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### Viewing cable 07MANAGUA178, LACAYO: FSLN INTEREST GROUPS COMPETE FOR DOMINANCE

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
07MANAGUA178 | 2007-01-23 15:43 | 2011-04-25 19:00 | CONFIDENTIAL | Embassy Managua

Appears in these articles:
http://www.nacion.com/2011-04-25/Mundo/NotaPrincipal/Mundo2743916.aspx
http://www.nacion.com/2011-04-25/Mundo/Relacionados/Mundo2743919.aspx
http://www.nacion.com/2011-04-25/Mundo/Relacionados/Mundo2743922.aspx
http://www.nacion.com/2011-04-25/Mundo/Relacionados/Mundo2752792.aspx

`

    VZCZCXRO5825
    PP RUEHLMC
    DE RUEHMU #0178/01 0231543
    ZNY CCCCC ZZH
    P 231543Z JAN 07
    FM AMEMBASSY MANAGUA
    TO RUEHC/SECSTATE WASHDC PRIORITY 8722
    INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
    RUEHCV/AMEMBASSY CARACAS PRIORITY 0899
    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 03 MANAGUA 000178

    SIPDIS

    SIPDIS

    DEPARTMENT FOR WHA/CEN

    E.O. 12958: DECL: 01/23/2017
    TAGS: KDEM NU PGOV PINR PREL ENRG EPET
    SUBJECT: LACAYO: FSLN INTEREST GROUPS COMPETE FOR DOMINANCE

    REF: MANAGUA 0155

    Classified By: Ambassador Paul A. Trivelli. Reasons 1.4 (B,D).

    ¶1.  (C) Summary:  Antonio Lacayo, secretary minister of the
    presidency during Violeta Chamorro's presidency and her
    son-in-law, believes that the power struggle among competing
    Sandinista National Liberation Front (FSLN) interest groups
    will "test" the new Ortega government and could be exploited
    to the opposition's advantage.  He recently warned the
    Ambassador that Ortega is intent on mounting a "parallel
    government" operating outside of public scrutiny, but
    believes the opposition holds the key to counter this trend.
    End Summary.

    Ortega Set on Mounting Parallel Government
    - - - - - - - - - - - - - - - - - - - - -

    ¶2.  (C) In a January 18 meeting with Ambassador, DCM, and
    PolCouns, Antonio Lacayo warned us that President Ortega is
    determined to mount a parallel government that will operate
    outside of public scrutiny.  Lacayo, who served as Violeta
    Chamorro's secretary minister of the presidency and is her
    son-in-law, described Ortega's new cabinet as "a group of
    largely unqualified, incapable novices".  Their loyalty to
    Ortega is unequivocal, but they will exercise no significant
    influence.  Citing Education Minister de Castilla as a case
    in point, Lacayo observed that the minister's double
    discourse has the population reeling, and even pro-Sandinista
    education union ANDEN has criticized de Castilla.  Lacayo
    recounted how in the course of a week de Castilla had
    proposed eliminating school cafeterias, and then reinstated
    them.  Similarly, the minister declared educational autonomy
    "dead" and ordered parents to refuse to pay any
    administrative school fees; days later, however, de Castilla
    announced that parents will be responsible for holding fund
    raising events to contribute to their children's schools.

    ¶3.  (C) As for Health Minister Maritza Cuant, Lacayo
    highlighted the fact that she was quick to correct the FSLN's
    pre-election opposition to abortion of any kind and is now
    openly opposing the penalization of abortion.  As for
    National Energy Institute (INE) director David Castillo, "he
    is totally crazy," declared Lacayo, while new Energy Minister
    Emilio Rapacciolli is one of the capable few in the new
    cabinet.  (Comment:  The FSLN has traditionally openly
    supported therapeutic abortion; its change of heart in the
    lead up to the November 2006 national election was clearly a
    political ploy to gain more votes and ingratiate the party
    with the Catholic Church.  (Note: The January 22 editions of
    Nicaragua's dailies La Prensa and El Nuevo Diario both
    featured Managua Archbishop Leopoldo Brenes' comments that
    the FSLN should remember its campaign position against
    abortion.)

