VZCZCXRO4481
PP RUEHLMC
DE RUEHMU #0259 0681942
ZNR UUUUU ZZH
P 091942Z MAR 09
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC PRIORITY 3854
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEHCV/AMEMBASSY CARACAS 1341
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEAUSA/DEPT OF HHS WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS MANAGUA 000259 
 
SIPDIS 
SENSITIVE 
 
STATE PASS USTR 
USDOC FOR 4332/ITA/MAC/WH/MSIEGELMAN 
HHS FOR FDA 
 
E.O.  12958: N/A 
TAGS: EINV EAGR ETRD ECON NU
SUBJECT: NICARAGUA: ALBA ENTITY BUYS SEMINOLE RANCH AND HOTEL 
 
REF: A) 08 MANAGUA 1437; B) 07 MANAGUA 0438 
 
¶1. (SBU) Summary: On February 26, President Ortega announced that he had authorized the use of funds generated through Nicaragua's membership in the Bolivarian Alternative for the Americas (ALBA) to purchase a cattle ranch and hotel from the Seminole Tribe of Florida. FSLN officials have designated a corporation known as ALBA Foods of Nicaragua, S.A. (ALBALINISA) to own and operate the assets. For the first time to our knowledge, funds generated by ALBA's oil monetization scheme are being used in Nicaragua to acquire commercial assets (as opposed to funding energy infrastructure, for example). These assets are controlled by trusted FSLN officials who hold no official government positions. The next question is, "Where will the profits go?" End Summary.
 
¶2. (SBU) On February 26, President Ortega announced that he had authorized the use of funds generated through Nicaragua's membership in the Bolivarian Alternative for the Americas (ALBA) to purchase a cattle ranch and hotel from Seminole, S.A., the investment arm of the Seminole Tribe of Florida. FSLN officials designated a newly formed corporation known as ALBA Foods of Nicaragua, S.A. (ALBALINISA) to own and operate these assets.
 
¶3. (SBU) FSLN-linked media report that in November 2008 the Venezuelan National Assembly provided $2.3 million in funding for ALBALINISA. According to Ortega, other sources of funds for the transaction were ALBA Nicaragua, S.A. (ALBANISA), a joint venture owned by the Nicaraguan and Venezuelan governments to import and monetize Venezuelan oil, and the National Rural Fund (CARUNA, often called ALBA-CARUNA), an FSLN-linked financial cooperative in turn funded partially by ALBANISA. (Note: Ref. A provides additional background on these entities. End Note.) Sources tell us that FSLN Treasurer Francisco Lopez, who is also ALBANISA Vice President, signed the sales agreement for an estimated $10 to $12 million.
 
¶4. (SBU) The Seminole Plaza Hotel, located in Managua, has 85 beds 
and is popular among business travelers.  Ariel Somarriba, a former 
tour operator, will serve as General Manager of the hotel, though 
there are rumors that Rafael Ortega Murillo, son of the President 
and First Lady, will have a hand in running it. 
 
¶5. (U) The 6,000 acre ranch includes about 3,500 head of cattle, 350 
of which are of the valuable Red Brahman breed.  Ricardo Coronel 
Kautz, twin brother of Vice Foreign Minister Manuel Coronel Kautz, 
is the General Manager of ALBALINISA and will also manage the cattle 
ranch.  As part of the deal, ALBALINISA will inherit the management 
of a bovine genetics and breeding facility (Cenamege) that Seminole 
S.A. had operated since 2007, after the Ministry of Agriculture and 
Forestry (MAGFOR) turned it over to the tribe (Ref. B). 
 
¶6. (U) Anticipating increased cattle and beef exports to Venezuela 
based on ALBA "solidarity and cooperation," Ortega said the purchase 
will help ranchers improve the genetics of Nicaraguan herds and 
offer better-quality cattle and beef.  The Central Bank reports that 
exports of cattle and beef to Venezuela were $19.1 million in 2008, 
about 8% of total cattle and beef exports worldwide.  Douglas 
Aleman, Vice President of the FSLN-affiliated Union of Farmers and 
Ranchers (UNAG), said his organization was working with its members 
and ALBALINISA to increase cattle and beef exports to Venezuela 
fourfold in 2009. 
 
¶7. (SBU) Calixto Garcia, General Manager of Seminole, S.A. and a 
U.S. citizen, told econoff that the tribe wanted to sell its assets 
in Nicaragua to reduce its international exposure.  Though he is 
currently in Miami, Garcia may stay on with ALBALANISA in an 
advisory capacity for several months. 
 
¶8. (SBU) Comment: The purchase of Seminole S.A. operations in Nicaragua shows a break with the past in that for the first time to our knowledge, funds generated by ALBA's oil monetization scheme are being used in Nicaragua to acquire commercial assets (as opposed to funding energy infrastructure, for example). These assets are controlled by trusted FSLN officials who hold no official government positions. This prompts us to ask, "What is the next commercial enterprise and where will the profits go?"
 
CALLAHAN