NicaNotes: US NICA Act Aims to Cut Nicaragua Access to Capital While Nicaragua Targets US Funding Pipeline to the Opposition

by Chuck Kaufman

The Nicaraguan government removed the legal standing last week of nine non-governmental organizations (NGOs) that supported the attempted coup that disrupted much of the country for three months last spring and summer. It should also be remembered that Violeta Chamorro removed the legal standing of nine NGOs when she was president from 1990-1996, and those NGOs weren’t advocating overthrowing the constitutional order.

The week prior to Nicaragua’s action, the US Congress passed the final version of the NICA Act and forwarded it to the President’s desk for his signature. I suspect that the Nicaraguan government was at least partially sending the US a message with the timing of their action against the NGOs, some of which are major recipients of US funding.

The main purpose of the NICA Act is to “make Nicaragua’s economy scream” by cutting off access to international financing. I am explicitly using Henry Kissinger’s quote about Chile because US regime change tactics haven’t changed in the 45 years since the overthrow of another troublesome nationalist/socialist, Salvador Allende. The final Nica Act text also interferes in Nicaragua’s electoral calendar by demanding early elections not even halfway through democratically-elected President Daniel Ortega’s term. Two days previously (on Nov. 27), President Trump had imposed sanctions against Vice-President Rosario Murillo and a handful of other officials, although I seriously doubt any of them entrusted their money to the US banking system in the first place.

The NICA ACT supporters, including the Sandinista Renovation Movement (MRS), hope it will cut off multilateral loans to Nicaragua through the World Bank, IMF, and other non-private lenders by using US votes and influence to kill the loans. To the extent that donor nations use International Monetary Fund (IMF) loan decisions to guide their own bilateral aid and loans, the NICA Act, if it succeeds in cutting off IMF loans, could have a multiplier effect and cut some European aid as well. This would be even more devastating to the Nicaraguan economy and would dump families back into poverty that have seen their standard of living constantly rise over the last ten years of Sandinista governance.

I don’t recognize all of the NGOs that lost their legal status, but I do recognize some of them. They are: CISAS, IEEPP, Hagamos Democracia, CENIDH, Instituto de Liderazgo de las Segovias, IPADE, Fundacion del Rio, CINCO, and Fundacion Popol Na. Hagamos Democracia admitted that it was funded through the National Endowment for Democracy and US Agency for International Development as long ago as 2006 when I took a pre-election delegation to Nicaragua to investigate US interference in the electoral process. Vilma Nuñez’ Nicaraguan Center for Human Rights (CENIDH), told us in the 1990s that they would never take US money. I certainly have no evidence that they have, but they admittedly take European money. CINCO, Carlos Fernando Chamorro’s organization is also a primary recipient of US money.

The opposition is trying to raise a stink about the police raid on Chamorro’s office, but CINCO, and perhaps some of the other NGOs in question moved computers and records to Carlos’ office in advance of the government’s legal action. As would have happened in most countries, the police sought a warrant and raided Chamorro’s office. They now have those materials and reportedly have already found a receipt for US$3,000 signed by Carlos Fernando and made out to Dora Maria Tellez on the day the coup attempt began, April 18. Tellez is one of the primary leaders of the Sandinista Renovation Movement and a key leader of the coup. I think it likely that the seized records will finally unravel the whole story of the coup including who paid for it and who its intellectual authors were.

The government’s reason for canceling the legal status of the NGOs was:

“This cancellation is due to the fact that these organizations did not comply with the legal requirements for their operation and violated the nature of their functions by actively participating in the failed coup attempt, promoting terrorism, hate crimes, encouraging and celebrating the destruction of public and private property, of domestic residences and businesses, assault on the dignity of thousands of people and families who suffered denigrating treatment, humiliation, unlawful detention, torture and all kinds of threats to their lives in absolute disrespect for the dignity and human rights of all Nicaraguans.

“Until their closure, these organizations organized and channeled their funds and resources so as to commit these very serious human rights violations and disturbances of public order, abusing the right to security and life of people and families in Nicaragua. All these irregular actions, promoting hatred and terrorism and the crimes derived from them constitute a complete contravention of the objectives and ends that justified giving these organizations their legal personality.”

As one of my long-time co-workers pointed out, “These groups were involved in a conspiracy to bring down the elected government. Conspiring to overthrow the government is not legal anywhere.”

So despite the hysteria of the corporate media and the organizations and people who supported the coup, the behavior of the government has actually been quite measured and minimalist. The heads of the nine NGOs were not arrested (although Ana Quiroz was previously deported for her very public leadership of the coup). They might yet be arrested depending on what is revealed on the CINCO computers and paper files. There are families who lost loved ones, others whose homes and businesses were burned, others who suffered torture, and just about everyone in the country suffered extortion and fear at the roadblocks. If there is actionable evidence as to who the intellectual authors and financiers of the coup were, then their victims deserve justice.

