealegre has visited El 
Salvador and is considering visiting other neighboring 
countries to seek additional campaign funds.  U.S. embassies 
could help facilitate meetings between Montealegre and the 
local private sector, as Embassy El Salvador has done. 
 
--Encourage Jarquin to remain in the race and continue our 
public statements that the U.S. considers the MRS a viable 
democratic alternative.  The MRS has told us that they are 
severely cash-strapped.  Jarquin estimates he can shave off 
several points from Ortega, but his lack of funds limits his 
ability to do so.  (NOTE: We believe Jarquin could but draw 
at least 5-6% of the FSLN vote -- enough to make a 
difference.)  Herty Lewites' nephew Israel is considering 
traveling to the United States to seek funds from the Jewish 
community with whom Herty maintained contact. 
 
--Draw on Republicans who maintained close ties with the PLC 
starting in the 1980's to talk to the PLC camp and tell them 
their game is over, that Montealegre is clearly the best 
democratic choice to beat Ortega.  If, as we expect, 
Montealegre leads Rizo in a joint poll, use the information 
to convince Rizo and his followers that it is clear he cannot 
win the election. 
 
--Ensure the OAS stays on top of the CSE, and quickly snuffs 
out any/all attempts at chicanery.  The latest concern 
involves the new regulations that allow fiscales and voting 
table (JRV) officials to annul the results of voting tables 
with one missing signature.  Encourage the OAS to make 
statements responding firmly to Daniel Ortega's sharp 
criticism of the OAS Election Observation Mission. 
 
--Encourage/support a "remembrance campaign," combined with 
reminders/tangible indicators of all the opportunities and 
benefits that come from their close association with the 
United States (CAFTA, MCC, remittances, Free Trade Zone jobs, 
tourism), the risks of losing them if Ortega wins. 
 
--Revoke the visas of FSLN/Yatama candidates/judges found 
engaged in, or benefiting from, narcotrafficking activities; 
show links between FSLN and narcotrafficking. 
 
--Step up engagement with department capitals and rural 
voters, especially those in the departments of Jinotega and 
Matagalpa, who still revere Aleman and are unaware of his 
alliance with Ortega and how it has hurt the country and 
their welfare. 
 
--Continue to encourage PLC mayors and other local leaders to 
challenge Aleman's control of the party and encourage them to 
withdraw in support of Eduardo Montealegre as the only viable 
option to beat Ortega. 
TRIVELLI