[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


                    NICARAGUA'S DEMOCRATIC COLLAPSE

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

                                 HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                         THE WESTERN HEMISPHERE

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 15, 2016

                               __________

                           Serial No. 114-235

                               __________

        Printed for the use of the Committee on Foreign Affairs
        
        
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                                 __________
                                 
                                 
                                 
                      COMMITTEE ON FOREIGN AFFAIRS

                 EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey     ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida         BRAD SHERMAN, California
DANA ROHRABACHER, California         GREGORY W. MEEKS, New York
STEVE CHABOT, Ohio                   ALBIO SIRES, New Jersey
JOE WILSON, South Carolina           GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas             THEODORE E. DEUTCH, Florida
TED POE, Texas                       BRIAN HIGGINS, New York
MATT SALMON, Arizona                 KAREN BASS, California
DARRELL E. ISSA, California          WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina          ALAN GRAYSON, Florida
MO BROOKS, Alabama                   AMI BERA, California
PAUL COOK, California                ALAN S. LOWENTHAL, California
RANDY K. WEBER SR., Texas            GRACE MENG, New York
SCOTT PERRY, Pennsylvania            LOIS FRANKEL, Florida
RON DeSANTIS, Florida                TULSI GABBARD, Hawaii
MARK MEADOWS, North Carolina         JOAQUIN CASTRO, Texas
TED S. YOHO, Florida                 ROBIN L. KELLY, Illinois
CURT CLAWSON, Florida                BRENDAN F. BOYLE, Pennsylvania
SCOTT DesJARLAIS, Tennessee
REID J. RIBBLE, Wisconsin
DAVID A. TROTT, Michigan
LEE M. ZELDIN, New York
DANIEL DONOVAN, New York

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

               Jason Steinbaum, Democratic Staff Director
                                 
                                 
                             ----------                                

                 Subcommittee on the Western Hemisphere

                 JEFF DUNCAN, South Carolina, Chairman
CHRISTOPHER H. SMITH, New Jersey     ALBIO SIRES, New Jersey
ILEANA ROS-LEHTINEN, Florida         JOAQUIN CASTRO, Texas
MICHAEL T. McCAUL, Texas             ROBIN L. KELLY, Illinois
MATT SALMON, Arizona                 GREGORY W. MEEKS, New York
RON DeSANTIS, Florida                ALAN GRAYSON, Florida
TED S. YOHO, Florida                 ALAN S. LOWENTHAL, California
DANIEL DONOVAN, New York
                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Mr. Juan Gonzalez, Deputy Assistant Secretary, Bureau of Western 
  Hemisphere Affairs, U.S. Department of State...................     6
The Honorable Marcela Escobari, Assistant Administrator, Bureau 
  for Latin America and the Caribbean, U.S. Agency for 
  International Development......................................    13

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Mr. Juan Gonzalez: Prepared statement............................     9
The Honorable Marcela Escobari: Prepared statement...............    15

                                APPENDIX

Hearing notice...................................................    32
Hearing minutes..................................................    33
The Honorable Jeff Duncan, a Representative in Congress from the 
  State of South Carolina, and chairman, Subcommittee on the 
  Western Hemisphere: Material submitted for the record..........    34

