The Lost Revolution

A decade after laying down their arms, the Contras and the Sandinistas are squaring off in an election that could return Daniel Ortega to power. But no matter who wins, few expect an end to Nicaragua's economic misery

On the northern edge of Managua squats the destitute barrio of Acahualinca, a jumble of dirt paths lined by decrepit one-room shacks without running water or indoor plumbing. Here, a few miles from the heart of Nicaragua's capital, there is no commerce other than petty drug dealing. The economic center of the neighborhood is the municipal garbage dump, a massive field of waste that sprawls across 100 acres. On this afternoon in early June, a line of diesel trucks belch and dump their loads. Dozens of small fires fill the air with an acrid chemical smoke as scavengers, many of them children, sift through the waste for copper, aluminum, and other recyclables. Overhead a flock of buzzards circles in formation. The dump serves as home to hundreds of people. The more established residents have pieced together wood- and-metal shelters along the edges of the dump. The newly arrived make do with plastic or cloth lean-tos erected right among the trash heaps.

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Eddie Perez, a children's advocate with a nonprofit group called Dos Generaciones, is picking his way through the mounds of garbage. "The government's economic policy has only cut more and more services and jobs for the poor," he says. "They hate us, really. The government policy is to try and make all of us, all this, invisible." Perez nods to one of the younger scavengers. "A decade ago we thought we were going to get rid of child labor in the dump," he adds. "But it didn't work out. Now we realize it was only a dream."

Indeed, things were supposed to work out differently for all of Nicaragua. After decades of autocratic rule by the U.S-backed Somoza family, a 1979 uprising put the revolutionary Sandinistas and their leader, Daniel Ortega, in power. The Reagan administration spent billions of dollars to overthrow the Sandinistas, branding them as a pro-Cuban threat to the hemisphere. In 1990, when war-weary Nicaraguans voted Ortega out of office and elected a pro-American administration, the United States promised massive economic aid and a new era of prosperity.

But 11 years later, Nicaragua is anything but a showcase for free-market democracy. After toppling the Sandinistas, the United States essentially abandoned Nicaragua, failing to deliver significant aid for reconstruction after the prolonged Contra war. The Washington-backed governments that succeeded the Sandinistas have meanwhile bled the country dry through widespread corruption. The nation remains one of the poorest in an impoverished region, its 5 million residents beset by hunger, crime, and unemployment.

As the economy has deteriorated, Nicaragua has remained mired in its political past. More than two decades after the Sandinistas toppled Somoza, the two sides remain the dominant political forces in Nicaragua. In presidential elections scheduled for November, the old guard is represented by Enrique Bolaos, a 73-year old entrepreneur who was once jailed by the Sandinistas for supporting the Contras. On the left is none other than the man who imprisoned him, Daniel Ortega.

For much of the campaign, Ortega has actually been ahead in the polls, and many observers expect him to regain the presidency. But few in Nicaragua expect either candidate to ease the country's economic misery. Bolaos is an ally of the current president, Arnoldo Alemán, who is accused of using his office to enrich himself and his business cronies at the nation's expense. And the Frente Sandinista de Liberación Nacional (FSLN), led by Ortega, has largely abandoned its principles of social justice, recasting the party in the traditional Nicaraguan mold of political patronage and outright corruption. Over the past few years, Ortega has steamrollered internal opposition, expelled his own allies by the dozens, and forged a power-sharing pact with his right-wing rivals that effectively excludes smaller parties from the political system. The backroom deal also made Ortega a congressman for life—a position that conveniently provided him with immunity from prosecution just as he was facing charges of sexually molesting his own stepdaughter.

Ortega's political resurrection has alarmed the Bush administration, which dispatched diplomat Lino Gutierrez to Managua in June to rail against the front-runner. "Marxism is in the trash bin of history," Gutierrez declared in a high-profile speech intended to discredit the Sandinistas. "No country can indulge in the luxury of going back to the past." But given the current political landscape, the effort to cast Ortega as a Soviet-style menace strikes many Nicaraguans as laughable. "If the CIA had any brains," says one political analyst in Managua, "they'd have figured out by now that the Sandinistas not only don't represent a Marxist threat, but that long ago the party was taken over by opportunistic yuppies."

Beneath the cynicism, few in Nicaragua see any way out of the current plight. Many prominent Sandinistas have left the party, saying a victory by Ortega holds no promise of meaningful change. "We are in a dead-end tunnel with no light," says Joaquín Cuadra, the former commander of the Sandinista army who now leads an insurgent political party. "And we are going head—on into an economic, social, and political crack-up."

