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### Viewing cable 06MANAGUA2180, ALN PLANNING FOR A ROUGH ROAD AHEAD

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
06MANAGUA2180 | 2006-10-03 17:43 | 2011-06-01 08:00 | CONFIDENTIAL | Embassy Managua

Appears in these articles:
http://www.nacion.com/2011-05-30/Mundo/NotasSecundarias/Mundo2758456.aspx
http://www.nacion.com/2011-05-30/Mundo/NotasSecundarias/Mundo2758467.aspx
http://www.nacion.com/2011-05-30/Mundo/NotasSecundarias/Mundo2758468.aspx
http://www.nacion.com/2011-05-30/Mundo/NotasSecundarias/Mundo2758464.aspx
http://www.confidencial.com.ni/articulo/4103/la-embusa-y-el-gabinete-de-ortega
http://www.confidencial.com.ni/articulo/4104/d-rsquo-escoto-en-onu-ldquo-un-desafio-de-ortega-a-ee-uu-rdquo
http://www.confidencial.com.ni/articulo/4102/estrada-y-la-ldquo-doble-cara-rdquo-ante-ee-uu
http://www.confidencial.com.ni/articulo/3966/la-ldquo-injerencia-rdquo-de-ee-uu-en-el-2006
http://www.nacion.com/2011-05-23/Mundo/Relacionados/Mundo2758764.aspx
http://www.nacion.com/2011-05-23/Mundo/NotaPrincipal/Mundo2758753.aspx
http://www.confidencial.com.ni/articulo/4041/millones-de-dolares-sin-control-y-a-discrecion
http://www.confidencial.com.ni/articulo/4040/la-ldquo-injerencia-rdquo-de-venezuela-en-2006
http://www.confidencial.com.ni/articulo/4047/rodrigo-barreto-enviado-de-ldquo-vacaciones-rdquo
http://www.nacion.com/2011-05-16/Mundo/NotasSecundarias/Mundo2757239.aspx
http://www.nacion.com/2011-05-16/Mundo/NotaPrincipal/Mundo2746658.aspx
http://www.nacion.com/2011-05-16/Mundo/Relacionados/Mundo2757244.aspx
http://www.nacion.com/2011-05-16/Mundo/Relacionados/Mundo2746673.aspx
http://www.confidencial.com.ni/articulo/3991/dra-yadira-centeno-desmiente-cable-diplomatico-eeuu
http://www.confidencial.com.ni/articulo/3968/pellas-pronostico-a-eeuu-victoria-de-ortega-en-2006
http://www.confidencial.com.ni/articulo/3967/barreto-era-ldquo-fuente-confiable-rdquo-para-eeuu

`

    VZCZCXYZ0018
    PP RUEHWEB

    DE RUEHMU #2180/01 2761743
    ZNY CCCCC ZZH
    P 031743Z OCT 06
    FM AMEMBASSY MANAGUA
    TO RUEHC/SECSTATE WASHDC PRIORITY 7761
    INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
    RUEAIIA/CIA WASHDC
    RHEFDIA/DIA WASHINGTON DC
    RHEHNSC/NSC WASHINGTON DC

` `

    C O N F I D E N T I A L MANAGUA 002180

    SIPDIS

    SIPDIS

    E.O. 12958: DECL: 10/02/2026
    TAGS: KDEM NU PGOV PINR
    SUBJECT: ALN PLANNING FOR A ROUGH ROAD AHEAD

    REF: A. A. MANAGUA 002160

         ¶B. B. MANAGUA 002158

    ¶1.  (C) SUMMARY: Drawing on Emboffs' recent meetings with
    various members of the Nicaraguan Liberal Alliance (ALN),
    this cable provides a comprehensive view of where the party
    stands five weeks before election day.  Although most local
    polls continue to show Eduardo Montealegre as the
    second-strongest candidate after Daniel Ortega, his ALN
    faces real obstacles to expanding its base.  Internal
    communication and organization problems undermine the
    party's efficiency and unless additional resources pour in,
    the ALN may not be able to make significant inroads against
    the Liberal Constitutional Party (PLC) in the all-important
    rural sector.  Given these challenges, the deciding factor
    in the election may not be how strong/popular the ALN is,
    but how vehement the anti-Ortega sentiments run.  Contacts
    in the ALN, Sandinista Renovation Movement (MRS), the
    private sector, and from various NGOs maintain that a
    significant portion of voters will vote not for their
    preferred candidate, but for whichever candidate seems
    best placed to defeat Ortega on election day.  END SUMMARY.

