From: rich@pencil.cs.missouri.edu (Rich Winkel)
Subject: Nicaragua: US Turns the Screws
Followup-To: alt.activism.d
Originator: rich@pencil.cs.missouri.edu
Organization: PACH
Date: Mon, 14 Sep 1992 22:54:31 GMT

/** reg.nicaragua: 157.0 **/
** Topic: CEPAD REPORT  JULY - AUGUST 1992 **
** Written  5:00 pm  Sep 11, 1992 by cepad@nicarao in cdp:reg.nicaragua **

               CEPAD REPORT           JULY - AUGUST 1992 
  
A bi-monthly publication of the Nicaraguan Council of Evangelical 
Churches (CEPAD), offering news and analysis from the evangelical 
church in Nicaragua.

                    Aid Held Hostage

The U.S. Turns the Screws
     The empire is striking back at Nicaragua. Upset that its
blueprint for democracy has not been followed to the letter in this
war-ravaged country, the government of the United States is tightening
the screws, insisting that the administration of Violeta Barrios de
Chamorro scrap its program of national reconciliation and move ahead
with economic and political changes designed to undo the remnants of
ten years of revolution.
     After two years of tempered frustration with President Chamorro--
whose campaign was conceived, designed, and funded by the U.S.--
Washington signalled it could take no more. In a May 12 syndicated
column in the Washington Post, Jeanne Kirkpatrick, Ronald Reagan's
ambassador to the U.N., charged that the U.S. Agency for International
Development (USAID) was throwing money down the drain in Nicaragua,
where the Sandinistas allegedly continued to make all the important
decisions.
     Although Chamorro administration officials were quick to refute
the charges, U.S. Senator Jesse Helms, a Republican from North
Carolina, dispatched a May 27 letter to USAID asking that US$100
million earmarked for Nicaragua be put on hold until certain
conditions were met. On June 22, Helms sent a second letter requesting
that an additional US$16 million be frozen.
     Ironically, the aid package was first suspended temporarily in
May by Representative David Obey, a Wisconsin Democrat who chairs the
House subcommittee on foreign operations. Obey was concerned that U.S.
assistance to Nicaragua should shift from budget support and balance
of payments cash assistance to more support for small farmers and the
alleviation of poverty. Helm's worry, on the other hand, was that
"Sandinista communists" not get their hands on any of the money.
     The chief USAID officer in Managua, Janet Ballentyne, at first
tried to downplay the significance of Helms' complaints, and departed
for Washington to straighten out the matter. She came back singing a
different tune. The State Department, she admitted, did have some
serious concerns about the way Chamorro was running Nicaragua. The aid
freeze was no longer just the whim of a conservative southern senator,
but reflected the policy of the Bush administration.
     Chamorro took the matter directly to the U.S. president.
Displaying typical optimism, she told reporters that George Bush
assured her everything would work out; moreover, she was "praying to
God that the aid will come." 
     In addition to relying on divine intervention, Chamorro also sent
Foreign Minister Ernesto Leal to Washington to lobby Congress and the
White House. Leal came home empty-handed and openly frustrated.
Referring to Helms' staff, he stated, "They had no desire to listen to
what we had to say or to understand what is happening in Nicaragua."
Chamorro then dispatched her son-in-law, Presidency Minister Antonio
Lacayo, to Washington. He fared no better.