On the patio of a stylish restaurant in Managua, across from the pyramid-like Hotel Intercontinental, Manuel Ignacio Lacayo sips a lemonade as his bodyguards stand watch off to the side. He may be the second- or third-richest man in Nicaragua—wealthy enough that all of his holdings were once confiscated by the Sandinistas. After Ortega was defeated, the government returned car dealerships, factories, and the local Coca-Cola bottling franchise. "I am very comfortable, obviously," he says in flawless English. "But you would have to be pretty cold-blooded to enjoy life here amidst so much poverty."

Since the Sandinista defeat of 1990, Nicaragua has become, in the parlance of international lending institutions, "normalized." The revolutionary murals and the Che Guevara statues have given way to a thin crust of globalized commercial culture. The streets of Managua are much cleaner now, the old ruins of the devastating 1972 earthquake finally bulldozed. A handful of luxury hotels, a Hard Rock Café, and even two small shopping malls (revered by the wealthy "Nicas ricas" as veritable temples) line the newly paved roads. McDonald's and Domino's Pizza have eaten up some of the old taqueria stands, and a few casinos offer neon enticements.

But outside the five-star hotels, teenage hookers share sidewalk space with even younger Nicaraguans addicted to sniffing glue. With only 1 in 4 Nicaraguans claiming formal employment, young and old crowd the intersections, selling everything from towels, combs, and chewing gum to windshield wipers, cell-phone holders, and coconuts. Disabled war veterans—ex-Sandinistas and Contras alike—beg from their wheelchairs. Outside the palatial new headquarters of the Foreign Ministry, still under construction, barefoot kids stand on the scorching asphalt streets hawking little bags of drinking water, for a profit of less than a penny each.

Lacayo, known to all by his initials, MIL, shocked the nation in 1998 when he denounced President Alemán—and the business elite who support the government—for gross corruption and neglect of the poor. His defection was met with immediate reprisals: tax audits, red tape on his imports, and a cutoff of government contracts. MIL is now divesting himself of all his Nicaraguan holdings to make himself less vulnerable as he gets more deeply involved in opposition politics. His passion has been stirred by what he sees as unprecedented levels of neglect by Alemán. "That Nicaraguan business is inefficient and corrupt and that it doesn't know how to make a profit except from government graft is really old news," Lacayo says. "But never before has so little been dedicated to social spending and the poor. Even Somoza spent more on social services, and of course, so did the Sandinistas."

Statistics back up his grim portrait. Three-fourths of the population survives on less than $2 a day. Those few with stable employment earn an average of $150 a month. A third of the population is illiterate, and 600,000 people are stalked by malnutrition. "Nicaragua's traditional poverty is now turning into raw hunger," says Orlando Nuñez, a sociologist with a political think tank in Managua.

Along the roadsides of the city, President Alemán and his Constitutional Liberal Party (PLC) have erected self-congratulatory billboards reading "Deeds—Not Words." But the only deed for which Alemán has gained notoriety is his remarkable personal enrichment. The son of a Somocista judge, Alemán spent months in jail under Sandinista rule. In 1990 he was elected mayor of Managua, and in 1996 he defeated Ortega in the Sandinista's first bid to regain the presidency. Since then, Alemán has become the embodiment of what Latin American politicos call "The Washington Consensus"—the conservative, democratic, free-market model vigorously promoted by the United States. He has dutifully slashed the country's budget to meet harsh "structural adjustments" imposed by the International Monetary Fund and the World Bank, squeezing Nicaragua to pay the interest on its $6 billion in foreign debt. He has created a "business friendly" atmosphere for the opening of low-wage and nonunion Taiwanese- and American-owned maquiladora assembly plants. And he has continued the privatization policies of his predecessor, Violeta Chamorro.

All this was anticipated by Alemán's right-wing platform. What has not been explained is how he has come to own so much prime real estate during his years in public service. Or why he needs not one, but two heliports. Or how a new highway that is of little use just happens to cross three of his properties.

Estimating the extent of Alemán's graft has become something of a national pastime. "What Alemán has stolen is at least in the tens of millions," says one conservative business executive. Lacayo puts the figure at $60 million. "President Alemán is rumored to have said he wanted to skim a million dollars a month," Lacayo says. "I find that figure quite plausible." And a dissident congressman from Alemán's own party says that Alemán's wealth tops $250 million. "Even Somoza showed more respect for the citizenry," Sergio García Quintero told reporters, sounding a common refrain in Managua. "His criminal ethic had more limits."

