VZCZCXYZ0001
PP RUEHWEB

DE RUEHMU #2518/01 3182302
ZNY SSSSS ZZH
P 142302Z NOV 06
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC PRIORITY 8211
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RUEHCV/AMEMBASSY CARACAS PRIORITY 0809
RUEAIIA/CIA WASHDC PRIORITY
RHEHNSC/NSC WASHINGTON DC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY

S E C R E T MANAGUA 002518 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR WHA/CEN, WHA/USOAS 
 
E.O. 12958: DECL: 11/14/2026 
TAGS: PREL PGOV PINR KDEM NU
SUBJECT: THE TORTOISE AND THE HARES -- WHY ORTEGA WON THE 
RACE 
 
REF: A. MANAGUA 2492 
 
     ¶B. MANAGUA 2491 
     ¶C. MANAGUA 2482 
     ¶D. MANAGUA 2473 
     ¶E. MANAGUA 2470 
     ¶F. MANAGUA 2466 
     ¶G. MANAGUA 2459 
     ¶H. MANAGUA 2450 
     ¶I. MANAGUA 2445 
     ¶J. MANAGUA 2415 
     ¶K. MANAGUA 2377 
     ¶L. MANAGUA 2116 
     ¶M. MANAGUA 2044 
     ¶N. MANAGUA 1630 
 
Classified By: Ambassador Paul A. Trivelli. Reasons 1.4 (B,D). 
 
¶1.  (C) SUMMARY: Sandinista National Liberation Front (FSLN) 
candidate Daniel Ortega won Nicaragua's presidential election 
after surpassing the low 35% threshold required to win on the 
first round and with 4 percentage points below what he 
received in the 2001 race.  While the lion's share of the 
independent vote probably rallied around Nicaraguan Liberal 
Alliance (ALN) candidate Eduardo Montealegre, he lost enough 
of the undecided and liberal votes to derail a hoped-for 
second round battle between him and Ortega.  Some liberals 
who initially endorsed Montealegre likely returned to their 
traditional affiliation, the Liberal Constitutional Party 
(PLC), after being convinced (largely via PLC misinformation) 
that PLC candidate Jose Rizo could defeat Ortega, or were 
duped into believing that Montealegre had withdrawn his 
candidacy.  The Sandinista Renovation Movement (MRS) may have 
lost considerable support from independent and once FSLN 
supporters, the former migrating to Montealegre, the latter 
returning to Ortega. 
 
¶2.  (C) SUMMARY CONTINUED: The fracturing of Nicaraguan 
liberals into two alliances clearly advantaged Ortega.  More 
specifically, the PLC's disinformation campaign against the 
ALN -- whose own campaign suffered from lack of direction and 
the late receipt of funds -- siphoned off enough votes to 
prevent second-place candidate Montealegre from obtaining the 
votes required to prompt a second round.  Further, private 
sector and other funding that could have bolstered the ALN 
campaign and countered the PLC's disinformation tactics came 
too little too late -- which hurt the new party's ability to 
organize, mobilize, and draw and maintain enough of the 
liberal vote.  And, while observers did not report 
significant fraud on election day, some noted that the 
Supreme Electoral Council's (CSE) "selective" issuance and 
distribution of national/voter IDs (cedulas) and temporary 
voting documents disenfranchised thousands of potential 
Nicaraguan voters - probably most of them unaffiliated with 
the FSLN or PLC.  END SUMMARY. 
 
ELECTORAL LAW/WEAK COUNTER-EFFORTS ADVANTAGE ORTEGA 
- - - - - - - - - - - - - - - - - - - - - - - - - - - 
 
¶3.  (C) Taking advantage of an uneven playing field tilted in 
his favor, FSLN presidential candidate Daniel Ortega won 
Nicaragua's November 5 presidential election after barely 
surpassing the low 35% threshold required to win on the first 
round -- thanks in large part to PLC caudillo Arnoldo Aleman 
and fellow "pacster" Daniel Ortega's lowering the threshold 
for a presidential candidate to win on the first round from 
45% to 35% in 2000.  According to the CSE's preliminary 
results, with 91.48% of the voting tables (JRVs) tabulated, 
Ortega has received about 38% of the vote, below the 42% he 
obtained in the 2001 election, while ALN runner up Eduardo 
Montealegre has obtained about 29% (NOTE: Montealegre would 
have needed at least 33% of the vote to prompt a runoff 
against Ortega.  END NOTE.)  Additional factors that 
advantaged Ortega follow: 
 
--Ortega's patience and determination over the past 16 years 
and his ability to "govern from below," thanks in large part 
to his long-standing power sharing pact with PLC caudillo 
Arnoldo Aleman. 
 