    ¶2.  (C) Over the last two weeks Emboffs have met with
    several members of the Nicaraguan Liberal Alliance (ALN) to
    guage where the party stands now, what it plans to do in
    the remaining five weeks of the campaign, and how it will
    respond to the challenges posed by opponents in the Liberal
    Constitutional Party (PLC) and Sandinista National
    Liberation Front (FSLN).  Among those we met with were
    Eduardo Montealegre's uncle and ALN legal adviser Mauricio
    Montealegre, Azucena Castillo (a former Cabinet minister
    who is running as the first substitute deputy on the ALN's
    National Assembly ticket), ALN campaign chief of staff
    Edmundo Leal, and campaign consultant Mario Elgarresta (Ref
    A).  This cable also draws on Eduardo Montealegre's recent
    meeting with Congressman Burton (Ref B) and the Ambassador,
    and on Emboffs' conversations with an array of contacts in
    the private sector and from various NGOs.

    A TIGHT RACE ACCORDING TO THE POLLS
    - - - - - - - - - - - - - - - - - -

    ¶3.  (C) According to an M&R poll released on 29 September,
    Daniel Ortega (30.9%) and Montealegre (26.4%) are the two
    leading candidates, followed by Jose Rizo (16.3%), Edmundo
    Jarquin (15.9%) and Eden Pastora (0.9%).  The percentage of
    people who will not vote or are still undecided stands at
    9.6%.  The poll was conducted between September 15 and 21,
    with a sample size of 4,204, and a margin of error of
    1.5%.  According to the poll, 66% of voters declared
    themselves "anti-Ortega." (Comment:  In this poll,
    Montealegre is gaining on Ortega, and the most likely
    outcome is that these two candidates will compete in a
    second round.  In a second round, Montealegre would win
    with 44.2% of the vote - 9 points over Ortega's 35%.  The
    surprise in this poll is that Jarquin's numbers appear to
    be slipping and Rizo is now in third place.  End Comment.)

    ¶4.  (C) In a recent meeting with Poloff, Edmundo Leal was
    optimistic that Montealegre will win the November 5
    elections, claiming that the ALN receives more and more
    support with each poll bolstering Montealegre as the only
    serious challenger to Ortega.  He claimed that, unlike any
    other party, the ALN has registered enough party poll
    watchers (fiscales) to provide 100% coverage of the voting
    tables (JRVs) on election day - putting to rest the PLC
    assertion that only that party has the "machinery to defend
    the democratic vote."  That said, the ALN faces some tough
    obstacles that could undermine the party's efforts to
    expand its base or even erode some of its support.

    ORGANIZATION REMAINS A CHALLENGE
    - - - - - - - - - - - - - - - - - -

    ¶5.  (C) Emboffs have heard from several sources that the
    ALN still suffers from problems of internal organization
    and communication problems, although ALN campaign
    consultant Maria Elgarresta believes that ALN has recently
    tightened up its organization.  Public statements by
    various party members occasionally appear uncoordinated or
    contradictory, and members of the alliance have told us
    that they often do not receive clear communication from
    party headquarters.  In a meeting on 29 September with Pol
    TDYer, Azucena Castillo described the ALN's central
    campaign coordination efforts as weak and reported that
    people often go about their activities without first
    talking with colleagues or checking to see whether the work
    has already been done, or really needs to be done at all.
    ¶6.  (C) Castillo said that much of the problem lies with
    the party's poor management structure.  Castillo accused
    some Assembly candidates of not working hard enough to back
    the campaign and finds that party structure in some places
    around the country to be lacking.  She said that while the
    ALN has campaign chiefs in both Matagalpa and Managua, the
    ALN needs someone in each department to take on a more
    hands-on role in coordinating the party's local efforts --
    something akin to a chief executive officer.  She blamed
    campaign manager Adolfo Arguello for much of the management
    difficulties.  A former bank manager, he does not have a
    strong political background and comes across as
    uncharismatic and demanding, she claimed.

