[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]


 
              DEMOCRACY HELD HOSTAGE IN NICARAGUA: PART I

=======================================================================

                                HEARING

                               BEFORE THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                            DECEMBER 1, 2011

                               __________

                           Serial No. 112-111

                               __________

        Printed for the use of the Committee on Foreign Affairs


 Available via the World Wide Web: http://www.foreignaffairs.house.gov/

                                 ______


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                      COMMITTEE ON FOREIGN AFFAIRS

                 ILEANA ROS-LEHTINEN, Florida, Chairman
CHRISTOPHER H. SMITH, New Jersey     HOWARD L. BERMAN, California
DAN BURTON, Indiana                  GARY L. ACKERMAN, New York
ELTON GALLEGLY, California           ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
DONALD A. MANZULLO, Illinois         DONALD M. PAYNE, New Jersey
EDWARD R. ROYCE, California          BRAD SHERMAN, California
STEVE CHABOT, Ohio                   ELIOT L. ENGEL, New York
RON PAUL, Texas                      GREGORY W. MEEKS, New York
MIKE PENCE, Indiana                  RUSS CARNAHAN, Missouri
JOE WILSON, South Carolina           ALBIO SIRES, New Jersey
CONNIE MACK, Florida                 GERALD E. CONNOLLY, Virginia
JEFF FORTENBERRY, Nebraska           THEODORE E. DEUTCH, Florida
MICHAEL T. McCAUL, Texas             DENNIS CARDOZA, California
TED POE, Texas                       BEN CHANDLER, Kentucky
GUS M. BILIRAKIS, Florida            BRIAN HIGGINS, New York
JEAN SCHMIDT, Ohio                   ALLYSON SCHWARTZ, Pennsylvania
BILL JOHNSON, Ohio                   CHRISTOPHER S. MURPHY, Connecticut
DAVID RIVERA, Florida                FREDERICA WILSON, Florida
MIKE KELLY, Pennsylvania             KAREN BASS, California
TIM GRIFFIN, Arkansas                WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina
ANN MARIE BUERKLE, New York
RENEE ELLMERS, North Carolina
ROBERT TURNER, New YorkAs 
    of October 5, 2011 deg.
                   Yleem D.S. Poblete, Staff Director
             Richard J. Kessler, Democratic Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

The Honorable Robert Callahan, former U.S. Ambassador to 
  Nicaragua......................................................     7
The Honorable Jaime Daremblum, former Costa Rican Ambassador to 
  the United States, Hudson Institute............................    11
Jennifer Lynn McCoy, Ph.D., director of Americas Program, The 
  Carter Center..................................................    17

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Robert Callahan: Prepared statement................     9
The Honorable Jaime Daremblum: Prepared statement................    13
Jennifer Lynn McCoy, Ph.D.: Prepared statement...................    19

                                APPENDIX

Hearing notice...................................................    40
Hearing minutes..................................................    41


