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C O N F I D E N T I A L SECTION 01 OF 05 MANAGUA 001067 
 
SIPDIS 
 
SIPDIS 
 
WHA/CEN, DRL, NEA, USAID FOR AA/LAC 
 
E.O. 12958: DECL: 04/25/2017 
TAGS: PGOV PHUM PINR PREL KDEM NU SNAR IR
SUBJECT: ORTEGA,S FIRST 100 DAYS -- AUTOCRATIC TRENDS DRAW 
CONCERN 
 
REF: A. MANAGUA 1028 
     ¶B. MANAGUA 0583 
 
Classified By: Ambassador Paul A. Trivelli.  Reasons 1.4 (B,D). 
 
¶1.  (C) Summary: In its first 100 days, President Ortega's 
government was characterized by a blur between party and 
state; autocracy and secrecy; dependency on Chavez; disregard 
for law and human rights; the dismissal of thousands of 
government employees; and, a pointed effort to financially 
"starve" independent media and threaten certain foreign 
business interests.  The administration's most resounding and 
uncontested success was its refusal to back the Japanese on 
whaling, while the downtick in electrical blackouts came at a 
steep price: political and economic bondage to Chavez.  The 
announcement of free health and education looked good on 
paper, but these sectors lack the required infrastructure, 
qualified personnel, and material resources to provide 
adequate services.  The National Police's flawed interception 
of a Mexican drug cartel was partly due to its failure to 
coordinate with the DEA.  We also note a downturn in 
cooperation from airport, immigration, and customs 
authorities in terms of access and information sharing. 
 
¶2.  (C) Ortega exploited every available media opportunity to 
laud Chavez and their common allies Cuba and Iran, while he 
criticized the United States for being the root cause of 
narcotrafficking, failing to compensate Nicaragua for mining 
its harbors in the 1980s, violating human rights in Iraq and 
Guantanamo, and releasing Posada Cariles on bond.  Countries 
on good terms with the United States also came under fire, 
even Brazil for having the "moxy" to cooperate on ethanol. 
The rudderless opposition was increasingly vocal, while 
Nicaragua's frightened business elite curried Ortega's favor 
and avoided confrontation.  Signs emerged that left and 
right-leaning civil society and political leaders are 
starting to coalesce to counter Ortega's authoritarian 
tendencies and apparent ambitions to turn Nicaragua into an 
autocratic, populist regime.  Sandinista dissidents tended to 
be the most vigorous critics of the government, while to 
Ortega's delight, Liberals spent most of their time 
bickering.  The opposition faces a foe flush with Chavez 
petrodollars, thus far free from the scrutiny of the National 
Assembly -- the only partially independent government 
institution remaining.  End Summary. 
 
Whales the Most Solid Beneficiaries 
- - - - - - - - - - - - - - - - - - 
 
¶3.  (C) During its first 100 days, Ortega's government was 
characterized by the blur between party and state; a close 
association with the Chavez axis; autocracy and secrecy; 
disregard for rule of law and human rights; the dismissal of 
thousands of government employees; and, a pointed effort to 
financially "starve" independent media and threaten certain 
foreign (and domestic) business interests.  Likely, Ortega's 
most resounding and uncontested success was his refusal to 
back the Japanese on whaling.  The downtick in electrical 
blackouts was welcome, but came at a price: the Venezuelan 
diesel burning gensets produce some of the country's most 
costly power, whether or not Nicaragua has to pay for them. 
While the government decided to negotiate a new IMF deal, 
Ortega also declared that Nicaragua will be "IMF free" within 
five years through a home grown, Chavez-financed "Zero 
Poverty" initiative, whose centerpiece is a project that 
provides chicks and a pregnant cow and pig to poor families. 
 
¶4.  (C) The new government's decision to reduce senior-level 
government official salaries and offer free health and 
education for all citizens sounded good on paper, but thus 
far has produced dubious results.  Cynical Nicaraguans claim 
that Ortega's cuts in the salaries of senior officials will 
also force out high-level civil servants, who do not support 
the Sandinista National Liberation Front (FSLN).  Those who 
remain will ultimately receive bonuses or supplemental FSLN 
salaries behind the scenes.  (Note: This was a common 
practice during previous governments.)  Skeptics also note 
that inadequate infrastructure, insufficient personnel, and a 
scarcity of a number of basic medicines make Ortega's 
promises for free education and health care ring hollow. 
 
