Envío Digital
Central American University - UCA  
  Number 264 | Julio 2003




Envío team


On June 20, the Attorney General’s Office ordered the state to seize La Chinampa, a 1,700-acre farm belonging to the Alemán family, along with 50 properties owned by others implicated in the alleged embezzlement of over $100 million in state funds known as “the stash,” revealed in August of last year.
As early as 1998, La Chinampa had already become a symbol of the economic wealth that former President Alemán had been amassing through corrupt practices. At that time, the Comptroller General’s Office showed that he had invested milli6ons of dollars worth of public funds to build a highway leading up to the previously isolated farm then equip the farm with outbuildings, light posts, wells, a gasoline pump, cattle, pureblood horses, fruit orchards and more, using public equipment and workers. By the time it was taken over, La Chinampa, once the site of Pantagruelian parties, had been virtually dismantled.

Three days later, Byron Jerez’s Pochomil beach house, valued at some US$2 million, was intervened as well. The media images of the former tax director’s luxurious summer mansion, allegedly built with international funds earmarked for Hurricane Mitch victims, triggered one of the greatest scandals since Alemán and Jerez, his partner in crime, were first accused of corruption.


The “spirit” of the Ortega-Alemán pact has permeated branches of state, government institutions, economic associations and, last but far from least, individual consciences. But no cloud as gray as this can fail to have a silver lining. The revived alliance between these two caudillos, feeding on the President’s isolation and weakness, pushed through approval of regulations for both the Caribbean Coast’s Autonomy Statute, passed in 1987 but largely toothless ever since due to the consecutive governments’ unwillingness to regulate the law, and the Law of Transfers to the Municipalities. Both the coast population and mayors across the country have persistently fought for the respective regulatory laws as a just demand.

Among other aspects, the Autonomy Statute establishes that the governments of the two Caribbean coast regions will administer health, education, culture, transport, infrastructure, natural resources and other institutions in coordination with the corresponding central government entities to benefit the region’s indigenous peoples and ethnic communities. With no detailed regulations spelling out the various competencies and just how this coordinated administration was to be implemented, however, these attributes have been unenforceable.

The unanimous approval of the legislation in general on July 3 was a huge and long-awaited step; the next day the streets of all the coast’s municipal centers were filled with ecstatic and incredulous revelers, many of whom were aware that it coincided with Independence Day in the United States. For all the celebrating,a major hurdle remains: the next step, which will reveal the real intentions of the national legislators, is approval of the bill article by article.

The two autonomous regions occupy 46% of the nation’s territory and, while home to less than 10% of the population, they contain a wealth of natural resources. Indiscriminate exploitation of the regions’ timber, fish and gold by foreigners and Pacific-based power groups during the Chamorro and Alemán governments and the conviction that there are oil deposits in the region go a long way to explain the disinterest in legally defining any real power for the coast governments.

The general approval of the Autonomy Statute’s regulatory legislation ranks alongside the passage of the Autonomy Statute itself during the revolutionary government and the Law of Demarcation of Indigenous Territories in December of last year as historic legal milestones for the coast’s population and for national unity. It remains to be seen whether the articles as finally approved live up to the expectations that have been created.


The tensions that had been building between energy consumers and the Spanish corporation Unión Fenosa (UF), Nicaragua’s electricity distributor since it bought out the state company in 1999, peaked in late June. Fenosa vice president José Miguel Maiz and other corporate directors were summoned to what became a hostile National Assembly hearing on June 25, in which representatives from all benches backed the growing consumer complaints unanimously . Among the charges were an excessive increase in electricity rates (150% since UF took over operations), billing home consumers for street lighting even in neighborhoods that have none and recent charges for “unrecorded energy.”
On July 1, the Nicaraguan Energy Institute (INE), the state regulatory body for the electricity industry, released a report charging serious UF administrative deficiencies resulting in excessive commercialization costs that it is passing on to users, an increase in uncollected accounts and poor customer service. INE also reported that UF has made no investments either to expand or to improve its service. The next day the legislators reformed the electricity industry law, seeking to hobble UF, which in turn sparked criticisms from INE. The reforms, it argued, “are the product of a moment at which there is a greater desire to punish the electricity sector than to create order in it.” Maiz expressed his confidence that President Bolaños would veto the reforms.


President Bolaños’ attempts to forge a winning alternative to both the PLC and the FSLN in next year’s municipal elections and the even more important presidential elections in 2006 may be taking shape. In an assembly in mid-June whose attendance exceeded expectations, seven small Liberal fractions “reunified” under the banner of his new Liberal Unity Movement. Taking a leaf from the FSLN’s reunification in 1979, the board of this new grouping included members of all fractions. in ensuing days, leaders of both bolaños’ old conservative party and the national unity movement expressed their interest.


If anyone thought that the property disputes created during the revolutionary years had all been resolved over the past 13 years, they are wrong on two counts. First, a full half of the country’s 1.4 million hectares of productive land are entangled in some ownership dispute, and second, some of these conflicts were in fact produced not during the Sandinista government but during successive ones.

“We have had three governments, and the problem is only getting worse,”said Hermógenes Rodríguez, a member of the Property Forum, adding that “we often have up to four claims by different beneficiaries for the same property.”
Agricultural minister Augusto Navarro admitted that the titling problems and the lack of loans available for agricultural production are two major obstacles to Nicaraguan farmers. He said that “traditional property owners have been selling properties de facto, but they don’t end up being duly legalized; and there are also still Agrarian Reform assignations that have not been correspondingly legalized.”
Vilma León York, deputy treasury minister, claims that the Bolaños government has the property problem high on its list of priorities and will try to resolve it as quickly as possible, while Government Vice Minister Alfonso Sandino, who sits on one of the government’s commissions on property conflicts, said that legalizing properties in conflict is a protracted and very complex process.

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How Do We Dig Ourselves Out of the Hole?

Nicaragua’s Future: Hooking Children on Books

The Bankruptcy of Municipal Governments and the Swindle of Municipal Autonomy

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