II 

115TH CONGRESS 

1ST SESSION S. 972 

To promote democracy and the rule of law on Nicaragua, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 27, 2017 

Mr. CRUZ (for himself, Mr. RUBIO, and Mr. PERDUE) introduced the following 

bill; which was read twice and referred to the Committee on Foreign Relations 

A BILL 

To promote democracy and the rule of law on Nicaragua, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Nicaraguan Invest5 ment Conditionality Act (NICA) of 2017’’. 

6 SEC. 2. FINDINGS. 

7 Congress makes the following findings: 

8 (1) In 2006, Nicaragua, under President 

9 Enrique Bolan ̃os, entered into a $175,000,000, 5- 


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1 year compact with the Millennium Challenge Cor2 poration (MCC). 

3 (2) After the 2008 municipal elections, the 

4 MCC stated that there was a pattern of decline in 

5 political rights and civil liberties in Nicaragua. 

6 (3) In 2009, the MCC terminated the compact 

7 and reduced the amount of MCC funds available to 

8 Nicaragua by $61,500,000, which led to the compact 

9 ending in 2011. 

10 (4) According to Nicaraguan law, the National 

11 Assembly is the only institution allowed to change 

12 the constitution, but in 2009, Daniel Ortega cir13 cumvented the legislature and went to the Supreme 

14 Court, which he controls, to rule in his favor that 

15 Presidential term limits were inapplicable. 

16 (5) The Committee on Foreign Affairs of the 

17 House of Representatives convened a congressional 

18 hearing on December 1, 2011, entitled ‘‘Democracy 

19 Held Hostage in Nicaragua: Part 1’’ where former 

20 United States Ambassador to Nicaragua Robert Cal21 lahan testified ‘‘[f]irst, that Daniel Ortega’s can22 didacy was illegal, illegitimate, and unconstitutional; 

23 second, that the period leading to the elections and 

24 the elections themselves were marred by serious 

25 fraud; third, that Daniel Ortega and his Sandinista 


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1 party have systematically undermined the country’s 

2 fragile governmental institutions’’. 

3 (6) From fiscal year 2012 until present, the 

4 Department of State found that the Government of 

5 Nicaragua did not meet international standards of 

6 fiscal transparency. 

7 (7) On January 25, 2012, a press statement 

8 from Secretary of State Hillary Clinton stated, ‘‘As 

9 noted by international observers and Nicaraguan 

10 civil society groups, Nicaragua’s recent elections 

11 were not conducted in a transparent and impartial 

12 manner, and the entire electoral process was marred 

13 by significant irregularities. The elections marked a 

14 setback to democracy in Nicaragua and undermined 

15 the ability of Nicaraguans to hold their government 

16 accountable.’’. 

17 (8) According to the Department of State’s 

18 2015 Fiscal Transparency Report: ‘‘Nicaragua’s fis19 cal transparency would be improved by including all 

20 off-budget revenue and expenditure in the budget, 

21 auditing state-owned enterprises, and conducting a 

22 full audit of the government’s annual financial state23 ments and making audit reports publicly available 

24 within a reasonable period of time.’’. 


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1 (9) According to the Department of State’s 

2 Country Reports on Human Rights Practices for 

3 2015: ‘‘In 2011 the Supreme Electoral Council 

4 (CSE) announced the re-election of President Daniel 

5 Ortega Saavedra of the Sandinista National Libera6 tion Front (FSLN) in elections that international 

7 and domestic observers characterized as seriously 

8 flawed. International and domestic organizations 

9 raised concerns regarding the constitutional legit10 imacy of Ortega’s re-election. The 2011 elections 

11 also provided the ruling party with a supermajority 

12 in the National Assembly, allowing for changes in 

13 the constitution, including extending the reach of ex14 ecutive branch power and the elimination of restric15 tions on re-election for executive branch officials and 

16 mayors. Observers noted serious flaws during the 

17 2012 municipal elections and March 2014 regional 

18 elections.’’. 

19 (10) According to the Department of State’s 

20 Country Reports on Human Rights Practices for 

21 2015 in Nicaragua: ‘‘The principal human rights 

22 abuses were restrictions on citizens’ right to vote; 

23 obstacles to freedom of speech and press, including 

24 government intimidation and harassment of journal25 ists and independent media, as well as increased reVerDate Sep 11 2014 02:23 Apr 29, 2017 Jkt 069200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S972.IS S972

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1 striction of access to public information, including 

2 national statistics from public offices; and increased 

3 government harassment and intimidation of non4 governmental organizations (NGOs) and civil society 

5 organizations’’. 

