criesdif@cdp.uucp (10/27/89)
/* Written 12:30 pm Oct 25, 1989 by criesdif in ni:ni.centam-elect */
/* ---------- "Nica:Hemis.Initiatives Report #2" ---------- */
NICARAGUA: HEMISPHERE INITIATIVES UPDATE #2
Nicaraguan Election Update # 2
Foreign Funding of the Internal Opposition
October 16, 1989
Hemisphere Initiatives' August Report "Establishing the
Ground Rutes: A Report on the Nicaraguan Electoral Process"
detailed the 10-month process resulting in agreed upon rules
for next February's elections. In its first Election Update
issued in mid-September, HI evaluated the initial stages of
the implementation of the rules and the conduct of the
players. This second Update addresses the sensitive and
important issue of foreign supoort and funding of the
internal opposition to the Sandinista Government.
Background
Having abandoned military aid for the contras in
February of 1989, the Bush Administration has since pursued
a policy of active support for the Nicaraguan internal
opposition. In so doing, the Administration maintains that
substantial aid is essential to "level the playing field",
asserting that the Sandinistas have an unfair advantage in
the election campaign by reason of their incumbent status.
The clear goal is defeating the Sandinistas and few in the
Administration question the propriety of the U.S.
influencing an election outcome in a sovereign, independent
country.
HI has previously expressed its concern over U.S.
funding of the opposition, both in terms of its desirability
and propriety. Such funding could actually undermine the
credibility of the opposition with many voters. HI has also
pointed out that the Administration may well be
overstimating the advantage of incumbency given the economic
crisis in Nicaragua and the unpopular austerity and anti-
inflation measures taken by the Sandinista Government over
the last two years. The question of funds may prove the
least of the problems faced by the opposition. Recent polls
give the Sandinistas significant popular support and strains
continue among opposition parties created by personal
ambition and differences over ideology, tactics and
programmatic ideals. Moreover, the opposition does not have
an organization or social base in many parts of the country.
But irrespective of the issues presented by U.S.
funding of the opposition, that aid is going forward,
necessitating an analysis of the following questions:
1. What has been and is the magnitude and scope of
prior and current U.S. and other foreign funding of the
opposition?
2. Between now and election day, what areas need to be
monitored by independent observers regarding foreign funds
to the opposition?
What Constitutes "Funding" for the Opposition?
The very nature of foreign funding, whether covert or overt,
direct or indirect, makes it impossible for HI to provide a
complete or totally accurate accounting of such funding.
Information on covert activities is, of course, intended to
be secret. Even in the case of overt funding, in many
instances, specific facts on funds from fovernmental, not to
mention private, agencies are dificult to obtain.
Furthermore, contributions from foreign countries or
political purpose as opposition parties and candidates: to
build support for defeating the Sandinistas.
At the same time, however, certain foreign funds are
clearly given and used for non-partisan purposes. For
example, funds given to international organizations to
monitor the elections do not directly support one party over
another.
Finally, it is even more difficult to determine the
actual use of foreign funding than to determine the amount.
While one can uncover in some instances the intended use of
overt funds, it is difficult to confirm that such intenden
use translates into actual use.
Foreign Aid to Internal Opposition Since 1984
Since 1984, the U.S. has provided anti-Sandinista
parties, business and labor groups and religious and media
organizations at least the following aggregate amounts:
$5,250.427 from the National Endowment for Democracy
(NED), and
$15,000.00 from the Central Intelligence Agency (CIA)
(FY87-89)
These groups are virtually assured of recei-
ving:
$5,950.00 from the $9 million supplemental package ap-
proved by the House of Representatives (at
press time of this Update, the Senate had not
yet approved the package, as is anticipated).
For a total of:
$26,200.427 of U.S. aid to the opposition since the 1984
elections.
In addition, foreign and private U.S. funding sources have
provided at least the following:
$3,100.000 from the West German Konrad Adenauer Founda-
tion (87-89)
$200.000 from West German Freidrich Naumann Founda-
tion
$100,000 from Venezuela, and
$20,000 from Miami-based Committee for Free Elections
and Democracy in Nicaragua.
While there may in fact be other governments and
organizations providing funds and support to opposition
groups in Nicaragua, HI, at this point, has identified the
following breakdown of support for the period roughly
between the 1984 elections and the February 25, 1990
elections.
U.S. Covert Funding of the internal Political Opposition
According to documents released during the Iran-Contra
investigation, the CIA program of covert support for the
internal political opposition in Nicaragua began in 1983
(1). While the CIA's operations inside Nicaragua are secret
making a systematic assessment impossible, HI estimates that
the CIA has provided approximately $15 million to the
internal opposition in Nicaragua over the last theree years.
