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DE RUEHMU #1083/01 1171449
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FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC PRIORITY 9999
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC

C O N F I D E N T I A L MANAGUA 001083 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR DRL MAGGIO, WHA/CEN SCHIFFER 
 
E.O. 12958: DECL: 04/23/2017 
TAGS: KDEM PGOV ECON ELAB NU
SUBJECT: NICARAGUAN EDUCATION SYSTEM IN CRISIS 
 
REF: MANAGUA 585 
 
Classified By: Ambassador Paul Trivelli for reasons 1.4(B,D) 
 
¶1.  (C) SUMMARY:  Over the past month, Nicaragua's 
chronically under-funded and fragile education system 
suffered turmoil over wage disputes, worsened by political 
rivalries.  Teachers demanding a larger salary increase have 
paralyzed schools throughout the country through partial or 
complete work stoppages.  Deepening the crisis, Sandinista 
Education Minister Miguel de Castilla (reftel), vowing to 
change the education system, terminated Nicaragua's 
autonomous school system by recentralizing budget control and 
prohibiting collection of voluntary fees.  He fired some 
1,000 cashiers employed under the old system and closed the 
offices of the opposition teachers union.  Further, he sacked 
the directors of five of Managua's largest high schools on 
grounds of misappropriation without proof, triggering a 
two-week takeover of the schools by parents, students, and 
teachers.  Liberals have called for a formal hearing to 
investigate De Castilla.  To date, President Ortega has 
remained silent; opposition leaders believe he seeks the 
right moment to intervene as "The Savior," maximizing his 
political gain.  END SUMMARY. 
 
Background 
- - - - - - 
 
¶2.  (U) In 1993, the government of Violeta Chamorro passed 
the Law of Participative Education (Law 413), transforming 
the education system in three important ways:  First, it 
authorized schools to form advisory councils comprised of 
teachers, students, parents, and a school director; second, 
it empowered schools to begin collecting voluntary fees from 
willing parents to help cover schools costs; and, finally, it 
placed the advisory councils in charge of school budgets, 
which included both funds allocated by the government and 
funds collected through voluntary contributions.  Under this 
system, the local school advisory councils were responsible 
for determining the schools' spending priorities and reserved 
the right to hire and fire school directors for 
non-performance.  The salaries of the school directors, at 
the discretion of the council, could be augmented by the 
voluntary fees, based on performance. 
 
¶3.  (U) Set within the context of Nicaragua's severely 
under-funded educational system, these "autonomous" schools 
performed admirably well in urban areas, responding to the 
needs of the specific communities served.  However, the 
system has always had its detractors, chief among which is 
the current Minister of Education, Miguel De Castilla, who 
claims the fee system evolved from being "voluntary" to 
"obligatory," excluding tens of thousands of poorer students, 
especially in rural communities.  Jose Zepeda, Secretary 
General of the Sandinista National Liberation Front 
(FSLN)-leaning General Confederation of Nicaraguan Education 
Workers (ANDEN) claims to have opposed the system since its 
implementation, but waited quietly during the past three 
Liberal administrations.  Critics also believe that the 
councils and directors have been corrupted by their fiscal 
responsibilities, alleging that the directors of some of 
Managua's larger schools received exorbitant salaries. 
 
Where the Trouble Begins 
- - - - - - - - - - - - - 
 
¶4.  (U) On January 11, 2007 -- within 24 hours of taking 
office -- Education Minister De Castilla issued Ministerial 
Accords 017-2007 and 018-2007, which terminated all 
"ministerial accords, conventions of autonomy, normatives, 
and other administrative dispositions" issued under Law 413 
and prohibited the collection of "voluntary fees," 
respectively.  On February 10, 2007, De Castilla declared 
that school advisory councils could no longer authorize 
additional compensation to directors and sub-directors using 
either their voluntary fee budget or surplus government funds. 
 
¶5.  (U) By eliminating the councils' control over the budget, 
De Castilla effectively ended the autonomous school system. 
Although the councils will remain in place to decide 
administrative matters, De Castilla re-centralized all budget 
controls in the Ministry.  After 13 years of relative 
autonomy, this overnight change sent shock waves through an 
already stressed education system, setting it at odds with 
the Minister, especially in the secondary school system, 
where voluntary fees comprised a larger percentage of the 
budget. 