    ¶7.  (C) To reinforce her point about the ALN's internal
    problems, Castillo cited a 25 September meeting of senior
    party members.  Called in part to improve internal
    communication, Castillo said the group broke down several
    times in arguments over strategy.  The chief "propaganda"
    officer spoke up saying that regional campaign offices feel
    "abandoned" because they lack resources and materials.
    Castillo reported that Arguello essentially told these
    people to 'deal with it' because "we are out of money."
    This standoffish attitude came across as disrespectful,
    according to Castillo, and many attendees began to
    grumble.  The meeting was saved in large part thanks to
    Mario Rapacciolli's intervention.  He took the floor,
    delivering an animated speech that went a long way toward
    lifting morale.

    ¶8.  (C) Castillo cited the ALN's strategy in the Atlantic
    Coast region as an example of how poor planning and
    resource constraints have undermined the effectiveness of
    the campaign.  She claimed that right after the Atlantic
    Coast elections in March, the ALN closed its campaign
    offices in the area, ostensibly because it lacked funds to
    remain.  Castillo said the move showed a lack of
    forethought that has proven detrimental to the campaign.
    She noted that the ALN lost much of the inroads the party
    had made in this area and has had to work almost from
    scratch.  (COMMENT:  The fact that Castillo has been
    frustrated because she does not comprise Montealegre's
    inner circle when she believes she should be included may
    have colored her views on the ALN campaign.  Early in the
    campaign, she was talked about as a potential running mate
    for Montealegre, but was passed over.  END COMMENT.)

    ¶9.  (C) Nevertheless, Castillo ended on a somewhat
    optimistic note, saying that  the ALN still has time to
    turn things around and get its house in order.  She
    mentioned that the return to the campaign of Mario
    Elgarresta could have a positive effect.  An astute
    campaign adviser with longstanding ties to Nicaragua,
    Elgarresta served the campaigns of Arnoldo Aleman and
    Enrique Bolanos.  Castillo said that Elgarresta - a Cuban
    living in Miami - has the trust of Montealegre, with whom
    he worked on the Bolanos campaign, and could have a
    positive impact on Arguello's management of the campaign.

    WEAK PUBLIC STANCE
    - - - - - - - - - -

    ¶10.  (C) Eduardo Montealegre's efforts to attack his
    opponents have been erratic at best and counterproductive
    at worst, according to Castillo.  While early in the
    campaign Montealegre vowed to focus his energies against
    Ortega, he has recently allowed himself to be dragged into
    lashing out at the PLC, which he continues to publicly
    maintain as an entity that has no chance of winning.
    Meanwhile Montealegre only takes an occasional swing at
    Ortega and is doing an inadequate job of defending himself
    against the attacks of his opponents.  Castillo asserted
    that Montealegre's failure to take a strong public stance
    on the CENIS issue and his lack of attacks against Ortega
    have earned him a weak public image - "he always appears on
    the defensive."  Moreover, Montealegre's attacks against
    the Liberals have often been misguided and clumsy.  Instead
    of taking direct aim at Aleman, Montealegre on the campaign
    trail has several times broadened his critique to include
    Liberals in general - a tactic that alienates many voters
    who would consider voting for Montealegre, but who consider
    themselves as Liberals.  Castillo argued that Montealegre
    shares the same Liberal ideology of many voters, including
    herself, so his anti-Liberal message comes across as
    confusing and schizophrenic.  Castillo said that she has
    told Montealegre, "Liberalism is your flag and you need to
    carry your flag."

