Nicaragua: A Three-Way Political Battleground

Council on Hemispheric Affairs
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Monitoring Political, Economic and Diplomatic Issues Affecting the Western Hemisphere

Word Count: 3400
Wednesday, July 20 2005

COHA MEMORANDUM TO THE PRESS

Nicaragua: A Three-Way Political Battleground

In February, a new political group was formed in Managua called the Movement for Nicaragua. Some 500 irate citizens, calling themselves non-partisan, rallied under the banner “Tomorrow is too late,” and called upon the people to “rescue” their country that had been “hijacked” by the country’s leftist and rightist party bosses (“Caudillos”) former President Daniel Ortega, of the Sandinista National Liberation Front (FSLN), and former President Arnoldo Aleman, of the Liberal Constitutionalist Party (PLC).

By “hijacked,” the Movement’s leaders were referring to the infamous January, 2000, agreement between the Caudillos, popularly called the “Pacto,” that has dominated Nicaraguan politics since that time. Essentially, the Pacto established virtual two-party control of the country. It divided up key governmental offices, including the Comptroller General, the Supreme Electoral Council, and the Supreme Court of Justice, among the two dominant parties according to their political weights. The Pacto also awarded seats in the National Assembly (AN) to the most recent ex-President and the Presidential candidate who finished second in the election (Aleman and Ortega), and also provided immunity from legal action to all members of the AN. The immunity clause pointedly covered Aleman, who would be immune from prosecution for a variety of nefarious, personal enrichment schemes, and Ortega, who was accused of sexually abusing his stepdaughter for many years. Moreover, the Pacto changed the electoral laws to restrict party eligibility, with the result that the nine small parties that had won seats in 1996 were reduced to three that could register in 2001, of which only the Conservative Party won an AN seat.

Because the constitution prohibits an incumbent from serving two successive terms, the 2001 elections resulted in the election of a new PLC President, Aleman’s former Vice President, Enrique Bolanos, whom Aleman had selected as his successor pro tempore. Bolanos was once a prominent cotton-farmer whose large landholdings were expropriated by the Sandinistas in 1985. Soon after, he became head of the Higher Council of Private Enterprise (COSEP), a position from which he sallied forth to relentlessly attack the Sandinistas. Because Bolanos lacked his own power base in the PLC, Aleman regarded him as a manipulatable successor to temporarily hold the Presidency until Aleman could run again, as permitted by the constitution. However, Bolanos turned out to be considerably stronger-willed than expected, and he soon became a formidable opponent of both Aleman and Ortega. In his inauguration address, Bolanos promised that Nicaragua would enter a “new era” that would not tolerate “Corruption, perversion in the use of power, and caudillismo.” So within months, a battle ensued based on his opposition to the Caudillos, a bare-fisted battle that continues to this day. Thus, Nicaragua now has three political leaders – Bolanos, Aleman, and Ortega – battling, and/or sometimes forming alliances, with each other to run the country. As one foreign newspaper recently put it, the battle “has taken on the characteristics of a game in which anyone can play and no one can win.”

Effectiveness in Several forms
Bolanos can definitely be credited with a number of important achievements during his administration. For one, he negotiated a nearly 80% reduction in Nicaragua’s $6.6 billion external debt under the International Monetary Fund’s (IMF) Heavily Indebted Poor Country Initiative. He also negotiated IMF support for a three-year Poverty Reduction and Growth Facility (PRGF). Moreover, he helped the economy achieve a 4.2% increase in the GDP during 2004. But most noticeably he can be credited with playing a major role in having Aleman prosecuted for corruption.

Within his first year, Bolanos and his supporters induced the AN to approve a resolution that suspended Aleman’s immunity. This was accomplished by a simple majority of 47 Deputies, including all 38 of Ortega’s FSLN Deputies, seven pro-Bolanos, PLC dissidents (who called themselves the Blue and White bench), the one Conservative, and an independent. Later, in 2003, Aleman was charged by the Attorney General on numerous counts including laundering some $100 million in state funds, fraud, misuse of public funds, embezzlement, illicit association, instigation to commit a crime, and electoral crimes, and was indicted, convicted, and sentenced in court to 20 years in prison. The judge in the case, Juana Mendez, is a long-time Sandinista which naturally led to speculation that her decision was politically biased. But whatever her reasons, the conviction and sentencing should end any hopes of Aleman’s running for President in 2006.