              DEMOCRACY HELD HOSTAGE IN NICARAGUA: PART I

                              ----------                              


                       THURSDAY, DECEMBER 1, 2011

                  House of Representatives,
                              Committee on Foreign Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:14 a.m., in 
room 2172, Rayburn House Office Building, Hon. Ileana Ros-
Lehtinen (chairman of the committee) presiding.
    Chairman Ros-Lehtinen. The committee will come to order. 
After recognizing myself and the ranking member, Mr. Berman, 
for 7 minutes each for our opening statements, I will recognize 
the chair and the ranking member of the Subcommittee on the 
Western Hemisphere for 3 minutes each for their opening 
statements, and 1 minute for any other member seeking 
recognition.
    We will then hear from our witnesses, and without 
objection, the witnesses' prepared statements will be made a 
part of the record, and members may have 5 days to insert 
statements and questions for the record, subject to length 
limitations in the rules. The chair now recognizes herself for 
7 minutes.
    Twenty-five years ago President Ronald Reagan assisted 
freedom fighters in pushing back the cancer of communism that 
Daniel Ortega and the Sandinistas were spreading into 
Nicaragua. At that time another Florida Member was chairing the 
Foreign Affairs Committee, the distinguished Dante Fascell, my 
friend and mentor, who had witnessed and heard firsthand from 
his constituents fleeing communism about what was taking place 
in Nicaragua.
    Dante Fascell decided, as he always did, to stand for 
freedom and democracy against the oppressive tactics employed 
by the likes of Daniel Ortega. Today I am proud to carry the 
torch and do the same for the people of Nicaragua, although not 
as well nor as valiantly as Chairman Fascell did. I am standing 
for U.S. interests against Ortega's new assault on Nicaragua's 
democratic process and institutions.
    Some may ask, why is Nicaragua important at all? As one of 
our fellow witnesses, Ambassador Callahan, wrote before the 
elections, ``Nicaragua matters because Nicaraguans, like people 
everywhere, matter. They deserve to live in freedom and with 
dignity.''
    In 2008 Ortega orchestrated massive electoral fraud during 
the municipal elections. This caused the Millennium Challenge 
Corporation to terminate the remainder of the compact with 
Nicaragua in 2009, totaling $62 million. It therefore should 
come as no surprise that Ortega would pursue the same approach 
to the recent Presidential elections.
    But what did we do to prevent this latest affront on the 
rule of law and constitutional authority? In hopes of receiving 
cooperation to fight drug trafficking in Central America, the 
Obama administration appeared to do nothing. A very small 
sector within the Nicaraguan military is assisting U.S. 
counternarcotics operations. U.S. foreign policy can neither be 
restricted to such narrow objectives in Latin America nor can 
we disregard democratic freedoms starting with the fundamental 
freedom to elect government leaders. Broader U.S. interests, 
such as ensuring long-term stability in Nicaragua and the 
entire region, are being threatened by Ortega's actions in 
conjunction with those of Chavez, Morales, Correa, and others. 
We cannot afford to let these injustices continue without any 
consequences.
    In October I sent a letter to Secretary of State Hillary 
Clinton urging that the administration not recognize the 
Nicaraguan elections if Daniel Ortega was on the ballot. Why? 
According to Article 147 of the Nicaraguan Constitution, a 
candidate cannot serve consecutive terms as President and 
cannot be President for more than two terms total, yet this 
election would serve as the second consecutive term for Ortega 
and the third time that he is President of Nicaragua, all in 
clear violation of the country's Constitution.
    If the election results stand, the consequences will prove 
detrimental to democracy in Nicaragua. Ortega will be able to 
change the Constitution at will and expand his absolute control 
over the legislative, judicial, and electoral branches of 
government.
    Leading up to the election, Ortega sympathizers in the 
Supreme Electoral Council distributed voting identity cards to 
Ortega sympathizers and denied others the right to vote. The 
electoral mission, led by the European Union and the 
Organization of American States, noted irregularities in the 
electoral process and said that this election caused a severe 
setback to democracy in Nicaragua. According to the Nicaraguan 
Episcopal Conference, ``The legitimacy of the electoral process 
and the respect for the will of the people have been seriously 
questioned.''
    There are clear indications of fraud in the electoral 
process in Nicaragua. The Department of State appears to agree 
that the elections were not transparent and that the Supreme 
Electoral Council did not operate impartially nor 
transparently. Thus, the U.S. must not recognize Daniel Ortega 
as Nicaragua's leader and should call for new, free, fair, and 
transparent elections to be held that are in keeping with 
Nicaragua's Constitution and reflect the will of the Nicaraguan 
people. The administration also should hold on any nomination 
for a new U.S. Ambassador to Nicaragua until this issue is 
resolved.
    Similarly, the OAS should look to its own charter and 
reaffirm in the preamble to the Inter-American Democratic 
Charter which clearly states that ``Representative democracy is 
indispensable to the stability, peace, and development in the 
region.'' Rather than putting its efforts in reintegrating the 
Cuban regime into the OAS, for example, the OAS must act 
quickly to reinstitute democratic order in Nicaragua.
    September 2011 marked the 10-year anniversary of the Inter-
American Democratic Charter. In light of recent developments in 
Nicaragua and the OAS and regional inaction, we need to 
evaluate the charter and determine if it needs to be reformed 
to ensure that it is living up to its mandated defense of 
democracy and prevention of democratic demise as has taken 
place in Nicaragua.
    Daniel Ortega is also trying to silence his critics by 
blocking the major local newspaper, La Prensa, from 
distributing its newspaper to a wide circulation. Threatening 
the freedom of the press is just another tactic by Ortega to 
prevent the Nicaraguan people and the whole outside world from 
learning the realities of his dictatorship, but Nicaraguans 
will not be deterred. This Saturday thousands of courageous 
Nicaraguans will once again march down the streets of Managua 
to peacefully protest Ortega's power grab.
    As the famous Nicaraguan poet Ruben Dario once said, ``If 
the nation is small, one dreams it great.'' The Nicaraguan 
people dream of a day that they will be free from tyrants and 
from the control of these tyrants, so it is our moral 
obligation to uphold the rule of law and democratic order in 
order to help them fulfill this dream.
    And with that I am pleased to turn to my ranking member, my 
friend, Mr. Berman, for his statement.
    Mr. Berman. Well, thank you very much, Madam Chairman. I 
was thinking about Mr. Fascell and your earlier comments 
because he was both a mentor to me and a friend, and I have 
fond memories.
    On November 6, 2011, elections were held in Nicaragua. As 
the dust settles around the results, there are at least two 
things that are clear. First, this was a real setback for 
democracy in that country; and, second, Daniel Ortega will most 
likely be President for another 5-year term.
    The problems with the election were numerous and will get a 
full airing here today. But before we get to those I do want to 
thank the Organization of American States, the OAS, the 
European Union, and The Carter Center for being present on the 
ground on Election Day despite significant efforts by Ortega to 
keep them out. All three organizations thought long and hard 
about participating at all under these difficult conditions, 
worried that they might become enablers of a fraud. Although 
the scope of their reports was somewhat limited by the fact 
that they did not have complete access, they are nevertheless 
critical for our understanding of the situation, and we are 
thankful for their voice in this debate.
    In a briefing held before this hearing, the head of the OAS 
observer mission, Dante Caputo, reported on the election's 
significant irregularities, the indefensible results, and the 
efforts to impede observer access. It is worth recalling that 
this committee recently voted to defund the OAS, with some of 
my colleagues on the other side of the aisle claiming that it 
was an ``enemy of democracy.'' The organization's participation 
in the Nicaraguan elections and its subsequent hard-hitting 
report is a stark indication of the kind of benefits that the 
OAS brings to the regional table.
    Why has the Nicaraguan Government chosen to bitterly smear 
the OAS and its report and not the two other organizations that 
said essentially the same thing? I think the answer is that 
Ortega believes the OAS has few friends and many foes, foes led 
by Hugo Chavez. It is critical that we line up behind the 
people and the organizations doing the tough work on behalf of 
democracy in this hemisphere, including the OAS.
    Even before these elections were held, the Nicaraguan 
political opposition was forced to decide if they should 
participate at all. Many people, and I include myself among 
them, saw Ortega's candidacy as unconstitutional from the 
series of questionable maneuvers from institutions he controls 
and the constitutional provisions cited by our chairman.
    The vexing policy issue that I believe stands before us 
right now and that I hope to explore with our witnesses is: 
What should the United States do now? In the short term I 
believe we should resist the temptation to collect our marbles 
in a huff and go home. We have a long history with and 
commitment to the Nicaraguan people, and the values we hold 
dear suggest we remain engaged, just as the Nicaraguans 
themselves are remaining engaged. And we continue to have 
important interests in Nicaragua and in Central America, not 
the least of which is the worsening drug problem. By and large 
the United States Government, in my opinion, has deftly 
navigated very turbulent waters in the Nicaragua-U.S. bilateral 
relationship. We have called Ortega out when we needed to and 
held our fire when that was the better move.
    Recently our Embassy fought very hard behind the scenes for 
the rights of election observers to do their job. While the 
Embassy itself was not invited to participate as an observer, I 
am told they did so anyway. Regionally, however, we are getting 
less traction. During last week's meeting at the OAS, the U.S. 
was very tough on Ortega, who is clearly running afoul of the 
Inter-American Democratic Charter, but we didn't get much 
support from other countries.
    One of our witnesses today, Ambassador Callahan, served on 
the front lines in Managua in both the Bush and Obama 
administrations and can give us some perspective on these 
issues. I would ask the panel directly what measures they would 
recommend for dealing with the Ortega government over the long 
term. Should we consider visa restrictions? Removing the 
waivers on assistance to Nicaragua, which amounts to about $24 
million annually? What effect would that have on the 
counternarcotics programs that are in our self-interest, on the 
poorest of the poor in Nicaragua, and on the civil society 
actors that we want to help? And does it make sense to cut off 
our aid when it is dwarfed by the $500 million provided by Hugo 
Chavez which, among other things, keeps the local business 
community quiescent? What about loans to Nicaragua and the 
Inter-American Development Bank? Last year these loans, which 
cover everything from direct help to government ministries to 
health aid, came to about $384 million. This year there are 
about $194 million worth of projects in the pipeline. This is, 
as they say, real money. Assuming we even can, should the U.S. 
try to interfere with these? What are the costs and what are 
the benefits?
    It is easy to see that Ortega is no democrat. Right now he 
doesn't appear to see much downside in behaving 
undemocratically. If questionable results in the congressional 
races are confirmed, they would grant Ortega a supermajority to 
change the Nicaraguan Constitution at will, including to allow 
his indefinite reelection.
    The waters that the United States has navigated for years 
in Nicaragua are about to get more turbulent, all the more 
important for the U.S. to define its strategic objectives and 
start on the path to achieve them. I look forward to the 
discussion with the panel on these issues. Thank you very much.
    Chairman Ros-Lehtinen. Thank you so much, Mr. Berman.
    I am very pleased to yield 3 minutes to the chairman of the 
Subcommittee on Western Hemisphere, my Florida colleague, 
Connie Mack.
    Mr. Mack. Thank you, Madam Chair. Thank you for this 
hearing, and I also want to associate myself with your opening 
remarks. I thought they were excellent and right on target, and 
so thank you for that. And I also want to thank my friend on 
the other side of the aisle for his comments because I know he 
believes them, and that is what this process needs is people 
who believe in what they believe in and are willing to make the 
case. I happen to disagree.
    The question is, you know, what should we do? Well, how 
about this? How about we tell Nicaragua that if you want the 
support of the United States, if you want support of the 
international community, then you must stand for freedom and 
democracy, you must have free and fair elections, and you must 
believe in the citizens of Nicaragua instead of the self-
interests of one man. If we do that, all of the things that the 
ranking member talked about, the United States can engage in.
    I believe that the OAS is a hindrance to democracy in Latin 
America. The OAS has become an organization that has on every 
turn supported the wrong side, and let me give you just a 
recent example. In Honduras the people of Honduras stood up. 
The government, the institution, they stood up and said that we 
want to follow the rule of law, we believe in our Constitution. 
And what happened? The OAS and the United States forced our 
will on the people of Honduras against their rule of law and 
their Constitution.
    Now what do we have in Nicaragua? We have the President of 
Nicaragua working against his own Constitution in violation of 
law and the Constitution, and then the OAS and apparently the 
United States Government is standing on the wrong side again. 
You know, it is not really--this is not difficult, I don't 
think, that what people are looking for not only here in the 
United States but around the world is leadership. And 
leadership, as I said before in this committee, comes from 
recognizing what it is that you believe in and standing for 
what it is you believe in.
    I don't believe that this administration has set a clear 
path for freedom and democracy in Latin America. I don't 
believe that the OAS is capable of ensuring that we get 
democracy and free and fair elections and freedom in Latin 
America. We should withdraw from the OAS, we should stop 
funding the OAS, we should create stronger alliances with our 
allies in Latin America. We should work together to put down 
the thugocrats like Hugo Chavez and others and let it be clear 
that in Latin America and, frankly, anywhere around the world, 
that if you stand for freedom, security, and prosperity, if you 
believe in democracy and the rule of law, then the United 
States will stand shoulder to shoulder with you. Right now, we 
don't see that leadership. We don't have that leadership here 
in the United States and the OAS is as much of a problem as 
anyone else.
    With that, Madam Chair, thank you very much for the 
hearing, and I do--whatever--with my 1 second.
    Chairman Ros-Lehtinen. Thank you so much, Chairman Mack, 
for your eloquent statement. And another eloquent speaker, Mr. 
Meeks, the ranking member of the Subcommittee on Europe and 
Eurasia, is recognized for a 1-minute opening statement.
    Mr. Meeks. Thank you, Madam Chairman. Where I do want to 
agree with the distinguished chairman of the Western Hemisphere 
Subcommittee, Mr. Mack, is we do need passion. I think that, 
and I know that he believes what he believes, although I 
believe that he is wrong, and I want to associate myself very 
strongly with the opening remarks of the ranking member, Mr. 
Berman, because it is clear to me that the OAS has done 
exemplary work in this election with dealing with Nicaragua. It 
is a way to move to try to make sure that we assure ourselves 
of democracy.
    The fact of the matter is what Mr. Mack said, you know, 
leadership. I have talked to a number of our allies in the 
Western Hemisphere and South America, they don't want us to 
disengage. They want us to engage. In fact, in talking to one 
of our closest allies just recently in Colombia, what he is 
trying to do is engage and to make a difference and to benefit 
all of the people. We should not take a side. That is almost 
like taking a side here in one of our Presidential elections. 
We don't want people from the outside to come and take a side, 
Democrat or Republican. What we want to do is to try to make 
sure we are impartial but try to make sure that democracy is 
spread for all of the people, not one side or the other side, 
but for all of the people of Nicaragua, and I look forward to 
asking questions of the witnesses, and I yield back.
    Chairman Ros-Lehtinen. Thank you very much. Mr. Turner of 
New York is recognized.
    Mr. Turner. Thank you, Madam Chair. I have nothing. Yield 
back.
    Chairman Ros-Lehtinen. Thank you. Mr. Bilirakis.
    Mr. Bilirakis. I am fine, Madam Chair. I would like to 
listen to the testimony.
    Chairman Ros-Lehtinen. Thank you so much. Mr. Sires of New 
Jersey.
    Mr. Sires. Thank you, Madam Chair, for holding this 
hearing, and, you know, here we go again. Another great, one of 
these great Communist liberators turns out to be a bigger thief 
than the people that were there before. Now he is taking from 
the people of Nicaragua the ability to have a democracy and 
perpetuate himself in power for as many years as he can. It is 
very unfortunate that the people of Nicaragua have to go 
through this, but we must act strong. We must certainly do 
whatever we can to promote democracy in some of these 
countries. This is just unacceptable that for many years the 
press played these people as great liberators and then they 
turn out to be bigger bums than the people that were there 
before. So I am looking forward to your hearing. Thank you.
    Chairman Ros-Lehtinen. Thank you so much. Ms. Bass of 
California is recognized.
    And with that I will introduce our excellent panelists. We 
welcome our witnesses. First, Ambassador Robert Callahan, who 
served as a Foreign Service officer with the Department of 
State for 32 years and as U.S. Ambassador to Nicaragua from 
2008 to 2011. In addition to Nicaragua, Ambassador Callahan 
spent time with the State Department in Costa Rica, Honduras, 
Bolivia, U.K., Greece, Italy, and Iraq. Thank you so much, Mr. 
Ambassador.
    Another Ambassador we welcome tonight, Ambassador Jaime 
Daremblum. He joined the Hudson Institute as a senior fellow 
and director of the Hudson Center for Latin American Studies in 
2005. The Ambassador served as the Ambassador of Costa Rica to 
the United States for 6 years, from 1998 to 2004. We welcome 
you as well, Jaime.
    I would also like to welcome Dr. Jennifer McCoy. She is 
currently the director of The Carter Center's Americas program 
and is a professor of political science at Georgia State 
University. Dr. McCoy has directed election monitoring 
activities for The Carter Center in Nicaragua, Bolivia, Panama, 
and Venezuela among numerous other countries in the hemisphere.
    We welcome all three of you. Your prepared statements will 
be made an official part of the record, and we kindly ask that 
you summarize your statements to no more than 5 minutes. And we 
will begin with you, Ambassador Callahan.

