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Central American University - UCA  
  Number 268 | Noviembre 2003



The “Powell Effect” on the Three Political Forces

US Secretary of State Powell’s brief stopover in Managua left in its wake a number of changes in the political scene. Most affected was the FSLN, whose opportunistic alliance with President Bolaños was undermined by Powell’s call for Liberal unity without Alemán in exchange for the former President’s freedom.

Nitlápan-Envío team

Nicaragua had to take two important “exams” in recent weeks, administered first by the donor community in late October and then by the US government a week later.

Against an increasingly tattered backdrop of sovereignty and national autonomy, the combination of national offers and international demands, pressures and recommendations produced by the donors’ consultative group meeting had immediate repercussions on the country’s political class. While the three forces that dominate the political scene—the FSLN, former President Alemán’s PLC and current President Enrique Bolaños’ shaky new amalgam called the Grand Liberal Unity (GUL)—were still digesting that experience, US Secretary of State Colin Powell’s quick visit imposed equally immediate changes on all three. Bolaños quashed the idea of postponing the municipal elections so as to combine them with the presidential ones in 2006, the PLC fell in line with the President and the FSLN found itself out in the cold alone, facing a dilemma. The linchpin to all those changes is that Alemán is reportedly willing to trade his freedom for staying out of politics.

Under the critical eye of the donor’s consultative group

The meeting with the donor countries’ consultative group that opened on October 27 was Nicaragua’s seventh such exam as a candidate accepted into the initiative for highly indebted poor countries (HIPC). Some 25 countries and 20 financial institutions and multilateral agencies that have amply financed Nicaragua’s dependent economy sent representatives to the now ritualized protocol event, held for the first time in Managua.
President Bolaños asked this august body of creditors to excuse the previous government’s “non-compliance and excesses,” requested their political and moral support for the institutional transformations he is trying to foster and made every effort to convince them to help finance what he considers his best offer—the recently unveiled National Development Plan. Referring to the Alemán administration that preceded him, he stressed that bad macroeconomic management, corruption and party identifications in state institutions had combined to harm the people and halt the country’s development.

How well did he do on his test? The international community gave him high marks. It still trusts his administration and is still gambling on his leadership, because he is seen to be putting the house in order. Bolaños’ blind adherence to the dictates of the United States, which is exercising ever increasing influence on the international community’s aid policy, surely helped his grade.

Following up on Bolaños’ own recognition of the institutional problems, the international community again suggested,very explicitly, that “profound” reforms are needed, especially in the judicial and electoral branches, currently in the hands of obedient PLC and FSLN loyalists thanks to the pact sealed between their respective leaders—Alemán and Daniel Ortega—several years ago. The Europeans underscored that the reforms are to avoid political exclusion and favor economic equity, while the US emphasis was on the importance of guaranteeing stable rules of the game for foreign investors and exploiting the opportunities supposedly coming Nicaragua’s way in the Central American Free Trade Agreement currently being hammered out.
The creditors were generally receptive to Bolaños’ development plan, pledged to help finance it and made recommendations to improve it. Among the observations of the various delegations, two critiques had particular strategic importance. First was the plan’s distinction between the poor “with potential” and those living in zones considered to have no potential who are thus excluded from the investment proposal. Second was the failure to incorporate a gender perspective into the plan in order to adequately analyze the profound inequities between men and women that impede development in Nicaragua. (For further comments on the new plan, see the article in this issue titled “Where’s the State’s Role in the National Development Plan?”)

Judge grants more privileges to the already privileged

As the consultative group met, former President Alemán, the individual most responsible for his government’s “non-compliance and excesses,” remained in his specially outfitted cell awaiting trial, which must take place before the end of the year, enjoying his new toy. A week earlier, in the presence of the press, Juana Méndez, the judge assigned to his case, personally handed him a cell phone with unlimited use, on which he could make national and international calls, connect to the Internet and even make financial transfers. Méndez justified her decision on humanitarian grounds: the man is lonely and has the right to communicate with his family. She had already authorized daily visits by his wife and two daughters, and in fact, isolated, lonely Alemán has received an average of six visits a day.
His main partner in crime, former tax director Byron Jerez, originally indicted on eight counts of corruption and so far found guilty of one and absolved of another, was granted an even greater privilege in the same days: after posting bail, he was moved from his cell to house arrest. The judges responsible for the two cases already heard against Jerez—including Méndez—and the appeals court judges again offered humanitarian justifications, this time based on a medical assessment. Before being arrested, Jerez had undergone an operation to insert a gastric band to reduce his appetite and ingestion capacity in order to lose weight. By not sticking to the specific diet that has to accompany this procedure (seven light, calorie-counted meals daily), Jerez has spent several days in the hospital on 16 different occasions since going to prison due to vomiting and esophagitis. Although it was not made clear whether the penitentiary system or Jerez himself strayed from the diet, it earned him domiciliary freedom. Both privileges are scandalous, particularly considering how many seriously ill prisoners suffer and even perish in Nicaragua’s prisons with no medical attention whatever.