Coincidentally, Bolanos had his own problems with the law. Less than a year after taking office he and his Vice President were charged by the Attorney General’s office with his own electoral law violations. The Liberal Party Alliance, representing the PLC and two other conservative parties, had only reported a fraction of the money it spent on PLC campaigns in 2001, and had hidden some $32 million in such funds. Bolanos’ answer was to waive his immunity and boast that his life has “always been an open book.” Ultimately, the charges led to a request from the PLC-FSLN-dominated Comptroller General’s Office (GCO) in November, 2004, that the AN impeach Bolanos. Added to this was a GCO complaint questioning the legality of Bolanos’ receiving two salaries: $9,000 a month as President, and $8,620 a month from a life pension as the former Vice-President, adding up to an incredibly high total annual salary of $211,449.

Intent on Limiting Executive Power
The GCO’s impeachment request was only one early stage in a long, nasty, and very complicated governmental crisis marked also by the introduction in November of a package of constitutional “reforms,” authored by the Caudillos’ AN coalition, which were aimed at reducing the authority of the Executive. Their stated purpose was to impose the U.S. approach to the appointment of ministers, vice-ministers, ambassadors, and directors of governmental agencies- to require legislative approval of presidential nominations. The AN would also have jurisdiction to confirm whether or not public officials were fulfilling their jobs.

The amendments were strongly opposed by Bolanos and his group of AN supporters who vowed publicly to fight them, and they retaliated with their own “reform” package of amendments. These would outlaw presidential re-election for life, and would implement a direct popular vote for AN Deputies to replace the current system by which voters simply vote for party-selected lists of candidates. Bolanos also became more confrontational, charging that a “constitutional coup d’etat was being planned, something that would mean the return of another collective dictatorship, a dictatorship with two heads but still a dictatorship.” His warning that he would stop the coup by “good means or by bad means,” prompted rumors that he might declare a state of national emergency.

Attempting to undermine his AN opponents, Bolanos sought the backing of other Central American Presidents, the Organization of American States, the Central American Court of Justice, and the U.S. But early in January, an unanticipated agreement, or “pacto,” as critics came to call it, was signed by Bolanos, Ortega, and Aleman, which stated that the controlling parties would not attempt to remove the President before the end of his term, and that the proposed amendments would not become law until a consensus could be reached between the legislative and executive branches. The very next day, however, saw the Assembly approve the Caudillos’ amendments, with PLC and FSLN Deputies supporting them. (For more details on these events, see WRH, Vol. 24.23 and Vol. 25.03.)

Reining in Corruption While Overlooking Poverty
In the midst of the developing crisis, Bolonas managed in January to deliver his annual report to a very unresponsive, and even hostile, AN audience. He claimed that “We are better off than in any moment in the past 25 years.” But he didn’t mention that poverty had grown 20% in three years, and that 30% of the population and 10% of children ages 1-5 now live with chronic malnutrition. Moreover, unemployment and underemployment currently are above 50%, and over a million people have no access to healthcare, education, or potable water. Although Bolanos doubtless deserves credit for his anti-corruption campaign, as well as other positive accomplishments, he has not done much to help the poor majority of Nicaraguans who live in the second poorest country in the Hemisphere. Even the much praised external debt cancellation has done little to help the poor because at least 60% of the available funds have gone to pay for an internal debt of $3.56 billion. To be candid, however, these failings must be more broadly blamed upon the current intragovernmental battle between Bolanos and the Caudillos, a battle that has nearly paralyzed the operations of all three branches.

The Crisis Worsens
Another, and even more serious, confrontation between the Caudillos and the President erupted in June. It was triggered initially by the legislative PLC-FSLN coalition over creating a new Superintendent of Public Services (SISEP) office, the members of which the AN would select without presidential concurrence. Control of this office would give the AN power to regulate all telecommunications, energy, and water. Bolonas reacted by having the police surround the building housing the SISEP offices and preventing their entry. Again, demands were made that Bolanos resign, and an anti-Pacto rally, this time attracting tens of thousands of ordinary citizens, was held to protest the entire situation. According to protesters, who were members of a group called Network for Nicaragua, “We are completely determined to…protest against the pact and against corruption which has the people drowning in poverty.”

Again, the President appealed to the OAS, which responded by sending a delegation to Managua for a week in mid-June to investigate and to try to bring the parties together. The delegation’s head, OAS Secretary-General Jose Miguel Insulza, recommended that a serious national dialogue between all parties should commence as soon as possible because the situation could deteriorate into a “profound crisis.” Although not as serious as crises in countries like Bolivia and Ecuador that threw out their Presidents, he warned that “we still have time to save Nicaragua from the current crisis.” But the dialogue that he proposed, modeled after one that had ended in April when Bolanos’ walked out, was rejected, this time by all three parties. Still optimistic, Insulza promised to return soon.