    STATEMENT OF THE HONORABLE ROBERT CALLAHAN, FORMER U.S. 
                    AMBASSADOR TO NICARAGUA

    Ambassador Callahan. Madam Chairman, Mr. Berman, Ranking 
Member, members of the committee, thank you for the invitation 
to appear before you to discuss the recent Nicaraguan elections 
and the future of democracy in that country, a place and a 
people that I came to like and admire during my 3 years as the 
United States Ambassador there.
    I continue to cherish that experience and remain committed 
to those Nicaraguans who, against formidable opposition, 
persist in their dream of creating a truly democratic country 
and who, at great personal risk, work to bring that dream to 
fruition.
    Today in these brief opening remarks, I want to make four 
points: 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; fourth, and despite the 
foregoing, that we Americans must remain engaged in order to 
support those Nicaraguans who share our vision of individual 
freedoms, representative government, rule of law, due process, 
and respect for human rights.
    First, Ortega's candidacy. As many here know and as we have 
heard, Sandinista members of the Supreme Court overnight, on 
the weekend, and in the absence of opposition magistrates, 
decided that the constitutional ban on consecutive Presidential 
terms and more than two terms for any individual, both of which 
disqualified Daniel Ortega, violated Ortega's human rights. In 
effect, they declared the Constitution unconstitutional. No 
serious objective jurist in Nicaragua or elsewhere regarded 
this decision as anything but a travesty, an insult to 
jurisprudence, an embarrassment to the country, and a stain on 
the reputations of the judges who rendered it. But it was all 
that Mr. Ortega needed to justify his candidacy, no matter how 
absurd it looked to the rest of the world.
    Then, during the campaign, the Sandinistas, who control the 
Supreme Electoral Council, the fourth coequal branch of 
government, manipulated the voter rolls, managed the issuance 
of voter cards to the detriment of the political opposition, 
and used state property to conduct their electoral activities, 
among other abuses, and on the very day of the election, and 
according to credible observers, they stole many thousands of 
votes.
    Allow me to cite one telling figure. The published results 
show that Nicaraguans cast over 100,000 more votes for Assembly 
candidates than for President, although all candidates appeared 
on the same ballot. In my judgment, and if we could credit 
these results, it would seem very odd indeed that so many more 
people cast a vote for legislators than for President in the 
same election.
    Next, the question of institutionality. Under the 
government of Ortega's predecessor, Enrique Bolaos, a decent, 
honest, and able man, Nicaragua slowly began to develop those 
independent and robust institutions that ensure true democracy 
and provide a check and balance on government excess, but 
Ortega has reversed these modest gains. As I have mentioned, 
the Supreme Court and the Electoral Council are involved with 
the Sandinistas. Ortega and his party have used, for their own 
purposes, these institutions and many others, including, 
increasingly and sadly, the national police. Nicaraguans now 
know that they have nowhere to turn for a redress of 
grievances, for the protection and preservation of their 
individual rights. Of all the damage that the Sandinistas have 
done to democracy in Nicaragua, their systematic co-optation of 
those governmental institutions is the most consequential and 
insidious.
    I come now to my last point: What, if anything, the United 
States can and should do with the next Ortega government. The 
dilemma is obvious. We maintain our current relations with an 
illegitimate and at times odious government in order to remain 
there to encourage and bear witness for those Nicaraguans who 
share our political values, or we reduce our diplomatic 
presence and our aid, thereby leaving these valiant Nicaraguans 
without the support and presence of the hemisphere's most 
powerful and active democracy. For the moment, at least, I 
think we should stay. We should continue to promote economic 
development, especially through our programs in health and 
education, which both benefit poor Nicaraguans and demonstrate 
our Nation's commitment to them. We should continue to champion 
good governance openly in every appropriate way and with 
everyone, including young Sandinistas who want to create a 
genuinely democratic future for their country. If, however, the 
next Ortega administration becomes ever more authoritarian, if 
it places intolerable conditions on our activities, we must be 
prepared to reduce or eliminate aid and reconsider the size and 
level of our diplomatic presence.
    Madam Chairman, Ranking Member, members of the committee, I 
thank you for your attention. In discussing this complex 
issues, I have been brief. If you have any questions, I will 
gladly try to answer them at the appropriate time.
    Chairman Ros-Lehtinen. Thank you, Ambassador.
    [The prepared statement of Ambassador Callahan follows:]

    
    
    
    
                              ----------                              

    Chairman Ros-Lehtinen. Ambassador?

STATEMENT OF THE HONORABLE JAIME DAREMBLUM, FORMER COSTA RICAN 
       AMBASSADOR TO THE UNITED STATES, HUDSON INSTITUTE

    Ambassador Daremblum. Thank you. Madam Chair, Congressman 
Berman, distinguished members of the committee, I am honored 
and pleased to be here today to discuss the future of democracy 
in one of Latin America's poorest countries. Over a century ago 
a wise political leader in my country observed that instead of 
the two usual seasons common in Central America, summer, 
followed by rainy winter, Costa Rica had a third season, the 
season of wars with Nicaragua. In spite of the traditional 
friendship between Costa Ricans and Nicaraguans, dictators and 
other unsavory leaders in Nicaragua have long ratcheted up 
border conflicts with Costa Rica in order to divert attention 
from their domestic mischief. The Somozas did it, Arnoldo 
Aleman did it, and now Daniel Ortega is doing it, and from 
Ortega's perspective, it is working just as planned.
    After Ortega and his ruling Sandinista party blatantly 
stole municipal elections in November 2008, United States and 
Europe suspended Nicaragua's economic aid. On November 6th, 
earlier this month, Nicaragua held another election and 
witnessed another example of Sandinista malfeasance. Government 
authorities deliberately made it hard for voters to acquire 
their ID cards, they sought to limit the number of election 
observers and poll watchers, and the Supreme Electoral Council 
once again operated with a disturbing lack of transparency.
    The disputed election results sparked a wave of protests 
and violence. Several Nicaraguans were killed and many more 
were injured. Such is the intensely polarized atmosphere that 
Ortega has fostered. By rigging the elections, trampling the 
Constitution, persecuting his political opponents, bullying 
journalists, he has laid the foundation for another Sandinista 
dictatorship. Indeed, the only reason Ortega was eligible to 
stand for reelection is that his judicial allies used legal 
thuggery to abolish Presidential term limits.
    Sandinista attacks on democracy at home have been 
complemented by aggressive behavior abroad. In the fall of 2010 
amid a river dredging project, Nicaraguan military forces 
effectively invaded and occupied an island, Isla Calero, that 
has always been considered Costa Rican territory, thereby 
sparking a major diplomatic crisis. When the Organization of 
American States demanded that Managua withdraw troops from 
Calero Island, Ortega refused, after multiple rulings from the 
OAS, the International Court of Justice in The Hague got 
involved, too. It ordered also Nicaragua to remove all military 
personnel from Calero Island. Ortega is still disobeying this 
order. He has been sending Sandinista youth brigades to the 
island along with soldiers, under the guise of environmental 
missions.
    Throughout the border dispute Nicaragua has shown a 
flagrant disregard for international law, not to mention Costa 
Rican sovereignty. It is the type of behavior one normally 
associates with rogue states and tin-pot dictators.
    Ortega has used the Calero Island conflict to stir up 
nationalist passions and boost his popularity. It has also 
become an excuse for yet another Presidential power grab, with 
the Nicaraguan leader expanding his control over the army and 
claiming broad new authority.
    Not surprisingly for an erstwhile Soviet client and a long-
time friend of Moammar Qadhafi--as a matter of fact Qadhafi's 
nephew is a personal secretary in Managua for Ortega--Ortega 
has aligned his regime with authoritarian governments in Iran, 
all over the world. Meanwhile, foreign investment numbers have 
been inflated by assistance from Hugo Chavez that has been 
mentioned here.
    Ortega is also benefiting from international loans and high 
commodity prices. While we should not confuse his economic 
moderation with a genuine commitment to democratic pluralism, 
Nicaraguan democracy is gradually being asphyxiated. Corruption 
is rampant, and the country is rapidly becoming a one-party 
state. If or when the business community finally does turn 
against Ortega, it may be too late. Thank you very much.
    Chairman Ros-Lehtinen. Thank you so much, Ambassador.
    [The statement Ambassador Daremblum follows:]

    
    
    
    
    
    
    
    
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    Chairman Ros-Lehtinen. Dr. McCoy.