Alemán and Jerez are the only government officials ever tried for corruption and imprisoned. The dossiers of so many others whose illicit acts were revealed through the national media’s arduous investigations, particularly during Alemán’s term, have been negotiated away or were effectively shelved when the accused fled the country. The now obvious fact that no other top official will be touched has bred social disillusionment, despite the Attorney General’s periodic promise that “very serious charges” will be announced “in a few days” and despite the kudos Bolaños still receives from donors, diplomats and foreign ministers as Central America’s, even Latin America’s anti-corruption champion.

He’s still the king

Alemán used the cell phone given him by Méndez, whom he cordially calls “my judge” despite her public allegiance to Ortega, to participate in the extraordinary PLC convention he himself had called to elect a new 18-person national leadership following his purge a month earlier of those he considered insufficiently loyal. His wife María Fernanda had quickly circulated his list of preferred candidates—all unconditional supporters of their caudillo—to the convention delegates around the country, and to no one’s surprise every one of the 18 on his list was either voted in or reconfirmed.
The convention, held on October 26, demonstrated that Alemán is still “king” despite all the political and personal reverses he has suffered this year. He has not lost his iron grip on the PLC’s party structures and his role in national politics continues to carry weight. He is hardly the “political cadaver” President Bolaños spoke of with such satisfaction only two months ago, echoed euphorically by the PLC dissidents who crossed over to Bolaños’ side.
On Alemán’s orders, Treasury Minister Eduardo Montealegre was finally removed as the party’s third vice-president, although not expelled from the party, ostensibly for refusing to quit his high government post after the PLC declared itself “in opposition” to the Bolaños government some months ago. For Alemán, however, the real goal is to erode the popularity Montealegre enjoys within the larger Liberal family. Alemán may be unable to realize his dream of running for President again when he gets out of prison, but he certainly intends to select a candidate in his image and at his command, and Montealegre does not fit the bill.

In anticipation of that moment, Alemán is busily strewing obstacles in the path of Montealegre, who is otherwise the PLC’s best candidate and the US preference. He is also beginning to promote other candidates more to his own liking, particularly Francisco Aguirre Sacasa, who was Alemán’s foreign minister. From his appropriately named “cell” phone, Alemán sent a taped message to the PLC convention promising to “set aside my own personal interests”—by which he meant his presidential aspirations, not his liberty—and suggested a “national agreement” with all the country’s “democratic forces” to avoid an FSLN electoral victory. His message was a preview—a signal of acceptance perhaps?—of the message attributed to US Secretary of State Colin Powell in his meeting with those same “democratic forces” (FSLN excluded) a week later.

The strategy to free Alemán?

René Herrera, Alemán’s most qualified, constant and closest political strategist—today off the PLC leadership table because Alemán doubted his loyalty—is sure “the king” will go free. Just before the PLC convention, Herrera revealed details of the strategy he claims to have been implementing to that end.
The “philosophy” of his negotiations, Herrera explained, consists of “linking his release from prison to Nicaragua’s development.” He argues, and not without reason, that as politics always precedes and determines economics in Nicaragua, there will never be economic stability or development without political stability. In his view, Nicaragua has been trapped in major political instability ever since President Bolaños decided that “all roads led to Alemán.” Herrera claimed that he warned Bolaños the anti-corruption war would produce uncontrollable political instability, which would in turn trigger greater economic crisis, “and here we are,” he concludes. He also recalled that when Alemán took office in 1996, some advised him to throw “two or three” big fish into jail, but Herrera stopped him from doing it because those close to them would then get even by jailing another few, and their allies would do the same in “a never-ending tale.”
According to Herrera, this is exactly what has happened since Alemán’s arrest; it has already prevented the country’s economy from stabilizing and will prevent any development plan—not to mention any free trade agreement—from functioning. Thus, Herrera predicts, Alemán’s freedom no longer depends just on negotiations between the PLC and the FSLN or on “the successive crises we’ve been fabricating,” referring to the Sandinista and Liberal justices in the bi-party Supreme Court.

