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  Number 231 | Octubre 2000
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Nicaragua

NICARAGUA BRIEFS

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GAMES BANKERS AND POLITICIANS PLAY

On September 7, producers from various parts of the country together with employees of the Centeno brothers took over the National Assembly, led by FSLN secretary general and National Assembly representative Daniel Ortega. Occupying the seats of various legislators, the demonstrators used their microphones to demand passage of the bills promoted by the FSLN in the wake of the Interbank crisis to restructure and pardon agrarian debts and create a state agricultural development bank. These "judicial mob" bills were debated by bankers, business leaders and government officials, who do not consider a debt-forgiveness policy viable because it would damage the economy. They also claim that there are no funds to create another development bank. (The old one, BANADES, was closed several years ago due to its inability to collect on a huge outstanding loan portfolio, mainly to big capitalist farmers holding government posts.)
On September 30, Daniel Ortega, who had earlier announced that not only Interbank but also seven other banks in Nicaragua were in trouble, argued that "all are contaminated because this because this rotten government has created a rotting economy." That same day he announced that his party was submitting a bill to reform the law governing the Superintendence of Banks, which would allow the banking system to suspend the massive action against producers with past-due debts. On October 4, dozens of coffee growers flung baskets and sacks full of coffee against the National Assembly to demand that the laws be approved.
Meanwhile, at the end of September, Nicaragua’s Supreme Court ruled that the Ministry of the Treasury and Public Credit must turn over to the Office of Comptroller General (CGR) the audit the World Bank commissioned on the government’s sale of stock in the state-run Banco Nicaragüense (BANIC). The sentence was considered "historic" given today’s institutionalized corruption. The state capitalized BANIC in 1999 by selling 51% of its stocks in a highly questionable process that then-CGR president Agustín Jarquín declared null. The subsequent World Bank audit reportedly discovered serious irregularities in credits granted to President Alemán’s close political friends and top public officials including treasury minister Esteban Duquestrada prior to that partial privatization. For months Duquestrada had been fending off international pressure to release the audit adducing an obligation to "banking secrecy." With President Alemán’s public support, he is now staunchly refusing to obey the Supreme Court ruling on the same grounds.

GAMES THE ELECTORAL BRANCH PLAYS

Amid a festive atmosphere, the newly-formed National Unity Movement (MUN), led by retired army chief Joaquín Cuadra, held the first meeting of its municipal boards on September 10 in Managua. Days later, Cuadra turned over to the Supreme Electoral Council (CSE) all the documentation required to obtain legal standing for his new party, including 120,000 signatures of support, all formally bound and beautifully presented. The MUN has its sights on next year’s presidential race since it was formed too late to run in the municipal elections this November. Well aware that the CSE disqualified thousands of signatures from other parties to keep them off this year’s ballot, the MUN exceeded the signatures required for the 2001 elections by nearly 50,000.

The MUN’s flair for media attention led the CSE to order it to suspend all its propaganda arguing that it is confusing voters, who should be concentrating on deciding whom to vote for in the municipal elections. Cuadra denounced what he called the arbitrary nature of this demand to the Nicaraguan Human Rights Center (CENIDH), and declared that he would continue to promote the MUN and call on voters to participate in the municipal elections. If there was any doubt that the CSE’s prohibition was political rather than civic, it was soon erased. President Alemán bragged in a radio interview on October 3 that "we’re not going to let this little soldier through." Two days later the FSLN submitted a challenge to the CSE aimed at preventing the MUN from being granted legal standing.

The Supreme Electoral Council is also apparently under orders to keep the Democratic Liberal Party (PLD) from "getting through." José Antonio Alvarado, a former PLC founder and three-time minister in Alemán’s government (of government, education and defense) created the PLD in July. First, the CSE increased the requisites governing the establishment of municipal boards by the nine new parties seeking official recognition. Then, seeing that the PLD had already gotten half of the necessary boards sworn in, the CSE ordered its municipal officials not to swear in any more. On October 5, the governing PLC followed the FSLN’s lead by submitting to the CSE a challenge against the PLD’s use of the color red in its emblem and the word Liberal in its name. According to the PLC, these are its exclusive symbols.

Meanwhile, on September 28, the Nicaraguan Resistance Party and a Christian Way splinter group called the Christian Unity Movement, neither of which achieved legal recognition either, signed an electoral alliance for the November 2001 general elections that they are calling the Grand Alliance of National Hope. The PLD has announced that it, too, will join the alliance, which, unless the CSE changes the rules again, must get signatures of 3% of all registered voters multiplied by the number of parties that end up in the alliance.

IS THE CGR THROUGH WITH GAMES?

In a resolution that surprised public opinion, the CGR decided that several former BANIC officials who had showered themselves with millions of córdobas in fees, bonds and other perks just before the bank’s privatization must return this money to the state. Then on September 25, it went after former ENEL executive president Edgard Quintana for a similar reason.

At the end of the month, the CGR determined criminal responsibility in the diversion of public funds earmarked for post-Mitch reconstruction. Those cited are Byron Jerez, the powerful former director of the state’s general tax department; Jaime Bonilla, former transport minister and current National Assembly representative; several other government officials; and a private construction company called MODULTECSA, belonging to a Cuban from Miami. In the period following that devastating hurricane, the reconstructions funds were used pay MODULTECSA to build a terrace at Jerez’s sumptuous beach house. The CGR estimates that the state lost nearly five million córdobas (around US$385,000) through all the irregularities committed.

In keeping with the PLC’s now customary style, Jerez and Bonilla filed an appeal. Jerez has also announced that he intends to sue Roberto Terán, president of the Supreme Council of Private Enterprise (COSEP), for slander. Referring to the irregularities Jerez committed in building the verandah of his summer palace with funds for homeless Mitch victims, Terán labeled him "the man who has done the most damage to Nicaragua."
All these resolutions emitted by the newly collegial Office of Comptroller General, carefully documented by the media, have restored some legitimacy to this state watchdog institution following the initial damage it inflicted on itself with its wimpy resolution on the "check scam" scandal, which also implicated Jerez.

THE UPS AND DOWNS OF PRIVATIZING PUBLIC UTILITIES

ENITEL, the state telecommunications company, was to have sold off 40% of its stocks on September 11, but the operation was voided because France Telecom, the only company that submitted a bid, only offered US$63 million, below the US$79 million base price set by the state. Avantel de México, the other company that had shown interest, did not participate in the end. The government has already earmarked $60 million of whatever price it obtains from the stock sale for infrastructure projects and rural credit. The World Bank’s representative in Nicaragua said he felt "disappointed" by the failure of the tendering process, as he believed that the French company had made a "very serious" offer. It is the third attempt to privatize ENITEL to have failed so far. Privatization of this state utility and of ENEL, the energy utility, is one of the conditions required by the World Bank. On September 12, a Spanish transnational corporation called Unión Fenosa purchased 95% of ENEL’s stocks in the energy distribution area for $115 million; it was the only bidder. Neither of these two privatizations—the failed one or the successful one—encountered any opposition from the social sectors that only a few years ago so strongly opposed turning these public services over to the private sector.

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