At the same time, the newspaper La Prensa released the results of a poll that showed that 74% of Nicaraguans now feel that their country is the “prisoner of the Pacto.” But it also showed that only 22.3% of the people approve of the way Bolanos is governing the country. In other words, the majority of people appear now to have very negative feelings toward almost everyone in government. A popular feminist cartoon figure, Mafalda, summed up these feelings very well on a poster held high at the Network for Nicaragua rally: “Ugh, I’m fed up with them all. Get rid of everybody.” Thus, it would be no exaggeration to say that the current battle has become one of the most dangerous crises facing the country since 1990, and the crux of it is the Pacto.

As for the U.S., it has repeatedly expressed its strong and continuing support for Bolanos and has sent Secretary of State Colin Powell, Deputy Secretary of State Dan Fisk, and other spokespersons, to meet with conservative leaders in the country to express support for Nicaraguan democracy, concern over Sandinista victories in local elections, and the need for uniting democratic forces in the country. But the U.S. now finds itself in a dilemma because it has also demonstrated its fervent opposition to both of the Caudillos and their followers. So, who might the U.S. support for President next year if future developments should determine that the choice is between Aleman and Ortega?

Retaining Overwhelming Influence and Weight
Concerning the Caudillos, the controversial Arnoldo Aleman is seen by most observers as a clever, if not crafty individual who seems able to survive most attempts to bring him to justice or to limit his political power. A lawyer and businessman, he became active with COSEP and the Liberal Party during the 1980’s and was eventually imprisoned for his political activities. Because of this he developed an intense, enduring hatred of the Sandinistas. He was elected Mayor of Managua in 1990 as a candidate of the United Nicaraguan Opposition (UNO), and during his term he conducted a vigorous campaign to renovate the city that had fallen into a state of extreme disrepair following the 1972 earthquake and during the austere Sandinista period. He also worked to rebuild the PLC, and with the help of cronies, hammered together a political machine that helped him score a resounding victory over Ortega in 1996.

Currently, the PLC center is dominated by Aleman and a group of his “Arnoldista” cronies whose fanatical hatred of the FSLN prompts them to support him no matter what kind of degraded officeholder he may be. Aleman has been accused of stealing more money for himself, his relatives, and friends while mayor and president, than did the Somozas in 20 years. In fact, Aleman was listed by Transparency International as the 9th most corrupt national leader in the world. Although a minority of PLC members, including Bolanos, have had enough self-respect to leave his party, Aleman remains the master politician who can build power and run a political machine even from prison where he has resided off and on for over two years.

In his battle with Bolanos, Aleman has done about everything possible to win. One victory was to get out of prison, which he managed to do a year after his sentencing. The reason for being transferred to house arrest was reportedly ill health, although the Attorney General and the press later speculated that it was a “political arrangement.” Last January, rumors circulated that Aleman might be officially pardoned, either by a political amnesty or by having his sentence vacated. So far, Aleman has neither received amnesty nor been pardoned, although his PLC loyalists in the AN have attempted to pass legislation that would grant amnesty to all public officeholders, including both Aleman and Bolanos. But the PLC bloc now consists of only 43 Deputies, less than a majority, because several PLC Deputies left the party in May, 2004 to form a new Alliance for the Republic (APRE), and others are members of the dissident “Blue and White” group formed in 2001. So, Aleman obviously needs Ortega’s help to run for the presidency again.

A Fresh Contender
However, there is serious competition with Aleman in the PLC in the person of Eduardo Montealegre, the former Minister of the Presidency and Minister of Foreign Relations during Aleman’s presidency. A popular investment banker who received a 41% favorability rating in a CID-Gallup poll in March, Montealegre refers to the current PLC and FSLN leaders as “dinosaurs” who are out of touch with the people. Montealegre’s pro-U.S., free trade views led to the U.S. State Department’s Dan Fisk asking him to seek the PLC Presidential nomination. Montealegre is also U.S.-educated and has noticeably attended all important U.S. Embassy functions. But the PLC leadership insists that Montealegre “separated” himself from the party by disobeying Aleman. So, Montealegre will somehow have to go around Aleman for the nomination.

