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O 152356Z DEC 09
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0276
INFO RHEFDIA/DIA WASHINGTON DC IMMEDIATE
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC IMMEDIATE
RHMFISS/CDR USSOUTHCOM MIAMI FL IMMEDIATE
RUEAIIA/CIA WASHINGTON DC IMMEDIATE
WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 03 MANAGUA 001141 
 
SIPDIS 
STATE FOR WHA/CEN 
STATE PASS MCC 
AMEMBASSY BRIDGETOWN PASS TO AMEMBASSY GRENADA 
AMEMBASSY OTTAWA PASS TO AMCONSUL QUEBEC 
AMEMBASSY BRASILIA PASS TO AMCONSUL RECIFE 
 
E.O. 12958: DECL: 2019/12/15 
TAGS: PGOV PHUM KDEM NU
SUBJECT: National Assembly Passage of Bills Points to Pacto 
 
REF: A) MANAGUA 1065; B) MANAGUA 1035; C) MANAGUA 96 
 
CLASSIFIED BY: RobertJCallahan, Ambassador, State, Embassy Managua; 
REASON: 1.4(B), (D) 
 
¶1.  (C) Summary: On December 3, the National Assembly approved a 
fiscal reform bill, the 2010 national budget, and a non-binding 
resolution against Ortega's re-election efforts.  The manner in 
which these three bills passed lead many to believe that the 
corrupt power-sharing agreement ("pacto") between President Daniel 
Ortega and former President Arnoldo Aleman continues to dominate 
Nicaraguan politics and governance.  Every partisan bloc in the 
Assembly voted as expected on the economic measures (in favor or 
opposition), but Aleman's Constitutional Liberal Party (PLC) 
abstained and a few PLC deputies voted with the governing 
Sandinista National Liberation Front (FSLN) on the budget.  This 
again makes the opposition parties and the general public wonder if 
the PLC truly is part of the opposition or an associate of the 
FSLN.  End Summary. 
 
PLC Helps Set the Stage 
 
¶2.  (C) On December 3, the National Assembly approved a fiscal 
reform bill, the 2010 national budget, and a non-binding resolution 
that annulled the Supreme Court's (CSJ) ruling that allows Ortega's 
re-election (ref B).  The 2010 budget was based on the passage of 
the fiscal reform.  (Note: We will report on the substance of the 
budget and fiscal reform septel.) 
 
¶3.  (C) In the weeks leading up to the votes on the budget and the 
fiscal reform, all opposition political parties described Ortega's 
proposed economic measures as bills that would worsen the country's 
economic situation.  The Nicaraguan Democratic Bloc (BDN, a 
combination of right-of-center parties in the Assembly led by 
Eduardo Montealegre), the Sandinista Renovation Movement (MRS, 
left-of-center), and independent deputies all stated their 
opposition to the budget and fiscal reform, and demonstrated their 
opposition by voting against the measures on December 3.  The PLC 
also had publicly stated their opposition to the measures prior to 
the vote.  On November 25, National Assembly Secretary and PLC Vice 
President Wilfredo Navarro stated that his party would oppose the 
budget in the Economic Committee because it was based on an 
uncertain fiscal reform. 
 
¶4.  (C) However, on November 26 the Economic Committee reported out 
favorably the 2010 budget with the FSLN votes and those of the 
Nicaraguan Liberal Alliance (ALN).  (Note: The Economic Committee 
is comprised of deputies from the following parties: 7 FSLN, 4 PLC, 
2 ALN, and 1 independent.  The PLC members are Navarro, Francisco 
Aguirre Sacasa, Freddy Torrez, and Oscar Moncada - all Aleman 
loyalists.)  The committee's PLC deputies did not sign the report, 
but neither did they vote against it.  Moreover, the PLC deputies 
did not issue a minority report (dictamen de minoria), a common 
mechanism in the Assembly and other state institutions to 
officially record dissent.  In the case of Torrez, he openly 
supported the budget. 
 
¶5.  (C) President Ortega submitted the fiscal reform bill to the 
National Assembly November 30.  That afternoon the Assembly's 
Executive Committee (EC) met and decided on the bills that would 
pass to a floor vote on December 3.  (Note: The EC is comprised of 
deputies from the following parties: 2 FSLN, 2 PLC, 2 ALN, and 1 
independent; the independent usually votes with the FSLN.  The PLC 
members are Navarro and Moncada.)  Contrary to opposition deputies' 
suggestions that the fiscal reform bill be referred to committee 
for review (and to slow down its passage), the EC unanimously 
decided that the reform bill should pass straight to a floor vote 
without going first to committee.  The PLC argued that in exchange, 
they were able to place on the agenda the non-binding resolution on 
the CSJ ruling that permits Ortega's re-election.  As one 
opposition deputy stated, the PLC gave the FSLN fiscal reform for 
something that has no effect.  In the end, both the fiscal reform 
bill and the 2010 budget went to a floor vote unimpeded (and 
basically facilitated) by the PLC. 
 
