Narco-scandal is watershed moment for Nicaragua

Part II in a three-part series on the government’s anti-corruption efforts

News Analysis.

The recent narco-scandal that has rattled Nicaragua’s quaint self-image and cast an even darker shadow of doubt across the already lightless Supreme Electoral Council (CSE), presents both an enormous challenge and a unique opportunity for the Sandinista administration.

The challenge for the government is to put aside politics, suspend silly triumphalism and get to the serious business of uprooting institutional narco-corruption before it flourishes like in neighboring countries. Police and state prosecutors must investigate the matter thoroughly and transparently and apply the full weight of the law against all those involved with organized crime, regardless of political profile, rank or office.

To do so, the administration needs to admit the human fallibility of its demiurges (something the rest of the country is already aware of) and not try to hide behind its clap-happy propaganda of being an irreproachable Christian, Socialist and Solidarity wonderland that is immune to such criminal temptation. So far, the Ortega administration’s slowness to recognize or respond to other corruption cases—with few notable exceptions during its first five years—does not augur well for an in-depth probe of narco-infiltrations.

But the opportunity is there. If Nicaragua handles the scandal in a professional, serious and thorough manner, the country—and the government—will come of it stronger than ever. Nicaragua shouldn’t look at the narco-scandal as a risk to its claim as “the safest country in Central America,” rather an opportunity to prove it.

The scandal of Nicaragua’s alleged narco-magistrate is still in the early phases of its development. Indeed, just in the past week, daily reports have surfaced suggesting that the tentacles of drug corruption are much more wide-reaching than the country wants to realize.

Roberto Orozco, IEEPP (photo/ Tim Rogers)

“It was just a question of time before this happened,” says Roberto Orozco, a Nicaraguan security expert at the Managua-based Institute for Strategic Studies and Public Policy (IEEPP). “We had already identified narco-penetration in lower levels of government, where municipal and local officials have been bought by organized crime. This is especially true along the principal drug-trafficking routes, where we’ve seen the worst corruption among police and local judges. Nicaragua is not an island — it’s the bellybutton of Central America.”

The bellybutton is starting to collect some lint. Orozco says the May 27 detention of de facto substitute Magistrate Julio César Osuna, who is being held under preventive arrest on charges of organized crime, drug trafficking, money laundering and falsification of state documents, represents a watershed moment for the country. How the government proceeds in the coming days and weeks could be enormously important for the future of the country.

“I hope the government gets to the bottom of this regardless of who is involved and regardless of the collateral damage it causes,” Orozco told The Nicaragua Dispatch. “I think the State of Nicaragua will be better off revealing all the institutional corruption that exists, because in the long run it will strengthen the image of the country. The message will be: In Nicaragua, there is a policy and decision to not allow this type of thing to happen here.”

On the other hand, Orozco warns, if the government tries to cover up the extent of the corruption by pinning everything on a few scapegoats and protecting others, “I will be worried because that will mean the government is covering up problems that have already become apparent.”

The risk of a cover-up is that the problem will only “fester and develop” in impunity, he warns.

“That would be a mortal error because it would start a territorial war here and the violence will start to grow,” the security expert warns.

‘This is bigger than we know’

Rosa Marina Zelaya, former president of the CSE, says the narco-infiltration and cédula-trafficking scandal is not only a “very serious situation for Nicaragua’s institutional democracy,” but for all Nicaraguan citizens.

Rosa Marina Zelaya, former president of the CSE (photo/ Tim Rogers)

“The dimension of this is much more serious than we realize yet,” Zelaya says. “This creates a crisis of credibility in the cédulas of all Nicaraguans.”

The former magistrate says when doubt is cast on the authenticity of Nicaraguans’ cédulas, it becomes a security issue for all of Central America, especially the countries of the CA-4 (Guatemala, Honduras, Nicaragua and El Salvador) that allow travel between borders with only a cédula for identification.

