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C O N F I D E N T I A L SECTION 01 OF 03 MANAGUA 002608 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR WHA 
 
E.O. 12958: DECL: 11/28/2016 
TAGS: PREL PGOV PINR ECON EAID KDEM NU
SUBJECT: A/S SHANNON'S MEETING WITH NICARAGUAN 
PRESIDENT-ELECT DANIEL ORTEGA 
 
Classified By: Ambassador Paul Trivelli for reasons 1.4 (b and d) 
 
¶1. (C) Summary: In his cordial yet measured meeting with WHA 
Assistant Secretary of State Thomas Shannon, Nicaraguan 
President-elect Daniel Ortega of the Sandinista National 
Liberation Front (FSLN) stated his desire for "productive 
relations" with the USG.  Ortega discussed his plans to fight 
poverty and identified narcotrafficking, terrorism, and trade 
as items of "mutual concern."  The FSLN will "work" with 
CAFTA while exploring trade relations with the European 
Union, Mercosur, and Venezuela and focusing on regional 
unity.  Ortega plans to maintain relations with Taiwan while 
"opening communications" with China.  Responding to A/S 
Shannon's comments on the need to strengthen democracy to 
alleviate poverty, Ortega stated that the FSLN will continue 
to promote parliamentary style government and will not block 
reforms passed in 2005 that transfer powers from the 
executive to the legislature.  However, he would consider 
delaying their implementation if needed to hold a 
consultation process with the Nicaraguan people on deeper 
reforms.  End Summary. 
 
¶2. (C) In general, the one-hour meeting -- which began and 
concluded with press photo ops -- was cordial, with Ortega 
emphasizing shared goals and his desire to avoid 
confrontation and foster "direct understanding" and 
cooperation with the United States.  Before the meeting, FSLN 
Foreign Relations officer Samuel Santos reminded poloff that 
Ortega's spouse Rosario Murillo is his Chief of Staff and "in 
charge" of the proceedings.  FSLN deputy and National 
Assembly vice president Rene Nunez joined the meeting at the 
last minute.  Santos commented that the FSLN will back Nunez 
to be the next Assembly president in 2007. 
 
¶3. (C) The meeting took place in the conference room of the 
FSLN Secretariat.  The room is painted with bright, gaudy 
designs and astrological symbols (Murillo's preference). 
Participants sat around a large glass conference table in 
roomy lavender-colored wicker chairs that forced us to lounge 
back or slouch forward.  Santos and Murillo appeared eager 
and anxious that the encounter occur flawlessly.  They 
arrived early to attend to every detail, and Ortega and Nunez 
entered precisely at 11:00 a.m.  (Comment: Notably, Ortega 
and Murillo -- known for making people wait (a la Fidel 
Castro), sometimes for hours -- respected A/S Shannon's tight 
schedule and began the meeting on time.  End Comment.) 
 
FSLN Will Focus on Poverty, Confidence in the New Government 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 
 
¶4. (C) According to Ortega, the alleviation of poverty is his 
government's first priority.  The Nicaraguan people demand 
jobs and access to health and education.  He credited past 
governments with improving Nicaragua's macroeconomic 
standing, but added that the vast majority of Nicaraguans 
still live in poverty, which endangers democracy.  Ortega 
noted that the poverty of the masses has contributed to 
emigration to Costa Rica and the United States.  "Your wall 
is not a solution," he stated. 
 
¶5. (C) Ortega admitted that before the elections, the FSLN 
was fighting to win the confidence of the public and the 
international community.  He claimed victory in this 
struggle, noting that Nicaragua has not suffered from massive 
capital flight or a cutoff of new investment. 
 
Relations with the USG 
- - - - - - - - - - - - 
 
¶6. (C) Throughout the meeting, Ortega repeatedly stated his 
desire to enjoy productive relations with the USG and 
maintain "frank and direct" communication.  He specifically 
mentioned the mutual interests of combating narcotrafficking, 
securing borders (related to narcotrafficking), and fighting 
against terrorism, as well as promoting regional integration 
as points of mutual concern. 
 
CAFTA, Regional Integration, and Trade Agreements 
- - - - - - - - - - - - - - - - - - - - - - - - - 
 
¶7. (C) Ortega pledged to continue to "work" with the U.S. on 
CAFTA, highlighting the fact that FSLN National Assembly 
deputies took the lead on approving implementing legislation. 
 He acknowledged that CAFTA is a key element of Central 
American integration, which will be a priority for his 
administration.  Ortega said that he and the FSLN had worried 
about "economic asymmetries" between the U.S. and Nicaragua 
during the negotiation of CAFTA.  However, he said the FSLN 
eventually supported CAFTA because of its importance to 
Nicaragua's private sector.  Ortega explained that after 
completing regional integration with Nicaragua's Central 
American neighbors, he would pursue Central American unity 
with the Caribbean, and then the Americas as a whole.  Ortega 
commented that the unity of the Americas depends on the "will 
of powerful countries, such as the United States."  In 
addition to CAFTA, the FSLN will seek trade agreements with 
Venezuela (ALBA), Mercosur, and the European Union. 
 