    ¶11.  (C) Despite facing a number of legal hurdles with the
    Supreme Electoral Council (CSE), the ALN has taken a
    relatively quiet approach to dealing with the body rather
    than attempting to call public attention to what are
    blatantly politicized decisions.  Mauricio Montealegre told
    Pol TDYers on 27 September that the ALN will seek to work
    with the CSE to "iron out" disagreements.  In those cases
    where the CSE has ruled against the ALN, Montealegre said
    they would exhaust all the means of appeals.  He argued
    that the alliance needed to avoid prematurely antagonizing
    the CSE so that the ALN will be freer to take a more
    critical approach at crucial later stages in the election
    process.  Part of this hesitance also stems from the desire
    to avoid scaring voters away from the polls.  Montealegre
    explained that one of the reasons for taking a toned-down
    approach toward the CSE on the issue of potential vote
    fraud is to prevent voters from getting the idea that fraud
    will be inevitable, which might prompt some not to vote.

    ¶12.  (C) COMMENT: The desire to work within the confines of
    the system for now makes sense.  However, calling out the
    CSE with allegations of favoritism and the possibility of a
    manipulated vote is unlikely to alienate many voters.  For
    one thing, this dialogue has now become a constant part of
    the political din in Nicaragua.  Also, strong statements
    linking  CSE mismanagement to the interests of the PLC-FSLN
    pact probably help to stoke anti-establishment (and thus
    pro-ALN or pro-MRS) sentiments.  END COMMENT.

    ¶13.  (C) Castillo also criticized Eduardo Montealegre's
    toned-down persona and aloof image, which she says hurt the
    party's outreach efforts.  Castillo told Pol TDYer that
    Montealegre is something of an introvert and that he has a
    very "mathematic and exact" personality that makes him seem
    uncomfortable around people.  She said, for example, that
    when on the campaign trail he does not engage in the
    traditional prolonged embrace, often pulling away from such
    encounters to move on to the next person.  According to
    Castillo, this is not intentional, but a reflection of an
    inability to understand why it is so important to spend
    more time with individuals.  His stance is akin to 'ok, I
    have greeted this person, time to move on.'  He thus comes
    across as uptight and aloof.

    MONEY REMAINS AN ISSUE
    - - - - - - - - - - - -

    ¶14.  (C) Most of our ALN contacts have complained about a
    lack of campaign finances .  While Post recognizes that
    these comments are made in part to solicit USG support, it
    is obvious that the party is truly hurting for resources.
    Montealegre told Congressman Burton and the Ambassador
    during their meeting on 23 September that the ALN has only
    spent about one-third of what was spent on the Bolanos
    candidacy at the same point in its 2001 campaign.  While
    admitting to having received support from private sector
    sources in Guatemala and El Salvador, Montealegre and his
    campaign advisers noted that most Nicaraguan donors are
    only giving in small amounts.  Post has heard the same
    thing from our private sector contacts.  One member of the
    Nicaraguan-American Chamber of Commerce (AMCHAM) told Pol
    TDYer on 25 September that many wealthy Nicaraguans have
    been hesitant to donate to Montealegre's campaign out of
    fear of prompting reprisals from the Sandinistas.
    (Comment:  The candidates are required to declare all thei
    r donations and their sources.  Businesses fear that the
    FSLN could use their muscle in the courts to 'punish' those
    who give significant amounts to Sandinista opponents.  End
    Comment.)

    ¶15.  (C) The lack of funding also appears to have forced
    the ALN to rely increasingly on borrowed money.  Edmundo
    Leal told Poloff recently that the ALN is operating in the
    red, having failed to receive the promised level of support
    from the Nicaraguan private sector.  The ALN is probably
    hoping to repay its debts from monies earned from a strong
    showing in the elections.  The government sets aside a fund
    equal to 1% of the ordinary budget to distribute to those
    political parties who gain more than 4% of the vote - to be
    disbursed after the elections.  These parties then split
    this pot in amounts proportional to the number of votes
    they receive.  The AMCHAM member said that this has
    prompted the parties to approach banks for loans based on
    how many votes they think they will be able to receive.
    However, Montealegre and his advisers hinted during their
    meeting with Congressman Burton that they were now having
    trouble persuading banks to lend them more money.  In the
    meantime the ALN will continue to appeal to international
    sources as well as domestic ones.  Castillo said that
    Rapacciolli and Montealegre were headed to El Salvador over
    the weekend of 30 September in order to drum up additional
    contributions.

