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C O N F I D E N T I A L SECTION 01 OF 03 MANAGUA 001149 
 
SIPDIS 
AMEMBASSY BRIDGETOWN PASS TO AMEMBASSY GRENADA 
AMEMBASSY OTTAWA PASS TO AMCONSUL QUEBEC 
AMEMBASSY BRASILIA PASS TO AMCONSUL RECIFE 
 
E.O. 12958: DECL: 2019/12/21 
TAGS: SNAR SOCI PGOV PHUM PREL KCOR ASEC NU
SUBJECT: Lords of the Narco-Coast: Part I - Deadly Confrontation at 
Walpa Siksa 
 
REF: MANAGUA 1051 (MOSQUITO COAST INDEPENDENCE) 
 
CLASSIFIED BY: Robert J. Callahan, Ambassador, State, Embassy 
Managua; REASON: 1.4(A), (B), (D) 
 
¶1. (C) SUMMARY: On December 8, after a plane laden with cocaine and 
cash crash landed in the remote, small village of Walpa Siksa in 
the North Atlantic Autonomous Region (RAAN), a deadly confrontation 
took place between Nicaraguan anti-drug units and drug smugglers 
allied with a some number of local residents.  Stories of how the 
clash came to pass on December 8 are divergent, but the Walpa Siksa 
incident,  the ensuing actions of regional leaders and local 
residents, as well as the enhanced posture of security forces seems 
to indicate there are stronger linkages between drug smugglers and 
local communities than previously believed.  This message is the 
first in a series that reports on the Walpa Siksa incident and its 
immediate aftermath, and explores what these events have revealed 
about the actual state of organized trafficking operations in 
Nicaragua's Atlantic Coast.  END SUMMARY 
 
WALPA SIKA: THE OFFICIAL ACCOUNT 
 
¶2. (C) On Tuesday, December 8, a Nicaraguan anti-drug unit clashed 
with suspected drug traffickers, leaving two sailors dead and five 
other government security forces wounded.  The following account of 
events is based on Government of Nicaragua (GON) official briefings 
and conversations between senior GON law enforcement/military 
officials and Embassy personnel.  On Tuesday, December 8, a 
Nicaraguan anti-drug unit combined force of navy and national 
police traveled to the remote, small village of Walpa Siksa in the 
North Atlantic Autonomous Region (RAAN) to investigate reports of a 
plane crash linked to drug smugglers.  The joint patrol arrived in 
the evening and was ambushed by civilians from the remote village, 
who were allegedly defending the drug traffickers.  In the melee, 
two sailors were killed, and three other military personnel and one 
police officer were severely wounded.  One villager from Walpa 
Siksa was also killed.  On Wednesday, December 9, a joint 
Nicaraguan navy-army patrol returned to Walpa Siksa to detain those 
suspected of involvement in the ambush, only to find the community 
abandoned of all males.  On Thursday, December 10, anti-drug forces 
from the Navy confronted an additional group of drug smugglers near 
the community of Prinzapolka, in which one suspect was killed and 
another wounded.  Two more were detained, and the fifth suspect 
escaped.  Subsequent missions by the anti-drug unit over several 
days resulted in 20 suspects arrested (18 in connection with the 
first clash), and confiscation of a powerboat, several guns, 
ammunition, small quantities of drugs and $177,960 in cash. 
Nicaraguan security forces have seized and are now operating out of 
several homes in the Walpa Siksa community that are believed to 
have housed drug smugglers.  The military has announced plans to 
establish a permanent presence in the area to discourage drug 
traffickers from using it as a base of operations any longer. 
 
