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C O N F I D E N T I A L SECTION 01 OF 04 MANAGUA 000155 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR WHA/CEN 
 
E.O. 12958: DECL: 01/19/2016 
TAGS: PREL PGOV PINR KDEM NU
SUBJECT:  EX-SANDINISTA VP SERGIO RAMIREZ: RECENT ORTEGA 
ACTIONS DO NOT AUGER WELL FOR NICARAGUA 
 
REF: A. MANAGUA 0140 
     ¶B. MANAGUA 0106 
     ¶C. 2006 MANAGUA 2059 
 
Classified By: Ambassador Paul A. Trivelli. Reasons 1.4 (B,D). 
 
¶1.  (C) Summary:  Sergio Ramirez, a renowned author and Vice 
President during the 1980s Sandinista National Liberation 
Front (FSLN) era who is estranged from the FSLN, paints a 
discouraging map of the course the new Ortega government has 
set over the past week.  He recently warned the Ambassador 
that President Ortega is bent on a course to transform 
Nicaragua's democratic system to mirror Venezuela's 
authoritarian regime.  He believes that most of the Ortega 
government's ministries will serve as mere "shells" and 
exercise little authority, while a shadow government 
controlled directly by Ortega and his inner circle will call 
the shots via the tutelage and funding of the Chavez regime. 
End Summary. 
 
Ortega Incapable of Governing, Chooses Loyalty over 
Capability -- with Some Exceptions 
- - - - - - - - - - -  - - - - - - - - - - - - - - - - - - - 
- - - - - - - - 
 
¶2.  (C) On January 16, Sergio Ramirez, a renowned author and 
Vice President during the 1980s Sandinista era, provided 
Ambassador, DCM, and PolCouns a discouraging prognosis of the 
course the new Ortega government has set over the past week. 
Ramirez -- who has long since broken with Daniel Ortega and 
who first endorsed the Sandinista Renovation Movement (MRS) 
presidential candidate and closer to election day called for 
Nicaraguans to rally around Nicaraguan Liberal Alliance 
candidate Eduardo Montealegre - - asserted that President 
Ortega is "incapable of running a government."  He coincided 
with the Ambassador's description of typical Sandinista 
traits: informality, improvisation, disorganization, 
tardiness, and a strong bent for secretiveness. 
 
¶3.  (C) Ramirez remarked that most of Ortega's cabinet picks 
are lackluster: Central Bank President Antenor Rosales is a 
"fifth-rate" official, new Minister of Environment Amanda 
Lorio is Ortega spouse Rosario's personal foot masseuse, and 
Minister of Health Maritza Quant's main qualification is her 
"handling" of fellow Sandinista union leader/National 
Assembly deputy Gustavo Porras' medical clinics, claimed 
Ramirez.  Ramirez noted that one encouraging exception in 
Ortega's choices is Arturo Cruz, Jr., who will represent the 
GON in Washington.  According to Ramirez, shortly after his 
election, Daniel Ortega consulted with President Carter 
regarding a suitable choice.  Carter raised the matter with 
some members of the Carter Center's "Friends of the 
Democratic Charter," including Ramirez and Antonio Lacayo. 
The consensus was that Cruz, the "man for all seasons," would 
be an excellent choice.  (Note: This version of Cruz's 
selection has been confirmed to us by Cruz and others as 
well.)  At this juncture, Ortega appeared to seek a 
pluralistic cabinet that would promote unity and 
reconciliation as he had promised during his campaign, but 
events over the past week suggest Ortega is now taking 
another course of action, remarked Ramirez. 
 
Red Flags: Efforts to Control Police and Military 
- - - - - - - - - - - - - - - - - - - - -  - - - - 
 
¶4.  (C) Ramirez concurred with the Ambassador that President 
Ortega's recent attempts to secure direct control over the 
military and police and emasculate the powers of the Defense 
and Government Ministries are disconcerting.  Ortega's 
vigorous efforts to consolidate his power through drastic 
changes in Nicaraguan legislation (Laws 290 and 228) present 
a stark contrast to his apparent delays and bumbling in 
standing up his cabinet, remarked Ramirez, who added that 
Ortega appears to be concurrently expanding the central 
government apparatus, while removing a number of government 
entities from ministries and placing them under his direct 
control through new "councils" that will report to Ortega and 
oversee the ministries.  Ramirez warned that Ortega intends 
to directly oversee defense, security, and foreign affairs 
interests; the Ministers of Defense, Government, and Foreign 
Affairs will serve as mere placeholders.  He concurred with 
reports we have received from other interlocutors that Lenin 
Cerna - "the fixer" - - will play an "inevitable" role in the 
 
MANAGUA 00000155  002 OF 004 
 
 
Ortega government, even though Rosario Murillo clashes with 
him. 
 