¶6.  (U) Adding to the pending crisis, on February 21 De 
Castilla signed a salary readjustment accord with ANDEN, the 
Sandinista union, authorizing a "salary adjustment" package 
of 206 million Cordoba, equal to a monthly salary increase of 
308 Cordoba (US$ 17.00) for each of Nicaragua's 39,000-plus 
teachers, retroactive to the first of the year.  However, De 
Castilla did not consult with the liberal-leaning United 
Teachers Union (USM), an affiliation of 23 smaller unions 
representing over 16,000 teachers.  He justified his decision 
on grounds that the law requires the minister to negotiate 
only with unions that have "national representation" and that 
ANDEN -- with offices in each of the 16 departments and some 
23,000 members -- is the only "nationally recognized" union. 
 
¶7.  (U) Apparently expecting a larger salary increase, the 
announcement evoked a strong reaction.  Teachers, parents, 
and students were outraged.  Across the country teachers from 
both unions called for work stoppages and strikes.  (NOTE: 
In a meeting with poloff, Zepeda denied that ANDEN teachers 
had participated.  END NOTE.)  Within days, the Nicaraguan 
Permanent Commission for Human Rights (CPDH) had received 
nearly 100 formal denunciations. 
 
Small Scale Work Stoppages Begin 
- - - - - - - - - - - - - - - - - 
 
¶8.  (U) On March 9, CPDH, together with members of the USM 
unions, announced that weekly Friday-only work stoppages 
would begin on March 17 and called on schools throughout the 
country to participate.  In mid-March, teachers repeatedly 
warned that failure to resolve the salary issue would result 
in full work stoppages, strikes, and street protests 
beginning on April 9, after the conclusion of Holy Week 
(April 2-8). 
 
 
De Castilla Dissolves Payment System... 
- - - - - - - - - - - - - - - - - - - 
 
¶9.  (U) In a Ministry of Education (MINED) circular 
distributed to the directors of Managua's high schools, De 
Castilla requested that school directors solicit, by March 
31, the resignation of the cashiers employed as part of the 
voluntary fee system.  While MINED estimates the change will 
affect 660 cashiers nationwide, media sources reported that a 
minimum of 900-1,000 jobs would be lost in the restructuring. 
 Commenting on the decision, De Castilla offered those with 
high school diplomas employment as teachers since "there 
exists a need for around 4,000 teachers."  Offended by De 
Castilla's brazen pronouncement, teachers immediately 
rejected his idea, insisting that a high school diploma does 
not qualify someone to teach and that any such redeployment 
of cashiers would violate the Teaching Career Law. 
 
... Closes Union Offices... 
- - - - - - - - - - - - - - 
 
¶10.  (U) On March 23, De Castilla ordered USM's offices 
closed.  Located in the Civic Center, where they had operated 
for years, De Castilla justified the closure as a 
cost-savings measure, claiming the Ministry was spending 
95,000 Cordobas (US$5,300) per month on rent that could be 
better spent "for the better satisfaction of the needs of our 
population."  Locked and guarded by MINED guards, employees 
in USM's offices were only allowed back in to pick up their 
personal items.  In a denunciation before CPDH, USM members 
alleged that De Castilla closed their offices in retribution 
for their work stoppages and strong criticism of his actions 
-- claims De Castilla roundly denied. 
 
... And Fires School Directors 
- - - - - - - - - - - - - - - - 
 
¶11.  (C) On Friday, March 30, De Castilla announced the 
immediate firing of the directors of five of Managua's 
largest autonomous high schools for alleged misappropriation 
of funds.  According to the Law of Participative Education 
(Law 413), the Minister can directly interfere in school 
affairs only when there is proven evidence of misuse of funds 
or other corruption.  However, three of the fired directors 
-- Vismar Cruz (Villa Austria School), Jairo Caceres (Miguel 
Ramirez Goyena) and Miriam Trana (14 de Septiembre) -- as 
well as National Assembly Education Commission president 
Mario Valle, assured poloff that none of the schools had been 
audited and there was no evidence of misappropriation. 
What's more, they insisted that De Castilla violated Law 413 
by taking action without conclusive evidence, a position 
confirmed by National Assembly Labor Commission president 
Alejandro Bolanos. 
 
¶12.  (C) According to a letter from De Castilla to Jairo 
Caceres -- delivered to him at the time of his physical 
removal from his school -- the basis for De Castilla's 
misappropriation claim was a supposed violation of the 
February 10 declaration that school directors were no longer 
authorized to receive additional compensation.  According to 
the directors, De Castilla alleged they had received payments 
in February and March, after the declaration.  The directors 
rebuffed this allegation, explaining to poloff that they had 
not received the declaration until the end of February, after 
the month's payment had been made, and the council had 
authorized payment for March.  When asked why they thought 
they might have been singled out, they explained that all 
five fired directors were members of a Managua-wide education 
council that De Castilla considers a threat to his power. 
 