“Average Nicaraguan citizens are now going to be subject to more scrutiny and suspicion when they use their cédulas to travel in Central America, or to open a bank account,” Zelaya says. “This has created a crisis of credibility that will affect all of us. This issue is more transcendental that we realize yet.”

Zelaya says given the amount of drug money involved, it’s very unlikely that one person was working alone inside the CSE to traffic cédulas.  

“This scandal has uncovered a serious problem,” she says.

Investigation shows evolved levels of crime

Regional security expert Roberto Cajina, a former advisor to retired Gen. Humberto Ortega, says the preliminary investigation of the narco-infiltration shows a “division of labor” indicating that a sophisticated level of transnational organized crime was already operating here. In other words, he says, the alleged criminal syndicate was apparently operating here long enough to have evolved into a “complex network with a division of labor and sub-structures of power.”

Roberto Cajina (photo/ Tim Rogers)

Police Chief Aminta Granera says the case is an “open investigation” and that police have orders from above to “get to the bottom of this.” The top cop says Nicaraguan police are also working with their counterparts in Central America and Colombia and have developed “an excellent and fluid coordination with other police.”

Cajina, however, says the case is another example of drug dealers staying a step ahead of the law when it comes to regional integration.

“In Central America, organized crime works better than the structures of regional security,” Cajina told The Nicaragua Dispatch. “Transnational crime is globalized and works extremely well, and the governments of Central America are not responding with the same capacity.”

While police continue to investigate the extent of the narco-corruption in Nicaragua, the apparent infiltration of the CSE reveals that it’s no longer accurate to measure citizen security and safety only in terms of statics on criminal violence, Cajina says.

“Security is not just limited to the number of homicides,” he says. “It’s infinitely more complex than that.”

If Nicaragua hopes to maintain its reputation as the safest country in the region, it’s going to have do something its neighbors have been unable to do: stop narco-infiltrations in their infancy. The police have been very successful at busting drug gangs in the street, now they might have to do the same in government.

Next, Part III: why the Comptroller General’s Office is so ineffective: An interview with Controller General Guillermo Argüello Poessy.

Read Part I here.

Reporting for this story was supported by a grant from The Pulitzer Center on Crisis Reporting.

  • Mike @ Farmstay El Porton Verde

    Excellent reporting by Tim Rogers here folks… The narrative by the government (and I must admit even by myself) has been that there has been at least one benefit to Nicaragua from the local CPC (Citizens Power Councils) groups (a sort of a politicized neighborhood watch).
    They keep an eye on any new influx of narco-activity in a given barrio, tip off the police, who investigate and prosecute as necessary, thereby keeping the level of trafficking to a dull roar.
    However, as the quotes about this scandal indicate, this may be just the tip of the iceberg of a whole new level of state corruption that heretofore has not been part of the conversation.
    I have doubts as to the integrity of any investigations. Let’s hope and pray that the Nicaraguan state and civil society step up to the challenge.

  • Concerned

    Old adage ‘Follow the Money’.

    Everyone seems to know who in positions of authority is living way beyond anything that could be supported by their ‘generous’ salaries. There are indeed some smart cookies within Nicaraguan Government who know how to follow a money trail and if they were let off the leash to investigate senior office holders almost certainly it would lead to a lot less corruption.

    Rather than tarnish Sandanista reputation it would instead create a lot more faith in their leadership. Unless the worry is those caught would point fingers higher up the feeding chain.

    Just some judicious cherry picking would reflect well on the President and his advisers must already know who the big pigs at the public trough are.

  • jim miller

    Part of the reason this case is coming to light and not being covered up is because the CSE magistrate is an Arnoldo Aleman crony (not Sandinista). It reminds us of the irony that this corrupt institutional working began under the Liberals who are now saying it is unconstitutional, undemocratic, etc (since ortega is taking advantage of their institutionality). The rules of how elections take place were writen by the PLC, which included Montealegre and many of the now “resistance” when they had almost complete power to write the rules as they liked. I take it as a reminder of old addage to treat others as you would want to be treated for you never know when you will be on the other side of the stick. Of course those who wrote the rules can now claim to be victims and ask uncle sam for help to preasure the “dictator”, to hurt the country by asking for the US waivers not to be passed (which will help no one, not even the US). And americans wonder why many Nicas suport ortega because the opposition have been some of the most corrupt and egocentric leaders in central america. A choice between worse and worst, just like the one I ussually feel I have when a US election comes around….