--The division of the anti-Ortega vote into the PLC and the 
ALN.  Robust international and domestic efforts to unite the 
anti-Ortega vote failed, as Rizo's blind ambition to don the 
presidential sash and the desire of "pacsters" Aleman and 
Ortega to maintain their power sharing agreement prevailed. 
(COMMENT: Efforts included our offer starting last year to 
fund joint primaries for Rizo and Montealegre to compete 
 
fairly (Rizo declined, Montealegre accepted); former 
Salvadoran President Calderon Sol's proposed compromise 
(Montealegre would run as Rizo's VP if Aleman and his inner 
circle stepped down from their leadership of the PLC and the 
selection of Assembly candidates); Congressman Burton's 
attempts to persuade Rizo and Montealegre to meet and work 
out a compromise (Rizo bailed, Montealegre appeared); and, 
COSEP's offer to fund a massive poll by a reputable polling 
firm to determine whether Montealegre or Rizo enjoyed the 
most support (Rizo declined and Montealegre accepted and the 
poll results showed Montealegre in the lead).  END COMMENT.) 
 
--The CSE's "selective" issuance and distribution of cedulas 
and temporary voting documents, disenfranchising thousands of 
potential Nicaraguan voters, most of theme likely 
unaffiliated with the FSLN or PLC.  International observers 
and the Nicaraguan Elections Donor Group (EDG) were aware of 
the problem, but the EDG refrained from issuing a communique. 
 Carter Center's COP spoke out on the matter, and the OAS 
Election Observation Mission (EOM) made note of it in its 
August report.  NGO Movimiento por Nicaragua (MpN) was the 
most vociferous, estimating that 100,000 Nicaraguans were 
unable to retrieve their cedulas/temporary voting and 
possibly up to 300,000 Nicaraguans could not complete the 
cedula application process because the CSE simply gave them 
the runaround (they did not have updated birth certificates 
required to apply for the cedula, or the birth certificates 
were flawed and thus invalid).  (COMMENT:  According to an 
ALN contact, a PLC supporter affiliated with the municipal 
electoral council (CEM) in Paiwas, Matagalpa department had 
stored 300 cedulas in his home.  He believes most of them 
belong to ALN supporters who could not vote.  END COMMENT.) 
 
--Higher voter abstention.  Although the final figures are 
not yet in, voter turnout appears to be significantly lower 
than in the 2001 election.  According to M&R pollster Raul 
Obregon, turnout may have been down 8%-10% points. (COMMENT: 
Historically, high voter turnout disfavors Ortega because his 
followers do vote.  Possibly, the confusion among liberals 
and some independents over Montealegre's and Rizo's 
candidacies may have discouraged them from voting at all. 
END COMMENT.) 
 
--Virtually unlimited funds and donations from domestic and 
foreign sources -- including free Venezuelan fertilizer and 
promises of cheap oil and narco-dollars obtained from the 
FSLN-dominated courts' release of narco and arms traffickers. 
 These resources enabled the FSLN to launch by far the most 
robust campaign of all competing parties. 
 
--The FSLN's cash-flush, non-confrontational campaign based 
on "peace and reconciliation," imbued with pastel colors, 
"zero unemployment" and featuring a revised version of 
Beatles' song "Give Peace a Chance."  These efforts may have 
reduced Ortega's image as a "Bogeyman" in the eyes of younger 
voters who were not exposed to the 1980s Sandinista Era. 
 
--The death of MRS presidential candidate Herty Lewites and 
the drying up of his funding sources.  At first, Lewites' 
successor Edmundo Jarquin appeared to hold on to MRS support, 
but his inability to acquire the funds needed to run a robust 
campaign likely prevented this Sandinista dissident party 
from attracting more traditional FSLN voters and perhaps 
prompted some of them to return to Ortega. 
 
--The selection of Liberal running mate (and PLC leader 
Arnoldo Aleman padrino) Jaime Morales Carazo to assuage 
private sector fears that the Ortega of the 1980s would 
return to impede their business interests. 
 
--The positive performance of a number of FSLN mayors and the 
resources at their disposal (materials and vehicles for the 
campaign, etc.). 
 
--The virtual endorsement of Cardenal Obando y Bravo of FSLN 
candidate Ortega and the reluctance of the Catholic Church to 
counter Obando's influence until it was too late to mitigate 
his grip on voters. 
 
--The "reconciliation" of ALN National Assembly candidate 
Salvador Talavera (third on the national list of deputies) 
with Ortega, which the PLC used to convince voters that the 
ALN was "infested" with Sandinista moles and the ALN, not the 
PLC, had "pacted" with Ortega. 
 
--Insufficient traction on Zoilamerica Narvaez' case before 
 
the Inter-American Human Rights Commission (IAHCR) against 
the GON for failing to give her case against stepfather 
Daniel Ortega a fair hearing in the Nicaraguan courts.  The 
IAHCR suddenly postponed Narvaez's hearing in October.  Also 
in October, the GON failed to address -- out of fear and/or 
complicity -- the allegations of a 12-year-old female who 
alleged she was sexually abused by Daniel Ortega. 
 