    ¶4.  (C) According to Lacayo, another reason for Ortega's
    delay in standing up his cabinet and the lack of transparency
    surrounding the process is his inability to deliver on his
    campaign promise to appoint women to 50% of the government
    positions.  Lacayo reported that GON "Zero Hunger" director
    Orlando Nunez had apprised him of the dilemma -- many capable
    women work for NGOs and are unwilling to sacrifice their
    generous salaries to take a much lower paying government job,
    especially if Ortega delivers on his promise to halve the
    salaries of senior government officials.

    So, Who is in Charge?
    - - - - - - - - - -

    ¶5.  (C) Depicting President Ortega as a "disorganized sort
    with absolutely no sense of time," Lacayo believes that
    Ortega will not be engaged in the daily goings on of his
    government.  He ventured that the increasingly evident
    rivalries and divisions among Sandinista leaders close to
    Ortega will further complicate the Ortega government.  Lacayo
    listed four main currents: Ortega's wife Rosario; his new
    senior economic advisor Bayardo Arce; Managua Mayor Dionisio
    "Nicho" Marenco; and, the ever-present Lenin Cerna, still a
    power to reckon with, even though he is not to Rosario's
    liking.  Lacayo opined that in the scheme of things,
    Rosario's influence is on rise, recounting that while a year
    ago Tomas Borge had ordered Rosario to "shut up," today he
    would not dare to confront her.

    MANAGUA 00000178  002 OF 003

    ¶6.  (C) Comment: The other shadow power figures in Ortega's
    government will be Miguel D'Escoto, Alvaro Baltodano, Manuel
    Coronel Krautz and Mohammed Lashtar.  Marenco's presidential
    ambitions could eventually trump his loyalty to Ortega.
    While National Assembly Deputy Edwin Castro and Foreign
    Minister Samuel Santos (and probably Nicaraguan
    Ambassador-designate to the United States Arturo Cruz) lie
    within Rosario's camp (considered the more "moderate" and
    "intellectual" wing), National Assembly President Rene Nunez
    appears closer to Bayardo Arce.  Lacayo predicted that the
    power struggles among these camps will test the new Ortega
    government and suggested that these tensions could be
    exploited to the opposition's advantage.  End Comment.

    ¶7.  (C) The Ambassador raised concerns regarding Ortega's
    choice of former Libyan/naturalized Nicaraguan Muhamad
    Muhktar Lashtar as his personal secretary, noting that
    Lashtar was a commercial attache at the Libyan embassy in
    Managua in the 1980s and reportedly associated with Libyan
    intelligence.  Lacayo, who shared the Ambassador's concern,
    remarked that Pepe Mathus, a former Contra (associated with
    the Nicaraguan Liberal Alliance, ALN) who has been involved
    in some business dealings with Lashtar, told Lacayo recently
    that the Libyan Embassy had informed him that Lashtar no
    longer maintains any relation with the embassy.  PolCouns
    shared that Lashtar is reportedly Moammar al-Ghadafi's
    nephew.

    Disgruntled Convergencia
    - - - -  - - - - - - - -

    ¶8.  (C) Lacayo related how Edwin Castro had sent a letter to
    President Ortega recommending he appoint Convergencia leader
    Santiago Rivas as Defense Minister, but Cerna knocked the
    idea down and lobbied for wife Marisol Castillo to take the
    job.  Only vigorous foreign and domestic objections derailed
    Castillo's appointment, opined Lacayo.  Similarly, Luis
    Guzman, another Convergencia member, was not taken into
    account, said Lacayo, who added that at one point he was also
    affiliated with Convergencia.

    Transformation in the Fast Lane
    - - - - - - - - - - - - - - - -

    ¶9.  (C) The Ambassador observed that President Ortega appears
    intent on a transformation of state along the lines of the
    Chavez model and is quickly trying to pass legislation that
    would reduce the role of traditional governmental
    institutions.  The Ambassador added that Ortega's aggressive
    efforts to consolidate power and his association with the
    Venezuelan, Bolivian, and Iranian presidents is causing him
    to quickly waste the political capital he had gained during
    the campaign and following his election.

