VZCZCXRO2182
RR RUEHLMC
DE RUEHMU #1562/01 1721626
ZNY CCCCC ZZH
R 211626Z JUN 07
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 0605
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 MANAGUA 001562 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR WHA/CEN 
 
E.O. 12958: DECL: 06/18/2017 
TAGS: PGOV PINR ECON KDEM MCC NU
SUBJECT: CHINANDEGANOS CONCERNED ABOUT ORTEGA, OPPOSITION 
DISUNITY 
 
 
Classified By: CDA Peter Brennan for reasons 1.4 (b and d) 
 
¶1. (C) Summary: The politically active citizens of 
Nicaragua's north-western department of Chinandega are 
concerned about President Ortega's centralization of 
government and attempts to establish local citizens' 
councils.  Members of the private sector note that economic 
activity is generally decreasing in the department, despite 
the presence of the Millennium Challenge Account (MCA).  In 
one specific instance, local Sandinista officials have more 
aggressively pressured a local American investor over land 
concessions since the elections.  Leaders of the opposition 
parties agree they must find a way to cooperate to prevent an 
FSLN sweep of the 2008 municipal elections.  End Summary. 
 
¶2. (U) Acting polcouns and incoming Nicaragua Desk Officer 
visited the north-western department of Chinandega from June 
14-15.  Officers met with political, business, and civil 
society leaders to discuss the local economic and political 
situation.  In general, Chinandeganos seemed more optimistic 
about the medium-term future of the country than their 
Managua counterparts, but are still concerned about Ortega's 
authoritarian tendencies, verbal attacks on the USG, and 
making friends with international outcasts such as Iran and 
North Korea. 
 
Locals Suspicious of President's "Citizens' Councils" 
- - - - - - - - - - - - - - - - - - - - - - - - - - - 
 
¶3. (C) The consensus of opposition political and civil 
society leaders in Chinandega is that the government's 
"citizens' councils" are being established along the lines of 
the Sandinista Defense Committees of the 1980s.  They suspect 
that only ideologically vetted citizens will be permitted to 
serve on the councils, which will serve as intelligence 
mechanisms for the government and create an alternative fount 
of authority apart from the formal bureaucracy. 
 
¶4. (C) MRS coordinator for Chinandega Jeronimo Navas 
complained that the selection procedures for the councils in 
Chinandega have been "secretive," and the councils plan to 
branch out and organize constituent groups of students and 
public servants.  Local Movimiento por Nicaragua (MpN) 
coordinator Juanave Cabrera explained that many Sandinistas 
are unhappy with the councils as they feel that the councils 
are usurping the authority of existing NGOs (largely 
controlled by Sandinistas). 
 
Economy Suffering from Vague Policies and Corruption 
- - - - - - - - - - - - - - - - - - - - - - - - - - - 
 
¶5. (C) Contacts commented that several economic sectors in 
Chinandega are declining or holding steady, which they blamed 
in part on uncertainty over the new governments commitment to 
a free market economy.  Chamber of Commerce vice president 
Enrique Cardenas noted that active membership in the Chamber 
has decreased from 120 to 69, and several members of the 
Chamber's staff have recently emigrated.  Etica y 
Transparencia coordinator Jose Francisco confirmed that 
emigration in general has increased, with El Salvador, Costa 
Rica, Spain, and the U.S. as the primary recipients. 
 
¶6. (C) The Chinandeganos gave a mixed analysis of the impact 
of MCC projects on Chinandega to date.  Cardenas commented 
that MCC has had a "huge impact" through road building and 
export promotion.  Navas agreed that MCC has helped medium 
and large producers, but encouraged more work with poor 
campesinos.  ALN departmental secretary Danilo Guerrero 
agreed with Cardenas and commented that the Sandinista mayors 
are "taking credit for everything" and "filtering the 
benefits" of MCC projects, presumably favoring their 
supporters.  Cabrera advised us to heavily promote MCC 
activities in the press, especially using radio spots that 
can reach the rural population. 
 
¶7. (C) American businessman Roberto Membreno, owner of Marina 
Puesta del Sol, described to us his considerable investment 
plans for his oceanfront property.  Membreno explained, 
however, that the local police and mayor have refused to 
assist him with a group of campesinos that have claimed and 
occupied portions of the property.  He reported that a local 
judge has joined forces with the "land invaders" to extort 
money from him, a tactic that he has vowed to resist. 
Membreno claimed that he met with Supreme Court president 
Manuel Martinez and National Police chief Aminta Granera on 
June 13 to enlist their support.  If the problems are not 
resolved at the national level, he stated, he will cancel his 
expansion plans. 
 
Political Parties Agree on Need for Unity 
- - - - - - - - - - - - - - - - - - - - - 
 
¶8. (C) Local opposition leaders agreed on the necessity to 
join forces to oppose the FSLN in the 2008 municipal 
elections.  MRS director Navas explained that the FSLN mayors 
(who control all but one of Chinandega's 13 municipalities) 
are especially vindictive towards MRS members, who suffer 
from higher taxes, slower services, and spurious legal 
accusations -- persecution that has grown more brazen since 
the elections.  ALN and PLC leaders also agreed on the need 
for opposition unity while continuing to downplay the 
relevance of the competing party.  Guerrero predicted that 
the PLC is heading for a "crash" as Arnoldo Aleman's 
leadership has been "demystified" by the PLC's defeat in the 
elections.  PLC director Alberto Jose Ubilla responded that 
the PLC still has the strongest party structure, while the 
ALN depends on Eduardo Montealegre for its (shaky) cohesion. 
 
Comment 
- - - - 
 
¶9. (C) While President Ortega has repeatedly told investors 
that their property will be respected, apparently Sandinistas 
in Chinandega have not received the message.  Membreno's 
experiences are not unique to Chinandega, especially for 
investors with coastal properties.  Unless Ortega makes good 
on his campaign promises to eliminate corruption and enforce 
respect for private property, investors in the tourism sector 
will view Nicaragua with increasing caution, to the detriment 
of economic growth. 
BRENNAN