--Inadequate resources for Miskito Indians opposing the FSLN 
and the branch of the FSLN-dominated indigenous party YATAMA 
to counter well-funded FSLN influence in the North Atlantic 
Autonomous Region (RAAN).  Since the FSLN's success in 
dominating YATAMA, it has moved on to its next project: 
assuming "leadership" of the Moravian Church Council. 
 
ALN'S CAMPAIGN SHORT ON CHARISMA, FOCUS, POLITICAL SAVVY 
- - - - - - - - - - - - - - -  - - - - - - - - - - - - - - 
 
¶4.  (C) The ALN's failure to win the election or position 
itself for a second round cannot be solely attributed to 
Ortega's advantages and the PLC's maliciousness.  At many 
critical points, ALN leadership lacked charisma, political 
judgment, direction and conviction, flaws that endangered the 
new party's integrity, discouraged private sector backing, 
and served to confuse already bewildered liberal voters. 
Montealegre's decision to position turncoat Salvador Talavera 
third on the Assembly candidate slate -- when it was common 
knowledge that Talavera's loyalties had been for sale in the 
past and his moral vulnerabilities made him easy prey for the 
Sandinista-dominated courts -- was a grave error that the PLC 
used to convince voters that "a vote for Eduardo is a vote 
for Daniel." 
 
¶5.  (C) The ALN's belated designation of its campaign 
manager, financier Adolfo Arguello, hurt the party's ability 
to organize and to mount a cohesive and coherent campaign 
that could effectively reach all corners of Nicaragua -- 
including remote rural areas that are traditional PLC 
strongholds.  Many ALN leaders questioned Arguello's 
suitability, citing his lack of political savvy, his 
inability to draw on a large cadre of ALN supporters who 
wished to contribute to the campaign, and his refusal on many 
occasions to follow the advice of foreign consultant Mario 
Elgarresta.  According to the ALN's first-ranking National 
Assembly deputy, Maria Eugenia Sequeira, Arguello refused to 
listen to reason from more politically experienced members of 
the ALN leadership.  For example, Arguello ignored her advice 
that the ALN should climax its campaign with a giant rally 
before the PLC's closure in Managua -- such a move could have 
convinced confused voters that the ALN possessed political 
muscle.  Instead, Arguello insisted on holding a number of 
smaller campaign closures in strategic departments throughout 
the country, while the PLC broadcast its well-attended 
(reportedly including a number of Sandinistas) Managua rally. 
 
 
. . . WHILE PLC'S WELL-ORCHESTRATED DISINFORMATION CAMPAIGN 
CREATES CONFUSION, ERODES SUPPORT FOR ALN/MONTEALEGRE 
- - - -  - - - - - - - - - - - - - - - - - - - - - - 
 
¶6.  (C) Compounding the ALN's leadership and organization 
challenges was PLC candidate Jose Rizo's well-orchestrated 
and well-funded disinformation campaign against  Montealegre 
-- which successfully siphoned off enough votes to prevent 
the ALN candidate from reaching a runoff.  While Montealegre 
appears to have drawn the lions' share of the independent 
vote, including some MRS sympathizers, some of his liberal 
supporters probably abandoned him after the PLC duped them 
into believing that Rizo would defeat Ortega, or that 
Montealegre had resigned.  Preferring to direct the bulk of 
its attacks against Montealegre instead of Ortega, the PLC 
launched its smear campaign with false accusations that 
Montealegre was engaged in acts of corruption during his 
involvement in the issuance of debt bonds (CENIs) to mitigate 
the damage incurred by a rash of bank failures in 2000-2001. 
Other tactics follow: 
 
--Releasing a number of fake polls showing Rizo neck-and-neck 
with Ortega, and Montealegre trailing far behind; 
 
--Using dozens of hours of radio and TV time, many featuring 
PLC Assembly candidate Enrique Quinonez spouting venom at 
Montealegre and insulting a number of ALN's female Assembly 
candidates. 
 
--Publicizing a meeting between Rizo and Congressman Burton 
 
to persuade voters that the U.S. considers Rizo a favorable 
candidate; 
 
--Persuading Oliver North that Rizo could defeat Ortega and 
that the USG was "wrongly endorsing" rival Montealegre, 
convincing North to pen an op-ed to this effect and visit 
Managua to support Rizo's candidacy; 
 
--Parading the U.S. flag, seal, and photos of Oliver North 
with Rizo throughout the traditionally PLC countryside to 
demonstrate to confused liberals that Rizo is the "gringo" 
candidate; 
 
--Releasing the day before the campaign blackout a falsified 
letter from Montealegre stating that he had withdrawn his 
candidacy; and, 
 
--Mounting a massive radio blitz announcing that the U.S. 
Embassy in Managua had pressed Montealegre to resign. 
 