Herrera argues that this instability is seriously affecting the pocketbooks of national business leaders and even involving “international actors” (read United States). “Everyone can now see the political and economic instability triggered by having imprisoned the leader of the country’s largest party and the need to resolve this”… which for Herrera involves setting that leader free, of course.

Is this version cynical enough to be true? Or is it cynical enough to have been cooked up by Herrera to aggrandize his leader and slough off onto Bolaños all the blame Alemán deserves for the country’s economic and political instability? Time will tell.

What will it cost to get to the culmination point?

The important economic events promised for the end of the year, particularly reaching the HIPC initiative’s culmination point on schedule in December, must be preceded by political agreements translated into law by the National Assembly. The three most important pieces of legislation are a civil service bill, a public indebtedness bill and next year’s national budget, which must be approved with a fiscal deficit in line with that set by the executive branch if Nicaragua is to get the green light from the International Monetary Fund. That obviously requires majority support in the National Assembly which, given the tenuous correlation of forces in the legislative body, is something President Bolaños must pay a high price for each time.

For over a year, Bolaños has gotten the majority needed to pass such strategic laws by allying with Daniel Ortega, who would then order the 38-member FSLN bench in the National Assembly to join forces with the handful of pro-Bolaños legislators, allowing Bolaños to push ahead with his projects. Now accustomed to being “needed,” the Sandinistas decided to raise the ante at this important economic juncture. On November 1, they declared that they would only approve the public indebtedness bill if the government turned over nine companies earmarked for worker ownership in the concertation hammered out during the Chamorro government at the beginning of the nineties. The government has set the price on these currently closed and obsolete companies at some US$16 million, which the FSLN and the workers consider totally unacceptable. When President Bolaños testily responded that he refused to be “blackmailed,” the Sandinistas radicalized their discourse further. This unexpected standoff filled the political air with speculation. It would take only three more days to become clear that the winds from the North were blowing in another direction.

Bolaños had presented his 2004 budget proposal to the National Assembly budget commission at the end of September. Like every other year, no institution was satisfied with its assignation and began to make demands. One of the least happy was the Supreme Electoral Council, whose magistrates declared that they could not possibly organize the municipal elections scheduled for November 2004 with the amount allocated. The international community, which normally kicks in a significant amount for elections, is now refusing to do so as long as the electoral branch remains dominated by Alemán and Ortega loyalists and as long as Nicaragua continues to have the most expensive per-capita election cost in Latin America due to the electoral branch’s inefficiency and corruption.

Also, like every other year since 1991, the university students belligerently demanded a more exact calculation of the 6% of the ordinary and extraordinary budgets constitutionally assigned to public universities. On October 28, students engaged in a pitch battle with the police right in front of the luxury hotel where the consultative group was meeting. The confrontation between students firing homemade mortars and the police, who saturated the area with tear gas and rubber bullets, left a number of police agents wounded, one seriously, and dozens of students detained. It was one of the most violent versions of this annual street demonstration Managua has ever experienced, and that’s saying something. Chastised by strong criticism from various social sectors, the students conducted a peaceful march in Managua days later that brought out some 5,000 students from all over the country.

Without going into the pros or cons of the 6% figure, the most novel aspect of the demonstrations this year was the disrespectful way President Bolaños and several of his top officials referred to graduates of the public universities, sweepingly calling professionals who had studied in Nicaragua “inefficient.” It was yet another expression of the oligarchic arrogance of the President and his team, who all studied in US universities and seem unable even to appreciate the implications of the budget’s inability to cover the nearly half-million primary students who remain outside the classrooms every year.

A new Bolaños-Ortega deal?

The country’s economic reality and President Bolaños’ political weakness in the National Assembly had earlier led him to privately request Daniel Ortega’s support for his proposal to suspend the municipal elections until 2006. While this would obviously allow the government to save money, it would also buy time for Bolaños to try to strengthen the GUL. In exchange, he promised new concessions to the FSLN.

