[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 3284 Introduced in Senate (IS)]

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114th CONGRESS
  2d Session
                                S. 3284

    To oppose loans at international financial institutions for the 
 Government of Nicaragua unless the Government of Nicaragua is taking 
effective steps to hold free, fair, and transparent elections, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 6, 2016

   Mr. Cruz introduced the following bill; which was read twice and 
             referred to the Committee on Foreign Relations

_______________________________________________________________________

                                 A BILL


 
    To oppose loans at international financial institutions for the 
 Government of Nicaragua unless the Government of Nicaragua is taking 
effective steps to hold free, fair, and transparent elections, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Nicaraguan Investment Conditionality 
Act of 2016''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) In 2006, Nicaragua, under President Enrique Bolanos, 
        entered into a $175,000,000, 5-year compact with the Millennium 
        Challenge Corporation (in this section referred to as the 
        ``MCC'').
            (2) After the 2008 municipal elections, the MCC stated that 
        there was a pattern of decline in political rights and civil 
        liberties in Nicaragua.
            (3) In 2009, the MCC terminated the compact and reduced the 
        amount of MCC funds available to Nicaragua by $61,500,000, 
        which led to the compact ending in 2011.
            (4) According to the law of Nicaragua, the National 
        Assembly is the only institution allowed to change the 
        constitution but in 2009, Daniel Ortega circumvented the 
        legislature and went to the Supreme Court, which he controls, 
        to rule in his favor that presidential term limits were 
        inapplicable.
            (5) The Committee on Foreign Affairs of the House of 
        Representatives convened a congressional hearing on December 1, 
        2011, entitled ``Democracy Held Hostage in Nicaragua: Part 1'' 
        where former United States Ambassador to Nicaragua Robert 
        Callahan testified, ``First, that Daniel Ortega's candidacy was 
        illegal, illegitimate, and unconstitutional; second, that the 
        period leading to the elections and the elections themselves 
        were marred by serious fraud; third, that Daniel Ortega and his 
        Sandinista party have systematically undermined the country's 
        fragile governmental institutions.''.
            (6) From fiscal year 2012 until the date of the enactment 
        of this Act, the Department of State found that Nicaragua did 
        not meet international standards of fiscal transparency.
            (7) On January 25, 2012, a press statement from Secretary 
        of State Hillary Clinton said: ``As noted by international 
        observers and Nicaraguan civil society groups, Nicaragua's 
        recent elections were not conducted in a transparent and 
        impartial manner, and the entire electoral process was marred 
        by significant irregularities. The elections marked a setback 
        to democracy in Nicaragua and undermined the ability of 
        Nicaraguans to hold their government accountable.''.
            (8) According to the Department of State's 2015 Fiscal 
        Transparency Report: ``The government does not publicly account 
        for the expenditure of significant off-budget assistance from 
        Venezuela and this assistance is not subject to audit or 
        legislative oversight. Allocations to and earnings from state-
        owned enterprises are included in the budget, but most state-
        owned enterprises are not audited. The supreme audit 
        institution also does not audit the government's full financial 
        statements. Nicaragua's fiscal transparency would be improved 
        by including all off-budget revenue and expenditure in the 
        budget, auditing state-owned enterprises, and conducting a full 
        audit of the government's annual financial statements and 
        making audit reports publicly available within a reasonable 
        period of time.''.
            (9) According to the Department of State's Country Reports 
        on Human Rights Practices for 2015: ``In 2011 the Supreme 
        Electoral Council (CSE) announced the re-election of President 
        Daniel Ortega Saavedra of the Sandinista National Liberation 
        Front (FSLN) in elections that international and domestic 
        observers characterized as seriously flawed. International and 
        domestic organizations raised concerns regarding the 
        constitutional legitimacy of Ortega's re-election. The 2011 
        elections also provided the ruling party with a supermajority 
        in the National Assembly, allowing for changes in the 
        constitution, including extending the reach of executive branch 
        power and the elimination of restrictions on re-election for 
        executive branch officials and mayors. Observers noted serious 
        flaws during the 2012 municipal elections and March 2014 
        regional elections.''.
            (10) According to the Department of State's Country Reports 
        on Human Rights Practices for 2015 in Nicaragua: ``The 
        principal human rights abuses were restrictions on citizens' 
        right to vote; obstacles to freedom of speech and press, 
        including government intimidation and harassment of journalists 
        and independent media, as well as increased restriction of 
        access to public information, including national statistics 
        from public offices; and increased government harassment and 