 
                    NICARAGUA'S DEMOCRATIC COLLAPSE

                              ----------                              


                      THURSDAY, SEPTEMBER 15, 2016

                       House of Representatives,

                Subcommittee on the Western Hemisphere,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The committee met, pursuant to notice, at 10:00 a.m., in 
room 2172 Rayburn House Office Building, Hon. Jeff Duncan 
(chairman of the subcommittee) presiding.
    Mr. Duncan. A quorum being present, the subcommittee will 
come to order. I would now like to recognize myself for an 
opening statement on the hearing Nicaragua's Democratic 
Collapse.
    We meet today to register our deep concern over the 
collapse of democracy in Nicaragua and conduct oversight of the 
Obama administration's priorities in the country, in view of 
U.S. interests and recent events.
    While Nicaragua does not suffer the same problems with 
citizen security, gang wars, or migration to the United States 
as the Northern Triangle countries have experienced, it is the 
poorest Central American country and second poorest in the 
Western Hemisphere, only after Haiti.
    Under President Ortega's multiple terms as President, he 
has taken increasingly blatant steps to concentrate political 
power into a single party FSLN-ruled system controlling the 
majority at executive, legislative, judicial, and electoral 
branches of government. In 2011, 2012, 2014 elections, the 
State Department and other observers found fraud and other 
major irregularities had occurred. Since then, the State 
Department has documented in several reports that Nicaraguan 
Government agents have committed arbitrary or unlawful 
killings, used excessive force and torture in prisons, and 
limited the Nicaraguan people's freedom of speech, religion, 
and the press.
    Compounding these problems, in 2014 the FSLN-dominated 
National Assembly passed 97 constitutional amendments and 
Ortega pushed through a new military code and reform of the 
National Police, giving Ortega more political control over the 
country. Ortega also appointed his sons and daughters positions 
of Ambassador, Presidential advisor, and his wife holds the 
post of communication minister, government spokesperson and now 
is a Vice Presidential pick ahead of the November 6 elections, 
even though Nicaragua's Constitution bars those related to the 
President from being a candidate for Vice President.
    In June, the Supreme Court stripped the opposition 
Independent Liberal Party, PLI, and the Citizen Action Party, 
PAC, of their chosen leaders.
    In July, the Supreme Electoral Council removed 28 PLI 
National Assembly members from their democratically elected 
positions. Ortega has even announced that no international 
election observers will be allowed for the November election, 
despite the wishes of the Nicaraguan civil society. Such an 
erosion of democracy and freedom and utter disregard for the 
rule of law and human rights should elicit cries of outrage 
from democratic countries in Latin America, and the Caribbean, 
and from the Obama administration. Yet, while a few countries 
have made statements and the OAS, Organization of American 
States, and Human Rights Foundation have expressed concerns, 
nothing more has happened.
    Today, there appears to be no cost to Ortega for 
undermining democracy and the rule of law in the pursuit of his 
own personal interests.
    The United States has national interests at stake in 
Nicaragua and Central America. Nicaragua is a member of the 
Central American Free Trade Agreement, CAFTA-DR, thus, 
benefitting from access to U.S. markets. There are multiple 
U.S. businesses operating in the country, 177 Peace Corps 
volunteers reflecting the U.S. spirit of compassion, and many 
U.S. citizens have chosen to retire there.
    Strategically, Nicaragua occupies the geographic center of 
Central America and is, therefore, key not only for legitimate 
commerce but also for drugs, contraband goods, migrant flows, 
and potential security challenges to the Northern Hemisphere. 
That said, we want to see a stable, prosperous Nicaragua that 
adheres to democratic principles, respects the rule of law and 
separation of powers, supports human rights, and responds to 
the will of the Nicaraguan people. We want to see that 
Nicaragua and all Central America achieve greater security and 
economic growth, limit migration north to the United States, 
and minimize the strategic influence of actors like China, 
Russia, and Iran from establishing a greater presence in the 
region. Unfortunately, under Ortega's tenure just the opposite 
is occurring.
    Furthermore, Ortega has displayed clear contempt for the 
common accepted principles of government-to-government 
relations with the United States through the expulsion of three 
U.S. citizens traveling on official U.S. business in June from 
the country. This follows the expulsion of Freedom House's 
Latin American programs director and students from Mexico 
National Autonomous University earlier this year.
    Ortega has also continued to pursue deeper relations with 
China through the Inter-Oceanic Canal Project, even though 
there appears to be limited progress on this canal and 
tremendous public opposition to his construction, Ortega has 
given the Hong Kong-based company HKND enormous discretion in 
building and operating the canal. Moreover, Russia has also 
been building stronger military ties to Nicaragua. Russia 
recently sold 50 T-72 tanks to Nicaragua, established and is 
expanding a large law enforcement training center in Managua, 
and gained access to Nicaragua's air space and ports.
    Iran has also continued courting Nicaragua, sporadically 
pursuing interest in Nicaraguan ports during the last decade, a 
strong diplomatic presence, and student exchanges with Iranian 
religious schools. Iran's continuing interest in Nicaragua was 
highlighted by a visit last month by Iranian Foreign Minister 
Zarif, where Zarif expressed interest in collaborating with 
Nicaragua on the Inter-Oceanic Canal and extending economic 
energy and trade ties.
    So, given the U.S. interest in Asia, the Middle East, and 
Europe, I am left wondering what the Obama administration is 
doing to understand and respond to the strategic implications 
of these countries' overtures to Nicaragua and to reassure our 
friends in the region, such as Costa Rica and Colombia, that we 
have particular concerns with Nicaragua's expanding military 
relationship with Russia.
    The State Department's fiscal year 2017 budget requests 
included over $14 million for Nicaragua. Although I support 
providing assistance to promote U.S. interests, given the 
current landscape in Nicaragua, I am deeply skeptical as to the 
effectiveness of the administration's priorities and efforts in 
the country. After all, the situation looks very bleak ahead of 
the November elections.
    If Ortega continues with his current activities, perhaps 
instead it is a time for the administration to consider a re-
think of its constructive engagement policy toward Nicaragua. 
To that end, what has the current U.S. policy achieved? Is 
Nicaragua more or less democratic? To what degree has the 
administration's policy help dissuade Nicaragua from pursuing 
partnerships with countries like Iran and Russia that 
potentially threaten U.S. interest in the region? If things do 
not change before the election, I believe the State Department 
should very strongly consider sanctions denying Nicaragua the 
benefits of CAFTA-DR and work with the Treasury Department to 
vote against loans in the international lending institutions 
until the Government of Nicaragua takes steps to respect 
freedom, fair and open elections, democracy, and the rule of 
law.
    So with that, I will turn to the ranking member for his 
opening statement.
    Mr. Sires. Thank you, Mr. Chairman, for holding this 
hearing and thank you to our witnesses who have joined us here 
today.
    Since winning the presidency a decade ago, Daniel Ortega 
has pursued a goal of gaining absolute political control over 
Nicaraguan society. With the November 6th Presidential election 
in Nicaragua approaching, and with his control over all the 
nation's public institutions, Ortega is poised to win his third 
consecutive term, this time with his wife serving as his 
running mate.
    How has Ortega been able to concentrate his power? Not 
satisfied with simply winning an election widely deemed 
fraudulent in 2006 and 2011, as President, Ortega has used his 
influence to gain control over the courts, rescind Presidential 
term limits, disqualify opposition leaders from running for 
office, remove opposition lawmakers from the National Assembly, 
and ban international election observers from the country.
    The opposition party including the largest, PLI, 
Independent Liberal Party, are fractured and in no position to 
effectively confront Ortega's overwhelming political power and 
influence. Both the Obama administration and Congress have 
expressed grave concerns over Ortega's blatant, undemocratic 
power grab, as well as his expulsion of the opposition 
legislators and U.S. citizens.
    Earlier this year, Ortega's Government needlessly expelled 
an American scholar from the American War College doing 
research on the supposed Nicaragua Canal. Additionally, they 
have also expelled two U.S. Embassy officials without cause and 
routinely harassed American visitors traveling down to 
Nicaragua.
    Congress and the administration need to work together and 
find ways to empower the Nicaraguan people and counteract 
Ortega's hostile behavior toward innocent civilians. That is 
why I was proud to work with my good friend from Florida, 
Congresswoman Ros-Lehtinen and our Chairman Duncan, among 
several other colleagues from both sides of the aisle to 
introduce and pass H.R. 5708, the Nicaragua Investment 
Conditionality Act, NICA.
    H.R. 5708 calls on the U.S. Government to oppose loans at 
international financial institutions for Nicaragua, unless the 
Nicaraguan Government takes effective steps to hold free, fair, 
and transparent elections and commits to upholding democratic 
principle. It is my hope that this legislation will pass the 
Senate and quickly be signed into law by President Obama.
    I look forward to hearing from our witnesses their points 
of view regarding the current situation in Nicaragua and how 
the U.S. and the international community can effectively 
respond to the non-democratic actions of Daniel Ortega.
    Thank you.
    Mr. Duncan. The Chairman will now recognize the former 
chairwoman of the full committee and now chairwoman of the 
Subcommittee on Africa and the Middle East--or Middle East and 
North Africa, I guess is what is called. Isn't that right?
    Ms. Ros-Lehtinen. I will take that.
    Mr. Duncan. You are recognized for 5 minutes.
    Ms. Ros-Lehtinen. Thank you, Mr. Chairman. And that beard 
looks pretty sexy on you.
    Mr. Duncan. Well, thank you.
    Ms. Ros-Lehtinen. I like it.
    Thank you for holding this hearing, Mr. Chairman. I think 
it is so important for your subcommittee to shine a spotlight 
on Nicaragua and the abusive actions orchestrated by Daniel 
Ortega and his decrepit regime. You have described them. The 
ranking member Albio Sires, has described them. We all know it.
    And on December 1, 2011, when I was chair of the Foreign 
Affairs Committee, I held a hearing on elections in Nicaragua. 
And now here we are, 5 years later, nada has changed.
    In February 2016, Ortega detained and expelled Freedom 
House Latin America Director Dr. Carlos Ponce. And in June 
2016, Ortega expelled three United States Government officials.
    Ortega has also forced the Nicaraguan Supreme Court to not 
recognize the leaders of two opposition political parties. He 
has even removed 28 opposition deputies and alternates from the 
National Assembly without any due process and in the most 
undemocratic way possible. Then, he chose his wife to be his 
running mate in the upcoming illegitimate elections in an 
effort to extend the Ortega dynasty at the expense of the 
people.
    We have seen Ortega send his cronies to break up peaceful 
marches by Nicaraguan civil society and peaceful protestors who 
are simply calling for inclusive elections to be observed by 
international and domestic experts.
    If these problems sound familiar to you, Mr. Chairman, it 
is because we have seen these deplorable acts in the Western 
Hemisphere just a bit too often. Ortega has taken a page out of 
the Maduro and Castro playbook on how to silence the opposition 
and maintain a grip on power. And while the failed policies 
toward Cuba and Venezuela tend to grab the headlines, we cannot 
forget about the other rogue regimes in the region like 
Nicaragua that subvert democratic principles.
    What is it going to take for us to take action? Russian 
tanks are in Nicaragua. What do we think they are going to be 
used for? Of course, it is going to be scare and intimidate the 
public, just like the National Police and the military is being 
used by Ortega to abuse the people and violate their human 
rights, as we speak. We cannot give Ortega a free pass on these 
actions.
    I know that State Department officials will say that at 
least Nicaragua is cooperating with the U.S. on counter-
narcotics operations, but the truth is cooperation is very 
limited and it is designed to detract our attention away from 
its bad actions. These rogue regimes in the region know how to 
play us like a violin. Bad actors in the region understand that 
as long as they can cooperate, even under a limited basis with 
U.S. authorities on counter-narcotics, then we typically turn 
the other way when it comes to democracy and human rights. This 
charade must not be allowed to continue. We have got to start 
holding Ortega and his ilk accountable.
    And thank you, Mr. Chairman, for the markup earlier. I am 
honored to be the Republican lead, alongside my good friend 
Debbie Wasserman Schultz, in introducing H.R. 851. Thank you 
for its passage. This resolution, as you pointed out, expresses 
the profound concern of Congress about the ongoing political, 
economic, social, and humanitarian crisis in Venezuela. It 
calls for the release of all political prisoners, for 
Venezuelan officials to respect constitutional and democratic 
process. As we know, the economic situation continues to 
deteriorate. Inflation has caused high food prices, making it 
difficult for people to afford even the most basic necessities.
    Also, Maduro continues to unjustly detain Venezuelan 
political prisoners from the opposition. The regime is even 
extrajudicially holding American citizens.
    So, I think you for the markup on that resolution and I 
thank you for the markup for supporting the Nicaraguan 
Investment Conditionality Act, a bill that I am proud to have 
introduced with the ranking member of your subcommittee, Mr. 
Sires, as well as the chairman of our subcommittee, Mr. Duncan.
    Taking his cues from Ortega and seeing the tepid response 
from the international community, Ortega has ignored the 
Nicaraguan Constitution, manipulated the nation's Supreme Court 
and its Electoral Council to empower his regime and silence his 
opposition.
    So, I thank you for the markup and the passage of this 
resolution to say that they have got to hold free, fair, and 
transparent elections, promote democracy, strengthen the rule 
of law, respect the right of freedom of association or they 
don't get these loans from the United States and the 
international community.
    Thank you so much, Mr. Chairman.
    Mr. Duncan. And you got all that done in just 4 seconds 
over your time. Thanks for the comment on the beard. I don't 
know how long it will stay.
    And we can all take a page out of your playbook for 
leadership on issues with regard to Latin American. So, thank 
you for that. Congratulations on passage of that.
    Ms. Ros-Lehtinen. Thank you.
    Mr. Duncan. The Chair will now recognize Mr. Castro for an 
opening statement.
    Mr. Castro. Thank you, Chairman, and thank you for holding 
this hearing today.
    The United States has an interest in making sure that 
around the world, particularly with allied nations, human 
rights and democracy are respected, whether their leaders fall 
on the right side of the spectrum or the left side of the 
spectrum, whether they are liberal, or conservative, or 
communists, or fascists, making sure that these nations have 
leaders who respect their people. That means respecting the 
institutions of democracy. And what we have seen in Nicaragua 
is especially troubling.
    And so, I look forward to the testimony and thank you for 
holding the hearing. I yield back.
    Mr. Duncan. I thank the member. No other member seeking 
recognition. We will go ahead and start the hearing.
    Before I recognize the witnesses, there is a lighting 
system in front of you. Just try to adhere to 5 minutes. We are 
not really pressed today, other than members are trying to get 
out of town for their weekend, back in the District, 
campaigning, and other things. So, if we can just stay on time, 
that would be great.
    Bios were provided to the members. So, I am not going to 
read the bios.
    Welcome again. I think I know Mr. Gonzalez has been here 
before and I welcome the young lady. So, I am going to 
recognize you in order. Mr. Gonzalez, you are recognized for 5 
minutes.