 STATEMENT OF JENNIFER LYNN MCCOY, PH.D., DIRECTOR OF AMERICAS 
                   PROGRAM, THE CARTER CENTER

    Ms. McCoy. Thank you, Madam Chairwoman and Congressman 
Berman. I am pleased to be here today. I was in Nicaragua for 
the elections on November 6th, as I have been for every 
election beginning with 1990. Normally I have led election 
observer missions to the national elections in Nicaragua. This 
year The Carter Center declined to send a mission because of 
restrictions in the regulations on international and national 
observation. However, we did take a small unofficial delegation 
and consulted with the observers on the ground, Nicaraguan 
citizens, and the international diplomatic community. So we 
have a pretty good picture of what happened.
    Indeed, my view is the elections were not verifiable; that 
is, it is nearly impossible to independently corroborate the 
official results because there were insufficient independent 
observers present on voting day and because the National 
Election Council declined to post the results precinct by 
precinct to allow the comparison by the political party poll 
watchers and independent observers of those results. This is a 
departure from past practice in Nicaragua.
    Nevertheless, by most indicators, polls prior and the 
partial results that are known, Daniel Ortega won the 
Presidency. The question is by how much and by how many 
legislators.
    I agree with most of the characterizations that we have 
heard today about the problems, the deficiencies, and the flaws 
in the elections and won't repeat that, but I will say that 
these problems are not new. Nicaragua has been unable to 
develop strong and independent institutions since the populace 
toppled a dictatorial dynasty in 1979. Every election after 
1990 has suffered from disputes, irregularities or ineptness, 
and repeated suggestions for electoral reform from election 
observers have been ignored. But this election was the worst in 
terms of the obstacles created by the National Electoral 
Council for citizens, political parties, and international 
organizations to verify the integrity of the process.
    So what can and should the United States and the larger 
international community do to strengthen and encourage 
democratic governance in the wake of these weaknesses?
    First, we should recognize that Nicaragua is a poor 
country, the second poorest in the hemisphere, with a long 
history of authoritarianism and U.S. intervention. Civil 
society is weak, the current political opposition is 
perpetually divided, political parties are dominated by 
ambitious personalities rather than strong organization, and 
the political culture is one of negotiation and clientelism. 
Thus the conditions are not propitious for strong democratic 
institutions at the moment.
    The news isn't all bad. Despite its limitations, the 
country does have still one of the best security and 
counternarcotics records in Central America, which is a region 
plagued with violence, gangs, and drug trafficking. And as we 
have heard, the Ortega administration does have a fairly strong 
macroeconomic track record sufficient to receive IMF approval, 
and it consults regularly with the private sector.
    So we have a mixed context. What should we do? We should 
criticize the lack of electoral credibility, we should 
encourage the opposition to present whatever evidence it can 
about the exclusion of its poll watchers and the irregularities 
in the count, and we should offer assistance to carry out 
desperately needed electoral reform. But I would say that 
assistance should be on the condition that the current 
Electoral Council be changed in its membership.
    We should also point out that a politicized judiciary and 
electoral authority and lack of accountability mechanisms 
threaten the sustainability of the economic gains achieved thus 
far, as investors will inevitably shy away from contexts 
lacking in juridical security.
    Now, it is also tempting to consider sanctions to highlight 
the unacceptability of this behavior. But I believe that 
efforts to unilaterally isolate and punish Nicaragua are likely 
to be counterproductive on several counts: First, the 
Nicaraguan Government will predictably characterize U.S. 
sanctions as imperialist dominance, and this is likely to 
resonate with a population or much of the population imbued 
with a history of U.S. intervention and choosing sides in the 
past as recently as the last election.
    Second, isolation imposed by one country simply does not 
work, as we have seen with other attempts in the hemisphere.
    Third, harming an economy that is just getting back on its 
feet is more likely to hasten a return to authoritarianism than 
to strengthen democracy.
    And, finally, unfortunately the U.S. has far less leverage 
over this poor country, traditionally dependent on U.S. aid and 
trade, than in the past.
    So withdrawing from Nicaragua and other perceived 
adversaries in Latin America I think will simply isolate the 
United States and leave a vacuum for others. The real question 
is how can we engage Latin America to support democracy?
    I want to conclude with saying that the way forward, I 
think, is to avoid personalizing politics, identifying friends 
and foes. It is to engage in pragmatic talks, to address the 
transnational issues of national interest to us all and that 
none of us can solve alone, and it is to recognize and 
appreciate the benefits of living in a relatively stable, 
democratic, and friendly neighborhood.
    Remaining silent about this election sets dangerous 
precedents for other countries and for Nicaragua's next 
elections, the municipal elections coming in 2012. Without 
change, many citizens will be alienated and won't vote in that 
process and will thus have no voice, but the problem is 
pressure for change needs to come first and foremost from 
inside Nicaragua. It is a long-term process, it won't change 
overnight. It takes education, information, public debate over 
proposed constitutional changes that may be coming and over the 
values and mechanisms of the fundamentals of democracy, which 
are first and foremost how can citizens hold their governments 
accountable. So I propose that universities and NGOs in the 
U.S. work with Latin American counterparts to hold these public 
discussions in Nicaragua and the hemisphere.
    Chairman Ros-Lehtinen. Thank you so much.
    [The prepared statement of Ms. McCoy follows:]

    
    
    
    
    
    