Rosario Reigns Supreme 
- - - - - - - - - - - - 
 
¶5.  (C) Continuing on the subject of Rosario, Ramirez noted a 
shift in the Ortega-Rosario relationship, citing the fact 
that she spoke before her husband at Ortega's popular 
inaugural event held at the Plaza La Fe.  This breach of 
protocol was remarkable and signals her growing influence, 
opined Ramirez.  (Comment:  Rosario's sway over Ortega is 
evident, both in public and private venues.  Ortega's 
reported health problems and the information Rosario holds 
over him on his reported pedophilic inclination may explain 
her dominance.)  Ramirez predicted that Rosario will command 
considerable influence through her position as 
"communications director." 
 
Chavez Calls the Shots 
- - - - - - - - - - - - 
 
¶6.  (C) For Ramirez, Venezuelan President Hugo Chavez "calls 
the shots" in the new Ortega government, remarking that 
Iranian President Ahmadinejad's recent visit to Managua was 
likely hosted by the new GON on Chavez' "instructions."  As 
for ALBA, Chavez' counteroffer to CAFTA, nobody has seen the 
document and it will require a "careful peeling away the 
leaves of this ALBA 'cabbage' to get to the heart of it," he 
said.  (Note:  We have asked Foreign Minister Samuel Santos 
to provide a copy of the document.) 
 
¶7.  (C) Ramirez warned that while most Nicaraguans are 
focusing on Venezuelan President Hugo Chavez' many offers of 
assistance to their country, they do not realize that sudden 
cash inflows could spur a 2%-3% inflation spike, a phenomenon 
that in turn could create panic, as many Nicaraguans and 
their trade partners would likely fear a return to the triple 
digit inflation of the 1980s. 
¶8.  (C) Ramirez concurred with the Ambassador that Chavez' 
"philanthropic" treatment of Nicaragua is clouded by the fact 
that, while Chavez has offered Ortega seemingly attractive 
loan terms to purchase Venezuelan oil, he is also lobbying to 
raise world oil prices.  High oil prices especially hurt the 
world's poor, the very people Chavez claims he champions.  On 
the other hand, Chavez feels pressed to maintain high world 
oil prices or risk losing his "revolutionary project," opined 
Ramirez.  As for building a refinery in Nicaragua and 
possibly a trans-coastal pipeline, Ramirez predicted that 
Chavez will use the refinery's excess production to help 
supply China's growing energy needs. 
 
The Decline of a Sandinista Alternative 
- - - - - - - - -  - - - - - - - - - - - 
 
¶9.  (C) Ramirez termed the Sandinista Renovation Movement's 
(MRS) decline "an unfortunate turn of events,' citing the 
recent expulsion of MRS National Assembly Deputy Juan Ramon 
Jimenez from the party after Jimenez reportedly colluded with 
rival FSLN and PLC parties to gain a seat in the Assembly's 
Board of Directors (Junta Directiva) behind the backs of his 
party's formal negotiations to select another MRS lawmaker. 
Ramirez, who was surprised by Jimenez' apparent betrayal, 
commented that Jimenez is a strong, capable, and respected 
leader in Carazo department.  He conjectured that the FSLN 
may have offered to help Jimenez obtain medical treatment for 
his wife who is seriously ill with cancer.  (Note: Political 
parties need at least four National Assembly seats to form a 
caucus and receive the corresponding administrative 
benefits.) 
 
¶10.  (C) Comment:  On the evening of January 16, MRS caucus 
leader Monica Baltodano told the press that, while Fernandez 
may have been expelled from the MRS, he remains in the MRS 
National Assembly caucus.  Jimenez has previously publicly 
asserted he wishes to remain within the party, but on January 
17 he indicated his plans to be "independent" instead.  The 
FSLN is renowned for its ability to target weak political 
opponents and buy or blackmail them to the point that they 
bend to the FSLN's wishes.  Salvador Talavera's desertion 
(Reftel) from the ALN to the Sandinista camp is an example of 
this tactic.  End Comment. 
 
 
MANAGUA 00000155  003 OF 004 
 
 
Keeping the Opposition off Balance 
- - - - - - - - - - - - - - - - - 
 
¶11.  (C) In addition to the MRS crisis, the continuing spat 
between the Liberal Constitutional Party (PLC) and the 
Nicaraguan Liberal Alliance (ALN) advantages the Ortega 
regime, opined Ramirez.  The FSLN is taking advantage of the 
opposition's disarray to bombard the National Assembly with 
alarming proposed revisions to Laws 290 and 228.  If 
promulgated, these changes would further consolidate the 
FSLN's power by allowing Ortega to directly control the Armed 
Forces and the National Police, as well as a number of 
socially-oriented state entities, warned Ramirez. 
 
Low Regard for Nica Private Sector 
- - - - - - - - - - -  - - - - - - 
 
¶12.  (C) In response to the Ambassador's query regarding the 
possible role Nicaragua's private sector could take in 
ensuring Ortega does not stray off the democratic path, 
Ramirez offered mostly disdain for what he called "a bunch of 
rent-seeking individuals," who place their narrow personal 
business interests above anything else.  He contrasted 
Nicaragua's politically "shortsighted" private sector with 
the its more mature counterparts in other Central American 
countries, especially El Salvador, where the private sector 
rallied around one candidate (Saca) and provided him the 
financial backing he needed to win.  Ramirez also warned that 
the short-sighted Nicaraguan private sector may be tempted in 
the near future to support Ortega's reasonable economic 
policies in exchange for turning a blind eye towards creeping 
authoritarianism. 
 