Since Alemán is barred by the constitution from holding consecutive terms, the Liberals are represented this year by Bolaños, one of his former vice presidents. A physical cross between Harry Truman and Junior Soprano, Bolaños inspires little confidence that he represents a change from Alemán's policies. In his stump speech Bolaños promises an "austere government," but as vice president he was noticeably silent on the nancial scandals blossoming all around him. Nor does Bolaños offer much hope of bridging the yawning social and political chasms that divide Nicaragua. "I am a Contra," he declared in a recent campaign speech. "I will be the first democratically elected Contra. And I will govern in their interests."

Beyond such anti-Sandinista declarations, the PLC has little ground-level reality as a political party. On a recent Saturday morning, Bolaños supporters organized a campaign "caravan" through the dilapidated eastern neighborhoods of Managua. At the staging point, party officials in pressed chinos, polo shirts, and Ray-Bans busily organized the motorcade. Street gangs, replete with tattoos and bandanas, were hired to fill the marshaled pickup trucks and wave party flags. As the motorcade wound through the dank industrial barrios, sidewalk onlookers jeered and laughed.

The caravan arrived at the nearly deserted Calendaria Park, where another rent-a-crowd of impoverished Nicaraguans was packed into a school bus. Party officials brought a single Winnie the Pooh piñata to lure local families out from their dirt-floored shacks. When Bolaños showed up, the crowd was brought in to cheer him. Standing on the back of a sound truck, the candidate shouted a series of verbal jabs. His message was simple: Me—or the Sandinistas. "Knowing they have already lost, the Frente Sandinista doesn't want elections! Only we can guarantee peace in Nicaragua! Vote for us to keep the peace! Vote for us for jobs! For housing! For health care!" Bolaños offered no details. After five minutes, he was whisked away in an armored suv. His poll ratings remained stuck at about 30 percent.

The corruption of the ruling party would seem to offer an easy target for the left-wing Sandinistas, who stirred the poor into successful insurrection against the abuses and inequalities of the Somoza dictatorship. Once in power, the party seized large estates and distributed land to sharecroppers, raised wages, and enforced labor laws. The romance of the revolution packed a strong allure for a generation of social activists around the globe, attracting thousands of foreign "sandalista" volunteers who braved deprivation and armed Contra attacks as they harvested coffee or fanned out through the countryside, bringing medicine and education to the poor. The youthfulness of the Sandinista leadership, their embrace of popular culture, and their relative ideological flexibility as quasi-socialists burnished their image as a new breed of rock-'n'-roll revolutionaries. Ortega himself had, perhaps, his greatest moment as a statesman on the eve of his electoral defeat in 1990. After delivering an emotional concession speech and rightfully claiming credit for bringing democracy to Nicaragua, he turned the government over to his political rivalsÑmany of them armed enemies openly financed by a hostile foreign power.

Since then, however, the Sandinistas have increasingly grown to resemble those they once vilified. In the brief interim between their election defeat and the inauguration of their successors, the Sandinistas scurried to grab a chunk of the state they had controlled. In what became known as La Piñata, the FSLN gobbled up 200 cattle and coffee farms, factories, and media outlets and privatized them behind an intricate array of offshore firms, many of them based in Panama. Many of the commandantes, most notably Daniel's brother and former military chief Humberto Ortega, became powerful businessmen. The party elite were soon managing hotels, factories, even banks. "The Sandinistas have kidnapped our principles and betrayed our purest dreams," says a middle-aged psychologist who fought in the anti-Somoza insurrection.

At the same time, the Soviet Union collapsed and Cuba plunged into economic free fall, leaving the Frente an ideological orphan. "The Sandinistas are the only party here with a real grassroots machinery," says Carlos Fernando Chamorro, a former party member who edited Barricada, the now-defunct Sandinista daily newspaper. "But it has a leadership that is politically confused and for whom ideology isn't very important. Maybe they are free-marketeers, or maybe not. But more than anything, they are Danielistas."

Ortega has done his part to promote his personal image. The old red-and-black billboards spouting Sandinista slogans have been replaced by bright yellow ones reading simply "Daniel!" Ortega long ago hung up his stiffly ironed olive-drab military uniform; he now prefers to campaign in blue jeans and blousy white short-sleeved shirts. At age 55, he's still trim and energetic, but suffers from heart ailments that send him to Havana for periodic treatment. While still praising Cuba, he often peppers his public speeches with references to Jesus. As president in the 1980s, responding to the Contra attacks, Ortega crisscrossed the countryside delivering rifles to the citizenry; nowadays, his campaign rallies are likely to climax with Ortega standing on the back of a truck throwing out baseballs or rolls of toilet paper to onlookers desperate for such har-to-find commodities. "Anyone who has a house, a farm, a business, or any other type of property should feel secure," he reassured wealthy voters at one campaign stop in June. "Because never again will there be confiscations in Nicaragua."