This estimate is based upon a series of recent news reports
which, citing CIA and State Department officials as well as
U.S. diplomats, provide the following information:
As of mid-1988, the CIA was still drawing on a $10-12
million "political" account (most probably for FY87 and FY
88) designated for Nicaragua's internal anti-Sandinista
opposition (2).
A recent report by Newsweek placed the FY89 annual
budget for cash aid to Nicaraguan political groups and
individuals at about $5 million (3). Sources said the aid
was for opposition "housekeeping" costs (4).
And in 1988, Newsday reported: "U.S. diplomats who are
closely familiar with the internal opposition (in Nicaragua)
say the Central Intelligence Agency already provides funds
to the leaders of many of the political parties" (5).
National Endowment for Democracy Funding the Opposition
NED was established as a quasi-private organization by
Congress in 1983 to "promote democracy abroad". Some critics
view it as a mere political vehicle to support parties and
groups compatible with U.S. policy similar to operations
previously conducted by the CIA. Wholely funded by the U.S.
gobernment, NED is obligated by charter to work through
"private sector" organizations, in particular four
institutions: the National Republican Institute for
International Affairs (NR), the National Democratic
Institute for International Affairs (NDI), the AFL-CIOS's
Free Trade Union Institute (FTUI) and the U.S. Chamber of
Commerce's Center for International Private Enterprise
(CIPE) (6). NED's annual budgets have been in the $18 to $25
million range (7). NED is funded throuhg appropriations to
the U.S. Information Agency, although on occasion, it has
received grants from the U.S. Agency for International
Development (USAID).
"Old Funding. Since its first disbursements in 1984,
NED has provided $5.6 million ($3.5 in FY89) in aid largely
to support Nicaraguan opposition groups (8). (See Appendix
for a list of major direct and indirect recipients of NED
grants). Excluding known aid for international monitoring
and human rights efforts, $5,250.427 of the $5.6 million,
representing some 43 NED grants, has been used to provide
aid and support to the opposition in the following
categories:
$990,688 (19 percent) has directly supported opposition
parties in organization, alliance building, publicity and
electoral strategies. The lions's share of this support went
to the National Democratic Coordinator (CDN) or its member
groups. The CDN formetd the ultra-conservative opposition
and now makes up the conservative core of the National
Opposition Union (UNO) alliance. Among the specific
beneficiaries are the Nicaraguan Conservative Party and its
two institutes and two chambers of the main anti-Sandinista
business alliance known as COSEP.
$1,644.613 (31 percent) has supported opposition based
"civic" projects designed to mobilize, organize and train
opposition supporters around various electoral activities.
Among the key groups NED grantees are supporting are
conservative led civic, youth and women's organizations, as
well as labor and voter-profile and analysis teams. While
the general description of a recently funded joint NDI/NRI
project ($400,000) seems aimed at providing additional
support to this structure, HI has been unable to confirm
with NED officials the specific elements of the grant.
$1,477,726 (28 percent) has supported the small anti-
Sandinista labor unions, principally the Confederation of
Labor Unity (CUS), through FTUI grants for budgetary
support, a newspaper, leadership training, technical
assitance and vocational education, However, $415,000 of
that total is earmarked for mobilizing the estimated 1,200
to 20,000 CUS membership for the elections.
$1,137.400 (22 percent) has provided direct support for
the opposition media, with the newspaper, La Prensa, owned
by Violeta Chamorro, the UNO presidential candidate,
receiving 72 percent of that total. The grants to La Prensa
covered the costs of wire services, newsprint, equipment and
staff training. The allocation for 1985 covered the entire
year's operating necessities. In addition, $95,000 has been
provided to opposition radio stations for equipment and
spare parts. An additional $25,000 was given for publication
of a cultural magazine hostile to the Sandinistas.
New Funding. While all the details of the $9 million
special aid package are subject to future NED board
decisions, the legislation provides $5 million for NED.
Specifically earmarked for the UNO "party infrastructure" is
$1.5 million for 62 vehicles and gas; $1.4 million in cash;
$815,000 for party members salaries and expenses; $600,000
to pay (20,000) pollwatchers; $300,000 for office equipment;
and 50,000 for trips abroad by UNO (9).
Of the remaining $4 million, $1,050.000 has been
earmarked for three international election monitoring
efforts and the rest is designated as "flexible funds" to be
used to support the electoral process, but outside the
constraints of the NED charter. The State Department has
suggested that $2 million will be given to the Nicaraguan
Supreme Electoral Council in compliance with the 50% rule on
foreign donations, leaving $950,000 of flexible funds to be
disbursed at the discretion of the State Deparment.
U.S. Private Groups Seek to Aid Nicaraguan Opposition
In addition to the numerous private U.S. organizations
whose direct involvement in Nicaragua is largely or wholely
funded by NED, there are other groups seeking to support the
opposition election efforts with private funds.