¶5.  (C) The spate of education and health worker protests for 
 
MANAGUA 00001067  002 OF 005 
 
 
higher wages and the Ortega administration's heavy-handed 
response in some cases, also drew well-merited fire from 
human rights organizations.  In its 100-day report, the 
Nicaraguan Human Rights Center (CENDIH) -- a left-leaning, 
traditionally pro-Sandinista human rights NGO -- lambasted 
Ortega for allowing an armed mob led by a Cuban-Nicaraguan to 
raid one of the secondary schools and physically remove its 
besieged director while the National Police looked on. 
Similarly, the inaction of the Ortega government in 
responding to the right-leaning Permanent Human Rights 
Commission's (CPDH) repeated pleas for protection after a 
number of its leaders received death threats caused CENIDH to 
question the new government and prompted it to file an appeal 
on behalf of the CPDH before the OAS Inter-American Human 
Rights Commission (IAHRC).  Ortega's insistence on running 
the Presidency from FSLN headquarters, which is also his 
private residence, drew considerable fire as well. 
 
¶6.  (C) Opposition media continued to feel the heat.  As 
government-sponsored advertising dried up, some media outlets 
were forced to lay off employees, including journalists.  In 
President Ortega's latest public appearance the evening of 
April 23, he launched a five-minute tirade against "the other 
media, we know who they are, who are guilty of censorship and 
attempting to limit freedom of expression."  He praised all 
Nicaraguan television stations for covering the event, except 
for one, Channel 2, which he did not mention by name, but 
blasted for refusing to broadcast unedited versions of 
Ortega's increasingly frequent and long diatribes. 
 
Daniel Slips Some in the Polls 
- - - - - - - - - - - - - - - - 
 
¶7.  (C) According to an M and R poll released on April 24 
(septel), President Ortega's popularity slipped somewhat in 
comparison to the results of a February Cid Gallup poll.  In 
the April poll, 42.5% of the respondents opined that that 
Ortega is leading the country in the right direction, down 
from 57% in February.  While 27.9% believe the president's 
performance is good to very good, 63.7% believe he is doing a 
fair to terrible job.  First Lady Rosario Murillo received 
lower marks: only 22.7% believed her performance is good-very 
good.  Over 64% of the respondents either do not support or 
have their doubts about the government.  Over 50% of the 
April respondents questioned Ortega's authoritarianism, 
including 26.6% of the Sandinista respondents.  About 78% 
rejected Ortega's substitution of the state seal with a 
psychedelic party-based emblem, 77.8% opposed presidential 
reelection, 73.3% disapproved of Cardinal Obando's 
participation in the Ortega government, and 70% think Ortega 
has not delivered on his campaign promise to reduce 
unemployment. 
 
Economic Picture, Business Climate 
- - - - - - - - - - - - - - - - - - - 
 
¶8.  (C) As promised, Ortega has made few changes to fiscal 
and monetary policy since taking office, and the government, 
of its own volition, is negotiating a new program with the 
IMF.  By most accounts, consumer demand has remained strong, 
tax receipts are up, and people continue to deposit money 
into their bank accounts.  Large investments announced before 
the elections, most noticeably ITG/Cone Denim's $100 million 
textile plant, are going forward.  Exports continue to grow 
in number and volume as the result of CAFTA and Central 
American economic integration.  Ortega's presence is felt on 
his "Zero Hunger" program (which has yet to take shape), 
"free education and health care," and forging cooperative 
agreements and off-budget financing with "new friends." 
(Note: Free and universal education and health care systems 
have been in place in Nicaragua for years.  The difference 
now is that the Ortega government has eliminated the system 
of supplemental payments for school supplies, medicines, 
etc.). 
 
¶9.  (C) This otherwise bright picture contrasts with the 
consistent drum beat of Ortega's political message that 
liberal economic policies have not worked and that the role 
of government must be enhanced.  Ortega compares the 
fraternal, socialist nature of his relations with Venezuela, 
Cuba, Bolivia, and Iran with the self-interested, 
capitalistic nature of the United States.  This has been 
 
MANAGUA 00001067  003 OF 005 
 
 
coupled with an agency-by-agency review of the activities of 
the previous administration to drum up accusations of 
corruption and discredit "neoliberalism."  Highly educated 
technocrats who do not support the FSLN have been forced out 
of key positions in economic ministries and replaced by party 
hacks.  Major government contracts with the private sector 
have come under review, especially foreign companies in the 
energy sector, with frequent revelations to the press that 
one or the other contract is null and void.  La Prensa 
recently reported on an internal government document 
proposing that all public services in which the private 
sector participates be "renationalized". 
 