6 (11) The same 2015 report stated: ‘‘Additional 

7 significant human rights abuses included consider8 ably biased policies to promote single-party domi9 nance; arbitrary police arrest and detention of sus10 pects, including abuse during detention; harsh and 

11 life-threatening prison conditions with arbitrary and 

12 lengthy pretrial detention; discrimination against 

13 ethnic minorities and indigenous persons and com14 munities.’’. 

15 (12) In February 2016, the Ortega regime de16 tained and expelled Freedom House’s Latin America 

17 Director, Dr. Carlos Ponce, from Nicaragua. 

18 (13) On June 3, 2016, the Nicaraguan Su19 preme Court, which is controlled by Nicaragua’s 

20 leader, Daniel Ortega, instructed the Supreme Elec21 toral Council not to swear in Nicaraguan opposition 

22 members to the departmental and regional electoral 

23 councils. 

24 (14) On June 5, 2016, regarding international 

25 observers for the 2016 Presidential elections, PresiVerDate Sep 11 2014 02:23 Apr 29, 2017 Jkt 069200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S972.IS S972

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1 dent Ortega stated, ‘‘Here, the observation ends. Go 

2 observe other countries . . . There will be no obser3 vation, neither from the European Union, nor the 

4 OAS . . .’’. 

5 (15) On June 7, 2016, the Department of 

6 State’s Bureau of Democracy, Human Rights and 

7 Labor posted on social media: ‘‘Disappointed govern8 ment of Nicaragua said it will deny electoral observ9 ers requested by Nicaraguan citizens, church, and 

10 private sector . . . We continue to encourage the 

11 government of Nicaragua to allow electoral observers 

12 as requested by Nicaraguans.’’. 

13 (16) On June 14, 2016, President Ortega ex14 pelled three United States Government officials (two 

15 officials from U.S. Customs and Border Protection 

16 and one professor from the National Defense Uni17 versity) from Nicaragua. 

18 (17) On June 29, 2016, the Department of 

19 State issued a Nicaragua Travel Alert which stated, 

20 ‘‘The Department of State alerts United States citi21 zens about increased government scrutiny of for22 eigners’ activities, new requirements for volunteer 

23 groups, and the potential for demonstrations during 

24 the upcoming election season in Nicaragua . . . Nic25 araguan authorities have denied entry to, detained, 


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1 questioned, or expelled foreigners, including United 

2 States Government officials, academics, NGO work3 ers, and journalists, for discussions, written reports 

4 or articles, photographs, and/or videos related to 

5 these topics. Authorities may monitor and question 

6 private United States citizens concerning their ac7 tivities, including contact with Nicaraguan citizens.’’. 

8 (18) On August 1, 2016, the Department of 

9 State issued a press release to express grave concern 

10 over the Nicaraguan government limiting democratic 

11 space leading up to the elections in November and 

12 stated, ‘‘[O]n June 8, the Nicaraguan Supreme 

13 Court stripped the opposition Independent Liberal 

14 Party (PLI) from its long recognized leader. The 

15 Supreme Court took similar action on June 17 when 

16 it invalidated the leadership of the Citizen Action 

17 Party, the only remaining opposition party with the 

18 legal standing to present a presidential candidate. 

19 Most recently, on July 29, the Supreme Electoral 

20 Council removed 28 PLI national assembly members 

21 (16 seated and 12 alternates) from their popularly22 elected positions.’’. 

23 (19) On November 7, 2016, the Department of 

24 State issued a press release stating, ‘‘The United 

25 States is deeply concerned by the flawed presidential 


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1 and legislative electoral process in Nicaragua, which 

2 precluded the possibility of a free and fair election 

3 on November 6. In advance of the elections, the Nic4 araguan government sidelined opposition candidates 

5 for president, limited domestic observation at the 

6 polls and access to voting credentials, and took other 

7 actions to deny democratic space in the process. The 

8 decision by the Nicaraguan government not to invite 

9 independent international electoral observers further 

10 degraded the legitimacy of the election.’’. 

11 (20) In November and December of 2016, the 

12 Board of Executive Directors of the Inter-American 

13 Development Bank postponed consideration of a pol14 icy-based loan of $65,000,000 to the Government of 

15 Nicaragua due to the efforts of the United States 

16 mission that expressed serious concerns of the ab17 sence of transparency, systemic corruption, and the 

18 lack of free and fair elections in Nicaragua. 