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    Chairman Ros-Lehtinen. I thank all three panelists for 
excellent testimony.
    Dr. McCoy, The Carter Center, as you pointed out, declined 
to observe the elections in Nicaragua and released a statement 
on November 9th stating, ``We are troubled by the reports of 
significant deficiencies in the 2011 electoral process in 
Nicaragua and their implications for democratic governance.''
    Further, in your prepared testimony you argue that Ortega 
should not be isolated as, in your assessment, ``such attempts 
to change behavior in Cuba and Venezuela have not worked.''
    I can't say that I am surprised, given that it was the 
Carter administration that enabled Ortega and the Sandinistas 
to take Nicaragua hostage in the first place decades ago. 
However, how can you justify accepting Daniel Ortega as 
President while recognizing electoral fraud in Nicaragua at the 
same time? How can The Carter Center argue that it is advancing 
human rights while supporting violators of fundamental 
liberties in Nicaragua and throughout the Western Hemisphere? 
You say that we need to get away from personalities, but we are 
talking about the person who orchestrated massive electoral 
fraud, and yet you think that he should be recognized as the 
President.
    In 2006 President Jimmy Carter observed the Presidential 
elections in Nicaragua. And after the elections he stated, 
``They have a very competent election commission that has so 
far proven to be fairly well balanced.'' This commission, the 
commission that he praised in 2006, has resulted in two corrupt 
elections in 2008 and 2011. Was President Carter wrong in his 
original assessment, and is it the view of The Carter Center to 
ignore electoral fraud when it likes the winner?
    And you mentioned that municipal elections are coming up. 
Certainly Daniel Ortega and Co have nothing to fear from The 
Carter Center when they were able to perpetuate fraud, when the 
Ortega government was able to perpetuate fraud and all that The 
Carter Center said is, Well, let's not personalize the problem. 
If you could address these seeming inconsistencies.
    Ms. McCoy. Certainly, I would be glad to. I think if you 
read our election reports, after every election you will see 
that we said that most of the elections that have been held 
have had serious flaws and irregularities, and we have made 
strong recommendations for reform after each of the elections.
    Chairman Ros-Lehtinen. And since those reforms have not 
been made and there is another one coming up, what does it 
matter to Daniel Ortega?
    Ms. McCoy. And we have also made statements after, though 
not present to observe, but after the 2008 elections and the 
issues in 2010, strongly criticizing the fraud and the other 
actions that have occurred. I think that questions here----
    Chairman Ros-Lehtinen. With no consequences?
    Ms. McCoy. Well, the question, as you will see if you read 
those statements, as earlier statements, we did indeed urge a 
cut in aid, which happened after the 2008 municipal elections 
when fraud was proven. I think the dilemma here, as Ambassador 
Callahan noted, is what to do in a situation like this, 
particularly one where it is very difficult to prove or not 
prove the election results. And in a poor country like 
Nicaragua, do we cut off our engagement completely and punish 
the people, or do we continue some form of engagement with that 
country? And I think we have seen some agreement----
    Chairman Ros-Lehtinen. Do you believe that the electoral 
fraud has not been proven?
    Ms. McCoy [continuing]. In the panelists. I am sorry.
    Chairman Ros-Lehtinen. Sorry. Are you saying, since we 
don't know if the fraud took place more or less--is that what 
you are saying, you are not convinced that there was electoral 
fraud in this election?
    Ms. McCoy. In this case, as I said, the elections are not 
verifiable, and the political parties and the national 
observers have been attempting to gather as much information as 
they can. The problem was they were not present in most of the 
voting sites, and therefore it is very difficult for them to 
present the evidence required. That is the difficulty with this 
situation. I think we have all agreed in this room today that 
these elections were seriously flawed and unacceptable in their 
lack of transparency and in the partiality. I don't think there 
is any disagreement on that.
    Chairman Ros-Lehtinen. And do you know--we had had a 
briefing before this hearing where we had one of the folks who 
was involved in the electoral monitoring who told us they were 
not able to go to the places. They were denied access. So they 
were denied access to the voting places, there were so many 
irregularities. So if we see that there were so many 
deficiencies in this election, what is the proper response of 
the United States?
    Ms. McCoy. I think that is exactly the dilemma and the 
challenge for the committee and for the administration to 
address. Criticizing the results----
    Chairman Ros-Lehtinen. Thank you, my time is up. Thank you 
so much. Thank you. Mr. Berman.
    Mr. Berman. Just before I ask a question, just an 
observation that when the government and the council do all the 
things to prevent you from gathering the information to 
ascertain whether fraud took place, perhaps not in a court of 
law, but certainly for us and for the public, one has to assume 
there was an intention to commit the fraud. I don't know that 
that is an unreasonable leap of faith, given the conduct of the 
government in the conduct of the election.
    But I guess, Ambassador Callahan, I would like you to 
elaborate a little bit. As I understood what you testified to, 
you are essentially saying Ortega is going to be the President, 
there is nothing within our arsenal that is going to stop that 
from happening, he is not going to rerun this election.
    For now, for the reasons you outlined, we should probably 
nominate and send an Ambassador and continue to staff our 
Embassy and do the things to connect with the Nicaraguan 
people. We should probably not immediately do everything we can 
to stop any assistance from going to Nicaragua, but there comes 
a point in the future where one may want to reassess that 
policy.
    So I guess my two questions, and if any of you else want to 
comment, are: One, describe a little more what that point might 
be. Secondly, in some ways you are in an interesting situation 
because of your time as Ambassador. The previous administration 
for the first 4 years tried a policy of nonengagement and 
isolation, and then it decided to change its approach and got 
more engaged and more involved. Are you--I don't remember 
whether your tenure passed through those two points, but can 
you tell us what the previous administration's calculation was 
in sort of changing its approach toward Nicaragua between the 
first term and the second term?
    Ambassador Callahan. Thank you, Mr. Berman. Your summary 
captured my position very accurately. I do think that for the 
moment we should stay. I do think it is important to give the 
kind of material and moral support to the opposition. After 
all, we did remain in Nicaragua throughout the 1980s, and I 
have got to believe that that, at least in a small measure, 
contributed to the victory of the opposition in 1990. They 
desperately need our help, including our moral support, and for 
that reason I think it is symbolically important to have an 
Ambassador there, although the functioning of an Embassy really 
doesn't change. Our Charge d'Affaires are very competent people 
and run the Embassy as well as Ambassadors; however, it is 
important symbolically for the Nicaraguan people to see that 
the Americans do have an Ambassador there.
    I would add, however, that I found it somewhat odd, the 
timing on the naming of our new Ambassador. A week or two after 
our Deputy Assistant Secretary condemned the elections in the 
OAS, we made public our request for agrment for the new 
Ambassador. I probably would have held off on that at least 
until the New Year. But, yes, I think it is important that we 
have an Ambassador and that we remain engaged.
    The point to leave? I can speculate that if Ortega decides 
to close down the newspapers, if he again begins to imprison 
people for political reasons, if he acts rashly or against our 
national interests----
    Mr. Berman. In my 36 remaining seconds, why aren't the 
other Latin American countries, not the Venezuelas, but the 
ones that have a commitment to democracy, speaking out more 
clearly at the OAS and other places about what happened? Why 
are we and Canada and I think Peru the only countries that are 
saying anything publicly?
    Ambassador Callahan. I wish I knew the answer to that 
question. But you are correct in that assessment. Privately, 
because I was dealing with them all the time, they express 
their serious doubts about the direction of the Nicaraguan 
Government, but publicly they seem to be very reluctant to 
express that, either individually as Ambassadors or through 
international fora such as the OAS and the U.N. I think it is 
unfortunate. I think that that kind of pressure would be 
beneficial to our desires to see a more democratic Nicaragua.
    Chairman Ros-Lehtinen. Thank you so much. Thank you, Mr. 
Berman. Mr. Mack, chairman of the Western Hemisphere 
Subcommittee, is recognized.
    Mr. Mack. Thank you very much, and I just want to follow up 
on some of those questions. And you were going through a list 
of things of when we might want to take some other action, 
reduce the--would you also include in that list stealing an 
election and hijacking the dreams and hopes of the people of 
Nicaragua?
    Ambassador Callahan. No. I know exactly--again, I think I 
tried to lay out as succinctly as I could the dilemma, but if 
we pull out, if we take drastic action, I am afraid this will 
have a greater effect on the political opposition, on the 
democratic opposition in Nicaragua than it will on Ortega. 
After all, Ortega receives $500 million a year from Hugo 
Chavez.
    Mr. Mack. So are you suggesting we should match that? Will 
that make everything all better?
    Ambassador Callahan. No, I mean, it is unrealistic. We are 
not going to match that, and I don't think it would. I think 
Daniel Ortega has almost a visceral dislike of the United 
States and what we represent. I am convinced of that after 
being down there for 3 years. So I don't think we can buy our 
way into his good favor. We will never do that. He doesn't like 
us, he doesn't like what we represent.
    But the opposition and many Nicaraguans--and I will point 
out that there were many polls done during my time down there. 
In every poll, somewhere between 75 and 80 percent of 
Nicaraguans expressed a favorable opinion of the United States. 
So one of our challenges, Mr. Mack, is to hold onto that 
affection that the Nicaraguans seem to have instinctively for 
the United States and for Americans, and I am afraid that we 
will alienate them if we take these drastic measures.
    Mr. Mack. And I understand that, and in a country, in the 
United States where we have public relations firms and 
advertising firms in New York and everywhere else who can get 
people to run out and buy pet rocks, I think certainly we can 
go and spread the word in Latin America, in any country, that 
the United States stands for those who are fighting for their 
freedom and their democracy.
    Ambassador Callahan. Agreed.
    Mr. Mack. I think this all goes back--what I am hearing 
from, and there is a lot that I can agree with with everyone, 
with all of the testimony, but what I am hearing is we are 
going to continue to do the same thing. So we are going to 
continue to, you know, the next layer of, if they--we don't 
like what they are doing, and we are going to do something if 
they do this, and we keep pushing that down the road; and I 
think what, you know, the question that keeps--that was asked, 
I think, is a legitimate one: Why aren't other countries 
standing either with the United States or standing against 
Nicaragua? And the reason is because there is no leadership. It 
is so muddled. You have got the Organization of American 
States, who has no clear direction. They can hold up something 
and say this is what our charter says, yet they are in 
violation of it every day. So there is no leader, and there is 
no leadership coming from the United States.