¶10.  (C) The result has been that investors, both domestic 
and foreign, have begun to re-evaluate their presence in 
Nicaragua.  Ortega's political discourse and embrace of 
self-declared enemies of the United States is unsettling. 
Legal challenges to long-standing government contracts raise 
questions about the motivation of government, the rule of 
law, and the sanctity of contracts.  While foreign investors 
with ongoing concerns continue to do business, they have 
started to consider contingencies.  Others who once 
contemplated Nicaragua have put their investment plans on 
hold.  The perception of rising political risk is affecting 
business decisions.  (Comment:  Three different Nicaraguan 
investors have told us that they have been shifting their 
holdings and assets outside of the country, mostly to Costa 
Rica and the United States.) 
 
Venezuela, Cuba, and Iran Can Do No Wrong 
- - - - - - - - - - - - - - - - - - - - - 
 
¶11.  (C) Ortega consolidated his alliance with Venezuela, 
Cuba, and Iran.  While the Venezuela and Cuba connection drew 
some criticism, of even more concern was Ortega's association 
with Iran following the Iranian President's visit to Managua 
on the heels of Ortega's inauguration in January.   Then 
during the Iranian Foreign Minister's "surprise" visit to 
Managua on April 22, Ortega publicly endorsed Iran's efforts 
to enrich uranium and rejected the UN-imposed sanctions. 
(Note: To date, the National Assembly has not ratified the 
GON's agreement with the Government of Iran.  Nicaraguan 
Liberal Alliance (ALN), Sandinista Renovation Movement (MRS), 
and many Liberal Constitutional Party (PLC) National Assembly 
deputies oppose the agreement, in large part because of the 
clause that stipulates mutual support in international fora.) 
 
"Gringo Bashing" is Back . . . 
- - - - - - - - - - - - - - - - 
 
¶12.  (C) President Ortega exploited every available media 
opportunity to laud Chavez and their common allies Cuba and 
Iran, while he criticized the United States for being the 
root cause of narcotrafficking and much of the region's other 
criminal activities, failing to compensate Nicaragua for 
mining its harbors in the 1980s, violating human rights in 
Iraq and Guantanamo, and releasing Posada Cariles on bond. 
Countries on good terms with the United States -- including 
Costa Rica, Honduras, and Colombia also came under fire, and 
to a lesser degree, Mexico and Brazil -- the latter for its 
"moxy" in cooperating with the United States on ethanol. 
 
.. . And Bilateral Cooperation Dips 
- - - - - - - - - - - - - - - -  - 
 
¶13.  (C) The Nicaraguan National Police's (NNP) recent 
interception of a Mexican drug cartel (septel) at first drew 
rave reviews, but then the facts came to light.  Instead of 
cooperating in operational planning as it had in the past, 
this time, the NNP failed to share critical information 
before mounting the operation.  Their lack of cooperation and 
information sharing resulted in the arrest of insignificant, 
low-level "laborers and enforcers" for the Mexican 
trafficking organization.  Due to the flawed police 
intervention and lack of evidence, these subjects will 
probably be released shortly.  The preemptive arrests of 
these individuals could jeopardize current investigations and 
future operations throughout Central America.  Similarly, 
cooperation from airport, immigration, and customs 
authorities also declined, specifically increasingly limited 
access to facilities and information, including eliminating 
our access to the immigration data base.  Since Ortega took 
 
MANAGUA 00001067  004 OF 005 
 
 
office on January 10, there have also been no resolutions of 
property claims filed by U.S. citizens. 
 