  STATEMENT OF MR. JUAN GONZALEZ, DEPUTY ASSISTANT SECRETARY, 
 BUREAU OF WESTERN HEMISPHERE AFFAIRS, U.S. DEPARTMENT OF STATE

    Mr. Gonzalez. Thank you, Mr. Chairman, ranking members, and 
members of the committee. It is an honor to testify before you 
today. I have submitted my testimony for the record and I 
thought, with your concurrence, I would use my time just to 
highlight the main points.
    Mr. Duncan. Can you pull that microphone just a little bit 
closer? We are trying to record all of this for posterity.
    Mr. Gonzalez. Understood. Without your objection, Mr. 
Chairman, I would like to submit my testimony for the record 
and just highlight the main points in my opening remarks.
    I last testified, as you mentioned, when this committee 
held a hearing on border security in March, which remains an 
incredibly issue and a national security priority for the 
administration. And thank you for your leadership in chairing 
that hearing.
    And I cannot let an opportunity go by to also thank this 
committee for its support for Central America. To be frank, we 
would be nowhere without you and we are actually very working 
aggressively to implement the U.S. strategy for engagement in 
Central America and it is all thanks to the work of this 
committee and the Members of Congress.
    Today we also celebrate the 195th anniversary of Central 
America's independence. The region's history is closely 
intertwined with ours and the region's prosperity and security 
has always mattered to the United States. Throughout, we have 
seen positive signs, like the region's active efforts to 
integrate and cement trade partnerships with the United States, 
Europe, Asia but challenges abound as well. Corruption is 
rampant throughout. Transnational criminal organizations 
challenge the state in some areas.
    Equally concerning is the state of democratic institutions 
in various parts of Central America but I would say most so in 
Nicaragua, where President Daniel Ortega has been working to 
transform the country into a de facto one-party system.
    The government's recent actions restrict free and fair 
elections and to dismantle democratic institutions, such as 
independent political parties are troubling to us. While 
certain freedoms continue to exist and elections are still 
being held in November, the Sandinista National Liberal Front 
has applied the tools of incumbency, influenced the judiciary, 
and manipulated the political influence and intimidation to 
eliminate the system of checks and balances necessary for a 
vibrant and functioning democracy. The cumulative effect of 
these actions threatens to render the upcoming elections a 
pantomime of democracy.
    And the question before us is how to respond. In sum, the 
approach we are taking if four-fold. First, we are voicing our 
concerns and exposing such authoritarian actions for what they 
are. To avoid bilateralizing the issue, we need to work with 
multi-lateral organizations and we are doing this.
    Second, we are standing in solidarity with Nicaraguan civil 
society and supporting democratic institutions in every way we 
can. To be clear, ours is not an anti-Ortega strategy; it is a 
pro-Nicaragua strategy and we are working with the opposition, 
as well as elements of the Sandinistas.
    Third, we are engaging directly with the Nicaraguan people. 
The future of Nicaragua will not be determined in Washington 
and only by the Nicaraguan people. So, our Ambassador is out 
there every day making the case for better U.S.-Nicaraguan 
relations and speaking on behalf of strong democratic 
institutions. Actually, I don't think Ambassador Laura Dogu 
sleeps. She is an active advocate on behalf of the United 
States.
    And fourth, we continue to have interests in the country 
and we need to continue advancing those interests. So, we will 
continue to cooperate with them in areas where we have a direct 
interest, like counter-narcotics and combating transnational 
criminal organizations.
    Again, we continue to closely monitor the developments as 
they relate to the election. It is something incredibly 
concerning. And we look forward to working with members of this 
committee on the best ways to promote our interest in 
Nicaragua. Thank you very much.
    [The prepared statement of Mr. Gonzalez follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
  
                     ----------                              

    Mr. Duncan. Thank you, Mr. Gonzalez.
    Now, I will recognize the Honorable Marcela Escobari for 5 
minutes.