It was left to the minister of education to publicly float the idea of suspending the municipal elections, linking it to the notion that the savings could be used to increase teachers’ salaries more significantly. In recent months the teachers have engaged in hunger strikes, demonstrations, work stoppages and many other pressures to demand the fair salary they deserve and are far from receiving. On October 24, Ortega made the surprising announcement that the FSLN had decided it would be best to postpone the municipal elections “for the good of Nicaragua,” and use the savings to satisfy the just demands of the teachers and university students.
The ensuing discussion about whether to hold or delay the elections necessarily brought back onto the agenda an older and more strategic issue: reversing the 2000 electoral law reforms cooked up by the Alemán-Ortega pact to ensure a closed two-party system and keep society polarized. In its current form, Nicaragua’s electoral law is considered one of the most exclusionary in Latin America. With the debate opened, a number of reforms were proposed. Those most strongly opposed to the pact’s changes rightly insisted that postponing or holding the elections is irrelevant if the law remains as is and continues to be administered by a discredited Supreme Electoral Council. Various reform proposals of a lesser political magnitude were offered to help cut election costs.

Who stands to benefit most from the postponement?

A year ago, when Alemán’s power started taking a decidedly downward turn thanks to Bolaños’ seemingly determined war on corruption, it was the PLC that proposed delaying the municipal elections, while the FSLN strongly opposed the idea. This time around the Sandinistas saw not only possible concessions growing out of cutting another deal with Bolaños, but also at least two potential political advantages of the postponement itself. The first is that the disputes between the two Liberal currents could fester longer, accentuating quarrels and splits that would favor the FSLN, and the second is that in a combined election the FSLN’s municipal results would not run the risk of negatively affecting the presidential ones as happened last time, when the two elections were held separately.

The risk the FSLN runs if the municipal elections are held earlier is two-pronged. If it wins Managua and significant departmental capitals as it did in 2000, it could make fence sitters more vulnerable to the fear-mongering campaign perennially applied by the Liberals, as happened in the 2001 presidential elections. If, on the other hand, the FSLN loses Managua because of the Ortega-imposed candidate Dionisio Marenco’s scant popularity, the image of defeat could also make it hard for the party to attract fence sitters in the presidential elections. Better to avoid the dilemma by holding the elections at the same time and count on the electorate’s tendency to vote a straight party ticket on all ballots, for better or worse.

The PLC, meanwhile, is perfectly aware of the fragility of the GUL’s structures and has no interest in giving it an extra year to try to consolidate. Better to hold the municipal elections next year and show that dissident Liberal current just how strong the PLC still is despite everything that has been leveled at Alemán.

Always playing one side off against the other in the Bolaños-Alemán feud, Ortega decided to go with Bolaños this time. His response led all the political groups and social sectors to take their own stand around the issue. Except for the FSLN publicly and the executive branch privately, the unanimous sentiment was to reject the postponement because it would mean breaking with the democratic process and affecting the relative autonomy that is taking root in local power thanks to independent municipal elections.

Powell came to mark territory

With Nicaragua in the preamble of this new deal and immersed in debates about electoral issues, it found itself sitting another “exam,” this time set by none other than US Secretary of State Colin Powell, who visited the country for 24 hours on November 3-4, bringing an important change of signals for the Bolaños government.
The US foreign policy chief brought clear signs of imperial determination on his brief passage through our country. There was no lack of pomp for this imperious representative of the North’s might, which Nicaraguan officials went to hilarious lengths to satisfy—including literally giving him the red carpet treatment. They also read into his visit a message only they perceived: if Powell deigned to sleep in Managua, it would surely send a signal to foreign investors that Nicaragua is a safe country...

But the real messages were different, and not a bit funny. Powell met with only four Nicaraguan politicians—pro-Bolaños National Assembly president Jaime Cuadra, possible unifying factor in the divided Liberalism due to the many years he dedicated to the PLC; Miguel López, legislator and GUL secretary; Oscar Moncada, survivor of Alemán’s latest PLC leadership purges and liaison with the caudillo; and Conservative Party president Mario Rapaccioli. The FSLN was openly excluded, despite its weight in all state institutions and in national politics. While not made public, Powell’s message to the four was unmistakable: take the steps needed to get to the HIPC culmination point, unify the Liberals and make common cause with the Conservatives to defeat the FSLN and forget about Alemán’s political future. A variant on the last point was also reportedly conveyed to Alemán in his cell: give up your political leadership and all your sins will be forgiven...

Immediate consequences of the “Powell effect”

If Powell didn’t quite get what he sought on his military agenda this go-round (see article titled “Sorry Uncle Powell, the Sams Are Ours” in this issue), the consequences of the “Powell effect” in the political realm were immediate. A mere day after his departure, an unexpected new majority duly appeared in the Assembly, made up of the pro-Alemán PLC and Christian Way benches, which after months of discord and insults joined ranks with the pro-Bolaños Blue and White bench to push through the laws needed for the HIPC. The FSLN bench suddenly found itself out in the cold.

