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C O N F I D E N T I A L SECTION 01 OF 03 MANAGUA 000329 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR WHA/CEN AND DRL 
STATE PASS USAID FOR LAC - BONICELLI/CARDENAS 
NSC FOR FISK/ALVARADO 
 
E.O. 12958: DECL: 03/18/2018 
TAGS: PGOV PHUM KDEM NU
SUBJECT: LIBERALS UNITE FOR NOVEMBER MUNICIPAL ELECTIONS 
 
REF: MANAGUA 209 
 
Classified By: Ambassador Paul Trivelli, Reasons 1.4 (b) and (d) 
 
SUMMARY 
-------- 
 
¶1. (C) On March 4, Nicaragua's two largest Liberal movements, 
Vamos con Eduardo (VCE, formerly the Nicaraguan Liberal 
Alliance, ALN) headed by Eduardo Montealegre and the 
Constitutional Liberal Party (PLC) led by ex-President 
Arnoldo Aleman officially formed an alliance to run jointly 
in the November municipal elections.  On March 14, through a 
haphazard and sometimes controversial process, the VCE-PLC 
alliance registered joint mayor and vice-mayor candidates 
(apparently) in all 153 municipalities, including the Managua 
ticket of Montealegre-Quinonez.  Montealegre told us his 
"party" (now technically just a "movement") was forced to 
choose between the lesser of two evils: joining the PLC to 
fight the growing authoritarianism of the Ortega/FSLN 
government or fighting the combined forces of the Pacto (the 
powersharing agreement between Aleman and Ortega) and face 
certain electoral defeat.  Promises of private sector 
financial support for the new alliance also played 
significantly into the decision to unite.  The unity 
agreement, if fully implemented, could offer voters a true 
referendum on the Ortega administration and thereby lead to 
Liberal victories in a significant number of municipalities. 
However, tough obstacles lie ahead, especially for 
Montealegre, and it remains to be seen how the FSLN, and 
Aleman, will respond.  End Summary. 
 
VAMOS CON EDUARDO AND PLC - A UNITED LIBERAL EFFORT 
--------------------------------------------- ------ 
 
¶2. (C) According to our political party contacts, following 
the abrupt decision by the CSE to advance the electoral 
calendar and change the leadership of the ALN (reftel), 
Montealegre considered withdrawing from the race for mayor of 
Managua.  Without the ALN's legal status, Montealegre simply 
had no party banner with a firm legal footing under which to 
run.  However, following a February 26 decision by the PLC's 
executive committee to endorse Montealgre's vice-mayoral 
candidate, PLC National Assembly Deputy Enrique Quinonez, and 
to open the door to a formal alliance, Montealegre formally 
announced his candidacy for mayor of Managua and his 
intention to pursue an alliance with the PLC, but under the 
party banner of the Independent Liberal Party (PLI). 
Montealegre subsequently told us that the announcement 
concerning PLI was actually part of a negotiating tactic to 
force Aleman and the PLC to offer better terms for the 
proposed alliance and acknowledged that he knew from the 
start of the talks that the alliance would most likely to run 
under the PLC banner. 
 
¶3. (C) Indeed, on March 4, the VCE, PLI and the PLC announced 
an alliance -- "a grand coalition of democratic forces" -- 
and registered the same day with Supreme Electoral Council 
(CSE).  All three parties agreed to use the PLC's party 
registration for the elections -- a step designed to reduce 
the likelihood of CSE interference and manipulation.  In 
addition, the alliance registered two joint legal 
representatives -- PLC Deputy Wilfredo Navarro for the PLC 
and Mauricio Montealegre for VCE/PLI, as well as an evenly 
split team to manage the campaign. 
 
¶4. (C) On March 14, in a contentious process lasting until 
midnight, the Liberals registered candidates for mayor and 
vice mayor in (apparently) all 153 municipalities.  According 
to an internal agreement, the party that gained the most 
votes in the 2006 elections in a given district would name 
the mayor candidate and the other party would choose the 
vice-mayor candidacy.  In practice, this arrangement appears 
to have not always been honored.  For example, in Bonanza, 
the PLC prevented the VCE and the Nicaraguan Resistance Party 
(PRN) from registering candidates, and instead inscribed its 
own candidates first.  There are reports of similar 
manipulation of registration in a few other municipalities. 
Furthermore, a last minute fight over the registration of the 
PLC candidate for Nindiri, anti-Aleman and pro-Quinonez Lucas 
Reyes, nearly scuttled the entire deal as Quinonez threatened 
to withdraw from the race and Montealegre refused to register 
without Quinonez.  Minutes prior to the closing of 
 
MANAGUA 00000329  002 OF 003 
 
 
registration, Aleman reportedly withdrew his objections to 
Reyes and the Montealegre-Quinonez ticket was duly inscribed 
with the CSE. 
 
IS THE STRUGGLE AGAINST ORTEGA OR THE PACTO? 
-------------------------------------------- 
 
¶5. (C) In a series of meetings with Montealegre and other 
leaders of VCE over the past two weeks, Montealegre 
acknowledged to us the challenges facing his movement, noting 
that he was confronted with two less-than-optimal choices 
following his loss of the ALN presidency and the advanced 
date for alliance and candidate registration set by the CSE. 
On one hand, he could have formed an anti-Pacto alliance with 
the left-wing Sandinista Renovation Movement (MRS) and the 
smaller parties (PLI, Conservative Party (PC), PRN and 
others) but that grouping would have been saddled which may 
have well ensured its defeat, namely, the lack of a legally 
viable party vehicle under which to run (i.e., one strong 
enough to withstand the CSE's pernicious legalisms), a dearth 
of funding, and the continued division of the Liberal forces. 
 He doubted these combined forces could put together a 
winning electoral coalition, particularly given the private 
sector's long-standing threat to withhold all funds from any 
alliance not representing Liberal unity. 
 
