VZCZCXYZ0017
PP RUEHWEB

DE RUEHMU #0448/01 1021939
ZNY CCCCC ZZH
P 111939Z APR 08
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC PRIORITY 2434
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RUEHME/AMEMBASSY MEXICO PRIORITY 5160
RUEAIIA/CIA WASHDC PRIORITY
RUMIAAA/CDR USSOUTHCOM MIAMI FL PRIORITY
RUEABND/DEA HQS WASHINGTON DC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY
RHEHNSC/NSC WASHINGTON DC PRIORITY

C O N F I D E N T I A L MANAGUA 000448 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR WHA/CEN, INL/LP 
STATE PASS USAID FOR BONICELLI/CARDENAS 
NSC FOR FISK/ALVARADO 
 
E.O. 12958: DECL: 04/08/2018 
TAGS: SNAR PGOV KCRM PREL NU
SUBJECT: NICARAGUA PUSHES COUNTER-MERIDA PROPOSAL 
 
REF: A. STATE 26799 
     ¶B. MANAGUA 207 
 
Classified By: Ambassador Paul Trivelli, Reasons 1.4 (b and d) 
 
1.(C) Summary. In an April 7 meeting with Foreign Minister 
Samuel Santos on a range of bilateral issues, Ambassador 
raised ref a points on the Merida Initiative and pressed the 
GON to become more engaged in the process.  Ambassador also 
expressed concerns about the GON's alternative proposal for a 
USD 1 billion line of credit to fund counter-narcotics 
activities in Central America, to be paid for via asset 
forfeiture.  Santos and Vice Foreign Minister Coronel Kautz 
criticized the Merida Initiative as "too modest" and pressed 
for consideration of their proposal as a better regional 
approach that would demonstrate that the USG can work with 
its neighbors.  Santos also provided a letter proposing the 
creation of an Ad-Hoc Commission with the U.S., Nicaragua and 
Honduras, to further develop and promote Nicaragua's 
counter-Merida proposal.  The GON appears to determined to 
push their counter-proposal and is increasingly reluctant to 
engage in constructive or substantive discussion on the 
Merida Initiative absent further consideration for their 
concept.  End Summary. 
 
¶2. (C) Ambassador met with FM Santos on April 7, at the 
request of the Foreign Ministry, to discuss a range of 
bilateral issues.  Also participating in the meeting was Vice 
Foreign Minister Manuel Coronel Kautz and Legal Affairs Chief 
Cesar Vega.  The Embassy has tried repeatedly over the past 
several weeks to meet with the MFA to deliver ref a points on 
the Merida Initiative.  However, the MFA declined all meeting 
requests and eventually proposed a meeting between the 
Ambassador and Santos with the aim of discussing further the 
Nicaraguan counter-Merida proposal.  The GON has proposed 
(ref b) that the USG provide backing for a USD 1 billion loan 
to the SICA countries through the Central American Economic 
Integration Bank (BCIE) to be administered by USAID.  The 
terms of the loan would be paid by funds derived from the 
liquidation of seized narcotics and organized crime-related 
assets.  The fund to be created by the loan would have a 
Control and Distribution Committee consisting of one Central 
American representative, one OAS representative, and one USG 
representative. 
 
¶3. (C) Ambassador delivered ref a points in support of the 
Merida Initiative and urged the GON to take a more active 
role in the process, noting that the GON has not participated 
in recent SICA meetings.  Ambassador noted that we have 
received the GON's counter-proposal and, though it was being 
reviewed in Washington, that there were some initial areas of 
concern.  In particular, it would be difficult to back such a 
loan and that general policy is to avoid using loans as 
development assistance.  In addition, such a program likely 
could not and would not be overseen by USAID given certain 
legal restrictions, which raises fundamental concerns about 
how the program could be carried out.  Finally, the proposal 
that the GON is considering would take years to develop and 
implement.  We, on the other hand, have already requested the 
initial funding for the Merida Initiative and the immediate 
support is likely to be significant and effective. 
 
¶4. (C) Coronel Kautz countered that there continues to be a 
misconception surrounding Nicaragua's counter-Merida 
proposal.  "We are not asking anything of the United States," 
he argued.  "We are only proposing that the U.S. help us 
obtain the credit."  It will be "the criminals who pay for 
it." Supporting Nicaragua's proposal would be a demonstration 
that the U.S. and Central America can work together and that 
the U.S. understands and values the views of its neighbors. 
"You are the market," he continued, "Colombia and others are 
the providers and we are stuck in the middle."  The Merida 
Initiative, on the other hand, will "take years" to get 
started and too much money is focused on Mexico.  He also 
expressed annoyance that Nicaragua's fellow SICA members seem 
"only willing to listen to 'gringo' proposals." 
 
¶5. (C) Santos handed the Ambassador a letter (faxed to 
WHA/CEN) that proposed the U.S., Nicaragua and Honduras 
create an "Ad-Hoc Commission" to analyze, develop and promote 
Nicaragua's proposal.  Coronel Kautz complained that the 
other Central American governments have not had "the 
patience" to work on the Nicaraguan proposal and believes 
that the Ad-Hoc group could help get the others to approach 
it more seriously.  Coronel Kautz suggested that the group 
could be led by WHA/CEN Director Feeley and proposed a 
meeting prior to a planned mid-May meeting of the Central 
American states in El Salvador. 
 
¶6. (C) Comment: The Ortega government is trying to leverage 
new support for its counter-Merida proposal.  They clearly 
are resistant to the Merida Initiative and would like to find 
some way to minimize it and put themselves at the center of a 
counter effort that is generated in Central America.  In a 
February 5 meeting with INL DAS McCampbell, Coronel Kautz 
(who appears to be the point-person on the issue) dismissed 
the Merida Initiative as "nothing - it doesn't mean much to 
Nicaragua.  It is so small it doesn't even help." 
Furthermore, the GON has written a letter to the SICA 
Secretariat decrying the U.S. proposal as "inadequate" and 
declining to participate in meetings where it is discussed. 
It appears they are not getting traction individually with 
their neighbors and now want to co-opt the USG into appearing 
to support their plan.  That said, if we wish to keep the GON 
engaged on Merida, we may well have to humor them and it 
hence will be necessary to arrange some form of a tripartite 
meeting to consider again the Nicaraguan proposal, perhaps on 
the margins of the next round of MANPADS negotiations.  We 
recommend that the Department seek the Hondurans' views on 
this issue.  We also suggest that Washington agencies 
undertake a preliminary analysis of the feasibility of the 
GON's plan as the basis for our position going into any 
tripartite session.  Topics to look at might include an 
estimate of possible seized asset flows, the willingness or 
ability of the IFIs to finance security projects, and the 
ability of SICA countries to actually dispose of and monetize 
seized assets. 
TRIVELLI