    What the people, the people that we are talking about in 
Nicaragua, what they are looking for is someone to stand strong 
with them, and that means opposing what Ortega is doing to 
them. And they understand that if we are clear in our mission 
and we do it in such a way that it is--with the same judgment, 
whether it is Nicaragua, Venezuela, Bolivia, Ecuador, 
Argentina, you name it--what they are seeing, though, is on one 
hand we go after Honduras, and then on the other hand we allow, 
we don't take the same strong position against Nicaragua. So on 
one hand we are not supporting a country who is fighting for 
their democracy and their Constitution, but we seem to be a 
little more passive when it comes to Nicaragua. And so that 
creates this muddled world in Latin America where there is no 
leadership.
    And, you know, this administration has failed, has failed 
on that mission. People in Latin America don't know where the 
United States stands, and that is why I think we ought to 
disengage from the OAS, directly engage with our friends and 
allies. We should be standing with Colombia and Panama, we 
should be standing with other countries that want to see 
freedom and democracy in Latin America. That will allow other 
countries who believe in those same ideals, who want to be 
friends and partners with the United States, it will give them 
the opportunity to do so. Right now it is so muddled that it is 
easier to sit on the sidelines, and that comes from a lack of 
leadership in the United States.
    And the last thing I would like to say is this. Dr. McCoy, 
you talked about no verifiable evidence and I think the ranking 
member talked about this too. Duh. They don't want us to see 
what happened. I mean they have intentionally created a process 
for fraud to steal an election. What more evidence do you need? 
Thank you, Madam Chair.
    Chairman Ros-Lehtinen. Thank you so much Mr. Mack. Mr. 
Meeks, the ranking member on Europe, is recognized.
    Mr. Meeks. Thank you Madam Chair. I want to thank all three 
of you for your testimony, because I thought all of the 
testimonies were very, very good. And I want to build upon I 
think where the ranking member left off, because I too--we were 
just talking up here--have strong questions in why no one else 
spoke up. Even when we were at the hearing before this, the 
meeting before this with Dr. Caputo, he said that he was all 
prepared for other member states to ask questions, et cetera, 
and no one did.
    And so, you know, because to me that if we are going to 
have democracy, it is not something that the United States does 
on a unilateral basis, because on a unilateral basis we are 
leading our allies, it is something that we have to do on a 
multilateral basis with our allies, et cetera.
    In your testimony, Ambassador Callahan, if it came to that 
point, I would hope that we do not say, just the United States, 
we are going to do this; because oftentimes people look the at 
United States and say we tell them what to do without working 
with anyone else and, you know, and we don't even look at 
ourselves. Because no matter where I go, some people still are 
talking about the 2000 election in the United States, 
especially in Florida. So I mean, we have got to be careful.
    So tell me how do we then work more in a multilateral 
situation, using the guidelines that you laid out saying that 
we can't withdraw now, but let's put the pressure on so that 
the people of Nicaragua does have a democracy and we do have 
better elections going forth and build upon what the OAS has 
done or stated, and even the EU and what I think I hear The 
Carter Center talking about. Where is that foundation being 
laid now so that whatever we have to do in the future we can do 
collectively together?
    Ambassador Callahan. You make a number of very good points, 
Congressman Meeks. To get back to why especially other Latin 
American countries do not comment publicly on such things as 
the fraudulent Nicaraguan elections, there is a tradition of 
that, frankly, in Latin America. I spent a lot of time in Latin 
America. Countries do not like to criticize each other publicly 
and they normally refrain from doing that.
    In regards to the multilateral approach, we tried it. We 
tried it in Managua certainly, dealing especially with my 
European, Canadian colleagues, Japanese, certain of the Latin 
Americans. But it just seems to be very difficult to coordinate 
our statements and our actions on Nicaragua.
    We were unquestionably the most outspoken, the most 
aggressive. Congressman Mack has left, but I would point out as 
Dr. McCoy did, after the 2008 elections we did eliminate the 
remainder of our Millennium Challenge Account aid to Nicaragua 
which amounted to about $63 million. We did it at great cost. 
The Embassy was attacked. I was attacked personally as a result 
of that. And I must say in my 3 years there, I never shied away 
from expressing our values and our intentions in Nicaragua. And 
sometimes, I must confess, I felt somewhat lonely out there 
doing so. And I thought there could have been better 
coordination between the Embassy in Nicaragua and Washington.
    I think had Washington spoken out a bit more vociferously 
on some of the issues in Nicaragua, it would have helped us and 
would have sent a clearer message. I think we should continue 
to work. To the extent we can work multilaterally, we should. 
It is much more effective. But to the extent we have to act 
alone and speak alone, well, we should do that as well. That is 
our only alternative.
    Mr. Meeks. And the other concern I want to make sure that 
we talk about, because there has been some issues with 
reference to the success Nicaragua has had with drugs. And as a 
result, also Colombia and what role Colombia may play, because 
I recently was down to Colombia and talked to President Santos 
who is trying to play a bigger role, a leadership role in South 
and Central America, and whether or not he is cooperating 
because he has mentioned to me of having dialogue and talking 
and engagement. I was wondering whether any of that has any 
effect to it.
    And lastly let me just say this. I am concerned, what I 
don't want to go back to, as Professor Robert Pastor has said, 
though we all agree that we think it was a mistake and a 
setback to democracy with the election of Mr. Ortega, but he 
said it would be a mistake for the United States to return to 
the battles of the Cold War. I want to make sure we are not 
doing what we did in the Cold War and have those hostilities 
again, because that will be a setback for all of us in the 
Western Hemisphere and for democracy to be spread throughout 
this hemisphere.
    Chairman Ros-Lehtinen. Thank you so much, Mr. Meeks.
    Mr. Turner of New York is recognized.
    Mr. Turner. Thank you Madam Chair. I thank the panelists.
    Ambassador Callahan, I just heard that Venezuela has put 
$500 million into the Nicaraguan economy. Are they getting 
direct aid--and how important is it as a percent of their 
budget even--from Iran? Is Cuba a factor providing military or 
intelligence work? And the same with Iran? Monetarily and other 
phases. Do you have any special knowledge of this or--I would 
appreciate that, thanks.
    Ambassador Callahan. Thank you, Congressman Turner. 
Venezuelan aid is indispensable to Daniel Ortega and the 
Sandinista party and very important to Nicaragua. Nicaragua's 
gross domestic product is about $6.5 billion. So you can 
imagine $500 million in unattached aid is 7 or 8 percent of 
their GDP, and so it is extremely important.
    We really don't know where it goes. There is no 
transparency in the use of that money. It has clearly been used 
for political purposes. It has been used for some social 
purposes as well. It has been used for familial purposes. The 
Ortega family is acquiring and senior Sandinistas are acquiring 
businesses, ranches, property, and you have got to assume that 
that in part is coming from the Venezuelan money.
    The Cubans do regularly send medical brigades to Nicaragua. 
Daniel Ortega endlessly expresses his solidarity with and 
appreciation of Fidel Castro. There is an ideological affinity 
there. There is no question of that. Cuba is not in a position 
to provide a lot of aid, especially financially, to Nicaragua. 
But clearly Ortega wants to maintain very close relations with 
Castro and admires Castro for a lot of reasons.
    Iran, this is something we paid a lot of attention to, 
Congressman, and we have seen very little evidence of any 
Iranian aid going to Nicaragua. In fact, it is mostly 
rhetorical. The Iranians would come and say they are going to 
build a deepwater port on the Caribbean, a multibillion-dollar 
project, but nothing ever comes of it. Their Embassy is very 
small. To the best of my knowledge there are two diplomats in 
the Iranian Embassy. Again, there is a certain rhetorical 
support on the part of Ortega. Their revolutions occurred in 
the same year and they like to make a big deal of that, 1979, 
and express solidarity. But in practical terms I have seen very 
little come from Iran.
    Mr. Turner. Thank you. And final question: Is the U.N., 
either directly or indirectly, and U.S. Aid going currently 
this year or next to Nicaragua? What percent or size is that?
    Ambassador Callahan. Yes, we maintain a bilateral aid 
program. It is focused on health, education. It is a modest 
program to support the Nicaraguan police and navy with the 
positive results that Congressman Meeks just mentioned.
    But it has been over my years there, especially once we 
lost the Millennium Challenge Account, it went from roughly 
$70- or $80 million a year. My guess now would be in the 
neighborhood of $20- or $25 million a year. It is a fairly 
modest program and the Nicaraguans have lost a lot of it by 
their behavior.
    Mr. Turner. Thank you. I yield back.
    Chairman Ros-Lehtinen. Thank you very much, Mr. Turner. Mr. 
Sires.
    Mr. Sires. Thank you, Madam Chairperson.
    Ambassador, you said that it is obvious that Ortega hates 
this country. Obviously we stand for honesty and we stand for 
freedom of expression and those are the worst enemies that 
communism has. So I am not shocked by that. And it is always 
amazing to me how these Communists become capitalists so 
quickly, able to acquire all of these things. It is amazing.
    So you know, I guess my question is, what is your 
impression of the support for Ortega in Nicaragua? You know, 
just like all--can you comment on that? Because some people 
have said, and I read someplace where had he run an honest 
election he would have won. Obviously, changed the 
Constitution. But some people said--is that true? Untrue? Can 
you give me an impression?
    Ambassador Callahan. Yes, Congressman. I think I said he 
viscerally dislikes us. I am not sure I said hate. He doesn't 
like us by any means.
    Mr. Sires. Well, I just extended it a bit.
    Ambassador Callahan. Well, Ortega's support for many, many 
years hovered around 35 percent. That is what he tended to 
attract in elections, 35-40 percent. He obviously has a 
constituency that supports him. It is more and more less 
ideological and more and more political and economic.
    And you are correct, the Ortega family has benefited 
tremendously over the last few years economically from the kind 
of aid that is coming in. So have many of the senior 
Sandanistas. They came to power as Marxists, and today those 
who are still around are still unquestionably at least 
capitalists in the way they live, but they don't express that.
    Would Ortega have won a free, fair, and transparent 
election? He may have. The opposition was fragmented, 
underfunded. Ortega has maintained somewhat prudent 
macroeconomic policies. Inflation is under control. The economy 
is growing modestly, 3 or 4 percent a year, but it is growing. 
There are social and educational programs for the poorest of 
the poor and they would likely support Ortega.
    But I find it fanciful indeed to think that Ortega could 
have won over 60 percent of the vote. It is inconceivable that 
he could have won that. Because there are--the opponents are 
again passionately anti-Ortega and anti-Sandinista. And to 
think that their numbers have suddenly been reduced to 38 
percent from what was traditionally 55, 60 percent? I find that 
hard to believe.
    But Ortega could have, I think personally, could have won a 
free and fair and open election, but not by the margin he did.
    Mr. Sires. Ambassador, would you care to comment on that?