The Votes Point to a Pacto Deal 
 
¶6.  (C) The fiscal reform bill passed on December 3 with 47 votes 
in favor, 23 against, and 15 abstentions.  The 2010 budget passed 
with 52 votes in favor, 20 against, and 15 abstentions.  In both 
votes the BDN (with 17 deputies), MRS (with 2 deputies), and one 
independent (Salvador Talaverra) all cast a negative vote.  The PLC 
as a bloc did not vote against the fiscal reform bill nor the 2010 
budget.  Only three PLC deputies voted against the fiscal reform 
(Aguirre Sacasa, Jose Pallais and Carlos Gadea).  However, no PLC 
deputies voted against the budget (which is based on the fiscal 
reform).  PLC Deputies Aguirre Sacasa, Freddy Torrez, and two 
others voted for the budget.  During the floor debate prior to the 
vote, opposition deputies and others introduced several amendments 
to the fiscal reform bill.  Of these only two passed - both were 
sponsored jointly by Economic Committee members Walmaro Gutierrez 
(FSLN) and Aguirre Sacasa (PLC).  For both the fiscal reform bill 
and the budget, the 15 abstentions were all PLC deputies. 
Subsequent to the votes, the PLC deputies defended their votes 
stating that the fiscal reform was agreed to by the private sector 
and that the passage of the budget was a requirement of the IMF. 
However, other deputies attribute the PLC abstentions to one of two 
factors.  One explanation was that the FSLN threatened not to 
deliver the funds earmarked for PLC-aligned NGOs if the PLC voted 
against the economic measures.  Another explanation was that the 
PLC needed to abstain to provide cover to the ALN who voted for the 
bills and so the ALN deputies would not feel pressured to join the 
votes against the measures.  (Note: The ALN is suspected of being a 
facilitator for the PLC-FSLN arrangements, ref A).  A few ALN 
deputies (but not all) voted on the non-binding resolution 
regarding the CSJ ruling, but the day after an ALN deputy 
highlighted to the media that the resolution was non-binding and 
had no effect. 
 
One Ray of Light 
 
¶7.  (C) The votes on fiscal reform and the budget were 
disappointing in that the PLC was unwilling to demonstrate its true 
opposition and independence from the Ortega-Aleman pacto.  However, 
the vote on the resolution on the CSJ re-election ruling provided a 
glimpse that the FSLN bloc in the legislature is not unbreakable. 
Two deputies who are part of the FSLN alliance in the Assembly 
removed themselves from the vote on the resolution.  Deputies 
Miriam Arguello and Augustin Jarquin (from minor parties formally 
aligned with the FSLN) argued that the CSJ ruling was illegal and 
the sentence non-existent, therefore they did not want to lend 
legitimacy to the ruling by voting on the measure.  This was not 
technically a vote in favor of the resolution, but by removing 
themselves from the vote the number of deputies needed to reach a 
simple majority (and pass the measure) was lowered.  Seen from a 
different angle, the FSLN's ability to block this resolution was 
weakened.  This appears to be the first time since Ortega entered 
the presidency in 2007 that members from his FSLN bloc have broken 
with the party on a legislative vote. 
 
Comment 
 
¶8.  (C) The PLC's position as an opposition party in the National 
Assembly has been increasingly less convincing throughout the year. 
They began the year voting in favor of an EC that gave 
administrative control of the legislature to the FSLN (ref C), and 
concluded the year facilitating partisan economic legislation. 
They did the latter despite signing an agreement earlier in the 
year with the other opposition parties stating they would not 
approve any legislation that worsened the country's economic woes. 
The FSLN/government news website El 19 characterized the December 3 
legislative votes accurately in stating that the majority won, and 
that majority included the FSLN, ALN, and PLC.  The PLC's inability 
in the Assembly to support its opposition rhetoric with its actions 
has disenchanted the political opposition as well as the general 
public.  For this reason the widespread belief remains that the PLC 
is more an associate of the FSLN than a true opposition force. 
CALLAHAN