FINANCIAL BACKING - TOO LITTLE TOO LATE 
- - - - - - - - - - - - - - - - - - - - - 
 
¶7.  (C) The lag in cash flows also hurt the ALN's ability to 
organize, mobilize, and court and maintain enough of the 
Liberal vote.  Notorious for hedging its bets by funding all 
potential presidential victors, including candidate Ortega, 
Nicaragua's private sector likely acted no differently this 
time around.  Most financiers stalled for months, 
rationalizing that they would wait for Carlos Pellas' "white 
smoke" or the latest poll before determining which candidate 
to back -- even though reputable polls showed clearly that 
ALN candidate Montealegre, not PLC competitor Rizo, was the 
only viable candidate to prevent an Ortega victory. 
 
¶8.  (S) For months, Pellas insisted that the ALN and PLC must 
unite or he would back neither, while probably contributing 
to Ortega's campaign for "economic life insurance."  (NOTE: 
According to many contacts, including CSE insider Rodrigo 
Barreto, Pellas contributed to Ortega's campaign in addition 
to helping both Rizo and Montealegre.  END NOTE.)  By the 
time chamber of commerce umbrella association COSEP endorsed 
Montealegre in mid-October, and the pace of funding 
increased, it was late in the game.  Similarly, the Taiwanese 
government hemmed and hawed over backing Montealegre until 
the release of the COSEP poll showing Montealegre in the lead 
over Rizo, while some Taiwanese businessmen here were 
influenced by PLC campaign fundraiser Gilberto Wong to back 
Rizo. 
 
JUSTICE IN THE SLOW LANE 
- - - - - - - - - - - - - 
 
¶9.  (C) The lack of traction on pending criminal and civil 
cases in the United States against PLC leader/convicted money 
laundering Arnoldo Aleman also worked against the ALN, as it 
emboldened the PLC and weakened the ALN's (and our) argument 
that PLC leadership was corrupt and no longer viable in the 
eyes of the U.S. government.  Similarly, DOJ's finding that 
 
it did not possess enough evidence to indict both FSLN and 
PLC Nicaraguan Supreme Court Justices for money laundering 
and abetting narco-traffickers (reportedly on the grounds 
that there was an insufficient link of these activities to 
the United States) struck down an opportunity to further 
expose Nicaraguans to the corrupt complicity of Aleman and 
Ortega through the FSLN/PLC-dominated judiciary. 
 
¶10.  (C) Despite the setbacks, the ALN cut its teeth on this 
election, and in the course of a year, evolved from a minute 
caucus in the Assembly to Nicaragua's second-strongest 
political force -- displacing the PLC's renowned machine and 
reducing Aleman's influence.  The ALN's showing second offers 
Nicaragua a new political dynamic, as it will make the new 
legislature more pluralistic and less subservient to the 
Aleman-Ortega pact.  Montealegre, who is poised to gain an 
Assembly seat and may become its next president, is 
determined to lead a constructive, democratic, and 
intelligent opposition that promises to legislate with the 
needs and aspirations of the Nicaraguan people in mind. 
 
COMMENT 
- - - - 
 
¶11.  (C) For the most part, we succeeded in our efforts to 
ensure that Nicaraguans held free, fair, and transparent 
elections, with the caveat that the CSE has not yet released 
 
the final numbers.  Although the election outcome did not 
meet all of our objectives, without our concerted efforts -- 
including training over 50,000 party poll watchers, 
supporting robust get-out-the vote and remembrance campaigns, 
and backing OAS and domestic observation missions -- the 
elections would have been a true disaster.  And, while we do 
not believe the elections were adequately inclusive because 
tens of thousands of disenfranchised Nicaraguans could not 
vote, we helped thousands of others obtain the required 
documentation to go to the polls. 
 
¶12. (C) Our efforts also encouraged the emergence of two 
democratic forces, one on the right and one on the left, 
political alternatives that responded to the call of many 
Nicaraguans seeking to build a modern and prosperous 
democracy based on rule of law and justice.  Combined, these 
two parties will probably occupy over 30 Assembly seats and 
can serve as a solid bloc for change.  Finally, we helped 
empower a number of Nicaragua's democratic civil society 
groups, including newcomer Movimiento por Nicaragua (MpN), as 
well as the more seasoned Etica y Transparencia, Hagamos 
Democracia, and IPADE.  While MpN leaders are disappointed 
with Ortega's victory, they are also encouraged by the 
emergence of the new political alternatives and are 
determined to partner with them to meet the challenges and 
exploit the opportunities that lie ahead. 
TRIVELLI