19 (21) On February 2017, the European Par20 liament issued a resolution on the situation of 

21 human rights and democracy in Nicaragua and ex22 pressed concern of the ‘‘deteriorating human rights 

23 situation in Nicaragua and deplores the attacks and 

24 acts of harassment to which human rights organiza25 tions and their members and independent journalists 


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1 have been subjected by individuals, political forces 

2 and bodies linked to the State.’’. 

3 (22) According to the Department of State’s 

4 Country Reports on Human Rights Practices for 

5 2016: ‘‘actions by the ruling Sandinista National 

6 Liberation Front (FSLN) party resulted in de facto 

7 concentration of power in a single party, with an au8 thoritarian executive branch exercising significant 

9 control over the legislative, judicial, and electoral 

10 functions.’’. 

11 (23) According to the Department of State’s 

12 Country Reports on Human Rights Practices for 

13 2016 in Nicaragua: ‘‘The November 6 elections for 

14 president, vice president, national assembly mem15 bers, and representatives for the Central American 

16 parliament did not meet the conditions of being free 

17 and fair . . . The November 6 presidential and leg18 islative elections were marred by allegations of insti19 tutional fraud and the absence of independent oppo20 sition political parties. National observers and oppo21 sition leaders claimed rates of abstention from 60 to 

22 70 percent.’’. 

23 (24) According to the Department of State’s 

24 Country Reports on Human Rights Practices for 

25 2016: ‘‘Companies reported that bribery of public ofVerDate Sep 11 2014 02:23 Apr 29, 2017 Jkt 069200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S972.IS S972

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1 ficials, unlawful seizures, and arbitrary assessments 

2 by customs and tax authorities were common . . . 

3 The courts remained particularly susceptible to 

4 bribes, manipulation, and other forms of corruption, 

5 especially by the FSLN, giving the sense that the 

6 FSLN heavily influenced CSJ and lower-level court 

7 actions.’’. 

8 SEC. 3. STATEMENT OF POLICY. 

9 It is the policy of the United States to support— 

10 (1) the rule of law and an independent judiciary 

11 and electoral council in Nicaragua; 

12 (2) independent pro-democracy organizations in 

13 Nicaragua; 

14 (3) free, fair, and transparent elections under 

15 international and domestic observers in Nicaragua; 

16 and 

17 (4) anti-corruption and transparency efforts in 

18 Nicaragua. 

19 SEC. 4. INTERNATIONAL FINANCIAL INSTITUTIONS. 

20 (a) IN GENERAL.—The President shall instruct the 

21 United States Executive Director at each international fi22 nancial institution to use the voice, vote, and influence of 

23 the United States to oppose any loan for the benefit of 

24 the Government of Nicaragua, other than to address basic 

25 human needs or promote democracy, unless the Secretary 


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1 of State certifies and reports to the appropriate congres2 sional committees that the Government of Nicaragua is 

3 taking effective steps to— 

4 (1) hold free, fair, and transparent elections 

5 overseen by credible domestic and international elec6 toral observers; 

7 (2) promote democracy, as well as an inde8 pendent judicial system and electoral council; 

9 (3) strengthen the rule of law; 

10 (4) respect the right to freedom of association 

11 and expression; 

12 (5) combat corruption, including investigating 

13 and prosecuting government officials credibly alleged 

14 to be corrupt; and 

15 (6) to protect the right of political opposition 

16 parties, journalists, trade unionists, human rights 

17 defenders, and other civil society activists to operate 

18 without interference. 

19 (b) REPORT.—The Secretary of the Treasury shall 

20 submit to the appropriate congressional committees a 

21 written report assessing— 

22 (1) the effectiveness of the international finan23 cial institutions in enforcing applicable program 

24 safeguards in Nicaragua; and 


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1 (2) the effects of the matters described in sec2 tion 2 on long-term prospects for positive develop3 ment outcomes in Nicaragua. 