Divide and Conquer 
- - - - - - - - - - 
 
¶14.  (C) One of President Ortega's overarching objectives was 
to keep the opposition divided, and encourage new fissures 
within the church and private sector.  As part of these 
efforts, Ortega revitalized his political power sharing pact 
with PLC leader/convicted money launderer Arnold Aleman as a 
means to deter PLC unity with the ALN.  In March, the 
Nicaraguan government released Aleman on country-wide "house 
arrest" and PLC and FSLN caucuses voted jointly for a slate 
of judicial appointments, all along party lines.  In April, 
"pact" caucuses made revisions to money laundering 
definitions and sentence terms that, if passed as is, could 
allow Aleman to walk free by December.  Ortega's insistence 
that Archbishop Obando y Bravo head a new "peace and 
reconciliation" council caused the Vatican and local church 
authorities to scramble -- clearly pitting Archbishop 
Leopoldo Brenes against Obando y Bravo.  Similarly, Ortega 
attempted to drive a wedge between economic heavy hitters 
like Carols Pellas and the owners of medium enterprises by 
courting the former and attacking the latter. 
 
Opposition 
- - - - - - 
 
¶15.  (C) Despite the growing skepticism, even alarm, 
political opposition leadership remained largely rudderless, 
while the once-fearsome business class curried Ortega's favor 
and avoided confrontation.  Sandinista dissidents tended to 
be the most vigorous critics of the government, while to 
Ortega's delight, Liberals spent most of their time bickering 
amongst themselves.  Nonetheless, there were some encouraging 
signs that left and right-leaning civil society and political 
leaders are starting to coalesce to defend Nicaragua from 
Ortega's apparent ambitions to turn the country into an 
autocratic, family-run regime under Venezuelan President 
Chavez's sphere of influence (Ref. A).  On the legal front, 
ALN, MRS, and PLC caucuses drafted a joint bill that would 
establish the Taiwanese-donated "Mamon" building as the 
official Office of the Presidency, the site of the Bolanos 
presidency.  ALN, MRS, and PLC caucuses also inserted a 
clause in the 2007 national budget reiterating the 
requirement that government to government transactions be 
included in the budget and subject to Assembly scrutiny. 
 
Discord and Discontent within Ortega Ranks 
- - - - - - - - - -- - - - -  - - - - - - - 
 
¶16.  (C) While Ortega attempted to sow discord among his 
rivals, his own party unity has also come under strain. 
First Lady Rosario Murillo appeared to be in the middle of 
much of the discord and discontent.  Nicho Marenco, the Mayor 
of Managua was told to mind his own business after he 
publicly suggested that the Presidency operate in 
installations separate from FSLN headquarters and most 
recently indicated that he might not run for the presidency 
in 2011 because he feared for his life.  During the period, 
three ministers, all female, were summarily fired, while 
Ortega insisted on defending  the most controversial figure, 
Education Minister Miguel de Castilla, despite education 
sector work stoppages and calls for his resignation.  The 
Minister of Culture was fired after questioning Ortega's gift 
to Chavez of valuable poems written by famed Nicaraguan poet 
Ruben Dario.  The Minister of Family's dismissal appears to 
be linked to a personal spat between economic advisor Bayardo 
Arce and Murillo. 
 
About Ortega's Health 
- - - - - - - - - - - 
 
¶17.  (C) Rumors continued to percolate regarding President 
Ortega's health.  According to stepdaughter Zoilamerica 
Narvaez, for years now Ortega has traveled to Cuba for blood 
cleansing treatments to treat a rare cholesterol problem. 
CENIDH's Vilma Nunez commented that as Ortega ages, these 
ozone blood cleansing procedures must be administered more 
frequently and are less effective.  Other contacts claim 
Ortega suffers from a form of lymphoma or leukemia.  Heart 
 
MANAGUA 00001067  005 OF 005 
 
 
trouble and high blood pressure round out Ortega's reported 
health problems. 
 
Comment 
- - - - 
 
¶18.  (C) The opposition confronts a power-hungry foe flush 
with Chavez petrodollars, thus far free from the scrutiny of 
the National Assembly -- the only partially independent 
branch of government remaining.  If the Ortega administration 
replaces private Albanic with state-owned Petronic to run its 
oil operations, then by law these revenues must be included 
in the national budget and the National Assembly is required 
to monitor the agreement.  The growing rejection of Ortega's 
abrasive rhetoric may eventually prompt him to tone down his 
public discourse.  Nonetheless, we expect Ortega's natural 
belligerent instincts towards the United States will continue 
to surface and Chavez will continue to pressure him to 
confront us. 
TRIVELLI