¶6. (C) Alternatively, to run jointly with the PLC could serve 
to unite the Liberal forces and tap a greater percentage of 
the electorate, but also risked surrendering control over his 
movement (and his political credibility) to Arnoldo Aleman. 
"The question is -- is the main struggle against Ortega or 
the Pacto?" he postulated.  In Montealegre's view, Ortega's 
growing authoritarianism, lack of respect for the rule of 
law, and mismanagement of the economy and foreign policy, now 
present the greatest threat to the future of Nicaragua and, 
given the political circumstances, forced him to seek an 
agreement with the PLC against Ortega.  Montealegre maintains 
no illusions that Aleman will respect the terms of the 
agreement, but believes that the joint legal representation 
and campaign team, plus the growing influence of anti-Aleman 
leaders within the PLC, will give him enough space to operate 
and advance his candidates in key municipalities. 
 
¶7. (C) Montealegre was clearly influenced in his decision by 
the private sector's continuing reluctance to provide 
financial support to the democratic forces in the absence of 
Liberal unity.  In particular, Nicaraguan businessman Carlos 
Pellas (Nicaragua's wealthiest person and head of the Pellas 
Group) told Montealegre (as well as us) that the leaders of 
the business class would not provide financing to him or 
other democratic groups unless the Liberals united.  It 
remains to be seen whether the inverse of the private 
sector's argument - that they will give money now that the 
Liberals are united - holds true.  Montealegre has placed a 
number of private sector leaders on his campaign team to 
expand the outreach to the business community and is looking 
to raise at least USD 2 million for the Managua race alone. 
 
 
OTHER PARTIES VOICE DOUBTS 
-------------------------- 
 
¶8. (C) Edmundo Jarquin, leader of the MRS, has privately 
expressed regret that Montealegre had joined with Aleman, 
thereby undercutting his anti-Pacto credentials.  Jarquin 
fears that Montealegre's decision has breathed new life into 
Aleman at a moment when his influence was clearly on the 
wane.  He believes the unity agreement will not help the 
Liberals attract more votes, noting that in 2000 the Liberals 
were united -- and still lost heavily to the FSLN.  Moreover, 
the association with Aleman will dampen the enthusiasm of 
independents, and increase the rate of abstention, further 
eroding the Liberals' chances for victory.  Jarquin had hoped 
that he and Montealegre could have formed an anti-Pacto, 
left-right coalition that would have been able to win the 
larger municipalities and establish a solid political base 
for the future.  Instead, the MRS will not participate in any 
formal alliance and indeed has registered Assembly Deputy 
Enrique Saenz to run for mayor of Managua. 
 
¶9. (C) The VCE-PLC alliance has also exacerbated tensions 
within the smaller Conservative Party (PC) and the Nicaraguan 
Resistance Party (PRN). Leaders of both parties formally 
 
MANAGUA 00000329  003 OF 003 
 
 
declined to participate in the alliance and have registered 
their own candidates (septel) in many municipalities.  To 
further add to potential confusion voters will face, some 
prominent PC members opted as individuals to register as 
candidates within the unity alliance while others are running 
under the PC party banner.  In Granada and surrounding 
municipalities, this division threatens to further split the 
democratic forces and perhaps hand the FSLN victories they 
otherwise would not have earned. 
 
COMMENT 
------- 
 
¶10. (C) The agreement of the two main Liberal movements 
(joined in some cases by candidates from other parties) 
represents a step forward by the pro-democratic movement to 
challenge Ortega in the upcoming elections.  With the two 
parties running jointly, they do have the potential to 
mobilize a majority of the electorate and capture a large 
number of municipalities.  The alliance also presents an 
opportunity to develop new political leadership within the 
democratic forces at the local level that will be more 
responsive to their constituents.  However, the combined 
effects of ill feelings within both parties over the 
haphazard candidate selection and registration process, and 
the electoral isolation of smaller parties like the 
Conservatives threaten to blunt some of the positive 
momentum.  Furthermore, it is not clear how much damage 
Montealegre may have done to his anti-Pacto and democratic 
credentials by joining forces with Aleman's PLC, regardless 
of how many institutional checks have been put in place by 
the terms of the agreement.  Finally, we can expect the CSE 
to throw up many more obstacles to Montealegre and his 
candidates in the coming weeks, including rejection of some 
hopefuls as well as limitations on domestic election 
observers and training for party poll watchers.  Whether the 
alliance, and the broader democratic movement, can overcome 
these internal and external challenges remains a serious 
concern. 
 
¶11. (C) We also not that several prominent FSLN members have 
told us privately that they did not expect the Liberals to 
united ("shocked, shocked!!!) and they are "losing sleep" 
over the thought of confronting "the very powerful" 
Montealegre-Quinonez ticket in Managua.  Such uniform 
protestations are only making us more suspicious that the 
Sandinistas have the Liberals right where they want them -- 
separated from several small parties on both the right and 
left, sill bound to an ever-scheming Arnoldo Aleman, and at 
the mercy of a CSE which has shown itself adept and shameless 
at tilting the electoral playing field sharply towards the 
Sandinistas. 
TRIVELLI