Relations with China, Taiwan, and Colombia 
- - - - - - - - - - - - - - - - - - - - - - 
 
¶8. (C) Ortega asserted that the FSLN government will not 
suspend relations with Taiwan, as maintaining relations will 
send a positive message of stability during the transition 
period.  Nevertheless, the FSLN has "opened communications" 
with Mainland China.  Shifting back to Latin America, Ortega 
opined that the Colombian government and the FARC should 
resolve Colombia's civil war through negotiations. 
 
A/S Shannon: USG Open to a Constructive Dialogue 
- - - - - - - - - - - - - - - - - - - - - - - - - 
 
¶9. (C) A/S Shannon thanked Ortega for the meeting and hoped 
it would contribute to a constructive dialogue between 
Nicaragua and the U.S., especially regarding our shared 
agenda:  strengthening democracy, consolidating institutions, 
and attacking social problems such as poverty and inequality. 
 A/S Shannon underscored the USG's commitment to work with 
Nicaragua to confront these problems, expand its economy, and 
use bilateral assistance programs and international financial 
institutions to help Nicaragua's poorest and neediest. 
Shannon said U.S. relations with Nicaragua would take place 
within a framework of support for democracy and democratic 
institutions.  He noted that we were intent on identifying 
points of agreement with the new government, but expected to 
be able to speak in a frank and direct fashion regarding 
points of disagreement.  Ortega agreed. 
 
¶10. (C) Referring to speeches given by President Bush and 
Secretary Rice, Shannon said that the democracies of South 
and Central America face a common challenge: showing that 
their governments could deliver the benefits of democracy to 
the poorest, neediest citizens in their countries.  Saying 
"democracy without social content will not succeed," the 
Assistant Secretary noted that investment in people is key to 
opening doors to economic opportunities.  He also referred to 
our focus on the Millennium Challenge Compact (MCC), now 
operating in two of Nicaragua's poorest departments, as an 
example of how bilateral cooperation improves infrastructure 
and increases market access for Nicaraguan exports. 
 
¶11. (C) A/S Shannon commented that Central American and 
hemispheric integration is a shared goal, citing CAFTA's 
contribution to integration and economic development.  The 
U.S. is an integral part of the Americas, and we will work to 
deepen our relationship with Latin America on all levels, 
through government ties as well as civil society.  This would 
be especially true for Nicaragua, Shannon said, where we 
would move closer to civil society and democratic political 
actors.  A/S Shannon encouraged Ortega to resolve 
disagreements through dialogue. 
 
FSLN Prefers "Parliamentary" Form of Government 
- - - - - - - - - - - - - - - - - - - - - - - - 
 
¶12. (C) Responding to A/S Shannon's comments regarding 
democratic development, Ortega observed that, despite the 
fact that the FSLN wrote the 1987 constitution that accorded 
strong powers to the executive branch, the FSLN now believes 
that a "parliamentary system"   offers a greater voice to the 
people.  "Strong presidents have not served Central America 
well," he argued.  For that reason, the FSLN voted for 
constitutional reforms in 1995 and 2005 that effectively 
redistributed power from the executive to the legislative 
branch. 
 
¶13. (C) Ortega commented that FSLN deputies will not vote to 
continue the "Ley Marco" (Framework Law) which suspended the 
2005 reforms until January 2007.  However, he conceded that 
his government would consider delaying the implementation of 
these reforms for up to a year if such a postponement would 
lead to a more "profound consultation" with the Nicaraguan 
people.  The FSLN will also seek to grant more powers to the 
local (municipal) governments through citizen assemblies, 
inviting the participation of women, youth, farmers, 
producers, and other groups to provide input in the formation 
of new legislation, and to reduce paternalism, Ortega 
claimed.  He stated that more participatory, parliamentary 
government, emulating the Swiss model, will make the 
legislative process more transparent and contribute to 
economic development. 
 
A Message From Chavez 
- - - - - - - - - - - 
 
¶14. (C) At the close of the meeting, Ortega asked to speak 
with Shannon privately.  Ortega said that he had spoken with 
Chavez earlier in the day, and had told Chavez that he would 
be meeting with the Assistant Secretary.  According to 
Ortega, Chavez said, "Please give my regards to Shannon, and 
tell him that after Sunday's elections we can think about how 
we can improve our relations."  Ortega said, "He is sincere; 
he means it."  Shannon responded, "President Chavez knows 
what he has to do to improve relations.  He is the author of 
the present confrontation.  Tell President Chavez that we 
look forward to hearing from him." 
 
FSLN Participants 
- - - - - - - - - 
 
President-elect Daniel Ortega 
Chief of Staff Rosario Murillo 
Foreign Relations Officer Samuel Santos 
Deputy Rene Nunez 
 
USG Participants 
- - - - - - - - - 
 
A/S Thomas Shannon 
Ambassador Paul Trivelli 
DCM Peter Brennan 
Political Counselor Victoria Alvarado 
Political Officer Timothy Smith (note taker) 
 
This cable was cleared by Assistant Secretary Shannon. 
TRIVELLI