    STATEMENT OF THE HONORABLE MARCELA ESCOBARI, ASSISTANT 
ADMINISTRATOR, BUREAU FOR LATIN AMERICA AND THE CARIBBEAN, U.S. 
              AGENCY FOR INTERNATIONAL DEVELOPMENT

    Ms. Escobari. Chairman Duncan and Ranking Member Sires, and 
members of the subcommittee, thank you for the opportunity to 
testify before you today and for speaking out on the Government 
of Nicaragua's efforts to restrict democracy.
    I am grateful for the committee's support for the work of 
USAID and for your leadership in our engagement in Central 
America. I have actually just come back from the Northern 
Triangle and I saw firsthand how our support is making a 
difference. This is a historic opportunity to help these 
countries in their effort to improve the lives of their 
citizens and the political will for reform is definitely there.
    Despite significant challenges, citizens are demanding 
accountability and local institutions are responding from CICIG 
in Guatemala to the show of independence in the Attorney 
General offices of each of these three countries, they are 
making significant strides in accountability and transparency.
    These gains are in stark contrast to the situation in 
Nicaragua, where the Ortega administration continues to close 
democratic space and consolidate power. Nicaragua is the second 
poorest nation in the Western Hemisphere. The country has yet 
to reach the levels of income per capita it had in 1978. 
Criminal activities and violence are on the rise on the 
country's Caribbean coast, which is also the area with the 
worst poverty indicators, where 40 percent of boys and girls do 
not attend school. This is not a country that can afford a 
government that refuses to be held accountable and respond to 
those most in need of assistance.
    We must continue to support the people of Nicaragua in 
their efforts to participate in the democratic process. And 
two-thirds of USAID's bilateral assistance focuses on this 
priority. We are supporting over 60 civil society organizations 
to help them be effective in advocating for citizens' rights. 
We are also helping nurture the next generation of civic 
leaders. We work with a network of over 2,000 young people who 
have participated in our leadership programs. They are leading 
local initiatives that matter to them, from bringing drinkable 
water to their communities to advocating for human rights but 
they are also increasingly making up the ranks of leadership in 
public and private organizations. These efforts are allowing 
them to exercise their political muscle and see results.
    As a result of USAID efforts, citizens are also holding 
municipal governments accountable, exercising democratic 
principles at a local level. Citizens have submitted nearly 200 
proposals to extend services for youth, women, and the disabled 
in nine municipalities and nearly half of these proposals, 
worth over $1.6 million, have been incorporated in municipal 
budgets.
    We are also strengthening independent media, as they face 
restrictive regulations and dwindling resources as advertisers 
pay a political cost for their support. USAID works with over 
20 organizations in press, radio, and television to strengthen 
their operations and help them be more effective.
    While democracy and governance remain USAID's priorities in 
Nicaragua, we also support citizen security and education in 
the autonomous Caribbean coast, where the worst poverty 
indicators exist. USAID education programs help improve early 
grade reading, which is an important determinant in keeping 
kids in school. Our vocational programs with the private sector 
are helping youth become employable with skills in carpentry, 
plumbing, car repairs, and ultimately become productive members 
of their society. The autonomous Caribbean region is home to 
the most isolated and vulnerable populations in Nicaragua and 
helping these populations prosper is also crucial to a thriving 
and healthy democracy.
    USAID will continue to evaluate and adjust our programs in 
Nicaragua so that they remain effective and, looking forward, 
will continue to elevate Nicaragua's most prominent civil 
society organizations and connect them with organizations 
around the globe who are facing similar challenges. It is 
imperative that the U.S. Government continue to engage and 
stand by the people of Nicaragua. We are a lifeline that helps 
them advocate for their rights and freedoms in an increasingly 
challenging environment.
    We share a commitment to democratic governance with our 
regional neighbors. As stated in the Inter-American Democratic 
Charter, the peoples of the Americas have a right to democracy 
and their governments have an obligation to promote and defend 
it.
    I want to thank this committee again for your leadership 
and support and I look forward to your continued counsel and 
welcome your questions.
    [The prepared statement of Ms. Escobari follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
                              ----------                              