Students and Teachers Take Over Schools 
- - - - - - - - - - - - - - - - - - - - 
 
¶13.  (C) De Castilla's announcement, on the heels of the wage 
dispute, the union office closure, and the cashier firings, 
set off a maelstrom.  Parents, students, and teachers 
immediately denounced De Castilla's decision and took over 
and barricaded four of the five schools in protest and to 
prevent ministry officials from removing the directors.  Of 
the five directors, only Jairo Caceres from Miguel Ramirez 
Goyena left voluntarily following the announced dismissals. 
In his meeting with poloff, he recounted that a team of 7-8 
MINED officials showed up in his office, presented him with 
the aforementioned letter, and without further justification 
of their actions, forcefully removed him from his office 
without allowing him time to gather his personal effects. 
The sub-director was installed as interim director under the 
watchful eye of a "team of ministry officials" that, 
according to Caceres, remains in place.  The other fired 
directors indicated that MINED installed similar teams in 
their schools. 
 
¶14.  (U) De Castilla announced the dismissals on the Friday 
before Holy Week vacation commenced, intending to use the 
vacation time as a transition for the interim directors and 
as a mental buffer for the teachers and students to recover 
from the decision.  However, this plan did not work. 
Instead, parents, teachers, and students in the other four 
schools -- Villa Austria, 14 de Septiembre, Miguel de 
Cervantes, and Benjamin Zeledon -- declared that they would 
remain in lockdown and no MINED official would be allowed to 
enter until De Castilla rescinded his allegations of fund 
misappropriations.  Still at an impasse over wage 
negotiations, the teachers vowed to intensify their work 
stoppage after the holiday, moving from a single day per week 
to a complete work stoppage. 
 
1980s Flashback 
- - - - - - - - 
 
¶15.  (U) In the early morning hours of April 10, nearly two 
weeks after the school takeover, 14 hooded members of the 
Federation of Secondary Students (FES) under the command of 
Cuban-born Sandinista radical Victor Cienfuegos, stormed the 
Miguel de Cervantes school, allegedly sporting homemade 
pistols and other weapons, and removed school director Juan 
Narvaez under threat of violence.  Questioned by the media 
following the incident, Cienfuegos justified his actions 
stating "This is a social struggle, we are rescuing the 
school for the students of this district.  All (those who 
took over the school) are students and asked for my help and 
I went with them."  (NOTE:  Contrary to Cienfuego's 
statement, none of the 14 FES members were active students at 
Miguel de Cervantes, all had been expelled for bad behavior. 
Additionally, FES leader, Javier Espana, according to media 
reports, is not a student, had never studied in public 
schools, and has served as the non-elected leader of FES for 
years.  END NOTE). 
 
De Castilla Implicated in Takeover Planning 
- - - - - - - - - - - - - - - - - - - - - - - 
 
¶16.  (C) Following the takeover -- which served as a vivid 
reminder to the Nicaraguan people of Cienfuego's school 
takeovers in the 1980s -- De Castilla vehemently denied any 
knowledge of the event.  However, Gustavo Bermudez, a 
commentator for "Radio Corporacion," reported to poloff that 
he was sitting in De Castilla,s office, with the Minister 
present, while two men were on the phone discussing plans for 
the takeover.  From the conversation, Bermudez reported that 
it appeared the original plan was to take over all four 
still-guarded schools, but the other schools were too heavily 
protected by families and human rights organization 
representatives.  Bermudez recounted that he denounced the 
Minister's knowledge of the takeovers on his radio program, 
but lamented that it appeared to have no affect.  (NOTE: In a 
previous conversation with ANDEN director Zepeda, poloff 
asked why Miguel de Cervantes had been the target of the 
takeover.  Zepeda commented that "it was something personal 
between Narvaez and Cienfuegos."  END NOTE). 
 
De Castilla Acquiesces on Misappropriation Claim 
- - - - - - - - - - - - - - - - - - - - - - - - - 
 
¶17.  (SBU) On April 12, in what was largely perceived as a 
defeat for the Minister, De Castilla signed an accord with 
the five directors guaranteeing that "the records of the 
directors will remain clean of any administrative sanctions." 
 In addition, the accord acknowledges, "the procedures used 
to intervene in the schools were not the most appropriate," 
and that "under labor law, the directors had a right to know 
about any auditory process or cause for sanctions."  Although 
the agreement required the directors to renounce their jobs, 
the letter also clearly showed that De Castilla had badly 
fumbled the dismissal of the school directors. 
 