    ¶16.  COMMENT:  Despite its financial challenges, the ALN
    appears to have been able to spend more than any other
    party other than the Sandinistas.  According to an Etica
    and Transparencia study published in the press (El Nuevo
    Diario) on 30 September, the ALN spent 3,153,571 cordobas
    on its campaign between 1 July and 15 August, compared with
    2,622,635 spent by the PLC during the same period.  The
    FSLN was listed as having spent 7,858,120.  END COMMENT.

    ALN CONCERNED ABOUT ELECTORAL FRAUD
    - - - - - - - - - - - - - - - - - -

    ¶17.  (C) Mauricio Montealegre told POL TDYers and POL FSN
    that the ALN is aware that Sandinista influence in the CSE
    and judicial sectors put that party in a strong place to
    commit fraud.  He listed four ways the Sandinistas could
    steal up to 5% of the election and avoid a second round:

    --Annul a handful of votes from each JRV:  Montealegre said
    that if the FSLN can use its clout at the JRV to annul 3
    votes in  each JRV around the country, this could void as
    much as 30,000 votes overall, potentially throwing out up
    to 1% of the total vote.

    --Raton Loco:  The FSLN-controlled electoral authorities
    can change the registered address of some voters, forcing
    them to have to vote in other polling centers at the last
    minute.  This strategy has unfolded in previous elections,
    and could prompt between 1-2% of the electorate to abstain
    (i.e. people will give up and decide not to vote rather
    than go through the hassle of having to travel to another
    polling place).  This result would favor Ortega as a high
    voter turnout improves the chances of the anti-Ortega vote.

    --Voiding entire JRVs:  FSLN clout over the three-member
    JRVs would give them an upper hand to challenge the results
    in particular polling centers - where they are losing.
    Through the challenge process, the entire results from each
    JRV (up to 400 votes) can be negated.

    --Virtual fraud:  Montealegre warned that FSLN influence
    over the CSE gives them control over the means by which the
    vote tallies will be transmitted (mostly by fax) to local
    vote tally centers.  He offered few specifics, but Embassy
    officers will follow up on this.

    THE OAS VIEW ON THE GROUND
    - - - - - - - - - - - - - -

    ¶18.  (C) POL TDYers met on 29 September with OAS official
    Patricio Gajardo to discuss the latest numbers of JRVs and
    the size of the voter list.  According to Gajardo, the CSE
    has said there will be 11,274 JRVs and that the total voter
    list numbers 3.6 million.  Gajardo, however, says this is
    likely inflated and expects that the number of voters will
    be between 2.6-2.8 million.  Assuming a voter base of 2.7
    million, each 1% of the vote is 27,000 votes, or
    approximately 68 JRVs (assuming that each of the JRVs
    contains the maximum of 400 votes).

    FENDING OFF ATTEMPTS BY OPPONENTS TO LURE, SCARE PARTY
    MEMBERS
    - - - - - - - - - - - - - - - - - - - - - - - - - - -

    ¶19.  (C) Over the course of the last few weeks the ALN has
    suffered several high-profile defections from within its
    ranks.  It is clear that the FSLN and PLC are attempting to
    seed chaos within the ALN in an attempt to undermine the
    public's confidence in the alliance as a viable political
    entity.  Most notable of these has been the decision in
    mid-September by former Contra and Nicaraguan Resistance
    Party (PRN) leader Salvador Talavera - who is the third
    candidate on the ALN's slate of national-level Assembly
    deputies - to publicly announce his support for the FSLN.
    Despite an ongoing appeals process, the CSE has so far
    prevented the ALN from replacing Talavera.  The damage this
    could cause to the ALN's Assembly slate is significant as
    Talavera will almost certainly win a spot in the Assembly
    given his senior spot on the slate.  While he would
    continue to be counted among the ALN bank of supporters, he
    would probably  vote with  the FSLN.