The Simon Bolivar Fund, an Alexandria, Virginia based
organization founded in march, 1989, plans to provide
"campaign services to the opposition incluiding literature
production, television advertising and get-out-the vote
assistance". Funding for these activities is to be drawn
from a projected $500,000 "1989 Election Fund" (10). The
Fund intends to keep details of its funding private (11).
Based in Miami, the Committee for Free Elections and
Democracy in Nicaragua began its support efforts by
sponsoring a fund raising visit for UNO presidential
candidate Violeta Chamorro Founded earlier this year by
investment banker Jos Antonio Alvarado (business partner of
former Contra leader and key UNO campaign adviser Alfredo
Cesar), Pedro Joaquin Chamorro, Jr. (Contra leader and son
of UNO presidential candidate) and Arturo Cruz (former
contra leader) among others, the Committee has thus far
raised $20,000 for the UNO campaign (12).
The Nicaraguan American National Foundation, founded in
1987 (Miami) to promote the contra cause (with funds from
the World Freedom Foundation), has recently been approached
to provide funds for the UNO ticket.
Non-US Foreign Funding of the Opposition Political Parties
At the September 1989 opening of the United Nations
General Assembly, Secretary of State James Baker made
private appeals to various Representatives in an effort to
secure funding for opposition parties in Nicaragua from
political parties affiliated with their governments. While
the Japanese ruling party publicy turned down the request
noting that in Japan foreign contributions to political
parties are illegal, the West Germans, the Austrians and
presumaby others that Baker approached have not publicity
responded (13).
There is already significant support of the Nicaraguan
opposition by non-US foreign organizations.
Three of the four West German stiftungen or "political
foundations" have made substantial contributions to
opposition groups, media and the Catholic Church, However,
as with NED the picture is difficult to decipher given that
West German political foundations are prohibited from
directly funding foreign political parties (14).
The Free Democrat's (FDU) Freidrich Naumann Foundation
provided the opposition newspaper La Prensa with a $545,000
low interest, easy terms loan to rebuild its plant in 1980
(15). And it has bee reported that in 1989, the Naumann
Foundation through the Liberal International gave $200,000
to the independent Liberal Party (PLI), headed by the UNO
vice-presidential candidate Virgilio Godoy (16).
The Konrad Adenauer Foundation (Christian Democrats-
CDU) and the Hans Seidel Foundation (Bavarian Social
Christian Union-CSU) have both supported various groups
associated with the UNO coalition. The Konrad Adenauer
Foundation spent $2.5 million in 1987-88 and has budgeted
$600.000 for 1989 on various opposition related projects in
Nicaragua. Adenauer has funded the operations of
institutions of the Catholic Church hostile to the
Sandinistas, two chambers of COSEP and is reported to be
working with UNO and the institute of the Social Christian
Party in the current election effort (17). The Adenauer
Foundation also has provided support to the Contras and a
CDU representative advised the Contras during their
negotiations with the Sandinistas.
Costa Rica and Venezuela over the last decade and a
half have played significant roles in the internal politics
of Nicaragua, including a financial roel through direct
government activities and/or politically affiliated
organizations based in their countries.
Although the UNO campaign has denied receiving any
money from Venezuela, a recent Newsweek article cites
sources as saying that "hundreds of thousands of dollars"
via Venezuelan President Carlos Andres Perez are being
funneled through Alfredo Cesar, a former member of the
contra political directorate, to the Nicaraguan opposition
(18).
The Fundaci"n Nacional Democr tica de Venezuela has
worked with NED and USAID on projects alding the opposition
newspaper La Prensa.
In association with NED and USAID funded projects
directed by the America's Development Foundation, the San
Jose Costa Rica based Counseling Center for Democracy (CAD)
has helped Nicaraguan opposition groups conduct "civic
education" projects. To date, CAD has received NED funds
totaling over $600,000.
Foreign Funding Issues Requiring Future Monitoring
Foreign funding of the opposition raises certain
questions that independent observers need to monitor. Under
each of the following questions, a discussion of related
ussues is included.
How much money has actually been given to assist the
internal opposition?
This Update does not provide a complete tally of all
foreign funding. Moreover, additional funds are likely be
provided by foreign sources between now and February. In
order to determine their effect, independent observers need
to keep track of the total amount of such funds.
Is covert aid to the opposition a dead Issue?
The Bush Administration has indicated that it does not
intend to seek at this time additional covert funds to
influence the Nicaraguan elections (19). Furthermore,
reports indicate that the intelligence Authorization Bill
for FY90 bars the use of the CIA contingency reserve fund
for that purpose. If the Administration seeks covert aid at
a later date, it must request a reprogramming of existing
funds which would require consert of the House and Senate
Intelligence and Appropriations Committees.
