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Viewing cable 07MANAGUA329, AMBASSADOR-DESIGNATE CRUZ: &BIGGEST CHALLENGE WILL

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Reference ID Created Released Classification Origin
07MANAGUA329 2007-02-05 20:32 2011-06-21 08:00 CONFIDENTIAL Embassy Managua
VZCZCXRO8438
PP RUEHLMC
DE RUEHMU #0329/01 0362032
ZNY CCCCC ZZH
P 052032Z FEB 07
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC PRIORITY 8963
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RUEHCV/AMEMBASSY CARACAS PRIORITY 0941
RUMIAAA/CDR USSOUTHCOM MIAMI FL PRIORITY
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RHEHNSC/NSC WASHINGTON DC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY
C O N F I D E N T I A L SECTION 01 OF 02 MANAGUA 000329 
 
SIPDIS 
 
SIPDIS 
 
WHA/CEN 
 
E.O. 12958: DECL: 02/05/2017 
TAGS: PGOV PINR KDEM NU PREL
SUBJECT: AMBASSADOR-DESIGNATE CRUZ: &BIGGEST CHALLENGE WILL 
BE TO MANAGE TENSIONS AND CONTRADICTIONS8 
 
REF: A. MANAGUA 00127 
     B. 2006 MANAGUA 02691 
 
Classified By: Ambassador Paul A. Trivelli. Reasons 1.4 (B,D). 
 
1.  (C) Summary:  Ambassador and country team members 
recently presented an overview of USG programs and their 
parameters to Nicaraguan Ambassador-designate to the United 
States Arturo Cruz (Ref. A), similar to the December 2006 
presentation to then President-elect Daniel Ortega's 
transition team (Ref. B).  The Ambassador reiterated our 
commitment to working with a democratic Nicaraguan government 
(GON) that supports open markets and cooperates on security 
issues, noting that the protection of U.S. citizens and 
investments in Nicaragua is essential to ensuring bilateral 
cooperation.  Cruz, who received pertinent written materials 
several days before the briefing, was particularly interested 
in the successes of CAFTA thus far, noting that President 
Ortega wants to be "convinced" of the trade agreement's 
benefits to the Nicaraguan people.  He was attentive to the 
annual 527 Property Waiver process and Nicaragua's Millennium 
Challenge Account program (MCA-N) program -- specifically, 
its organizational composition and structure and compliance 
with the program's rigorous compliance indicators.  End 
Summary. 
 
2.  (SBU) On January 29, Ambassador presented an overview of 
USG programs and their parameters and distributed written 
materials to Ambassador-designate Arturo Cruz and his future 
Press attache Fernando Coronel.  In addition to the 
Ambassador, the Embassy team included the DCM, USAID 
director, acting consul general, FAS director, Millennium 
Challenge Account-Nicaragua (MCA) director, public affairs 
counselor, political counselor, economic counselor, property 
office director, milgroup attache, INL-Managua director, and 
Peace Corps country director. 
 
3.  (C) The Ambassador reiterated our commitment to remain in 
Nicaragua and continue our assistance programs as long as 
Nicaragua's government remains within a democratic framework, 
supports open markets and economic opportunity, and 
cooperates on common threats and other security issues of 
mutual concern.  The Ambassador, who explained that he has 
conveyed the same message in his meetings with new ministers, 
commented that President Ortega's remarks during the January 
26 Diplomatic Corps event could lead to unexpected 
consequences -- specifically, President Ortega's sharp 
criticism of the IMF and his stated desire to remove 
Nicaragua from IMF programs as soon as possible.  While 
Central Bank President Antenor Rosales had subsequently 
assured the Ambassador that GON intends to negotiate a new 
IMF agreement, the mixed messages are confusing and 
worrisome.  Cruz noted the Ambassador's observation. 
 
4.  (C) Touching next on CAFTA, the Ambassador noted its 
remarkable success thus far, highlighting the fact that 
Nicaraguan exports to the United States have increased by 30% 
since CAFTA entered into force on April 1, 2006. 
Cruz requested additional details on the successes of the 
trade agreement thus far.  He explained that President Ortega 
had asked him to "convince" him that CAFTA works and is a 
good thing for Nicaragua.  The Ambassador offered to send 
additional information and invited Cruz to read his op-ed on 
the topic to be published the following morning in 
(left-leaning) daily El Nuevo Diario. 
 