The Brothers-in-Law War
     In the battle of the US$100 million, Lacayo also contended with
his brother-in-law, National Assembly President Alfredo Cesar. Cesar
served as the source for Kirkpatrick's allegation that U.S. funds were
being misused by the Nicaraguan government, including the charge that
a chunk of U.S. assistance had ended up in the bank account of
Sandinista organizations.
     Cesar paints Lacayo as an ineffective leader who has sold out to
the FSLN and, therefore, is not to be trusted by the U.S.  Cesar,
meanwhile, travels frequently to Washington and boasts of his close
connections to U.S. policymakers.
     Government officials from Cesar's Social Democratic Party have
also charged Lacayo with complicity in the "Tony-gate" scandal;
Antonio Ibarra, a former assistant to Lacayo, allegedly ran off to
Miami last year with US$1 million embezzled from an anti-poverty fund.
This convenient flaw in Chamorro's "revolution of honor" takes some
heat off Cesar, under fire himself for making a tidy profit on a
CIA-funded exile repatriation program during the election campaign, as
well as for spending considerable National Assembly funds on promoting
himself. "Cesar wants to be seen as the white knight fighting against
corruption," charged Sandinista legislator Sergio Ramirez. "But
Nicaraguans should know that he lives in a glass house."
     Cesar clearly wants to force Lacayo out of office. The president
has stated on several occasions that if her top minister goes, so does
she. "The day I have to replace Mr. Lacayo, Violeta is gone," she
stated on July 20. That would suit Cesar fine; Vice President Virgilio
Godoy could take over and let Cesar run the government from behind
Lacayo's desk. Cesar would then be in good position in 1996 to fulfill
his life-long ambition to run for president. An alternative plan,
announced on August 5 by the Nicaraguan right's Gang of Three--Cesar,
Godoy, and Managua Mayor Arnoldo Aleman--called for a national
plebiscite on whether Chamorro should continue to "co-govern" with the
Sandinistas.
     Washington's squeeze on aid leaves Chamorro and Lacayo little
room to maneuver. The economic takeoff government planners have been
hoping for has yet to materialize. Domestic turmoil and high pro-
duction costs have kept significant foreign investment at bay. Sagging
coffee and cotton prices have sunk hopes for earning much hard
currency the old-fashioned way. Continuing failure to keep costly
promises to university students, former contras, and cashiered
government soldiers can only yield more embarrassing violence in the
streets.
     Officials here admit that if the embargoed funds are not released
by late September, the government will have to raise taxes and cut
credit. Indeed, as the parallel exchange rate for cordobas crept
upward in August, the administration threatened to tack a 10 percent
tax on utility bills. If the U.S. holds back until November, the whole
structural adjustment program--which has eliminated hyper-inflation
and kept the cordoba stable since March, 1991--could unravel,
provoking more unpopular decisions by Chamorro's economic cabinet.
With unemployment at an official 56 percent and the economy stagnated
at an expected zero to -3 percent growth for 1992, additional
austerity measures are the last thing the nation needs. On August 26,
Chamorro told reporters, "If the assistance doesn't come I'm not going
to hang myself in desperation. I'll just have to raise taxes."
     Given the alternatives, the Nicaraguan government has been
moving, albeit reluctantly, to meet the conditions that Helms outlined
in his letters, and that Secretary of State James Baker reiterated to
Lacayo in Washington.
     Among the conditions:
     - Return of confiscated property to U.S. and Nicaraguan citizens,
including handing over nationalized companies to their original
owners.
     - Removal of Sandinista officials from leadership positions in
the police, military intelligence, and other governmental agencies.
     - Replacing most of the country's judges and restructuring the
banking system.