    Mr. Duncan. I thank both the witnesses and will step out of 
the norm here and recognize the ranking member first for 5 
minutes.
    Mr. Sires. I want to thank the chairman for his 
consideration. You know it is always bewildering to me how the 
second poorest country in the Western Hemisphere, basically, is 
buying tanks, is buying planes, is buying all sorts of arms and 
yet, the need of the people seems to be ignored.
    So, I am just wondering if this is the typical intimidation 
factor that leaders that abolished democracy or tried to 
circumvent democracy usually use. Or why do you think he needs 
so much artillery, Warren--or I am sorry--Mr. Gonzalez? Like my 
buddy.
    Mr. Gonzalez. Thank you, Congressman. So, you are exactly 
right, actually, Nicaragua is the second poorest country in the 
Western Hemisphere. What we have seen, however, is that even 
though he won and actually observed the 2006 election when 
Ortega came back to power. He won with just roughly 38 percent 
of the vote.
    Today, he enjoys 60 percent or so level of popularity and a 
lot of that has been as a result of a lot of the social 
investments that he has made in the country. There have been 
reductions in poverty, even though the level of poverty remains 
above 39 percent but a lot of it is a result of Venezuela's 
largess. And in our view, it is not sustainable, particularly, 
in the absence of strong institutions.
    Every country has the right to buy military equipment. And 
is it something that they are using as a tool of intimidation? 
What is clear to us is that the approach that Ortega has 
actually been using since 2006 have been overt efforts to 
consolidate one-party control, something he has been working on 
since he returned, remove even independent allies within 
Sandinista, repress civil society, independent media, and the 
opposition, control the private sector and advance an active 
propaganda for the Sandinista party.
    But to answer your questions, sir, there is this old Latin 
American saying, which is for our friends, anything and for our 
enemies, the law. So, they are using a way to actually 
technically using legal systems to undermine the opposition in 
a way that is bad for the country's democracy and for the 
thriving of civil society.
    Mr. Sires. Thank you. Marcela?
    Ms. Escobari. So, I would just agree with your comment that 
we agree that the Nicaraguan Government should be focusing more 
on its poor, particularly the Caribbean Coast, which is an 
isolated area with the most vulnerable populations and we have 
seen violence and poverty increase in those areas.
    Mr. Sires. Thank you. And through this process, Daniel 
Ortega and his family have become very wealthy in the last few 
terms, I understand that one of the richest in Nicaragua. Is 
that accurate?
    Mr. Gonzalez. Well, I know that the wealthiest 10 percent 
receive roughly 39 percent of all income and that right now the 
bottom 30 percent receive roughly 8.3 percent. So, there is a 
huge level of inequality that endures in Nicaragua.
    Mr. Sires. Yes, but I am talking about the President and 
his family.
    Mr. Gonzalez. I could get you information. I don't have the 
details on his personal wealth.
    Mr. Sires. But he is doing much better than he has done 
before, right?
    Mr. Gonzalez. I imagine, yes.
    Mr. Sires. You are being a good politician here.
    Thank you, Mr. Chairman.
    Mr. Duncan. I thank the ranking member.
    I am now going to go ahead and recognize Mr. Yoho for 5 
minutes.
    Mr. Yoho. Thank you, Mr. Chairman. I appreciate the meeting 
here.
    And I want to spin off of my colleague, Mr. Sires, about 
here we are the second poorest country in the Western 
Hemisphere, yet, they are buying tanks and planes from Russia. 
And we engage in the IMET Initiative, the International 
Military and Education Training. What are we benefitting out of 
this? Are we showing them our techniques and our skills and all 
that? And they are using Russian forces. Is that benefitting us 
and who are they preparing for an invasion from? Or is it like 
Ms. Ros-Lehtinen said, to keep oppression on the people?
    Mr. Gonzalez. Congressman, thank you for your question.
    The IMET support that we provide to Nicaragua, I have got 
to say that they are not allowing members of the Nicaraguan 
military to actually come up here. And I think it is, my 
interpretation is because what we actually do through IMET 
training is create a professional military. We promote the 
respect for human rights. We find synergies between U.S. and 
foreign militaries and it has been an effective took for us to 
cooperate with foreign militaries around the world.
    Mr. Yoho. Let me interrupt you there. You said we respect 
their rights for human rights or their initiative on that.
    Mr. Gonzalez. Well, the types of classes that we teach 
through IMET where we will bring people up here is a series of 
classes that include human rights, better interoperability with 
U.S. military, those types of trainings. They have not actually 
allowed Nicaraguan military to come up for the training.
    Mr. Yoho. All right, I want to drop back and come back to 
that because how do you hold a dictatorship like Ortega 
accountable when we know they are doing what they are doing? 
They are dealing in human trafficking. They said there is not a 
lot of narco trafficking but how do we know that is true? We 
know the heroin is coming across the Mexican border. Where does 
the heroin come from?
    Mr. Gonzalez. Well, we have actually concrete results in 
cooperating with them on counter-narcotics.
    Mr. Yoho. Well, again, where is the heroin coming from? We 
know it is coming across the Mexican border into America. Where 
does it come from in South America?
    Mr. Gonzalez. Well, the source countries include Colombia, 
I would say, primarily but----
    Mr. Yoho. Okay, so how does it get from there to Mexico, to 
the United States, if it is not coming through Nicaragua? Are 
they going around that? Are they going through that and we 
don't know about it and we are facilitating with our military 
intelligence, giving them foreign aid and teaching them our 
counter narcotics methods?
    Is that helping us or is it helping them circumvent our 
counter narcotics interdiction?
    Mr. Gonzalez. It actually helps us because it instills, it 
aligns values, in a way, actually, of how you manage 
responsible and a political military.
    In terms of the flow of drugs, cocaine and heroin that come 
up to the United States, they go by land and by air. Mostly, 
they will skip over Nicaragua, even though they are, right now 
I think in 2015 we seized over 4.3 metric tons of cocaine but a 
lot of them are overshooting and going to other countries or 
going, obviously, still through land but in lower numbers 
because Nicaragua has actually been very active on the counter-
narcotics front.
    Mr. Yoho. All right and then let me ask you this, Ms. 
Escobari, if you would answer. How are we going to respond if 
the elections are run as a mockery to democracy in their 
country with a constitution that says he can't run another 
term, his wife can't be there? How are we going to respond?
    And I would also like to know about the hypocrisy of what 
happened in Honduras when their President ran for the third 
term and the people of that country stood by their constitution 
and pulled him out but, yet our administration, along with Ms. 
Clinton, said that we can't do that; we have to stand by that 
President of that nation. But yet, the opposite is happening 
here and where is the outcry from the administration?
    So, what are we going to do, the first question is, after 
this election and it is a mockery? What is this 
administration's response going to be?
    Ms. Escobari. Well, thank you, Congressman for your 
question.
    And it is true, we are also very troubled about the lack of 
electoral observers in this election. Through USAID, we are 
working to continue to push for accountability. We are even 
running up to the election. We are working with youth 
organizations that are able to monitor fraudulent election 
practices and misuse of funds. During the election, we are also 
going to have volunteers who are going to try to be in polling 
stations and report on----
    Mr. Yoho. How effective is that? I mean you have got youth 
monitoring that but you have got a country that has tanks and 
all that other stuff. How realistic is that?
    Ms. Escobari. No, absolutely, this is not the ideal 
situation. And we very much regret the setbacks in a fair 
electoral procedure.
    And we are mentioning here the things that we are trying to 
do just not to stay quiet and to continue to try to push for 
accountability and at least make sure that there are observers 
and they are able to share with the Nicaraguans and outside, if 
things continue to proceed as they----
    Mr. Yoho. I am out of time and I will yield back. If there 
is another round, we will come back to that. Thank you.
    Mr. Duncan. Thank you, Chairman.
    Now, we will go to Mr. Castro.
    Mr. Castro. Thank you, Chair.
    Let me ask you all about Nicaragua's involvement with 
Russia and China. What is the extent of those two nations' 
involvement with Nicaragua?
    Mr. Gonzalez. Thank you, Congressman. So, separate from 
