Daniel Ortega was a leader of the Sandinista National Liberation Front (FSLN) when it overthrew the corrupt and repressive Somoza family dictatorship in 1979. When the pro-Soviet Sandinistas gained control of the government and pursued increasingly radical social policies, including redistribution of land and wealth, the United States backed opposition "contras" who launched an eight-year war (1982-1990) against the government. About 30,000 Nicaraguans died in the war. As President from 1985-1990, Ortega's administration was marked by improved education and healthcare on the one hand, and charges of corruption and authoritarian tendencies on the other. As part of the Central American Peace Plan, Ortega's Sandinista government agreed to internationally monitored democratic elections in February 1990, which he lost and peacefully ceded to Violeta Chamorro. Ortega also ran for President and lost in 1996 and 2001. Because he came in second place, however, Nicaraguan law gave him a seat in the National Assembly, where he has served as an opposition leader. He ran for President again in 2006 and won. Since 1990 Nicaragua has developed democratic institutions and a framework for economic development. Progress has been made in social and economic reforms. Nonetheless, significant challenges remain: Nicaragua is still very poor, the second poorest nation in the western hemisphere. Its institutions are weak and often corrupt. In 2003, former President Arnoldo Alemán (1997-2002) was prosecuted by the Administration of President Enrique Bolaños (2002-2007) for embezzling about $100 million in public funds while in office. The effort was particularly notable because Bolaños and Alemán not only belonged to the same political party, the conservative Liberal Constitutional party (PLC), but Bolaños also served as Alemán's Vice-President until he stepped down to run for President. Alemán was sentenced to 20 years in prison for fraud and money-laundering. In December 2006 U.S. federal officials seized $700,000 in certificates of deposit they said were bought for Alemán with Nicaraguan government funds. Nonetheless, Alemán continues to control the Liberal party. His supporters have tried continually to secure his release and an amnesty. He has served his term under increasingly lax terms, and was released under very broad terms in March 2007 after Ortega took office. The 2006 elections followed more than a year of political tensions among then-President Bolaños, the leftist Sandinista party, and allies of rightist former President Alemán. Alemán and Ortega, once longtime political foes, negotiated a power-sharing pact ("El Pacto") in 1998 that has since defined national politics. Their parties passed laws making it difficult for other parties to participate in elections, and otherwise facilitated an alternating of terms between their two parties. Their ongoing influence made governing increasingly difficult for President Bolaños, who had limited legislative support. In 2004, renegotiation of the pact included a demand for Alemán's release. In October 2004 the Organization of American States (OAS) sent a special mission to Nicaragua to encourage all parties to preserve and follow democratic order there. In January 2005, the two parties adopted a series of constitutional amendments that transferred presidential powers to the legislature, and further divided up government institutions as political patronage, moves the Central American Court of Justice ruled illegal. During the height of tensions, President Bolaños invoked the OAS Inter-American Democratic Charter, and the OAS sent several high-level delegations to help negotiate a solution. Negotiations in October 2005 considerably reduced tensions and provided for President Bolaños, who had been isolated by his anti-corruption efforts against Alemán, to serve the remainder of his term, which expired in January 2007. Ortega announced he was breaking the power-sharing pact between his party and the PLC that had hampered Bolaños' ability to govern. After Ortega's announcement, the legislature passed reforms such as the passage of the 2006 budget, the first-ever tax code, local government transfers, and financial administration reforms. Ortega and Bolaños then agreed to postpone the implementation of the constitutional amendments at the root of the tensions. Politics remained volatile in 2006, but for a different reason, as attention shifted to national elections held on November 5, 2006. The FSLN and PLC still control many state institutions, however, including the electoral authority, and opposition parties and others expressed concern that the two parties would use those posts to manipulate the electoral outcome. Concerns