    Stepping Back on Law 290
    - - - - - - - - - - - - -

    ¶10.  (C) Lacayo, who agreed with the Ambassador's assessment,
    attributed Ortega's recent decision to retreat a few steps on
    some of his party's most egregious proposed changes to Law
    290 (including revisions that would have accorded Ortega
    direct control over the police and the military) to his
    realization that he can only go so far, so fast before the
    opposition will dig in its heels.  However, Ortega is certain
    to try to "score other goals," warned Lacayo.

    Ortega's Double Discourse -- A Matter of Money
    - - - - - - - - - - - - - - - - - - - - - - -

    ¶11.  (C) The Ambassador solicited Lacayo's views on whether
    Ortega is serious in his "double discourse" that he seeks
    positive relations with the United States while allowing the
    Venezuelan and Iranian presidents to lambaste the United
    States as they signed a number of cooperation agreements.
    Lacayo's response was immediate: "It's all about the money"
    -- Ortega wants to remain within the graces of the IMF, and
    with the U.S., EU, Japan, and other donors.  Thus, Ortega's
    rhetoric during his inaugural ceremonies was relatively
    benign.  However, because Ortega needs more funds than these
    traditional sources can provide to deliver on all of his
    campaign promises, he must court Chavez.  Ortega knows that
    President Chavez saved Cuba, explained Lacayo, adding that
    "Chavez is not a revolutionary, he's a gorilla."  Fidel
    Castro does not even respect Chavez and Daniel possibly might

    MANAGUA 00000178  003 OF 003

    not even consider Chavez a "true ideological" colleague, but
    they both need him, he concluded.

    ¶12.  (C)  The Ambassador commented that some of Chavez'
    offers are to problems that the Nicaraguans do not have, for
    example, the construction of a refinery that will process
    much more crude than Nicaragua's domestic consumption
    requires.  Lacayo replied that the refinery and pipeline are
    directed at meeting China's growing energy needs.

    Taking Advantage of the New Political Chapter
    - - - - - - - - - - - - - - -  - - - - - - - -

    ¶13.  (C) Lacayo mused that Ortega's return to power and his
    fast-track efforts to transform Nicaragua's political model
    has panicked the opposition and opened a new political
    "chapter" that offers the divided liberals and other
    opposition parties a chance to rally around a common purpose.
     He listed lawmakers Wilfredo Navarro, Francisco Aguirre
    Sacasa and Jose Pallais as some of the PLC deputies who might
    be willing to participate in such an effort with their ALN
    and Sandinista Renovation Movement (MRS) counterparts.  Both
    Navarro and Aguirre Sacasa hold strong ambitions to run for
    president, so their loyalty to Aleman could be compromised,
    he explained.  Referring to DCM/POL's recent meeting with PLC
    caucus chief Maximino Rodriguez, he agreed that Rodriguez
    would be another good candidate.

    A Bit of Pact History
    - - - - - - - - - - -

    ¶14.  (C) Commenting that Aguirre Sacasa claims he is
    "different" from his father Francisco Aguirre Baca, Lacayo
    related how Aguirre Baca, who resides in the United States,
    and Humberto Ortega were the initial intermediaries who set
    up the "pact" between Arnoldo Aleman and Daniel Ortega.
    Later on, current VP Jaime Morales and Managua Mayor Nicho
    Marenco replaced Aguirre Baca and Humberto Ortega as the pact
    intermediaries, he explained.

    Comment
    - - - -

    ¶15.  (C) Lacayo's insights track closely with many of our
    other contacts, although he seems out of touch regarding PLC
    deputy Wilfredo Navarro; thus far, Navarro has shunned ALN
    efforts to seek common ground against Ortega.  The fissures
    within Ortega's inner circle can be exploited to the
    opposition's and our advantage, particularly if the
    opposition starts rallying around a common goal to prevent
    Ortega from transforming Nicaragua's political model and
    remaining indefinitely in power.  The  media can also help by
    informing the public that Chavez' use of Nicaragua as his
    bully pulpit against the United States demonstrates his
    aggressive, neo-imperialistic intentions for the region.
    TRIVELLI

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