Russia and China, whenever a third country is involved in Latin 
America or Central America and promoting a hemisphere that Vice 
President Biden calls secure middle class and democratic and is 
abiding by international rules, it is not a zero sum game. We 
say welcome. You can't take those roads with you when you build 
them.
    Specifically to your question, sir, Russia has seen itself 
specifically isolated over the past several years, as they face 
international outcry over its incursions in other parts of the 
world. And so they have tried to increase their engagement. If 
you seize the countries that they have an opening with, like 
Nicaragua, are few and far between. The engagement tends to be 
transactional. And it is something we are watching very closely 
but we see it as limited and to arms sales and resulting spare 
parts and training as a part of the main part of the 
relationship.
    Mr. Castro. Is there a foreign aid component from either of 
those countries over Nicaragua that you all know of?
    Mr. Gonzalez. Well, with regard to Russia, they will 
provide credits. As you know, they sold the tanks to Nicaragua. 
But beyond that, it has been mostly just a transactional arms 
trading exercise.
    It is something that we are watching very closely and it is 
something that we would welcome an opportunity to brief you in 
a classified setting. I know we have discussed this with the 
chairman in a classified setting before and welcome that 
opportunity.
    Mr. Castro. Sure. Did you have something? Okay.
    And can you describe the status of our security cooperation 
under CARSI and how that is coming along?
    Mr. Gonzalez. Yes, so Congressman, our assistance that 
focuses on Central America is one that does not go directly to 
the government. We providing training, equipment and so on and 
so forth. Overall, we are going to provide $13 million in 2016 
funds and the impact is one where we have actually worked with 
the Nicaraguan Navy, which even though it has really limited 
assets, conducts regular patrols and interdiction operations in 
their internal waters in the Pacific and in the Caribbean 
Coast. We have donated equipment. They are actually using 
donated Nor-Tech Boston Whalers and refurbished boats under 
Section 1033 authority, which is the DoD money but it something 
that has synergies with the Central American Regional Security 
Initiative.
    And the support, again, is the work that we do is there 
will be training and we will provide equipment that is 
specifically focused toward the counter-narcotics operation. 
The results have been, as I mentioned earlier, 4.3 metric tons 
in seized assets last year. So far, they have arrested over 135 
people, seized $2.8 million and 55 go-fast boats and other 
means of transport. And so we are having a lot of results in 
that area of cooperation.
    Mr. Castro. And also, Nicaragua is party to CAFTA, right?
    Mr. Gonzalez. That is correct.
    Mr. Castro. What effect has that had on the country?
    Mr. Gonzalez. Well, it has actually been significant. 
Actually, our trade, two-way trade has doubled in the past 
decade. We have a $5 billion trade relationship and our exports 
have increased 25 percent in 2015 or up 18 percent as far as 
July of this year.
    But Congressman, to the point on the democracies, we could 
do so much more to cooperate with Nicaragua in the way that we 
do with other parts of Central America. But because of the 
limiting of democratic freedoms, we have a very limited scope 
in which we work with the government.
    Mr. Castro. Okay, thank you.
    Mr. Duncan. We will take just a second.
    [Recess.]
    Mr. Duncan. For the record, Chairwoman Ros-Lehtinen was a 
great chairwoman of the Foreign Affairs Committee. She was very 
fair to me when I was a freshman member. So, I would do 
anything for her.
    I let her catch her breath and the Chair recognizes----
    Ms. Ros-Lehtinen. Thank you, Mr. Chairman. Thank you. And I 
have been listening to the testimony and the questions from the 
side room. So, I appreciate your testimony and the questions 
from the members.
    Secretary Gonzalez, I would first like to thank you for 
working closely with our committee and staff. My staff has 
briefed me on how helpful you have been with providing 
information and briefings regarding Nicaragua. So, I want to 
say gracias, that we appreciate your work on this issue. And as 
you have just witnessed, before the hearing, we had the markup. 
We passed the Nicaragua legislation in a bipartisan manner.
    Do you think that this legislation helps advance U.S. 
efforts to hold the Ortega regime accountable for its 
violations against human rights and electoral manipulation?
    Mr. Gonzalez. Madam Chair, thank you for your words. First 
of all, I think the most important lesson Vice President Joe 
Biden taught me was taking very seriously the advice and 
consent role of the U.S. Congress. So, it has been a pleasure 
to work with you and your staff.
    So, while we cannot comment on pending legislation, I will 
say, Madam Chair, that we share the principles behind it and, 
frankly, the work that this committee and that you personally 
doing to spotlight the challenges in Nicaragua. So, we share 
the principles but I cannot comment on the specifics.
    Ms. Ros-Lehtinen. Absolutely. I understand.
    Also, press reports have indicated that the Ortega regime 
will now exercise control over diplomatic pouches. This is very 
troubling. Is this accurate? And if so, how will this impact 
the work of our U.S. Embassy officials and its staff?
    Mr. Gonzalez. Madam Chair, my understanding is that they 
are going to--they have announced that they will begin using an 
x-ray of packages, which is something that they can do under 
international law but it is something we are watching very 
closely because any step beyond that to maybe move to open it 
would be something that would be in violation of their 
international obligations and would be troubling to us in the 
course of----
    Ms. Ros-Lehtinen. Well, thank you for that.
    And Administrator Escobari, thank you so much. It was a 
pleasure meeting with you just yesterday.
    Congress brought back USAID back into Cuba, as we fast 
tracked your congressional notification last year, yet it took 
over 6 months to get the program dollars out the door. In 
Venezuela, USAID decided to cut the democratic program dollars 
last year to $3.2 million. While this was quickly corrected 
after congressional intervention, I worry about the signal that 
this sends about USAID's commitment to promoting democracy 
efforts. We can't let the fear of possibly being expelled from 
the country from scaring USAID from cooperating in closed 
societies. And in Nicaragua, USAID has failed to improve the 
democracy programs in Nicaragua for years. And in 2012, I sent 
a letter to USAID stating that funds to Nicaragua have not been 
spent wisely and prohibited funds from being used in the 
Ortega-controlled municipalities or from being used to work 
with the Ortega regime. Yet, just months ago, committee staff 
traveled to Nicaragua and USAID officials requested flexibility 
in order to work with officials from the Ortega regime and that 
is just simply unacceptable.
    How can we work together in order to improve the democracy 
programs in Nicaragua? I know that is your goal. That is our 
goal as well. How can we help Nicaraguan civil society who are 
being oppressed on a daily basis? And related to that, if you 
can share with us some success, in terms of human rights and 
democracy, the program that you have from USAID programs. Is 
the country more democratic and with stronger civil society and 
empowered human rights organizations now? Thank you.
    Ms. Escobari. Thank you very much Madam Chairman.
    At USAID, we totally share your concerns and your focus on 
democratic programming. And it actually makes up the priority 
of our bilateral funding to Nicaragua. If you ask me, I think 
the last years have witnessed more democracy and governance 
setbacks than gains and it has become a more challenging 
environment to work in.
    That said, we continue to support over 60 civil society 
organizations, local organizations, both through international 
partners and through directly with many of them and we are 
trying to strengthen them. For many of them, we are their only 
lifeline, as many other donors have left.
    We have also started working with younger people and 
organizations that advocate for democratic principles at a 
local level. And we are also working with independent media, 
which we believe is a very important force that needs to remain 
open and is facing increasing challenges in this environment.
    Ms. Ros-Lehtinen. Thank you very much, Mr. Chairman. Thank 
you for allowing me to speak and for the markup earlier today. 
Thank you, sir.
    Mr. Duncan. You are welcome. Anytime.
    I now recognize myself for 5 minutes. And I would like to 
start with the expulsion of three U.S. citizens in Nicaragua, 
Mr. Gonzalez.
    On June 13th, three U.S. citizens traveling on openly 
cleared U.S. official government business were kicked out of 
Nicaragua. Such actions suggest flagrant disrespect by the 
Ortega Government for commonly accepted principles of 
government-to-government relations.
    Given the erosion of democracy in Nicaragua, the clear 
