Nicaragua's newest tycoon? 'Socialist' president Daniel Ortega.
Daniel Ortega's opaque business dealings, linked to Venezuela President Hugo Chávez, are blurring the lines between party, state, and first family, say critics.
Managua, Nicaragua — Nicaraguan President Daniel Ortega doesn't talk like most successful businessmen. The former revolutionary leader is much more likely to rail against the evils of "savage capitalism" than he is to discuss his multi-million dollar business ventures.
Yet despite his rhetorical stance against the "failed imperialist model," Mr. Ortega and his inner circle of Sandinista confidants are quickly and quietly becoming the new masters of the impoverished country's economy.
Since returning to the presidency in 2007 – 17 years after being voted out of office at the end of the Sandinista revolution in 1990 – Ortega has created a network of private businesses that operate under the auspices of the Bolivarian Alliance for the Americas (ALBA), an opaque cooperation agreement of leftist countries bankrolled primarily by Venezuelan President Hugo Chávez.
Ortega's "ALBA businesses" – known by an alphabet soup of acronyms, including ALBANISA, ALBALINISA, and ALBACARUNA – have cornered Nicaragua's petroleum import and distribution markets, become the country's leading energy supplier and cattle exporter, turned profits on the sale of donated Russian buses, and purchased a hotel in downtown Managua, among other lucrative investment moves.
While government secrecy has cast a long shadow over the business operations, the light that gets through reveals profits registering in the hundreds of millions of dollars, despite the economy's slip into recession.
In 2008, Nicaragua's Central Bank reported that Venezuela gave Nicaragua $457 million in aid, all of which was managed privately by Ortega's ALBA holdings, with no third-party oversight. ALBANISA, a joint Venezuelan-Nicaraguan oil company linked to Ortega, recently signed a 15-year energy contract expected to net the company upwards of $500 million, depending on price fluctuations. And last year's oil imports earned the ALBA group an additional $280 million in revenue, according to calculations by opposition leader and former Inter-American Development Bank analyst Edmundo Jarquín.
"Maybe Ortega isn't the richest man in the country, but he is making more than anyone else in Nicaragua," Mr. Jarquín said.
Blurring the line between state and first family?
Critics say President Ortega and the Sandinista Front have created a web of businesses operations that have blurred the distinction between party, state, and first family. For example, Ortega's personal confidant Francisco López is the treasurer of the Sandinista Front, as well as the president of the government-run Petronic petroleum company, the vice-president of the private-run ALBANISA, the president of ALALINISA, and the administration's representative to power-distributor Unión Fenosa, of which the Sandinista government recently purchased 16 percent. At this point, critics say, it's impossible to know whose interests he or his businesses represent.
"Wherever there is confusion or a conflict of interests between the state and the government, and the ruling party and the first family, the situation becomes corrupted," said former Attorney General Alberto Novoa, who spearheaded the anti-corruption campaign against former President Arnoldo Alemán, accused of bilking the country of $100 million during his turn in government. "The separation of state and party is an unfinished task in Nicaragua."
Untangling the web of business interests has been a difficult task.
Moises Martínez, an award-winning investigative journalist for the leading daily La Prensa, says the government secrecy of Nicaragua's "Cuban-inspired model" has made his two-year investigation of Ortega's ALBA business dealings "like trying to dig a tunnel with a hand shovel."
Despite being denied access to government sources and companies such as ALBANISA, journalists have uncovered a web of almost a dozen ALBA business holdings, which Martinez claims has made Ortega and his family one of the most important economic players in the country, on par with Nicaraguan business tycoon Carlos Pellas. "The difference," Martinez says; "is that it took the Pellas family 80 years to accumulate their wealth. Ortega has done it in two years."
Yet unlike most nouveau riche, Ortega and his Sandinista confidants – who first rose to economic power in 1990 during a $1.5 billion land grab known as the "piñata" – still identify as the poor and downtrodden. In fact, Ortega, who has had no other job in his life other than president, claims a net worth of only $200,000, according to his last declaration in 2006.
But Ortega failed to report any property or "piñata" holdings, including his personal compound, which he confiscated in the 1980s and is estimated to be worth around $1 million.
The Sandinista leadership is decidedly tight-lipped on the subject of its business dealings. Ortega's wife, Rosario Murillo, spokeswoman for the government, the president and the Sandinista Front, did not respond to the Christian Science Monitor's requests for an interview. And presidential adviser and economist Orlando Núñez also failed to return requests for comment.
President Ortega's brother, however, says the Sandinistas' new capitalist clout and economic rise to power is nothing to be ashamed of.
"If there is a free market, there needs to be a system in which people are free to get rich, so the poor can stop being poor, so the poor can become middle class and the middle class can become business owners and be better off," says retired Gen. Humberto Ortega, adding that the Sandinista revolution broke the economic stranglehold of a small ruling class and allowed the Sandinistas to become "new actors" in today's modern free-market economy, which he defends.
People shouldn't pay too much attention to the Sandinista government's anti-capitalist rhetoric, says General Ortega, because "one thing is discourse for the political clients, and another thing is what the reality shows you are doing."