        intimidation of nongovernmental organizations (NGOs) and civil 
        society organizations.''.
            (11) The same 2015 report stated: ``Additional significant 
        human rights abuses included considerably biased policies to 
        promote single-party dominance; arbitrary police arrest and 
        detention of suspects, including abuse during detention; harsh 
        and life-threatening prison conditions with arbitrary and 
        lengthy pretrial detention; discrimination against ethnic 
        minorities and indigenous persons and communities.''.
            (12) In February 2016, the Ortega regime detained and 
        expelled Freedom House's Latin America Director, Dr. Carlos 
        Ponce, from Nicaragua.
            (13) On May 10, 2016, the Supreme Electoral Council 
        announced and published the electoral calendar that aims to 
        govern the electoral process.
            (14) After receiving the electoral calendar for the 2016 
        presidential elections, the Nicaraguan political opposition 
        raised concerns and pointed to a number of anomalies such as 
        the electoral calendar failed to contemplate national and 
        international observations, failed to agree to publicly publish 
        the precincts results of each Junta Receptora de Voto, and 
        failed to purge the electoral registration rolls in a 
        transparent and open manner.
            (15) Nicaragua's constitution mandates terms of 5 years for 
        municipal authorities, which would indicate that the next 
        municipal elections must occur in 2017.
            (16) On June 3, 2016, the Nicaraguan Supreme Court, which 
        is controlled by Ortega, instructed the Supreme Electoral 
        Council not to swear in Nicaraguan opposition members to the 
        departmental and regional electoral councils.
            (17) On June 5, 2016, regarding international observers for 
        the 2016 presidential elections, Daniel Ortega stated: ``Here, 
        the observation ends. Go observe other countries. . . . There 
        will be no observation, neither from the European Union, nor 
        the [Organization of American States] . . .''.
            (18) On June 7, 2016, the Department of State's Bureau of 
        Democracy, Human Rights and Labor posted on social media: 
        ``Disappointed government of Nicaragua said it will deny 
        electoral observers requested by Nicaraguan citizens, church, 
        and private sector. . . . We continue to encourage the 
        government of Nicaragua to allow electoral observers as 
        requested by Nicaraguans.''.
            (19) On June 8, 2016, the Supreme Electoral Council, which 
        is controlled by Ortega, announced a ruling, which changed the 
        leadership structure of the opposition party and in practice 
        allegedly barred all existing opposition candidates from 
        running for office.
            (20) On June 14, 2016, Daniel Ortega expelled 3 United 
        States Government officials (2 officials from U.S. Customs and 
        Border Protection and one professor from the National Defense 
        University) from Nicaragua.
            (21) On June 22, 2016, a Global Fellow from the Woodrow 
        Wilson Center chose to leave Nicaragua because of fear. 
        According to a media report, the fellow stated, ``Police were 
        following me. I did not understand the reason why they were 
        following me, but it was clear to me what they were doing. . . 
        . Of course (I felt fear), I was surprised especially because 
        the research I am doing is completely academic, not 
        journalistic, and that made me wonder why they would be so 
        interested in something like that.''.
            (22) On June 29, 2016, the Department of State issued a 
        Nicaragua Travel Alert which stated: ``The Department of State 
        alerts U.S. citizens about increased government scrutiny of 
        foreigners' activities, new requirements for volunteer groups, 
        and the potential for demonstrations during the upcoming 
        election season in Nicaragua. . . . Nicaraguan authorities have 
        denied entry to, detained, questioned, or expelled foreigners, 
        including U.S. government officials, academics, NGO workers, 
        and journalists, for discussions, written reports or articles, 
        photographs, and/or videos related to these topics. Authorities 
        may monitor and question private U.S. citizens concerning their 
        activities, including contact with Nicaraguan citizens.''.
            (23) On June 30, 2016, the Human Rights Foundation issued a 
        press release stating: ``Daniel Ortega has used all sorts of 
        trickery to push for constitutional reforms and illegal court 
        rulings in order to extend his time in power indefinitely. . . 
        . If the opposition is not allowed to meaningfully compete, the 
        upcoming elections in Nicaragua cannot be considered free and 
        fair and the Inter-American Democratic Charter should be 
        applied to the Sandinista regime.''. The release continued, 
        stating, ``The principle of alternation of power is enshrined 
        in the Inter-American Democratic Charter (IADC) as an essential 
        element of democracy. Even though Ortega pushed through a 
        constitutional amendment allowing for indefinite re-election, 
        he did so by circumventing the separation of powers illegally. 
        An uncontested re-election of Ortega would clearly violate the 
        IADC, which was signed by Nicaragua in 2001. If that is the 
        case, Secretary General Almagro should activate the IADC and, 
        if necessary, call for the suspension of Nicaragua from the 
        [Organization of American States].''.