¶3. (U) Capt. Roger Gonzalez, newly-installed chief of the 
Nicaraguan naval forces, told the press that "we understand there 
is a Colombian criminal, suspected drug trafficker, [Alberto Ruiz 
Cano] who has $500,000 and has armed certain area individuals, and 
we are searching for him."  Police investigators revealed that Ruiz 
Cano, whose real name is Amauri Pau, was illegally issued a 
Nicaraguan national identity card (cedula) and owns several 
properties and businesses in Managua believed to be involved in 
money laundering (see SEPTEL).  Ruiz Cano is also believed to have 
been on the crashed plane and is suspected of leading the December 
8 attack against the anti-drug unit.  Officials detained two 
Colombians -- Ruiz Cano's father [Fernando Melendez Paudd known as 
"el Patron"] and his cousin [Catalina del Carmen Ruiz] -- but 
neither has been willing to talk to police about Ruiz Cano or his 
whereabouts.  Ruiz Cano's associates have hired attorney Julian 
Holmes Arguello to defend them.  The presence of Holmes Arguello, a 
well-known and expensive attorney, has reinforced official 
suspicions about Holmes own possible drug connections. 
 
WALPA SIKSA: EYE-WITNESS ACCOUNTS -- EARLY "WHITE" CHRISTMAS OR 
FAILED DRUG RESCUE? 
 
¶4. (U) The national daily newspaper El Nuevo Diario "END" 
(left-of-center) has provided continuous coverage of the Walpa 
Siksa incident, since it came to light on the evening of December 
8th.  According to the paper's accounts, events leading up to the 
deadly December 8 firefight differ somewhat from the official 
account.  The paper's sources, who requested anonymity for fear of 
possible reprisals from traffickers, other residents and the 
government, stated that the plane crash-landed in the Walpa Siksa 
cemetery on Sunday, December 6 at 11 a.m.  The impact killed the 
pilot and co-pilot instantly, and broke the plane into several 
pieces scattering packets of cocaine and bundles of dollars in the 
debris.  Walpa Siksa residents quickly discovered the dead pilots 
and one crash survivor, to whom they gave medical attention.  They 
were also surprised at the large quantity of cocaine the plane was 
carrying.  According to the paper's sources, some community elders 
wanted to immediately contact the police and navy about the plane 
crash and drugs, but others argued that it would be better to 
divide the cash and drugs within the community and then burn the 
plane to hide the evidence.  According to the media reports, the 
latter group prevailed and armed themselves with weapons (pistols, 
AK-47 rifles) that had been stored since the 1980's.  According to 
the eye-witness accounts, on December 7 at 2 p.m. two boats with 
approximately 40 Colombian narco-traffickers, who were "armed to 
the teeth," arrived in Walpa Siksa to rescue the pilots and the 
third passenger (known as "el Jefe" or "the boss," believed to be 
Alberto Ruiz Cano), and to recover the plane's lost "merchandise." 
The Colombians spent the night of December 7 and all day December 8 
trying to convince the community to return the missing drugs and 
cash.  According to END reports, when the narco-traffickers learned 
that a government anti-drug unit was coming from Bilwi to 
investigate the plane crash, they armed the community in order to 
repel the Navy.  As soon as the two Navy boats arrived, the 
narco-traffickers opened fire on the sailors, who also shot back, 
killing four community members [NOTE: only one death in the 
community has been confirmed. END NOTE].  The navy boats returned 
to Bilwi at 7 p.m. with their dead and wounded.  On December 9, the 
wounded civilians from Walpa Siksa were taken to a nearby village 
and, by the afternoon, the Walpa Siksa village was evacuated 
because villagers feared reprisals by the Government. 
 