In the face of passage of the NICA Act, the reason for the timing of this move to shut down the NGOs is to assert Nicaragua’s sovereignty in the face of inexcusable, and under international law, illegal, provocation. Nicaragua is sending a very mild message that it is going to make it a little more difficult for the US to send money to fuel violence and instability. Nicaragua has stood up to US intervention since the days of Sandino, the general of free men. It will continue to stand up for sovereignty, self-determination and the preferential rights of the poor.

Nicaragua’s NGO laws have been notoriously lax, allowing for unaccounted for and unlimited foreign funding. In the US, any of these NGOs and their leaders would have been found guilty of failing to register as agents of a foreign power or entity, the same charge that the Cuban Five were sentenced to serve from 15 years up to a double life sentence.

The nine NGOs are paying a heavy price for their involvement in the coup – loss of their legal standing and confiscation of their assets which will be auctioned off and the money deposited in an account to help the victims of the coup who lost family members, incurred medical expenses, or lost homes and businesses to arson. The NGOs can, and probably will, appeal the government’s action through the court system, but it is hard to work up much sympathy considering the number of lives lost and the economic destruction caused by the failed coup.

As coup mongers have leaned throughout history, if you are going to foment a coup, you better succeed because there is a high price to pay for failure. For many it has meant a trip to the gallows or the firing squad. Nicaragua has thus far been very restrained, arresting and trying only those material authors of the most heinous crimes of murder, torture, and arson. I’m sure the intellectual authors of the coup will be able to find comfortable homes in Miami or Costa Rica alongside previous generations of oligarchs.

A few final word about the NICA Act. Its passage says a lot about the total consensus that exists on foreign policy between the two parties of the 1%. In the 1980s we could count on a sufficient number of Democrats, although seldom a majority, to oppose Reagan’s Central American wars. Once we even gained a majority in Congress to end Contra Aid (until the Democratic leadership brought it back under the guise of “non-lethal” aid a few months later. But the NICA Act had plenty of Democrat co-sponsors in both Houses. In the Senate that included Vermont Sen. Patrick Leahy, who is recognized by his peers as the expert on Central America, and Illinois Democrat Dick Durbin, the number two Democrat in the Senate leadership. Once those two signed on, there was no possibility that the much-reduced Central America solidarity movement could stop the bill from passage.

What we don’t know yet is what effect it will actually have on Nicaragua’s economy. Section 4(b) of the Act states: Exceptions For Basic Human Needs And Democracy Promotion.—The restrictions under paragraphs (1) and (2) of subsection (a) shall not apply with respect to any loan or financial or technical assistance provided to address basic human needs or to promote democracy in Nicaragua.

Tim Rieser, Leahy’s long-term aide on the Foreign Affairs Committee staff, responded to a Vermont constituent last year that passage of the NICA Act would have “no effect” on Nicaragua because all multilateral loans were for “basic human needs.” I am not that sanguine about the effects, but certainly the lenders themselves have never seemed worried and have continued to praise Nicaragua for its effective use of their loans. The possibility of passage also did not seem to worry the credit rating agencies like Moody’s and Standard & Poor’s very much, although the attempted coup did.

In addition, we have always been told that the US had effective veto power in the World Bank and IMF. A source inside the Bank has said that is not the case. I know the Inter-American Development Bank recently changed its rules which previously required consensus to make a loan. So it will be interesting to see if, especially under Trump, the US can exert the same influence over international loans that it could in the past. There is no doubt that the intent of the NICA Act is to “make the economy scream.” But whether that will be its actual impact is too early to say.


By Susan Lagos

  • The Venezuelan airline, Conviasa, inaugurated this week a route from Managua to Havana to Managua six times a week. (Informe Pastran, Dec. 13)
  • Leonardo Torres, head of CONMIPYME, the council of Micro, Small and Medium sized Businesses, which include agricultural/animal products, tourism, and commerce, explained that the government is training and strengthening this sector both urban and rural. (Informe Pastran, Dec. 13)
  • Ivan Acosta, Minister of Hacienda and Public Credit, said the approval of the 2019 national budget shows the country is on the path of growth. At US$2.16 billion, the budget gives priority to the sectors of public health, education (together 35%), and public investment, and Acosta said that the national economy is stabilizing. Construction of four new regional hospitals (including Ocotal, Matiguas, and Nueva Guinea), a bypass from Ticuantepe to Nejapa, the widening of the Juan Pablo II highway, a coast route, and a port in Bluefields are major infrastructure projects in the budget for the coming year. (Informe Pastran, Dec. 13)
  • Vice President Rosario Murillo announced that an 8.25% minimum wage increase will be implemented in the Free Zone sector in January. Murillo noted that a 5-year salary agreement was signed in June of 2017, establishing periodic salary adjustments in the sector. “More than 124,000 workers will benefit from the new salary increase,” the Vice President said. (Nicaragua News, Dec. 14)
  • Minister of Energy and Mines Salvador Mansell said more than US$ 97.6 million was invested in electrical infrastructure projects this year, reaching 95.5% in electricity coverage nationwide. He also noted that, in 2019, more than US$ 120 million will be invested in the National Sustainable Electrification and Renewable Energy Program (PNESER) being carried out by the Nicaragua government in the 153 municipalities of the country. (Nicaragua News, Dec. 14)