    ¶20.  (C) Mauricio Montealegre told POL TDYers that the
    slate system of electing Assembly deputies opens doors for
    opponents to attempt to encourage defections.  He argued
    that low-ranking ALN supporters are unlikely to get a seat
    in the legislature, and are prone to the temptations or
    threats made by the PLC or FSLN.  A party as new as the
    ALN, which lacks strong resources, may find it hard to
    maintain the loyalty of these people who would be tempted
    by the opportunity to gain a stronger position with a more
    established party.  (COMMENT:  Each party has a list of
    twenty names to fill the twenty national-level seats in the
    Assembly but that as no party has a chance of winning all
    the seats, which are divvied up based on the proportion of
    the vote, most of the nominees from a party slate will not
    gain a position.  Moreover, the number of likely
    disappointed persons is actually 40 because with each
    deputy candidate comes a spot for an alternate or
    substitute candidate ("suplente").  END COMMENT.)

    ¶21.  (C) Anecdotal evidence also suggests that the PLC and
    FSLN have offered money and other incentives to entice
    these 'weak links' away from the party.  The ALN's
    Department heads in Leon and Chontales publicly decried on
    27 September that the PLC and FSLN are trying to lure,
    bribe, or blackmail ALN members to join forces with the PLC
    and FSLN.  Both regional leaders said they had been offered
    money from these parties to switch sides.  Several PLC
    figures disenchanted with party leadership and advocating
    either liberal unification under Montealegre or outright
    support for his candidacy have told Emboffs that they have
    received personal threats.  ALN Assembly deputy candidate
    Ariel Montoya told Poloff on 28 September that leaders of
    the internal PLC movement to support Montealegre's
    candidacy (GANARAM) have received personal threats.

    ¶22.  (C)The ALN has been able to weather Talavera's
    departure, and that of several other "suplente" candidates
    - at least for now.  Edmundo Leal and Azucena Castillo have
    told Poloffs that Talavera's defection was a 'wake-up call'
    for the ALN, and that other PRN members have since rallied
    around Montealegre.  (Comment:  Castillo has also said that
    Talavera's defection took many by surprise, but that party
    management had ignored warnings from four or five sources
    within the ALN against choosing him as a candidate in the
    first place due to his personal baggage.  End Comment.)

    LEGAL SHOALS AHEAD
    - - - - - - - - - -

    ¶23.  (C) The ALN is expecting the FSLN to exploit its
    leverage in the CSE, National Assembly, and the courts to
    lash out at the ALN to handicap, and possibly derail,
    Montealegre's campaign.  Castillo said that the likelihood
    that the FSLN and PLC will try to undercut Montealegre's
    campaign (or a Montealegre administration) through legal
    cases is the ALN's "achilles heal." She said that
    Montealegre received a message from Comptroller Arguello
    Poessy in which Poessy told Montealegre that he regarded
    the candidate as a friend, but that he could not permit him
    to continue to divide the Liberals.  She said that the
    PLC-FSLN attacks on Montealegre tend to coincide with the
    release of polls depicting Montealegre as the strongest
    center-right candidate.

    ¶24.  (C) To counter these efforts Mauricio Montealegre told
    Poloffs that the ALN is attempting to work closely with the
    CSE wherever possible.  He said that they have contacted
    former CSE employees to seek help on how best to work with
    the institution.  The ALN is also mounting an intense
    effort to place as many party observers at the polls on
    election day as possible.  The specific legal cases facing
    Montealegre - and some hypothetical ones - are listed
    below:

    --Removing Talavera from the party slate:  Numerous ALN
    contacts have told Poloffs that the CSE's refusal to allow
    the ALN to replace Talavera is yet another example of how
    politicized that body is.  Mauricio Montealegre said that
    because Nicaragua's system of electing representatives to
    the Assembly via slate (vice voting for individual members)
    should give the party the right to replace these members at
    will.  Montealegre says that jurisprudence points to
    several legal precedents in which both the PLC and FSLN
    have been able to switch out members as late as ten days
    before the elections.  Mauricio said that the party would
    continue to appeal the case to the CSE knowing that "we do
    not have the slightest hope [of winning]."  (COMMENT: With
    the suicide of one of the PLC's substitute Assembly deputy
    candidates, the PLC has requested that the CSE allow the
    PLC to replace him.  If the CSE approves the request, the
    ALN will have a bit of leverage to argue its appeal to
    E
    replace Talavera. However, the CSE is likely
     to counter that the cases are very different.  END
    COMMENT.)