contempt that Nicaragua has displayed in its government-to-
government relationship with the U.S., is it appropriate to 
continue to reward Nicaragua with a virtually unrestricted 
access to U.S. markets that the nation receives under CAFTA?
    Mr. Gonzalez. Mr. Chairman, thank you for that question.
    While it is the right of every nation to control its 
borders and who enters and, obviously, official interaction, we 
agree. We coincide entirely with you that the expulsion was 
unwarranted and inconsistent with a constructive and positive 
bilateral relationship.
    Immediately after, the two officials who were actually 
there to facilitate trade on textiles, I, personally, spoke 
with Ambassador Campbell and made clear the potential 
ramifications of going down this road. We communicated a 
diplomatic note and, since then, actually, clarified the travel 
procedures with the Nicaraguan Government.
    Since then, we have not had problems. And we know that 
there have been religious organizations and faith-based 
organizations that have been interested in doing work, we have 
had journalists and others.
    Since the new travel procedures have been established, we 
have been able to go forward without incident but we have made 
it clear that we will have to reconsider how we respond if this 
is something that continues.
    Mr. Duncan. Given the fact that Nicaragua is one of the 
poorest countries in Central America, who do you think benefits 
the most from a free trade agreement with the United States, 
the United States or Nicaragua?
    You don't need to answer that. I think Nicaragua does. You 
are a diplomat. I am a politician.
    Nicaragua benefits from that access to the United States 
but we continue to see things like this happen and the United 
States goes right back in and continues to cozy up to these 
countries, when the countries have sort of thumbed their nose 
at the U.S. This has happened in Venezuela in the past. It is 
now happening here. And it is definitely happening in Cuba.
    So, let me ask you this. I have got concerns with U.S. 
Ambassador Dogu's actions. So, on June 8th, the Nicaraguan 
Supreme Court stripped the opposition Independent Liberal Party 
from its recognized leader and Ortega's 2006 Presidential 
challenger, Eduardo Montealegre--I can't pronounce that. My 
Spanglish isn't that good. So, it put in the party under 
control of a government-allied leader.
    On June 17th, the Supreme Court invalidated the leadership 
of the Citizen Action Party, the only remaining party with a 
legal standing to present a Presidential candidate. This also 
disqualified the Presidential candidate Luis Callejas and 
Ortega's main challenge for the November 6th election.
    So, let's get rid of all of our political opponents, using 
the Supreme Court to do that. But then recently, U.S. 
Ambassador Laura Dogu paid a visit to Nicaragua's Supreme 
Court. She shouldn't have dignified them by visiting them. So, 
why did that visit take place?
    Mr. Gonzalez. Mr. Chairman, first on the trade point, I 
just want to say that it is in our interest to actually engage 
with the Nicaraguan people and trade. While it does benefit the 
economic elites, it also benefits the people.
    But we are looking at, as the elections progress and 
coincide with everything that you have said on the treatment of 
political opposition, we are looking at all of our tools at our 
disposal, understanding that there is no silver bullet and that 
the Nicaraguans have to be the ones that decide the future of 
their country.
    The Ambassador Dogu, who has been very active on the 
ground, we coincided that diplomatic engagement is not a 
reward. It is an opportunity to actually make very clear what 
our concerns are. And whenever she meets with the Supreme Court 
and she meets just as much with members of the opposition, 
civil society and youth, and the government, makes very clear 
what our concerns are and where U.S. policy is headed. And so 
we feel like she has been very effective in that regard.
    Now, just very briefly on the political situation. I don't 
need to tell this committee that the political process involves 
constant compromise. But in the United States, we are not 
perfect. Our democracy is always improving. But we speak out on 
these sorts of issues not because we are perfect but because we 
think the ideal of not persecuting people if they disagree with 
you is the right ideal, number one. And we do not have, as 
Americans, confidence in a system where one person or one 
family is making all of the decisions.
    And we believe that in a democracy, if we believe in 
democracy, it means everybody has to have a chance to speak out 
and actually offer their views. And that is what being 
undermined in Nicaragua and I think, in the long-run, will not 
be good for the country.
    Mr. Duncan. Let me just say this. I think if a country is a 
recipient of the money from the U.S. taxpayers for economic 
assistance and USAID and all of this, and we are trying to 
court or support democracy and free elections, and individual 
liberties, humanitarian rights, and those sort of things, these 
countries ought to, personally ought to be a little more 
friendly to the United States. And kicking out diplomats, and I 
don't know all of the details of that, but I disagree from what 
I know.
    So, let me just ask one other question and then I will move 
on. The United States supports OAS. OAS supports democratic 
principles throughout the region. And you are not representing 
the OAS but I would ask your opinion on why the OAS hasn't been 
any stronger in its stance over what has gone on in Nicaragua 
with regard to the elections because the elections are the core 
of democracy.
    So, why would you think the OAS hasn't been stronger in 
this instance? And we have seen the OAS really take not 
stringent enough positions against Venezuela. So, why wouldn't 
the OAS be stronger here?
    Mr. Gonzalez. Mr. Chairman, on your first point, we 
coincide entirely. One of the strategies that the Ortega 
administration has taken is to actually essentially control the 
private sector, under the presumption that as long as they have 
good counter-narcotics cooperation with the United States and a 
good relationship with the private sector, they pay their 
international debts, that we will turn a blind eye to the 
undermining of democracy.
    This will have, I think--we are approaching a situation 
where in November they will be free, in the sense that people 
will be allowed to vote in the election. But they will not be 
fair and it is something that over time will undermine, I 
think, how the institutions work and it will have implications 
for the private sector. And it is something that in Nicaragua 
but around the hemisphere and around the world, Secretary 
Kerry, our Acting Assistant Secretary Mari Carmen Aponte have 
made anti-corruption efforts a priority.
    And we have taken actions even with our allies in places 
like Honduras. You have seen our work in Guatemala and it is 
something that we are looking at everything we have in our 
diplomatic toolbox to see how we can actually tackle these 
sorts of issues of corruption, violations of human rights, et 
cetera. I look forward to working with you and your committee 
on developing those tools most effectively.
    On the OAS briefly, sir, we have done everything possible 
to try to get the Government to agree to invite an electoral 
observation machine. I will note that the OAS is observing the 
U.S. election. So, it is not that we are saying do what we say 
and not do what we do, we are actually walking the walk in this 
case.
    And the OAS is actually looking very closely at the 
situation in Nicaragua. I understand they are working on a 
report that they will release. And the reality is that 
currently the time is closing for there to be an international 
observation mission and that the conditions maybe don't exist 
for there to be a fair election, as I mentioned.
    Mr. Duncan. I didn't mean to put you in a predicament there 
talking about the OAS but when I read of the history of the 
OAS, I am pro-OAS. I know what it was founded for. I know what 
it is supposed to be doing with regard to democratic principles 
in the region but I think we are approaching at point, to use 
your term, we are approaching a point where the OAS is becoming 
less effective because they continue to kind of deviate or 
water down their traditional stances in those regards, with 
regard to Nicaragua, in this case, Venezuela.
    So, I would say that if the OAS was sitting here. I think 
they need to go back, reread their founding documents, reread 
their charter and come to a meeting of the minds on what they 
exist for because this is a prime example, where they need to--
it shows a little bit more outrage with regard to what the 
Supreme Court in Nicaragua has done and taking it even one step 
further, what Maduro is doing in Venezuela with not allowing a 
recall when the Constitution of Venezuela calls for that. And 
when you believe in those democratic constitutional principles, 
you have got to adhere to that and OAS says we are going to 
support the democratic principles. So, where is the outrage for 
those founding principles?
    So, I am going to stop there. And I will now go to Mr. 
Castro, if he has got another round of questions.