Nevertheless, without access to the secret Intelligence
Authorization Bill, not to mention prior incidents of
unauthorized covert activities most notably the iran/Contra
affair, observers should remain vigilant. For example,
despite Administration assurances, it still seems possible
that already allocated funds could be diverted to the
infernal opposition.
Are the foreign funds given in accordance with Nicaraguan
law?
Nicaraguan law permits unlimited foreign contributions
to the opposition but sipulates that the contribution must
be administered through the Supreme Electoral Council and
that 50 percent go into a "Fund for Democracy" to be used to
cover the cost of the election. Independent observers need
to determine whether foreign funds are given in accordance
with Nicaragua law.
How has the internal opposition actually used the foreign
funds?
Crucial to an evaluation of the effect of foreign
funding is a determination of the uses to which such funds
are put. In the past, covert funds from the U.S. have been
used to pressure recipients rather that simply assist them.
For example, in the 1984 elections, the CIA used its
economic leverage to pressure opposition candidates and
parties to boycott the elections. Whille all oposition
parties are committed to participating in the 1990
elections, it is important to track how foreign funds are
used. Without such information it is impossible to determine
whether the funds have helped to level the playing field or
distort it.
Have the foreign funds helped to level the playing field or
distor it?
Part of the answer to this question relates to how the
funds are used. The amount of such funds is also crucial.
Nicaraguan law prohibits the use of state resources by the
Sandinistas for political purposes, and this provision is to
be enforced by the Supreme Electoral Council conssisting of
both government problems in Nicaragua (which will limit the
availability of public funds for candidates) and the
substantial amount of foreign funds received and to be
received by the opposition, it is possible that the internal
opposition will be in better financial condition than the
incumbent Sandinistas.
In considering this question, independent observers
should keep in mind that NED expenditures on the Nicaraguan
elections far exceed its largest previous election effort
($2.8 million). In addition, such observers should consider
that Nicaragua han only approximately 1.75 million potential
voters and that the total foreign contributions (20) to the
opposition set forth in this Update of $29,620.427 (or
approximately $17.00 for each potential voter or 3 weeks
wages for an average Nicarguan) is an enormous amount of
money.
Virtually all of the foreign funds provided and to be
provided to the internal opposition have hgone in support of
UNO alliance, but the Sandinistas and UNO are not the only
participants in this election campaign, Indeed, there are
eight other opposition candidates for President and Vice
President, as well as many others for the National Assembly.
In terms of a level playing field for all participants,
independent observers need to consider the advantages to UNO
by reason of the substantial foreign funding not only vis-a-
vis the Sandinistas but also the other opposition
candidates.
Finally, observers should consider the effect on the
playing field of the contra war, the U.S. trade embargo and
the unavailability of international bak lending to Nicaragua
as a result of U.S. action.
Has the foreign funding helped or hurt the internal
opposition?
While the opposition clearly requires resources to
conduct an aggressive campaign, it is possible that foreign
funds will hurt the opposition rather than help it. In
particular, given the unfortunate record of the U.S. in
organizing and funding the contra war, U.S. funding of the
opposition will be characterized by the Sandinistas as
continuing intervention in the internal affairs of
Nicaragua. From a political standpoint and, indeed, from the
standpoint of future U.S. policy, independent observers need
to determine whether foreign funding, particulary from the
U.S., has helped or hurt those the funds are intended to
assist.
Has foreign spending in Nicaragua contributed to the
development of long-term democratic traditions and
institutions?
Perhaps more than any other question, the answer to
this one is essential. Given the absence of democratic
traditions in Central America (except Costa Rica), foreign
funds should have the effect of promoting democratic
institutions and not distorting them. For example, funds
used to train Nicaraguans in the electoral process will
likely contribute to democracy. On the other hand, massive
infusions of date or party at election time do little, if
anything, to promote the development of sustainable
democracy. Nicaraguans will associate democracy and
elections with political patronage. Such infusions of funds
into future campaigns will be impossible to sustain, and
their present use threatens to undermine genuine political
participation and pluralism. Obviously, if funds are used to
pressure or bribe people, the process will be further
distorted and the development of demcoracy retarded.
To what extent are the Sandinistas recelving foreign funds
for campalning purposes?
While this Update deals only with foreign funding of
the opposition, foreign funding of the Sandinista party is
an important issue worthy of investigation. In the course of
this investigation, it is inapropiate, however, to equate
economica and military aid to the Nicaraguan government with
money given for election purposes. Secretary of State James
Baker's assertion that the Sandinistas hace received
hundreds of millions of dollars available for the election
campaign unfairly misses this distinction. It is
particularly unfair when earlier this year the U.S.
maintained it was entirely neutral in the El Salvador
elections while providing hundreds of millions of dollars in
economic and military assistance to the Christian Democratic
Government.
********************
Complete copies of the HI report are available by writing to
PO Box 179
Boston, MA 02118-0179
(617) 437-6220
FAX: (617)437-6268
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