Unsuccessful at the Ballot Box, Yet Still Politically Powerful
The other Caudillo is Daniel Ortega, who is probably the strongest and most successful political leader today in Nicaragua. Although he loses Presidential elections with regularity, he manages to dominate the FSLN. He has been active with the FSLN since 1963, and after Somoza fled the country, he joined the governing Junta and in 1984 was elected President. During his term, Nicaragua drafted a constitution under which Ortega surprisingly was defeated in 1990 by Violeta Chamorro. Since then, in addition to leading the party, he has also managed to maintain very tight control of the FSLN in the AN, an ability that results from his close control of the selection of all FSLN legislative candidates.

The FSLN and Ortega received great encouragement from the results of the municipal elections in November, 2004. The party increased its control from 55 to 88 of Nicaragua’s 152 municipalities, including the capitol, while the PLC lost in 39 municipalities, the worst the party has suffered since 1994. As for percentages of votes cast, the FSLN received 46%, the PLC received 36%, and APRE, the new party, received only 12%. So, it was a good day for the FSLN, and a bad day for the PLC which lost control of more than half the municipalities it had previously controlled.

Ortega believes ardently that he will one day win the Presidency, and 2006 is the year to do it. He still echoes some of the old socialist ideas, although much toned down, and evidently believes that a more compromising FSLN approach to political and economic issues could be successful, but only under his leadership. However, there is little doubt that his authoritarian-style party leadership and his negotiating the 2000 Pacto have lost him many followers, including numerous prominent Sandinistas who have left the party, such as Father Ernesto Cardenal, Carlos Mejia Godoy, Ortega’s brother, Humberto, etc., etc.

One particular issue that could make Ortega very unpopular with potential voters, would be his possible support of legislation to grant amnesty to Aleman. This would give Aleman the opportunity to run for President in 2006 which he could no doubt do with the support of his most faithful PLC followers. But since Aleman is so unpopular with the general population, he would be more likely to lose to Ortega, a possibility of which the wily Ortega is well aware.

Former Mayor Emerges as a Formidable Threat
Currently, Ortega is being challenged by the former FSLN Mayor of Managua, Herty Lewites, a 65-year-old Jewish businessman who wants the FSLN’s nomination for President. He has a strong, although minority, following among the general party membership, as well as a solid revolutionary background that includes being jailed in 1960 during the insurgency against Somoza. He also served as an FSLN member of the AN for five years after Ortega’s defeat in 1990. His view is that the “radical group” of the party, headed by Ortega and Tomas Borge, is only “a small group of opportunists around Daniel.”

However, the FSLN Party Congress in March disagreed with Lewites and voted both to bypass its usual primary election, and to select Ortega as its candidate for President in 2006. The Congress also ratified the FSLN Assembly’s expulsion from the party of both Herty Lewites and his campaign manager. Lewites’ comments, that reflect a good deal of contemporary reality, were “There are two tendencies within the Sandinista party…The first tendency is for implementing a dictatorship. The second is for the democratization of the party and the country.” So he has vowed to continue fighting “the Danielista clan.” According to a March CID-Gallup Poll of Sandinista voters, support for Ortega had fallen by 16 points since October to only 31%, while 59% of Sandinistas said they supported Lewites, a 21% increase from October. In spite of this divisivness, the poll also showed that the FSLN was still the most popular party in the country, while Lewites was the most popular political figure in Nicaragua, almost 20 points ahead of the PLC’s Montealegre.

An Uncertain Future Awaits
The coming year and a half will see numerous challenges for the Caudillos. Both are attempting to hold on to their powers within their respective parties, and of the two, Ortega has certainly been the most successful. But the futures of the Caudillos and the parties they control are by no means certain, because too many things can happen to undermine their respective political groups. One of those things could be an unpredictable, disastrous outcome of the current constitutional crisis, and another could be the development of an alternative, “Third Way,” between the two parties. APRE, which was formed in May, 2004, with Bolanos’ blessing, contains a significant number of PLC dissidents, and could offer that kind of alternative. Currently, a “dark-horse” candidate, Dr. Jose Antonio Alvarado, who was evicted from the PLC by Aleman, is seeking APRE’s nomination for President. He is making a special appeal to the middle class which he feels virtually disappeared because of the FMLN’s “socialist” policies. Despite its poor showing in last year’s municipal elections, APRE conceivably could provide that Third Way. Whatever happens, however, the majority of Nicaraguans now appear to share the belief that they deserve far more then they now receive from almost all of their current leaders.

This analysis was prepared by COHA Senior Research Fellow Frank J. Kendrick, Ph.D.

July 20, 2005

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