Property: A Return to the Past?
     Underlying these demands is the U.S. government's perceived need
to dismantle the structural transformations undertaken during the
Sandinista revolution, particularly the radical change in property re-
lations that took place between 1979-1990. Yet, while seeing
eye-to-eye with Washington on the broad contours of neo-liberalism,
the Chamorro administration is trying to maneuver between the U.S. and
the FSLN to set its own priorities.
     On the property issue, the Chamorro administration envisions
privatization as long-term process, based less on a U.S.-prescribed
kneejerk return to pre-1979 property relations than on a New Right
modernization which builds on many of the revolution's social and
structural transformations while transferring hegemony to a
modernizing elite--incarnated in business leaders like the
MIT-educated Lacayo.
     The U.S. wants the property issue resolved yesterday. Lacayo
explains the complex matter will take "months, perhaps years" to
straighten out. The government is on record that it will honor the
land reforms carried out by the Sandinistas, who claim that more than
50 percent of Nicaragua's productive land is now in the hands of
140,000 families. And Chamorro has promised to give land to thousands
of ex-contras and demobilized army personnel. Yet exiles returning
from Miami self-righteously demand back the land they abandoned a
decade ago. At times, the three groups end up fighting over the same
stretch of earth. So far this year, according to Edgardo Garcia, head
of the Field Workers Association, seven workers, five police officers,
and 17 demobilized contras have died in conflicts over the
privatization of land. CEPAD officials in San Carlos report the re-
gional peace commission was reactivated in August in order to
intervene in land disputes that had turned especially bloody. The U.S.
approach to the property question would undoubtedly accelerate such
bloodshed throughout the country.
     The government here has other disagreements with the U.S. demand
to return land to its Somoza-era owners. Helms claims there are up to
400 U.S. citizens whose lands should be returned. Leal counters that
170 U.S. citizens have filed claims with the government and only 51 of
those furnished the necessary data. Moreover, 24 of those revealed
that they were Nicaraguans at the time their lands were confiscated,
becoming U.S. citizens only after deserting their home country. Leal
says that leaves a total of only 27 legitimate claims.
     The Chamorro administration also makes a distinction between
properties that were seized from Somoza and his cohorts, and
properties that were confiscated from other persons who fled the
country later. It says it is willing to return the latter but not the
former. The U.S. government fails to appreciate that distinction.
     Cesar has clearly cast his fate with the U.S. position. In 1991,
he sponsored a National Assembly bill that would have opened the door
to a wholesale return of properties. The bill passed, but Chamorro
vetoed it, and the National Assembly upheld the veto by a narrow
margin. In another chapter of "Tony-gate," Cesar charged that Lacayo
authorized US$400,000 in USAID funds to buy the votes of the moderate
UNO Assembly deputies necessary to uphold the president's veto.
     With the pressure of the frozen U.S. aid in his favor, Cesar has
a new version of the same property bill that he wants to push through
the Assembly. But Lacayo maintains no new laws are needed to resolve
the property claims. He admits that some confiscations by the
Sandinista government were legal, others were not. He insists it is a
matter of the court deciding which is which. The current system is
working slowly but surely, and Lacayo points to a steady stream of
properties that have been returned to former owners since President
Chamorro took office. Some 40 pieces of property were turned over in
the last four months, including three to U.S. citizens. Yet, in the
wake of the aid suspension, the government announced in June the
creation of a special section in the attorney general's office to
expedite such claims.