    Ambassador Daremblum. I only have one point that I would 
like to underline. Ortega is a hardened autocrat and by now he 
is an expert in stealing elections. Recommendations for 
electoral purity in Nicaragua will fall into deaf ears.
    Yesterday I read in La Prensa, which is the daily in 
Managua, that it was announced that the European Union was 
going to provide some recommendations to fix the electoral 
system in Nicaragua. The Foreign Minister disqualified the 
European Union to provide any advice, because they have their 
own problems so they cannot provide advice on electoral purity 
to them, Nicaragua.
    On the other hand, Ortega yearns for legitimacy. Even 
though he doesn't care about elections he wants to navigate 
international waters with the legitimacy of having been elected 
democratically. And in this respect I think the United States 
should follow a line of clearer and more resounding criticism 
of what is going on in Nicaragua. The United States should be 
exerting leadership with the Latin American countries. The 
thing to do that--it is not a matter of one day--is 
continuously to engage more democracies in Latin American that 
are not friends really, politically, of Nicaragua.
    But it is a constant fight for engagement that needs to be 
led by a State Department that is willing to do that. And so 
far, unfortunately, I have to say I haven't seen that either at 
the bilateral level or in the OAS.
    Mr. Sires. Thank you very much. Dr. McCoy, in a few 
seconds?
    Ms. McCoy. In terms of--your question is why does Ortega 
have support? Two reasons why his support has increased from 
the historic levels of 35-40 percent. One is that people fear 
that with him in the Presidency would return hyperinflation and 
war, and so they have seen over the last 6 years that basically 
the economy was mostly stable and there was no war as in the 
past. So I think that helps.
    His ability to distribute benefits financed by the 
Venezuelan aid helps. But I agree, and as I said in my 
testimony, and I agree with Ambassador Callahan, the question 
is by how much did he win? We don't really know because it is 
is not verifiable. But probably, yes, all the indications are 
that he had enough support to have won.
    Mr. Sires. Thank you very much.
    Mr. Burton [presiding]. I thank the gentleman for his 
comments and questions, and I'm sorry I was late. I had to go 
to another hearing. You mentioned that there was no prospect of 
inflation. Is it still that way down there now?
    Ms. McCoy. What I said was that people feared a repetition 
of the hyperinflation from the 1980s. Right now the 
macroeconomic situation is pretty stable and has been approved 
by----
    Mr. Burton. So they don't have an inflationary problem at 
the present time?
    Ms. McCoy. Not at the present. I can't predict the future.
    Mr. Burton. And he needed a two-thirds majority in order to 
change the Constitution. I guess he got that.
    Ms. McCoy. Only 60 percent.
    Mr. Burton. Only 60 percent?
    Ms. McCoy. Yes.
    Mr. Burton. But there was great fear that there was not a 
legitimate count.
    Ms. McCoy. That is the suspicion. That is the doubt.
    Mr. Burton. That is the suspicion. After having known 
Ortega since 1982 or 1983 when I first came to Congress, that 
doesn't surprise me a bit. The Communist Sandinista regime has 
always been willing to do whatever it takes in order to gain 
their ends.
    I think you have probably already answered this but I would 
like to ask this question anyhow. The status of Iran in 
Nicaragua. Chavez in Venezuela has had regular flights and 
connections with Iran for some time. In fact it is rumored that 
he has even been trying to get nuclear capability, and Chavez 
has been very supportive and friendly with Ortega.
    Now we see that Iran is dealing with Nicaragua and see they 
are giving them tractors and $350 million ocean port and 10,000 
houses. That ought to help the economy a little bit as well. 
But what kind of relationship do they have? Can you just give 
me a thumbnail sketch of it? How about you, Ambassador?
    Ambassador Callahan. Congressman, I answered briefly that 
question earlier, but we are obviously very concerned with 
Iran's presence in Nicaragua and, frankly, keep a very close 
eye on it. And there is very little indication that there is 
anything more than a rhetorical relationship there.
    Mr. Burton. Excuse me, Ambassador. It just seems to me that 
you don't give away $350 million for an ocean port and give 
them 4,000 tractors or 10,000 houses unless there is something. 
And they are also backing a $120 million hydroelectric project. 
So there has got to be some reason for it. I know there is a 
lot of coffee down there and meat and bananas, but that is an 
awful lot of meat and bananas.
    Ambassador Callahan. I spent 3 years there and repeatedly 
heard of the deepwater port on the Caribbean. Nothing has ever 
come of it. I rather doubt that anything will come of it. I 
don't know where--those are things that are said. An Iranian 
trade delegation comes through and says we are going to build 
this deepwater port, we are going to build a railroad. It is 
all of these grandiose projects that frankly never come to 
fruition, we never saw.
    I really do think that it is greatly inflated and Iran's--
let me say one thing. Iran is one of the few countries that has 
refused to forgive Nicaragua's debt. They haven't even forgiven 
the debt that Nicaragua owes them from the 1980s. So their 
contributions to the Nicaraguan economy I think are quite, 
quite modest, and if these things come to pass it would, 
frankly, surprise me.
    Mr. Burton. Do they allow Iranians to come in without 
visas?
    Ambassador Callahan. I think they do, yes. But there are 
not many there.
    Mr. Burton. Nothing to worry about?
    Ambassador Callahan. Well, of course you do, and we keep 
our eyes open. But I think that their diplomatic presence is 
two. I think they have an Ambassador and he has an assistant.
    Mr. Burton. But you don't think there is a threat to the 
United States' security from the Iranians and their involvement 
down there?
    Ambassador Callahan. Not in Nicaragua at this moment. It is 
something that clearly we all have to pay attention to.
    Mr. Burton. Just south of there, just across, they have got 
Venezuela; and Venezuela is tied in with Nicaragua supporting 
the Communist movement down there. But you don't think there is 
any----
    Ambassador Callahan. To date, no. Not with Iran. And you 
are absolutely correct and I agree with you. It is extremely 
worrisome, Venezuela's relationship with Iran. But that has not 
yet penetrated Nicaragua.
    Mr. Burton. Have they provided any kind of transit support 
through Nicaragua up into North America and the United States? 
Has there been any indication of that?
    Ambassador Callahan. For Iranians coming through Venezuela, 
for example?
    Mr. Burton. Yes.
    Ambassador Callahan. No, we have no indication of that at 
all. Nothing that would suggest that. I think, frankly, Ortega 
would be extremely concerned about that. And he wouldn't want 
to give the United States an opportunity to reveal that or 
condemn him for doing that. The FARC is there. He does play 
loose with some terrorist groups, there is no question about 
it. But I haven't seen any indication at all that he would have 
allowed them or facilitated their transit to the United States. 
No, I haven't.
    Mr. Burton. Do you have any comments, Ambassador, my old 
friend?
    Ambassador Daremblum. Yes, thank you. All the projects that 
they keep presenting and announcing is really a facade, because 
what counts is the strategic type or the strategic link between 
Ortega's thinking and Ahmadinejad in Iran. The Embassy for them 
is not the same thing an Embassy is in Western eyes. It is true 
physically, the Embassy in terms of how many people are in the 
Embassy is small. But Iranians can come into Nicaragua without 
a visa. There is no record of how many Iranians are in 
Nicaragua. And Nicaragua is needed not to present flourishing 
projects, but as a strategic presence of Iran vis-a-vis the 
United States. Inasmuch as the United States has troops in Iraq 
or has bases in those countries, which are close to Iran, Iran 
wants to do exactly the same thing or parallel thing with a 
presence in Venezuela--in Nicaragua.
    Mr. Burton. Before I yield to my colleague, does that in 
your opinion pose any threat to the United States?
    Ambassador Daremblum. Yes, of course.
    Mr. Burton. Can you elaborate really quickly?
    Ambassador Daremblum. Yes, of course. You pointed to one of 
them, the type of relationships that Ortega has with subversive 
groups all over the hemisphere and also in terms of the gangs 
that control very much the flow of illegals toward the United 
States. We don't know about how many people are going through 
the Maras, Salvatruchas, from the south to the United States. 
The concept of Embassy that they have is what produced in 
Buenos Aires in 1992 or 1994 the two greatest bombings and 
episodes where many people were killed. Everything was 
controlled from the Embassy, by the Embassy.
    Mr. Burton. My time has expired, I have gone over. Mr. 
Connolly.
    Mr. Connolly. Thank you, Mr. Chairman. And like you, I also 
met Mr. Ortega in 1982, when I led a Senate trip with the late 
Senator Pell and Senator Leahy to Central America to look at 
the whole issue of the wars going on there and illicit 
funneling of assistance to the contras, then operating in and 
around Nicaragua.
    Let me first ask, Ambassador Daremblum, picking up on your 
answer to my colleague Mr. Sires, I heard you criticize the 
United States for not exercising sufficient leadership and--my 
words, not yours--kind of being squishy on the whole issue of 
Ortega and the Sandanistas and what is going on in Nicaragua. 
Have I got that roughly right?
    Ambassador Daremblum. Yes.
    Mr. Connolly. You were the Costa Rican Ambassador to the 
United States. Do you believe that your government was 
sufficiently outspoken with respect to what is going on in 
Nicaragua and Mr. Ortega?
    Ambassador Daremblum. Definitely. We had problems with Mr. 
Aleman and the border. We had problems with Ortega. We have had 
problems with most Nicaraguan leaders, with very few 
exceptions. And Costa Rica tried to take up some of those 
complaints to the OAS and to other forums and requested the aid 
of the United States. In many cases it was forthcoming. In 
other cases it was not forthcoming.
    Mr. Connolly. The United States? You mean the United States 
was not forthcoming?
    Ambassador Daremblum. Yes.
    Mr. Connolly. Yes. But let me ask you, my colleague Mr. 
Mack from Florida recommends that the United States pull out of 
the OAS and substitute bilateral one-on-one diplomacy for 
multilateral forums such as the OAS. Do you share that view?
    Ambassador Daremblum. I would not abandon the OAS, anyhow. 
I think the United States is going to be facing another OAS 
without the United States if Venezuela--if Chavez fulfills his 
organizational zeal of having an OAS without the United States.
    Mr. Connolly. Professor, if I could stay with you for a 
minute. And your observation of not pulling out of the OAS is 
very valuable. Thank you.
    What is it from your perspective, given your role here now, 
and as an Ambassador and representing a very important country, 
Costa Rica, what is it do you think that Ortega and his 
government are out to achieve? What is it that they really want 
to accomplish in Nicaragua?
    Ambassador Daremblum. Well, the number one rule for the 
ALBA countries or the axis of Venezuela with Ecuador, Bolivia, 
and Nicaragua, is to hang onto power as long as possible, a 
lengthy stay in power, and eviscerate democracy and create an 
authoritarian state that they can use for their single 
purposes. And that is the objective. They wanted to do 
something like that in Honduras with Zelaya, but the Honduran 
people put an end to that, thank God.
    Mr. Connolly. Thank you. Ambassador Callahan, I think you 
wanted to comment on that as well and I welcome your view.
    Same question. What is it that you think Ortega and the 
Sandinistas want to achieve in Nicaragua today?
    Ambassador Callahan. I would agree with Ambassador 
Daremblum. I think power. I don't think they are motivated by 
ideology. I think what they want is power and the wealth and 
influence that comes along with that. Many Nicaraguans now 