4 (c) DEFINITIONS.—In this section: 

5 (1) APPROPRIATE CONGRESSIONAL COMMIT6 TEES.—The term ‘‘appropriate congressional com7 mittees’’ means— 

8 (A) the Committee on Foreign Relations, 

9 the Committee on Appropriations, and the 

10 Committee on Banking, Housing, and Urban 

11 Affairs of the Senate; and 

12 (B) the Committee on Foreign Affairs, the 

13 Committee on Appropriations, and the Com14 mittee on Financial Services of the House of 

15 Representatives. 

16 (2) INTERNATIONAL FINANCIAL INSTITU17 TION.—The term ‘‘international financial institu18 tion’’ means— 

19 (A) the International Monetary Fund; 

20 (B) the International Bank for Recon21 struction and Development; 

22 (C) the European Bank for Reconstruction 

23 and Development; 

24 (D) the International Development Asso25 ciation; 


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1 (E) the International Finance Corporation; 

2 (F) the Multilateral Investment Guarantee 

3 Agency; 

4 (G) the African Development Bank; 

5 (H) the African Development Fund; 

6 (I) the Asian Development Bank; 

7 (J) the Inter-American Development Bank; 

8 (K) the Bank for Economic Cooperation 

9 and Development in the Middle East and North 

10 Africa; and 

11 (L) the Inter-American Investment Cor12 poration. 

13 (d) TERMINATION.—This section shall terminate on 

14 the day after the earlier of— 

15 (1) the date on which the Secretary of State 

16 certifies and reports to the appropriate congressional 

17 committees that the requirements of subsection (a) 

18 have been met; or 

19 (2) 5 years after the date of the enactment of 

20 this Act. 

21 (e) WAIVER.—The President may waive the require22 ments of this section if the President determines that such 

23 a waiver is in the national interest of the United States. 


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1 SEC. 5. ORGANIZATION OF AMERICAN STATES. 

2 (a) FINDINGS.—Congress finds that, according to the 

3 Organization of American States (OAS) report on the Nic4 araguan 2011 Presidential elections, ‘‘Nicaragua: Final 

5 Report, General Elections, OAS (2011)’’, the OAS made 

6 the following recommendations to the Government of 

7 Nicaragua: 

8 (1) Prepare alternative procedures for updating 

9 the electoral roll when a registered voter dies. 

10 (2) Publish the electoral roll so that new addi11 tions, changes of address, and exclusions can be 

12 checked. 

13 (3) Reform the mechanism for accreditation of 

14 poll watchers using a formula that ensures that the 

15 political parties will have greater autonomy to ac16 credit their respective poll watchers. 

17 (4) Institute regulations to ensure that party 

18 poll watchers are involved in all areas of the elec19 toral structure, including the departmental, regional, 

20 and municipal electoral councils and polling stations. 

21 Rules should be crafted to spell out their authorities 

22 and functions and the means by which they can ex23 ercise their authority and perform their functions. 

24 (5) Redesign the CSE administrative structure 

25 at the central and field levels, while standardizing 

26 technical and operational procedures, including the 


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1 design of control mechanisms from the time registra2 tion to the delivery of the document to the citizens; 

3 the process of issuing identity cards should be timed 

4 to the calendar and, to avoid congestion within the 

5 process, be evenly spaced. 

6 (b) ELECTORAL OBSERVATION MISSION.—The Presi7 dent shall direct the United States Permanent Represent8 ative to the Organization of American States (OAS) to 

9 use the voice, vote, and influence of the United States at 

10 the OAS to strongly advocate for an Electoral Observation 

11 Mission to be sent to Nicaragua in 2017. 

12 SEC. 6. STATEMENT OF POLICY. 

13 The Department of State and the United States 

14 Agency for International Development should prioritize 

15 foreign assistance to the people of Nicaragua to assist civil 

16 society in democracy and governance programs, including 

17 human rights documentation. 

18 SEC. 7. REPORT ON CORRUPTION IN NICARAGUA. 

19 (a) REPORT REQUIREMENT.—Not later than 90 days 

20 after the date of the enactment of this Act, the Secretary 

21 of State, in consultation with the intelligence community 

22 (as defined in section 3(4) of the National Security Act 

23 of 1947 (50 U.S.C. 3003(4))), shall submit to Congress 

24 a report on the involvement of senior Government of Nica25 ragua officials, including members of the Supreme ElecVerDate Sep 11 2014 02:23 Apr 29, 2017 Jkt 069200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\S972.IS S972

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1 toral Council, the National Assembly, and the judicial sys2 tem, in acts of public corruption or human rights viola3 tions in Nicaragua. 

4 (b) FORM.—The report required in subsection (a) 

5 shall be submitted in unclassified form, but may contain 

6 a classified annex. The unclassified portion of the report 

7 shall be made available to the public. 

Æ 


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