5.  (C) Acting ConGen underscored the positive relations 
between his section and Lotty Bedana of the Ministry of 
Foreign Affairs in handling deportation flights and other 
matters.  He provided a handout on visa application 
procedures for GON officials and for facilitating VIP entry 
into the United States.  In reference to the Eric Volz case 
(Reftels), ConGen noted that the case continues to draw 
substantial U.S. Congressional attention and that our duty is 
to make sure his rights are protected and he is given a fair 
trial.  Cruz assured us that President Ortega is very 
attentive to the matter and has asked him to monitor and 
assist with the case. 
 
6.  (SBU) PolCouns outlined the parameters of the annual 
human rights, religious freedom, and trafficking in persons 
(TIP) reports and their link to our foreign assistance 
programs.  She explained that Nicaragua had been placed on 
the TIP watch list in 2004, but after the GON made 
considerable progress in addressing Nicaragua's trafficking 
problems, it was raised back to Category 2.  Cruz requested a 
copy of the 2005 TIP report, which was subsequently e-mailed 
to him. 

7.  (SBU) Ambassador-designate Cruz paid particular attention 
to the annual 527 property waiver process and diligently 
noted the need for the GON to make reasonable progress in 
resolving outstanding property claims filed by U.S. citizens 
(1,130 registered properties involving 298 U.S. citizens). 
Assuring us he will make this issue a top priority, Cruz 
requested information on all Nicaraguan entities and contacts 
involved in resolving/compensating the claims. 
 
8.  (SBU) Cruz posed a number of questions regarding 
Nicaragua's Millennium Challenge Account program and was 
pleased that the MCA's principal goal is to reduce poverty 
through economic growth.  The MCA-N country director 
explained that the $175-million, five-year program's 
integrated development approach involves national and local 
government, civil society, and the private sector. 
Continuation of the program depends on a country's ability to 
rule justly, invest in its people, and promote economic 
freedom - as measured by 18 indicators obtained from 
independent, internationally respected sources. 
 
9.  (U) Cruz inquired whether the GON's delay in entering 
into a new IMF agreement could affect Nicaragua's compliance. 
 The country director replied that it could affect one of the 
indicators, but the MCA would thoroughly review the situation 
before taking any action.  He explained that the MCA conducts 
an annual review of its programs and regularly informs 
Congress of the progress and concerns in each MCA program. 
 
10.  (SBU) The Ambassador-designate raised President Ortega's 
interest in expanding the MCA program.  The country director 
replied that current legislation does not allow for 
concurrent compacts in a country, but deliberations are 
underway to reconsider this restriction.  He encouraged Cruz 
to meet with MCA CEO Danilovich in Washington, adding that 
Cruz' predecessor had aggressively lobbied for Nicaragua's 
participation in the MCA program. 
 
11.  (C) MCC board staffing also peaked Cruz's curiosity, 
specifically, how the executive director is selected and the 
terms of his appointment.  The country director clarified 
that the executive director's appointment is indefinite and 
that the MCA selected Juan Sebastian Chamorro for the 
position after a rigorous screening process based on his 
qualifications.  (Comment: Cruz may have been under 
instructions to determine whether or not the GON is 
authorized to replace the executive director, likely to one 
who is politically affiliated with the new government.) 
 
 
12.  (U) Cruz was impressed by the range of USG exchange 
programs and offered to host Nicaraguan participants who 
visit Washington.  Similarly, he invited Peace Corps 
volunteers to meet with him before they depart for Nicaragua. 
 He was also impressed by our level of cooperation with the 
police and military in counter-narcotics and by the scope of 
our humanitarian assistance to Nicaragua's poor through the 
New Horizons and Medrete programs.  Cruz urged us to increase 
the frequency of these types of programs. 
 
13.  (C) At the close of the meeting, Ambassador-designate 
Cruz commented that his biggest challenge will be to "manage 
tensions and contradictions."  Referring to President 
Ortega's penchant for making polemic public statements, Cruz 
acknowledged that at times the "noise can be loud," but 
insisted that in comparison to the past, Ortega has "toned 
down" his public messages and is "very reasonable" in 
private. 
TRIVELLI