    • http://no Maria Zeledon


    • Ternot MacRenato

      In the modern period, complete power has only existed in Nicaragua during the long 1933 to 1979 Somoza period and 1979 to 1991, the Sandinista period. Since his 1991 electoral defeat, Daniel promised to rule from below, and if not ruled, he was at least able to block any reforms, either by doña Violeta or don Enrique. Aleman and his gang of 40 thieves did not rule by themselves but with the cooperation of Daniel and his own 40 thieves. They accomplished this via el pacto the deal they agreed to in order to help themselves at the trough. When el gordo was no longer useful he was thrown under the bus. The problem, in Nicaragua and in Latin America, has always been impunity. Very few politicians pay the price either with jail time or with confiscation of their ill-gotten wealth. The few examples among many miscreants are the two Somozas, Somoza Garcia and Somoza DeBayle and those were political executions, not because of their corruption. Perhaps Byron Jerez is one of the very few who has paid a price but that was only because don Enrique Bolaños was in office.

  • Jon Cloke

    As someone who’s written quite a bit academically on corruption, as well as more specifically on corruption in Nicaragua, I sincerely doubt that this does indeed represent a ‘watershed’ moment for transparency in Nicaragua. You have to remember that Nicaragua is just a tiny component in the huge Latin American machine for transmitting drugs to the US and that the Nicaraguan political ‘elite’ have adapted as a whole to take advantage of this reality over a long, long period of time – remember Aleman’s coca-jet (and the graffiti, ‘ahi va la coca de Aleman’)? As Jim Miller suggests, the case against Julio César Osuna is purely political, not juridical and anyone who thinks that the CPCs will have any effect on narco-trafficking, rather than incorporating a whole load of people who are already involved in it, is delusional, I’m afraid…

  • Kelvin Marshall, Del Sur News

    Mr. Cloke, For someone who claims to be such an expert on corruption in Nicaragua, perhaps you could offer some solutions instead of criticism.

    • Concerned

      The solution is easy. Getting a Government formed willing to put it into place is a whole different game.

      All you need is an independant judical body not subject to dismissal by the President or the Legislature. Then an independant investigative body who can lay charges and put it before said ‘independant’ judicuary.

      The laws are already there, you don’t pay income tax etc. and you can be charged. You don’t declare earnings from bribes, payoffs etc. and yet have a huge net worth? Believe me a solid case can be made you’ve avoided income tax and that tax isn’t low in Nicaragua, just not enforced.

      The only tax collection seemingly done properly is the value added tax (sales tax) which is enforced and has auditors looking for infractions. Tax on property sales is a joke and attorneys either go along with this or lose the business. Again easy to put a stop to if the will is there just pass appropriate law for market value determination required at time of sale including sale price of similar properties ‘which have been valued/appraised by professionals’ and get database for reverence set up.

      It’s really not hard to see who is living beyond their declared income and then go get them.

      Since a lot of those who would be targeted are closely tied to the Government in one way or another it’s hard to see the Political will being there to do any of the above.

  • D. E. Emison

    I say just legalize everything, they have the beginings, if not already and awesome start to an amazing healthcare system. With the taxes on what Americans and most the rest of the world consider Illegal drugs, they could accomplish what the US scientists and healthcare agencies have been saying all along. Spend the money on prevention, treatment, rehab, and recovery, which is cheaper, instead of building giant prisons to hold millions of people. Even out own (US) govt agencies such as SAMSHA and the CDC have been pushing for moving money from criminalization to treatment – because (look at the last twenty years) it doesn’t work!