Nicaragua’s legislative protocol is to vote the overall bill up or down then debate it article by article if it is accepted. November 5 opened with the general passage of the civil service bill by 88 of the 92 legislators. Moving to the specific debate, however, the new majority bloc, totally ignoring the stunned Sandinista legislators, quickly approved 29 important alterations introduced at the last minute by the executive branch, unstudied by the legislators but previously agreed to by all the union federations.

This majority, which the pro-Alemán Liberals call “rapprochement but not unification” will allow Bolaños to have the laws and the 2004 budget guaranteeing the HIPC culmination point ready on time without major problems and without need for the FSLN. The FSLN’s haughty demands that the government turn over the “workers’ companies” were also ignored.

Arnoldo: up and out!

The effects bgan to be felt even faster in the El Chipote police prison cell where Alemán is being held. The very first proof of the “Powell effect” came on November 4, the day of his departure, when Judge Méndez suddenly issued a judicial order restricting Alemán’s use of his two-week-old cell phone to 10 minutes a day and only between 4 and 5 pm. Alemán, responding in kind to such silliness, renounced its use altogether and requested that it be given to his wife. Such huffiness aside, Alemán seems to have finally accepted that his leading role on the political scene, including his legislative post and any electoral aspirations, are history, traded off for his freedom.
By what mechanism will Alemán be released, an event that could happen soon? Will the National Assembly grant him an amnesty? Will it result from some “authentic” interpretation of the money laundering law or the discovery of some procedural flaw in the Office of Attorney General’s presentation of evidence leading the court to throw out his indictment? The standard refrain of family members who love and rely on him, party members who see him as king and even those who have entered into so many nefarious pacts with him is that “nothing has ever been proved against him.” In so stating, they have been preparing the way for the deal that will definitively open the jailhouse door.
What will he do and where will he go when he gets out? Assuming he leaves the country, which like everything else in Nicaragua is not yet a safe bet, will he take asylum, go into exile, seek “medical treatment” abroad? And what measures will be taken to prevent him from reneging on his word to stay out of politics once he is again breathing the fresh air of freedom?
Alemán’s release without a political leadership role will cost him enormously, although releasing him at all will have a huge political cost for both Bolaños and Ortega. In the latter’s case either his definitive sentencing or his definitive release means, as we are already seeing, that President Bolaños has less need of his alliance with the FSLN caudillo. The FSLN will thus have to negotiate an agreement with the PLC bench to be able to hang on to the power quotas in state institutions it negotiated with Alemán while he was in office. What might the FSLN come up with to make Bolaños pay the full price for Alemán’s release?
What seems most important to the United States in all of this is a winning anti-FSLN bloc united under a more modern political administration than Alemán’s outmoded and freewheeling caudillo style. An acceptable administrative approach must guarantee the signing and implementation of the free trade agreement, the disarmament of the Nicaraguan army—still too associated with Sandinismo in the Bush administration’s view—and the execution of the Empire’s hemispheric security plans.

Ortega faces a major dilemma

The FSLN is unquestionably the political actor hardest hit by the “Powell effect.” Time is running out on Ortega’s opportunistic tactics of allying with either Bolaños or Alemán depending on which offers the best advantages and possibilities. Has the moment already arrived in which the FSLN must choose between the two? What are the short- and medium-term consequences of choosing the Liberal caudillo over the Liberal President? Or is it possible that Powell’s arrogant intromission has already closed off the option of choice for the Sandinistas?
In addition to the evident electoral consequences of a US-imposed Liberal bloc, what other consequences might this “rapprochement” bring in its wake? Could it truly result in greater unification and, if it does, would it foretell the demise of caudillismo in favor of the more modern leadership the United States is looking for?

Such a high price for Nicaragua

Time is showing increasingly clearly that the Ortega-Alemán pact was a democratic involution, an authoritarian regression for which Nicaragua and its society paid a tremendous economic and social cost. The pact’s cost to the FSLN is also becoming more evident in the demoralization and ethical disarticulation of its rank and file and the political unraveling of the organizational and mobilizing networks that the best of the Sandinista forces were holding together only out of their own convictions.

Today the FSLN is rooted in only one network: that of dozens of petty caudillos with petty but significant quotas of personal power in their fiefs, faithful to the party and its chief caudillo through salaries, perks, atavistic fears and/or emotional loyalties. Time continues to reveal how very much Nicaragua has lost and goes on losing because Sandinismo is hostage to an FSLN controlled by Ortega and the powerful circle that benefits from his control.

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