¶5. (C) Our Embassy contacts on the ground in the RAAN have relayed 
an account similar to that reported in the newspaper, but that 
differs on some important details.  According to our sources, on 
Friday, December 4, an airplane carrying hundreds of pounds of 
cocaine and sacks of cash ran out of fuel on its way to a 
clandestine runway in the RAAN and was forced to make an emergency 
landing on the beach near Walpa Siksa.  The plane's pilot and two 
passengers, allegedly Colombians, suffered minor injuries and were 
sheltered by the local community.  Members of the community quickly 
emptied the airplane of its cargo, estimated to be approximately a 
half-ton of cocaine separated into individual one kilo packets. 
Our contacts told us that word of the plane crash quickly spread 
throughout the coastal communities and on Saturday morning, 
December 5, several local merchants left Bilwi with their boats 
full of commercial goods and food to sell to the community with its 
sudden new windfall.  By Saturday evening narco-trafficker "rescue 
boats" carrying approximately 40 Colombians and Hondurans 
(reportedly from Honduras and San Andres) arrived in the community 
to save the pilot/passengers and recover the drugs and cash.  Over 
the ensuing three days, village elders urged by the narco "recovery 
team" tried to persuade the community to sell the cocaine packets 
back at a price of $3,000 a kilo.  According to our contacts, the 
major sticking point was that the $3,000 price was only half the 
$6,000 per kilo price that locals knew they could get by taking 
their windfall slightly up the coast to Honduras.  When one group 
of Walpa Siksa residents ultimately refused to sell back their 
stash to the narco-traffickers, they were attacked and robbed of 
their "windfall."  This group subsequently traveled to Bilwi on the 
morning of Tuesday, December 8, and filed a formal complaint with 
the police there, which confirmed rumors of a drug-plane crash. 
Our contacts told us that it was this formal complaint that lead to 
the government dispatching the counter-drug unit to investigate at 
Walpa Siksa.  The anti-drug unit arrived in two boats to Walpa 
Siksa at approximately 6 p.m.  Our contacts told us that there had 
been no ambush when they arrived, but rather an "amicable" meeting 
between law enforcement and village elders.  However, things turned 
sour after one of the Colombians from the "rescue team," who was 
drunk and under the impression they were under attack, shot his 
automatic weapon into the group of uniformed sailors, killing one 
and seriously wounding several other counter-drug unit members. 
Our contacts told us that the "ambush" story was fabricated later 
by authorities to account for their dead and wounded. 
 
COMMENT 
 
¶6. (C) Walpa Siksa has obliged us to revise our views about the 
nature and extent of trafficking activity on the Atlantic. 
Previously, our assessment had been that the majority of the local 
indigenous Miskito villages were too xenophobic to actively support 
outsiders (even Nicaraguans from the Pacific side of Hispanic 
descent) in transporting drugs (or, frankly, any other activity) 
for extended periods.  We had also believed that local interaction 
with traffickers had been intermittent, and normally took place 
upon the instruction or advice of a small number of corrupt 
political and indigenous leaders in the region.  We maintain our 
basic assessment is still valid; however, all three versions of the 
Walpa Siksa incident reveal evidence that there is likely a much 
higher degree of cooperation and support than we previously 
believed between foreign drug trafficking organization and, at 
least, the more remote local communities of Nicaragua's Atlantic 
Coast.  In some cases there may be persistent and pervasive 
relationships within an entire community.  We fear that it now 
appears that organized criminal elements may have made major 
inroads within some remote coastal communities, convincing them to 
join forces by offering perhaps the only secure and steady 
employment opportunity on the Coast - maintaining drug trafficking 
supply routes.  Nicaragua's Atlantic is a key mid-point for an 
increasingly busy transit corridor of South American drug shipments 
bound for the United States.  It is also the most underdeveloped 
and economically backward region of the country and has been 
generally ignored by the current and previous central governments 
in Managua.  This combination of political neglect, limited 
economic opportunity and daily shipments of drugs creates 
conditions for a possible "perfect storm" where Nicaragua's 
Atlantic Coast could degenerate into an ungoverned "Narco-Coast," 
with serious repercussions for Nicaragua's political stability and 
U.S. counternarcotics cooperation.  In subsequent messages we will 
address reaction to Walpa Siksa by local, regional and national 
figures.  We will also provide more detailed reporting about the 
key figures caught up in the Walpa Siksa incident and outline some 
of the networks and relationships that we believe traffickers have 
been able to establish. 
CALLAHAN