Strikes and Work Stoppages Continue 
- - - - - - - - - - - - - - - - - - 
 
¶18.  (U) While De Castilla's acquiescence ended the school 
takeovers, it did nothing to halt the work stoppages slowly 
spreading around the country.  The full work stoppages 
announced before the Holy Week holiday began, in limited 
numbers, on April 9 and continue.  While the exact number of 
schools and teachers that have participated in some form of 
partial or full work stoppage over the past four weeks is not 
clear, National Assembly Education Commission president Mario 
Valle opined that less than 10 percent of the nations 
39,000-plus teachers have participated.  Independent analysis 
of media coverage would seem to confirm this estimate, 
showing that approximately 4,000 teachers from at least eight 
departments -- Carazo, Chinandega, Chontales, Esteli, Leon, 
Managua, Matagalpa, and Nuevo Segovia -- have participated. 
Although the Ministry of Education has been quick to point 
out that fewer than perhaps 50 of Nicaragua's 9,000-plus 
schools have been affected by the stoppages, because they 
have been concentrated in Managua and other urban centers, 
the proportion of students affected is much more significant. 
 
Budget Confusion Fueled Problems 
- - - - - - - - - - - - - - - - - 
 
¶19.  (C) Underlying the initial work stoppages was confusion 
over the approved wage increase.  According to news reports, 
teachers had expected to receive a 516 Cordoba (US$27) 
monthly salary increase based on what appears to have been 
either a misunderstanding or misrepresentation of the 
education budget.   Poloff consulted with the presidents of 
the Education Commission, Labor Commission, and Economic 
Commission in the National Assembly and all denied such an 
increase was included in the 2007 education budget.  However, 
Mario Valle, Zepeda from ANDEN and Francisco Aguirre Sacasa, 
president of the Economic Commission did comment that the 
budget calculations may not have correctly factored in 
employee insurance and other mandatory payments that would 
reduce the net salary paid to employees.  Valle and Sacasa 
estimated the number to be 24 and 56 million Cordobas, 
respectively, while USM leader Jose Siero was quoted saying 
68 million Cordobas. 
 
¶20.  (C) In an attempt to rectify the situation and avert 
further strikes and work stoppages, Aguirre Sacasa reported 
sitting down with USM leaders, De Castilla and others on 
April 16 to present a counter-offer.  Sacasa's package 
included an additional 50-60 million Cordobas, bringing the 
total monthly compensation adjustment to US$21-23.  He 
lamented that the offer was not accepted, but would not or 
could not reveal what had happened to sour the deal.  In a 
counter proposal reported in the media on April 23, teachers 
asked the government to pay out the full 206 million Cordobas 
as a salary increase and to cover upwards of 78 million 
Cordobas in insurance and other payments, a request that, 
assured Valle and Aguirre Sacasa, is strictly forbidden by 
law. 
 
Salary Increase Could Jeopardize International Funding 
- - - - - - - - - - - - - - - - - - - - - - - - - - - 

¶21.  (C) Aguirre Sacasa readily asserted that the Nicaraguan 
government cannot afford to offer teachers a US$30 monthly 
salary increase.  Although he characterized the current 
national budget as "surprisingly austere," he warned that 
such an increase would certainly place at risk future 
international funding.  A member of the PLC, Aguirre Sacasa 
blamed political rivals in the Nicaraguan Liberal Alliance 
(ALN), claiming they sided with the striking teachers for 
short-term political gain instead of Nicaragua's long-term 
interests.  He emphasized that any wage adjustment decisions 
for public sector employees must be evaluated within the 
context of access to international funding. 
 
¶22.  (C) Aguirre Sacasa further warned that giving teachers 
the demanded increase could trigger other public sector 
workers to ask for salary increases.  Under intense pressure 
from one of his key constituent bases, President Ortega could 
invoke populist rhetoric, underwriting across the board 
increases by reneging on outstanding debt service.  According 
to Aguirre Sacasa, Ortega might also see this as a way to 
punish Liberals who supported striking teachers (ALN), 
believing that these Liberals would come under intense 
criticism from the private sector for not adequately 
defending private sector interests should funding be cut and 
the economy suffer. 
 
National Assembly Willing to Summon De Castilla? 
- - - - - - - - - - - - - - - - - - - - - - - - - 
 
¶23.  (SBU) Attempts by Valle, Bolanos, and Aguirre Sacasa, as 
well as by USM leaders and teachers to sit down with De 
Castilla to discuss complaints and legal violations have been 
largely unsuccessful.  He has cancelled meetings, not shown 
up, and, on April 17, snuck out the back door minutes before 
a scheduled meeting with Valle, Bolanos, and Aguirre Sacasa. 
On April 18, De Castilla finally appeared before the National 
Assembly, but refused to answer questions.  Instead, 
according to Aguirre Sacasa, he stood before the Assembly and 
lamented in an "articulate and compelling manner" about the 
state of Nicaragua's education system. 
 