SEC. 3. STATEMENT OF POLICY.

    It is the policy of the United States to support--
            (1) the rule of law and an independent judiciary and 
        electoral council in Nicaragua;
            (2) independent pro-democracy organizations in Nicaragua; 
        and
            (3) free, fair, and transparent elections under 
        international and domestic observers in Nicaragua in 2016 and 
        2017.

SEC. 4. INTERNATIONAL FINANCIAL INSTITUTIONS.

    (a) In General.--The President shall instruct the United States 
Executive Director at each international financial institution to use 
the voice, vote, and influence of the United States to oppose any loan 
or other utilization of the funds of the institution for the benefit of 
the Government of Nicaragua, other than to address basic human needs or 
to promote democracy, unless the Secretary of State certifies and 
reports to the appropriate congressional committees that the Government 
of Nicaragua is taking effective steps to--
            (1) hold free, fair, and transparent elections overseen by 
        credible domestic and international electoral observers;
            (2) promote democracy, as well as an independent judiciary 
        system and electoral council;
            (3) strengthen the rule of law; and
            (4) respect the right to freedom of association and 
        expression.
    (b) Termination.--This section shall terminate on the day after the 
date on which the Secretary of State certifies and reports to the 
appropriate congressional committees that the requirements of 
subsection (a) are met.
    (c) Definitions.--In this section:
            (1) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on Foreign Affairs, the Committee 
                on Appropriations, and the Committee on Financial 
                Services of the House of Representatives;
                    (B) the Committee on Foreign Relations, the 
                Committee on Appropriations, and the Committee on 
                Banking, Housing, and Urban Affairs of the Senate.
            (2) International financial institution.--The term 
        ``international financial institution'' means the International 
        Monetary Fund, the International Bank for Reconstruction and 
        Development, the European Bank for Reconstruction and 
        Development, the International Development Association, the 
        International Finance Corporation, the Multilateral Investment 
        Guarantee Agency, the African Development Bank, the African 
        Development Fund, the Asian Development Bank, the Inter-
        American Development Bank, the Bank for Economic Cooperation 
        and Development in the Middle East and North Africa, and the 
        Inter-American Investment Corporation.

SEC. 5. ORGANIZATION OF AMERICAN STATES.

    (a) Findings.--Congress finds that, according to the Organization 
of American States (in this section referred to as the ``OAS'') report 
on the 2011 presidential elections in Nicaragua entitled, ``Nicaragua: 
Final Report, General Elections, OAS (2011)'', the OAS made the 
following recommendations to the Government of Nicaragua:
            (1) ``Prepare alternative procedures for updating the 
        electoral roll when a registered voter dies.''.
            (2) ``Publish the electoral roll so that new additions, 
        changes of address and exclusions can be checked.''.
            (3) ``Reform the mechanism for accreditation of poll 
        watchers using a formula that ensures that the political 
        parties will have greater autonomy to accredit their respective 
        poll watchers.''.
            (4) ``Institute regulations to ensure that party poll 
        watchers are involved in all areas of the electoral structure, 
        including the departmental, regional and municipal electoral 
        councils and polling stations. Rules should be crafted to spell 
        out their authorities and functions and the means by which they 
        can exercise their authority and perform their functions.''.
            (5) ``Redesign the [Supreme Electoral Council] 
        administrative structure at the central and field levels, while 
        standardizing technical and operational procedures, including 
        the design of control mechanisms from the time registration to 
        the delivery of the document to the citizens; the process of 
        issuing identity cards should be timed to the calendar and, to 
        avoid congestion within the process, be evenly spaced.''.
    (b) Electoral Observation Mission.--The President shall direct the 
United States Permanent Representative to the OAS to use the voice, 
vote, and influence of the United States at the OAS to strongly 
advocate for an Electoral Observation Mission to be sent to Nicaragua 
in 2016 and 2017.

SEC. 6. STATEMENT OF POLICY.

    The Department of State and the United States Agency for 
International Development should prioritize foreign assistance to the 
people of Nicaragua to assist civil society in democracy and governance 
programs, including human rights documentation.
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