Holding Ortega's Feet to the Fire on Democracy 
- - - - - - - - - - - - - - - - - - - - - -  - - 
 
¶13.  (C) Concurring with the Ambassador that Ortega may not 
be content with merely assuming the leadership of the new 
government, but instead, attempt to transform the democratic 
system into an authoritarian regime, Ramirez noted the 
important role of international donors, who must hold Ortega 
accountable to his campaign promises that he would govern 
democratically.  It is not enough for the Ortega government 
to improve economic indicators and adhere to IMF standards. 
For example, if Ortega begins to erode basic freedoms and 
institutions, or restricts the media, donors should tie their 
assistance to the GON's remedying these behaviors. 
 
¶14.  (C) Ramirez outlined three poles of influence that can 
help check Chavez' influence on Ortega: the EU, Latin 
American democratic left-leaning countries, and other Central 
American countries.  As major donors, the EU and a number of 
member countries should tie their assistance to the GON's 
continuation along a democratic path, while the leftist 
governments of Brazil, Chile, Uruguay, and Argentina could 
help offer Ortega an alternative to the Chavez' 
populist-authoritarian model.  Similarly, as neighbors, the 
other Central American countries can "corral" Ortega within a 
democratic context and regional instruments such as CAFTA and 
SIECA.  Ramirez cited Honduras President Zelaya and 
Panamanian President Torrijos as leaders who "are on the good 
side of Ortega," and can influence him, while Ortega 
considers Saca his adversary, Guatemalan President Berger is 
"on his way out," and Costa Rican President Arias suffers 
longstanding personal issues with Ortega. 
 
U.S. Approach on the Mark, Vatican off Base 
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¶15.  (C) Ramirez lauded the USG's approach towards President 
Ortega thus far, terming President Bush's call to Ortega days 
before the inauguration an "excellent move."  He suggested 
that an Ortega visit to Washington "sooner rather than later" 
would also be effective.  Ramirez criticized the Vatican's 
passive stance vis a vis Ortega confident Cardenal Obando y 
Bravo, decrying Obando's unabashed ingratiation before 
President Chavez, including seeing him off at the airport. 
He added that many Nicaraguans were insulted by the hypocrisy 
of the Cardinal's inaugural prayer to combat corruption, 
while one of Ortega's "guests of honor" -- Liberal 
Constitutional Party (PLC) caudillo/convicted money launder 
Arnoldo Aleman -- looked on. 
 
 
MANAGUA 00000155  004 OF 004 
 
 
Municipals Elections - or Bust 
- - - - - - - - - - - - - - - - 
 
¶16.  (C) Ramirez warned that the FSLN-PLC pact will thrive 
under the Ortega government; pact leaders Ortega and Aleman 
will pre-arrange the 2008 municipal election results to favor 
their candidates, as they did in the 2005 national elections. 
 Thanks to Supreme Electoral Council President Roberto Rivas, 
the FSLN and PLC probably stole four to five Assembly seats 
from the ALN and probably two from the MRS, calculated 
Ramirez. 
 
Cuban Scenarios 
- - - - - - -  - 
 
¶17.  (C) Touching on Cuban leader Fidel Castro's apparent 
imminent death, the Ambassador outlined three possible 
scenarios:  Raul Castro will remain in power and maintain the 
party line; Raul Castro will remain at the helm, but as a 
pragmatist, he will gradually open the economy and implement 
other modest reforms; or, Cuba will experience a 
transformative change of government in response to popular 
cries for democracy.  Ramirez predicted that Raul Castro and 
a number of fellow Army cronies will likely remain in power, 
but because of their pragmatism and business interests, they 
will be inclined to take steps to open the Cuban economy. 
 
Comment 
- - - - 
 
¶18.  (C) Ramirez' assessment of the current political 
dynamics tracks with the views of a number of other 
interlocutors, including third country ambassadors resident 
in Managua (reftels).  Since our meeting with Ramirez, 
pressure from opposition parties, the media, civil society, 
and the diplomatic community thankfully prompted the FSLN to 
"reconsider" some of its proposed modifications to Laws 290 
and 228.  Under these latest modifications, the supervision 
of the Police will remain under the Ministry of Government. 
However, the FSLN has not retracted the revision mandating 
the formation of "advisory councils" reporting directly to 
the President and "guiding" ministerial operations, as well 
as the establishment of popular community councils that will 
"orient" the National Assembly committees and inform the 
national councils.  How Nicaragua will pay for and organize 
these new councils is unclear, but if the Assembly accords 
Ortega the authority to create them, he will be well on his 
way towards establishing a parallel government network, which 
would facilitate his apparent efforts to transform 
Nicaragua's political model to one more to his liking -- and 
control. 
TRIVELLI