The Price of a Police Chief
     Since Chamorro took office, Washington has carefully designed
USAID and other assistance programs, as well as its public and private
diplomacy, to marginalize progressive sectors and strengthen the
Nicaraguan right. In most cases, including trade liberalization,
budget cuts, credit restrictions, and so on, the Chamorro
administration has willingly cooperated despite protests from popular
sectors. 
     Where Chamorro, until recently, turned a deaf ear to U.S.
direction was with regard to her country's security forces. U.S. State
Department officials, since before her inauguration, have twisted
Chamorro's arm, trying to persuade the president to drop General
Humberto Ortega as head of the army and purge the police of Sandinista
officials such as Police Chief Rene Vivas.
     The U.S. bases its position on the understanding that neo-liberal
economic models require a repressive instrument to contain the social
protest that inevitably arises from the implementation of structural
adjustments. From Venezuela to Indonesia, soldiers and police must
bust heads in order to quell uppity workers and protesting poor
people. In Nicaragua, a security force dominated by Sandinistas is
clearly an obstacle to the U.S. blueprint for democracy. Or at least
it used to be.
     General Ortega has learned to read the signs of the time and has
to some degree ingratiated himself with U.S. officials. The Popular
Sandinista Army, now one of the smallest armies in the region, has
accepted U.S. technical assistance and sent Nicaraguan soldiers north
for training at U.S. bases. The general has become a staunch defender
of law and order in recent weeks; his troops helped break up a
demonstration by striking bus drivers and university students on July
20 and protesting former soldiers on July 21--the latter action
including a twenty minute shoot-out in front of the National Assembly
building. On July 22, Ortega railed against his former
comrades-in-arms for acting against constituted authorities "in a
disorderly fashion, with irresponsible hatred and fury." Ortega also
accused the Sandinista media of contributing to the violence by
presenting the protesters as heroes. Some in Washington, though
certainly not Helms, have decided they can live with General Ortega
for the time being.
     The leadership of the National Police is a different matter; the
police are an essential part of returning property to former owners.
Without someone to evict rural peasants from occupied cotton farms, or
striking workers from seized factories, the government can issue new
titles to the rich but the poor--taking power into their own hands--
will simply disregard them.
     Yet the National Police is not the same body it was two years
ago; many new recruits once carried arms in the anti-Sandinista contra
army. The force is spending more time these days serving eviction
notices and dislodging rural peasants from farms slated for return to
their old owners. One such massive operation by combined forces of the
police and army in late May earned praise from the U.S. Embassy's
charge d'affaires, Ronald Godard, who happily observed, "This
indicates a change in the maintenance of order."
     Sandinista human rights activists have charged the army and
police with using physical force and psychological pressure to compel
peasants to sell off their land for a pittance. Vilma Nunez, president
of the Nicaraguan Center for Human Rights, charged that "abusive
procedures are becoming commonplace." Jose Gonzalez, FSLN party chief
in Matagalpa, reported the government has "militarized the country-
side, systematically violating human rights, in order to return
property to former owners."
     Vivas let his own discomfort be known on July 10 while speaking
at a meeting of Central American police chiefs in Panama. Vivas said
many of those being dislodged were humble people unaware of the
judicial mechanisms necessary to defend their rights or legalize their
properties. "The rich take advantage of the peasants," Vivas said.
"They hire good lawyers to reclaim their confiscated properties.
Sometimes the courts require the police to adopt methods of pressure
and eviction that I disagree with." Vivas argued that the police were
not meant to be an armed band at the service of the landlords.
     Such remarks were hard to swallow in Washington. Lacayo
reportedly tried to convince Baker during their meeting in Washington
to retain Vivas. According to Barricada, Lacayo presented a plan for
restructuring the police force that would make changes in a third of
the top positions but leave Vivas in place; Baker said no. On August
7, the government confirmed that Vivas and a dozen other top police
officials would be replaced as part of a reorganization of the force
slated for September 5. Sandinista patriarch Tomas Borge complained
the government had "exchanged Vivas for a few more dollars."
     While Borge's observation appears patently true, Lacayo told the
Miami Herald in August that the Chamorro administration would not put
the cart before the horse. "The changes in the police have not yet
occurred," he said. "And they won't take place until the aid gets
here." If the frozen U.S. funds don't materialize by September 5,
Lacayo warned "there won't be any changes." Chamorro later said Lacayo
had been "misinterpreted," and claimed the changes would take place
regardless.
     Speaking to a crowd of more than 50,000 on July 19--the 13th
anniversary of the Sandinista triumph--former President Daniel Ortega
charged that the dismissal of Vivas is part of an "anti-Sandinista
political persecution that also threatens the heads of the army, the
Supreme Court, and the Supreme Electoral Council." Ortega claimed that
the U.S. government wants to "impose an army like that of Somoza and a
police force like that of Los Angeles."
     Ortega insisted the FSLN favors peaceful means, but warned, "If
they want to impose a Somocista police and army, we will take up arms
as we did to overthrow the Somoza dictatorship." Referring to the
imperiled aid, Ortega declared, "The yankees wasted no time in sending
military assistance to El Salvador, Honduras, and Nicaragua, but they
haven't been very adept at providing assistance for development."
     The same day Ortega made those remarks, Jose Moran (Comandante
Indomable) was killed by government troops while leading a band of
rearmed contras into Nicaragua from Honduras. One of the more
bloodthirsty recontra leaders, Moran left the country for Miami last
February with a fistful of dollars and a U.S. visa after negotiating
the surrender of his troops. How Moran got back to Honduras and where
he got the funds to wage war a third time were questions left hanging
in the wake of his aborted invasion. Many, however, saw it as a sign
that old ways die hard for a superpower used to getting its way among
the banana republics of Central America.
** End of text from cdp:reg.nicaragua **

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