refer to it as Somozismo sine Somozo, or Somozism without 
Somoza. It is hauntingly reminiscent of what Somoza did. The 
intimidation, the crony capitalism, nepotism. A lot of Ortega's 
large family, a lot of his children are now in positions of 
power. And as I often said, if your intention is to rule in 
Nicaragua for half a century, what better model to use than 
Somoza because Somoza succeeded in doing that. And I am 
convinced that is their motivation: To remain in power, with 
all the attributes that brings, for as long as it is possible.
    Mr. Connolly. Mr. Chairman, I find it interesting and I am 
sure you do too, that when I think back to my visit to 
Nicaragua and meeting with Sandinista leadership including Mr. 
Ortega, the revolutionary fervor was powerful and real. To hear 
Ambassador Callahan say, Well that is gone, this is just about 
raw power and holding onto it, as the Ambassador from Costa 
Rica also says, I think it is quite an interesting statement. 
And it kind of takes the nobility out of everything and just 
makes it sort of garden-variety autocratic dictatorship, not 
wanting to give up power once achieved. And at least in saying 
that it is not of direct strategic concern to the United 
States, other than human rights get violated, obviously, in our 
backyard, and the promotion of democracy is retarded and we 
certainly do not want the virus of autocracy to spread any 
further in the region, but the threat perceived in the eighties 
is not what we are talking about today. I thank you. Thank you, 
Mr. Chairman.
    Mr. Burton. Mr. Rivera of Florida, my good friend.
    Mr. Rivera. Thank you so much, Mr. Chairman, and thank you, 
all of you, for being here today on this panel. I represent 
many, many Nicaraguan Americans now in South Florida, perhaps 
more so than any other Member of Congress. And I say Nicaraguan 
Americans now, but many of them originally were Nicaraguan 
exiles, political exiles, that fled the Sandinista 
dictatorship. And many of them--they are now contributing, 
productive, positive members of society, many of them citizens 
and have become Nicaraguan Americans--have expressed dismay to 
me at the disturbing approach that we have seen from this 
administration vis-a-vis U.S. policy toward Nicaragua, 
particularly in its lack of outspokenness regarding what it 
sees as undemocratic--what many see as undemocratic measures 
that have been taken by Ortega and his regime from Nicaragua, 
starting with the mechanisms that were utilized to approach 
this election and to be able to run again in this election, the 
antidemocratic means that the Ortega regime manipulated the 
judiciary in order to be able to invoke his qualifications for 
this election. And it brings to mind what, again, many of these 
Nicaraguan Americans have told me that they see from this 
administration as a lack of support for those--for the forces 
of democracy in the region and silence toward the forces of 
dictatorship in the region, such as Mr. Ortega and his 
dictatorial actions.
    And I wonder if that silence from this administration, from 
the Obama administration, in not strongly objecting to the 
mechanisms utilized to implement this election, as well as the 
results, the dubious results of these elections. Do you believe 
that helps legitimize Ortega's regime or legitimize has 
Presidency, and what should be the consequences against the 
Ortega regime after these dubious elections?
    Ambassador Callahan, I will start with you.
    Ambassador Callahan. Thank you, Congressman. This 
administration has been far more outspoken recently over what 
is happening in Nicaragua than through the previous couple of 
years. I would to a certain extent agree with you. I was down 
there, I would have appreciated more rhetorical support from 
Washington. I would have appreciated a more explicit 
condemnation of what the Sandinistas were doing. I am afraid 
that the relative silence of Washington over a period of years 
led them to believe that there was a difference in the approach 
between the Embassy, which I was leading, and the State 
Department. And in fact, I was told by senior Sandinistas that 
I was not acting consistent with the policy of Washington. I 
was taking a harder line. So I think that would have clarified 
matters had we been a bit more outspoken.
    We are, frankly, very limited in what we can do down there. 
The $500 million a year that Daniel Ortega receives in 
unconditional aid from Hugo Chavez allows him to thumb his nose 
not only at the United States but at the Europeans and at the 
Japanese, and he has done that.
    I think it is important that we remain engaged, as I said 
in my testimony, to provide the kind of moral support that the 
opposition really needs. I am convinced that by staying down 
there through the 1980s, the United States contributed to the 
victory of Dona Violeta de Chamorro in 1990, and I think that 
ultimately the kind of government that Daniel Ortega is 
forming--crony capitalism, nepotism, corruption--ultimately 
will implode. It has to. There is enough pressure these days, 
international pressure, and it is no longer a bipolar world as 
it was in the 1980s.
    And obviously if Venezuelan aid were to dry up for any 
reason, Daniel Ortega would find himself in a very serious 
predicament, because he has alienated a lot of the traditional 
donors, ourselves included. So I do think that the best 
approach is to continue to put pressure on him, work with the 
opposition, but to stay engaged.
    Mr. Rivera. Thank you very much. I yield back. Mr. Chair.
    Mr. Burton. Thank you. Mr. Sherman.
    Mr. Sherman. I am interested in this view of Somozism 
without Somoza. With Somoza, he was in alliance with the 
oligarchs that preexisted his personal rise to power. Has 
Ortega co-opted or replaced the wealthy in Nicaragua? Has he 
put--has he been able to decimate the old wealthy and put in 
his own people, or has he co-opted or both?
    Ambassador Callahan. Good question, Congressman. The 
question is the large entrepreneurs in Nicaragua have been 
fairly content with Somoza--with Ortega's economic policies. As 
we mentioned, his macroeconomic policies have produced modest 
growth in the economy, controlled inflation. And what is 
extremely important is in my 3 years, there was not one serious 
labor strike because the Sandanistas control the labor unions. 
And this obviously redounds to the benefit of the big 
entrepreneurs.
    Mr. Sherman. So the individuals who are entrepreneurs, it 
is not like everybody who was in the jungle with Ortega last 
century now is a billionaire. The 100 millionaires and the 
billionaires that existed before Ortega's new rise to power are 
still there, and he is just keeping them happy?
    Ambassador Callahan. Yes, they are still there. But there 
is a new class of wealthy and they are the Sandanistas.
    Mr. Sherman. So the current wealthy class in Nicaragua is a 
combination of those who have been co-opted and those who have 
benefited. Speaking of benefits, of course Ortega himself is 
one of the most wealthy individuals in Central America. Does 
that undermine him with his own political base?
    Ambassador Callahan. You know, I am not certain he is one 
of the wealthiest in Latin America, although he is far, far 
wealthier than he was 10 years ago.
    Mr. Sherman. I want to move on to another question for both 
yourself and the other Ambassador. And that is, you know, I 
know what it takes to try to sell people on foreign aid. And I 
am part of a government of what is still the wealthiest 
government in the world. How does Chavez sell the Venezuelan 
people on $0.5 billion of aid to Nicaragua, plus the other 
foreign aid he is providing throughout Latin America? 
Ambassador Daremblum?
    Ambassador Daremblum. PDVSA, the national petroleum company 
of Venezuela, has become the source for all sorts of goodies 
throughout Latin America. They are fairly restricted now and 
they are incurring very high debts, the Venezuelans, in order 
to keep up with the level of expenditures that Chavez is 
carrying on. By now I have heard--I read reports, in a sense, 
that they have mortgaged their petroleum reserves for a century 
already. They have been----
    Mr. Sherman. Why would any sane capitalist lend money 
against the oil that Chavez's regime will extract from the 
ground 20 years from now?
    Ambassador Daremblum. I'm sorry, the number one lender is 
China.
    Mr. Sherman. China?
    Ambassador Daremblum. China, yeah.
    Mr. Sherman. China may or may not be paid. They are lending 
money to an illegitimate, repressive government, and when China 
pays the bonds issued by Sun Yat-sen and the last Emperor of 
China, that is when they should get their money from the 
Venezuelan people. Do the Venezuelan people know about the 
foreign aid, or is it something that is hidden from them?
    Ambassador Daremblum. It is very well-known. Very well-
known.
    Mr. Sherman. And finally the Ortega family is buying up the 
media outlets. What is the implication of that?
    Ambassador Callahan. I think it is very clear. The 
electronic media, because they are the ones that reach the 
masses of the people, especially the poor--and, again, it is 
reminiscent of what Somoza did. Somoza controlled television 
and radio, and pretty much--there were periods where he 
suppressed the newspapers--but those who are reading the 
newspapers were largely opposed to Somoza's government, are 
largely opposed to Ortega's government. So he can allow them to 
continue reading their papers, and when he is accused of 
interfering with freedom of the press he says, ``How can you 
say that? Don't you read these papers?'' Which are highly 
critical of him.
    Mr. Sherman. Let me see if I can squeeze in one more 
question. The one enormous difference between Somoza and 
Ortega--they both seem dedicated to power and wealth--is Somoza 
found it in his interest to be pro-America and Ortega finds it 
in his interest to be anti-America. Is that because of the half 
billion from Venezuela or is that out of genuine conviction?
    Ambassador Callahan. I think it is the latter. Daniel 
Ortega dislikes the United States.
    Mr. Sherman. And finds it useful in holding power to have 
that be part of his ideology?
    Ambassador Callahan. I don't think it is that useful 
frankly. Because as I mentioned before you came in, poll after 
poll indicates that 70-80 percent of the Nicaraguans, which 
means some Sandanistas, hold a favorable opinion of the United 
States. It obviously has not hurt him, because he remains 
President. But nevertheless I don't see that as an aid to him 
other than, of course, getting the money from Chavez. But he 
feels much more comfortable with Chavez, with Castro, with that 
ilk.
    Mr. Sherman. Okay. Thank you. I thank the chairman.
    Mr. Burton. I just have one quick question or comment. When 
I was down there in 1983 when the conflict was going on, I met 
with their--I can't remember his name, the guy that was the 
public relations, if you want to call him that, of the 
Sandinistas, and I went into his office. And he had a big 
picture of Mao Tse Tung right behind his desk. I would think 
that that might indicate he believed in communism. Just a wild 
guess.
    But I asked him, I said--this is just kind of an aside--I 
said, you went to school in the United States. He said, yes. 
And I said, in fact you did graduate work. He said, yes. I 
said, how can you be a Communist after being in the free 
enterprise system? And he said, everything I am or I have 
learned, I learned at Harvard.
    I just thought I would tell you that little funny aside. I 
am sure Harvard doesn't need that. But you don't believe that 
they are Communist or Communist-motivated anymore? It is just a 
power issue?
    Ambassador Callahan. Yes, I do. He pays lip service to 
socialism and proletariat, but it is entirely insincere as far 
as I can see.
    Mr. Sherman. Mr. Chairman, there is another place that they 
pay some lip service to Mao Tse Tung but are in fact pretty 
damn capitalist, and that is the home of Mao Tse Tung, China.
    Mr. Burton. Yes, I understand. The whole world has changed.
    Thank you very much. We really appreciate it, and on behalf 
of our chairman. We really appreciate your testimony. The 
hearing is adjourned.
    [Whereupon, at 11:55 a.m., the committee was adjourned.]
                                     

                                     

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