    --The CENIS case:  However convoluted the CENIS bank-buyout
    scandal might be, the FSLN and PLC will almost certainly
    continue to hold this case over Montealegre's head.  To
    summarize the issue, Montealegre has been accused of
    personally profiting as part of a deal in 2000-2001 where
    the government issued "Negotiable Indemnization
    Certificates" (CENIS) to facilitate the takeover of failed
    banks by other Nicaraguan banking institutions - including
    one in which Montealegre may have had a personal stake as
    he was General Director and minority shareholder.
    Montealegre counters the accusation with the assertion that
    he was not Finance Minister when these decisions were made
    and was never in a position of authority to influence the
    decision, the exception being when the CENI rates and time
    periods were renegotiated in 2003 during his tenure as
    Finance Minister.  The lead agency in the renegotiations
    was the Central Bank, where Montealegre was ex oficio
    chairman.  They negotiated lower interest rates for the
    CENIs to the benefit of the Nicaraguan public.  (COMMENT:
    We suspect Montealegre's opponents will re-engage this
    issue closer to the election when it can do more political
    damage.  END COMMENT.)

    --Accusations over printing fake ballots:   When asked
    about the sample ballot issue currently before the CSE,
    Leal explained that the ballots are blacked out except for
    the ALN "casilla" and could never be mistaken for the real
    thing.  The whole "scandal" has been trumped up by the FSLN
    and CSE, he claimed.

    --Campaign finance allegations:  A quick look at the law
    also reveals potential Achilles' heels for some of the
    campaigns.  Article 177 of the Electoral Code states that
    candidates found guilty of violating finance-related rules
    laid out in Chapter 4 (articles 99-106) or any of the other
    electoral violations cited in Title 14 (articles 173-178)
    are required to renounce their candidacies and are
    prohibited from exercising public functions for a period of
    between one and three years.  Should they be charged with
    having committed these offenses during their campaigns
    after they have already taken office, then they must step
    down.  This provides an obvious opening for the pactistas
    to use their influence to hamstring opponents.

    CHANCE OF LIBERAL ALLIANCE UNLIKELY
    - - - - - - - - - - - - - - - - - -

    ¶25.  (C) Eduardo Montealegre told Congressman Burton and
    the Ambassador during their meeting in late September that
    he was still open to offering Rizo a chance to join his
    campaign, and has considered giving him the inducement of a
    desirable ambassadorial position in Chile or Spain.
    Nevertheless, as time gets short, Montealegre's firm
    refusal to join a party controlled by Aleman, and Rizo's
    inability or unwillingness to challenge his party leader,
    make an alliance increasingly unlikely.  Castillo said that
    the idea is losing traction within the ranks of both the
    PLC and the ALN.

    ABILITY TO SUSTAIN STRONG NUMBERS KEY TO THE ELECTION
    - - - - - - - - - - - - - - - - - - - - - - - - - - -

    ¶26.  (C) Multiple contacts from both the ALN, MRS, and the
    private sector have told Emboffs that the key to the
    election will be the anti-Ortega vote.  Many people may
    consider voting for whichever candidate appears most
    capable of defeating Ortega.  According to the M&R poll
    released on 29 September of the 66% of respondents who
    described themselves as against Ortega, 74.7% said they
    would consider voting for a candidate other than the one
    they preferred in order to avoid an Ortega win.  Thus, much
    of the population may pay a high degree of attention to the
    polls produced near election day, regardless of how
    credible they might be.

    ¶27.  (C) COMMENT:  Despite its challenges, the ALN still
    has a good shot of finishing the campaign at a strong
    pace.  Elgarresta, Leal, and Casillo all commented that the
    campaign has identified its weaknesses and insist that they
    are taking steps to address their shortcomings and
    reinforce their strengths.  Assuming the party stays strong
    in the polls, the ALN can probably count on their numbers
    receiving an additional boost from voters from other
    parties who might see the ALN as the best chance of
    E
    defeating Ortega.  END COMMENT.
    TRIVELLI

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