    Mr. Castro. Thank you, Chairman.
    I have a question on Nicaragua and energy. Nicaragua does 
not produce oil and has long been dependent on imported fuel 
oil to generate electricity. My understanding is that Nicaragua 
has recently invested heavily in renewable energy, wind, solar, 
and geothermal, in particular. So, my question is, has the U.S. 
played a supporting role in this transformation and can 
Nicaragua's renewable energy transformation be replicated 
across the hemisphere.
    Mr. Gonzalez. Thank you, Mr. Congressman, for that very 
important question.
    One of the initiatives that when I was with Vice President 
Biden that we launched with our State Department Special Envoy 
for Energy Issues, Amos Hochstein, was the Caribbean Energy 
Security Initiative in June 2014 but then it is something that 
we also rolled out in Central America.
    And on the premise that the region's dependence on 
expensive imported fuel provides headwinds to development and 
efforts to actually reduce poverty. And what we have been doing 
in Nicaragua has actually been we have been taking a regional 
approach.
    The countries have what is called the SIEPAC line, which 
allows them to coordinate in the transmission of electricity 
and it is something that is not being taken full advantage of. 
And it is something we are trying to provide technical 
assistance through kind of the regional energy market to help 
them actually take full advantage and get to the point where 
they can expand the capacity but also, because cooperation on 
energy issues between states is incredibly complicated, try to 
find a way to ensure that renewable energy is something that is 
integrated into the grid and not just traditional fossil fuels.
    Costa Rica and Nicaragua have actually taken very active 
steps on renewables. Honduras is making investments. And I 
think the positive consequences or results of our engagement 
have been that we are trying to streamline the way they do 
regulation, the way they take advantage of the line, and how 
they actually start expanding the use of renewables.
    Mr. Castro. Thank you. And then a question about the 
Chinese canal that is being built. How likely is it that Inter-
Oceanic Canal underwritten by Chinese billionaire Wang Jing 
will actually be completed? And what implications does 
construction of the canal have for China-Nicaragua relations 
and Chinese involvement in the country?
    Mr. Gonzalez. Congressman, perhaps this will sound 
undiplomatic but I am skeptical. We have not seen a single 
shovel being used in the building of the Nicaragua Canal. And 
so the position we will take is we will believe it when we see 
it.
    But it is something that we are watching, I think, very 
closely. The expansion of the Panama Canal is something that 
benefits U.S. ports in a significant way, because it allows us 
to reduce our shipping costs. And so, it is something that we 
are watching.
    With regard to China's involvement, whether it is in 
Nicaragua or in the Caribbean, where they have also been very 
present, the message we have always conveyed to them is that 
there are international standards that all of us have to uphold 
and that insofar as they are upholding those and they are 
promoting secure, prosperous, and democratic region, we are 
welcoming their engagement. But we maintain a yearly active 
dialogue with the Chinese on Latin America and how best to 
actually maximize their cooperation in a productive way.
    Mr. Castro. Thank you. I yield back.
    Mr. Duncan. Great questions, Mr. Castro.
    I will go to Mr. Yoho for 5 minutes or as much time as he 
needs.
    Mr. Yoho. Thank you, Mr. Chairman. I appreciate it.
    And I kind of want to spin off a couple of things here but 
I want to read a statement here that Mr. Ortega said in Cuba. 
The current President Daniel Ortega gave a speech in Havana, 
Cuba, affirming Sandinista policies and ideology in joining the 
Non-Aligned Movement and in excoriating the imperialism of the 
U.S. That was a statement he made. Do you feel he has wavered 
from that or varied from that in his stance toward the U.S.?
    Mr. Gonzalez. I can't pretend to know what is in the mind 
of President Daniel Ortega but I know that often, be it 
Nicaragua or be it Venezuela, often the moniker of U.S. 
imperialism is a foil to distract from problems inside the 
country but also, I think, as a way to I think maybe brandish a 
sort of socialist--or not socialist--a sort of way of governing 
and try to push out any sort of----
    Mr. Yoho. I think we can tell where he stands with actions, 
when you see what they do. You know you are looking at the 
amount of corruption there and you look at the wealth. He is 
one of the wealthiest people in the country that is the second 
poorest country in the Western Hemisphere. And then you look at 
the loan that Venezuela gave them back a few years back, I 
think it was $457 million with no third-party oversight, it is 
a very convenient situation.
    And then they are buying Russian military equipment. They 
are putting up Russian military radar systems. And I am not 
feeling the love here. And I, along with the chairman, you know 
he was talking about the trade, the free trade agreement that 
we have with them, I don't see the benefit we do. I see we do 
export but I think they are benefitting a whole lot more. And 
the benefit to them is they have a lot of money coming into 
their country that is promoting a rogue--a dictatorship, I will 
say. And with the administrator's misstep of sending our 
Ambassador Dogu down there and allowing them to basically give 
credit to their Supreme Court for ruling out any competing 
parties in the political process, I just think that is a very 
poor judgment and misstep on this administration.
    We have all these conditions on trade. We have all these 
conditions on human rights. We have all these conditions on 
free and open elections and he has already said there is not 
going to be free and open elections because there is not going 
to be any monitors but yet, we are relying on the students to 
tell us how fair they are.
    How intimidated are those students going to be and how well 
are they going to speak up? And at what point does 
administration say, you know what, if you are going to play by 
the rules, we are done and pull out of the trade agreement?
    Do we have the backbone to do that? Does this 
administration have it or any administration? When is America's 
word going to stand for what we say?
    Mr. Gonzalez. Congressman, I will say two things. And thank 
you for your comments. We coincide entirely on the democratic 
backsliding in Nicaragua.
    Two things. First----
    Mr. Yoho. Well, then we are not doing it with action.
    Let me ask Ms. Escobari. Is that close? What is your 
opinion on that? At what point does America say if you are 
serious about being an ally of ours? Because we have weakened 
the OAS and it is because of the actions. If our action is not 
standing up to--our words aren't backed up by our actions.
    Ms. Escobari. Thank you, Congressman. For our case, the 
majority of our programming is trying to strengthen the few and 
usually harassed organizations that are trying to defend 
democratic institutions and citizens.
    Mr. Yoho. How do you see them strengthening, if they are 
throwing people out that have diplomatic or regular passports 
and our administration is validating their Supreme Court?
    Ms. Escobari. No, you are absolutely right that there has 
not been progress. There has been backsliding but we believe 
that we should still be there to stand with those organizations 
to continue to maintain some openness and to have these 
organizations that can speak for the citizens as that closes.
    Mr. Yoho. Yes, but if we are not willing to take something 
back for that government to lose, it is not going to get 
better. I mean history repeats itself. And until we are willing 
to stand up and make a strong stand, they are going to keep 
doing what they are doing and we are going to keep 
capitulating. And yes, we can say we are helping the people, 
which I think we should, but you have to hold that government 
accountable and you have to be willing to do that is what I 
see.
    And I yield back and I appreciate the second round, 
Chairman.
    Mr. Duncan. All right. This has been great. Do you have 
anything further?
    I want to thank the panel. Nicaragua is not a country that, 
since I have been here 6 years, other than when Chairwoman Ros-
Lehtinen was active in my first term, have we really delved 
into this. But what we are seeing, as brought out today, is 
just some things that we may not agree with going on with free 
and fair elections, and humanitarian rights, and strong 
military changes, and whatnot down there.
    So, we are going to continue focusing on it and I want to 
thank the service of our witnesses to our great Nation. And it 
is not lost on us, the sacrifices you make as well. So, thank 
you so much.
    I want to thank the committee for all of their 
participation, not only on the hearing but also on the markup.
    And without anything further, we will stand adjourned.
    [Whereupon, at 11:43 a.m., the subcommittee was adjourned.]

                                     
                                    

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