remain that the two parties will use their dominance of state institutions to manipulate state power in their favor. Three elements were key to Ortega's victory: a change in Nicaraguan electoral law, an effective political machine, and a divided opposition. The Sandinistas negotiated a change in the electoral law with then-President Alemán's party eliminating the requirement that a candidate gain 45% of the vote to avoid a run-off election. The new law requires that a presidential candidate win either 40% of valid votes, or 35% of the vote plus at least 5% more votes than the second-place candidate in order to win in a first round. Failing that, a run-off vote between the top two candidates is held. Many observers saw this lowering of the threshold as part of the Pact alternating power between the PLC and FSLN. The lower percentage required to win in the first round facilitated the election of Ortega, whose support in the previous three presidential elections had hovered around 40%. Analysts believed Ortega felt it was critical he win in a first round, because the opposition would unite against him in a second round. Ortega won only 37.9% of the vote, but was able to avoid a run-off vote because he was 9.6% ahead of the next closest candidate, Eduardo Montealegre of the Nicaraguan Liberal Alliance (ALN). Ortega also had the advantage of an extremely well-disciplined party. Critics say he forced out members seeking reform, and made the party into a platform for his personal ambitions. In addition, Ortega ensured through his position as opposition leader in the legislature and through the Pact that FSLN loyalists were firmly entrenched throughout various government agencies. According to polls prior to the vote, about 60% of voters said they would not vote for Ortega. This held true in the final vote, but the opposition was divided in 2006 among four candidates. In the 2001 presidential elections, Ortega received 40% of the vote, but faced a united opposition and lost. Montealegre, who gained 28.3% of the vote, is a Harvard-educated banker and former finance minister. He says he offered to run as the vice presidential candidate for the conservative Constitutional Liberal party (PLC) party to prevent further splintering of the opposition. When Alemán refused to remove himself from the political scene, however, Montealegre split from the PLC, formed the ALN, and advocated continued political reform. He was regarded by many as the U.S.-favored candidate. Montealegre's second place position garnered him a seat in the legislature. The PLC then came in third place with 26.2% for candidate José Rizo, an ally of Alemán and critic of President Bolaños. Edmundo Jarquín registered a distant fourth place at 6.4%. Jarquín, an economist who worked at the Inter-American Development Bank, became the presidential candidate of the center-left Sandinista Renewal Movement (MRS) when nominee Herty Lewites died suddenly in July 2006. The son-in-law of former President Violeta Chamorro (1990-1997), Jarquín chose popular singer and composer Carlos Mejia Godoy as his running mate. The two candidates are prominent former Sandinistas who left the FSLN in opposition to Ortega and in favor of political reform, joining other like-minded former Sandinistas in the splinter party, the MRS. Edén Pastora, another disaffected one-time Sandinista leader, won less than half a percent of the vote as head of the Alternative for Change (AC) party. The 90-member National Assembly was also elected. No party won an outright majority. The FSLN has 38 seats, the PLC 25, the ALN 22, and the MRS 5. Pastora's AC won no seats. Voters also chose 20 members of the Central American parliament in the November 5 elections. The United States provided $15.3 million to support the 2006 elections in Nicaragua. Critics accused both U.S. officials and Venezuelan President Hugo Chávez of trying to influence the election's outcome. The U.S. embassy was criticized for making critical remarks, such as alluding to Ortega and Rizo as "two corrupt bosses." After U.S. officials voiced their opposition to Ortega, support for him increased. U.S. Ambassador Paul Trivelli, asserting a right to express his opinion, rejected calls to stop commenting on the elections. A prominent figure in the Iran-Contra scandal was also accused of interfering in the elections. Oliver North, a former Reagan Administration aide who manipulated the funding of the Nicaraguan contras by selling arms to Iran, appeared in Nicaragua to support Rizo's candidacy. Ambassador Trivelli, who has criticized Rizo's PLC as undemocratic and corrupt, publicly distanced himself from North, saying North spoke only as a private citizen, not for the U.S. government.