¶24.  (C) Unable to get satisfactory explanations under 
voluntary circumstances, Liberal national assembly deputies 
-- led by Labor Commission president Bolanos -- are seeking 
approval to call De Castilla before a formal hearing 
("interpelacion") in the National Assembly.  In a rare show 
of Liberal unity, the presidents of both the Liberal 
Constitutionalist Party (PLC) and the ALN caucuses signed the 
motion, giving it the votes necessary to put the motion on 
the Assembly's agenda.  While Bolanos was confident the 
formal hearing would move forward, Valle confided that the 
Executive Committee lacked the political will to put the 
motion on the agenda and that it would never "see the light 
of day."  To date, the Assembly has not summoned De Castilla 
to a formal hearing. 
 
¶25.  (C) The motion filed by Bolanos declares that De 
Castilla's actions since teachers first declared their work 
stoppage in early March have violated the Nicaraguan 
Constitution (Articles 26, 34, 58, 118), the Law of 
Participative Education (Articles 4, 5, 6, 16), Law of the 
Teaching Profession (Articles 36, 88), the Teachers' 
Collective Bargaining agreement, and the Universal 
Declaration of Human Rights (Articles 11, 12, 23). 
Commenting on Bolanos' motion, Valle accused him and the ALN 
of getting involved in the education crisis for "purely 
political reasons," stating that the ALN wouldn't "make a 
strong stand." 
 
Setting Stage for "El Salvador" 
- - - - - - - - - - - - - - - - 
 
¶26.  (C) Throughout this ordeal, which has seen De Castilla 
come under tremendous pressure and criticism, President 
Ortega and First Lady Rosario Murillo have remained silent. 
Valle opined that Ortega is "watching very closely, waiting 
for the ideal moment - politically - to react."  He predicted 
Ortega would "take action within 30 days" (by mid-May), 
perhaps coordinated with the arrival of school supplies from 
Venezuela.  Aguirre Sacasa agreed that he believes Ortega is 
waiting for the ideal moment, but stated that Ortega may use 
the symbolically important May 1 Workers' Day to make his 
move.  Aguirre Sacasa warned, however, that Ortega runs the 
risk of losing control of the situation if he waits too long. 
 Further, he believes that Ortega will use the much bigger 
and better organized ANDEN to control and quell the USM 
teachers, keeping them from getting out of control until 
Ortega is ready to present himself as "The Savior." 
 
Comment: 
- - - - 
 
¶27.  (C) It is possible that Ortega firmly believes in De 
Castilla's initial efforts to reform the education system and 
recognizes that the economy, as Aguirre Sacasa indicated, 
simply cannot absorb the additional increase in teachers' 
salaries without threatening the country's future economic 
viability.  Thus, he is willing to suffer the shorter-term 
consequences for the longer-term political pay-off. 
Certainly, Ortega and the Sandinistas demonstrated ample 
patience in waiting 16 years to regain the presidency.  If 
so, he could indeed emerge as a true "champion" of education 
and reap political gains.  That said, Ortega cannot afford to 
get this wrong.  Education formed a cornerstone of his 
election campaign and education, as a cause, is symbolically 
-- and thus strategically -- important to the Sandinista 
socialist ideology.  Therefore, Ortega's absolute silence 
during this period of turmoil is puzzling.  He has neither 
criticized nor defended his embattled Minister of Education 
and has not responded to the pleas of teachers and families. 
 
¶28.  (C) Opposition leaders believe he is simply waiting for 
the perfect time to take action to maximize his political 
gains, a strategy that becomes increasingly risky as time 
goes on.  Perhaps, however, Ortega's opponents give him too 
much credit.  It is hard to imagine a single "quick fix" that 
will undo the acrimony built up over the past month towards 
the Minister and Ortega.  If, in fact, Ortega is playing this 
game purely for personal political power, without true 
interest for the welfare of the teachers, parents, and 
students, then any gain will certainly be tempered by the 
loss of disillusioned Sandinistas looking for other options. 
Further, the longer the education crisis continues, the more 
time Ortega gives his Liberal opponents to form a unified 
opposition against him.  The ALN, PLC, and Sandinista 
Renovationist Movement (MRS) have all publicly criticized De 
Castilla's handling of the situation and all three caucuses 
signed the motion to summon De Castilla to the National 
Assembly.  As long as the issue remains an obvious soft 
target, the opposition will continue hitting it, emboldened 
through the growing sympathy of a public fed-up with being 
ignored by De Castilla and Ortega. 
TRIVELLI