Ortega lives in a Managua residence sealed off by eight-foot walls, razor wire, and manned guard turrets. His public life is equally closed. Ortega has crushed repeated attempts to democratize the FSLN, expelling internal critics and launching smear campaigns against outsiders. Many of the Frente's most acclaimed members have walked out in protest, including Ortega's former vice president Sergio Ramírez, former cabinet ministers Ernesto and Fernando Cardenal, the poet Gioconda Belli, and legendary guerrilla commander Dora María Téllez, who led the rst insurgent troops into Managua. By the mid-1990s, the Sandinistas found themselves stripped of their dazzling intellectual firepower.

"Daniel today reminds me of Michael Corleone at the end of The Godfather Part II," says a former bodyguard for a top Sandinista leader. "He has wiped out all his enemies and is all-powerful, but there he sits all sad and alone."

His own party weakened, Ortega decided to cut a deal with his right-wing opponents. During the 1996 elections, with two dozen parties fielding candidates, neither the Sandinistas nor the Liberals was able to command a simple majority. So the two sides began a series of secret negotiations that concluded last year in constitutional reforms known simply as El Pacto. The deal—which is reportedly opposed by up to 70 percent of Nicaraguans—gave the two parties a virtual monopoly on the political system. Smaller parties were required to submit unattainable numbers of signatures to qualify for elections, essentially forcing them off the ballot, and candidates can now win the presidency with as little as 35 percent of the vote, eliminating the need to form alliances with minority parties. "Alemán and Daniel found common interest in dividing up the political system," says Chamorro, the former Sandinista editor.

The deal did more than divvy up the government—it also granted former presidents Alemán and Ortega immunity from prosecution by making them lifelong congressmen. "The Sandinistas and the Liberals found two things they needed from each other," says María López Vigil, a political analyst in Managua and editor of the respected journal El Envío. "They both needed a way to eliminate minority parties. And they both needed impunity."

The pact was sealed last year just as Alemán faced calls for indictment on charges of corruption—and as Ortega was confronted by equally serious allegations. The Sandinista candidate's need for immunity can be summed up in one word: Zoilamérica. The adopted stepdaughter of Ortega, 33-year-old Zoilamérica Narváez Murillo is a direct descendant of the legendary guerrilla leader Augusto Sandino. A committed Sandinista activist, Narváez rocked the nation in March 1998 when she accused Ortega of 20 years of sexual abuse, including rape, starting when she was 11. The Sandinistas responded with a propaganda campaign smearing her as a CIA agent, mentally ill, and a lesbian. Narváez, who was once married to one of Ortega's closest advisers, then filed felony charges against her stepfather.

Since Ortega enjoyed limited political immunity at the time, the courts passed the complaint on to the national congress. There the PLC joined its Sandinista rivals in simply ignoring the charges until the pact was cemented and the leaders of both sides were immunized. Now Narváez has taken her case to the Interamerican Court of Human Rights, the legal arm of the Organization of American States, suing the Nicaraguan government for denying her access to justice.

Ortega refused repeated requests for an interview, but Narváez agreed to break her self-imposed silence in a conversation at her modest home in Managua. Tall, soft-spoken, and highly articulate, she unleashed a torrent of anguish as her two young children played nearby. "I'm on a tightrope, because in this election year anything can happen," she says. "If I speak out, the Liberals can try and use me in some partisan maneuver against Daniel Ortega. But if I am silent, then the Frente will say that I am exonerating him, something I have no intention of doing."

"The greatest error that my Sandinista brothers and sisters made has been fear of cleansing themselves of anything and everything that has stained our ideals," she continues. "I was afraid to start over, but I did. The Sandinistas have to do the same thing. The biggest tragedy is that Daniel has now subjected the entire political strategy of the Frente Sandinista to his personal needs and fears. It has brought him closer than ever to the Somocistas." And if Ortega is elected president? "Nothing changes," she says. "I will pursue the case until the truth is recognized."

Ortega has denied the allegations, and even Narváez's most ardent supporters acknowledge that given the power-sharing pact between the Sandinistas and Liberals, her charges are likely to have little effect on the elections. "Ask me about Zoilamérica and I will tell you clearly: I absolutely believe her," says Dora María Téllez, the former Sandinista commander. "But this is a society where incest is common, and no one wants to come to terms with it. It's just not going to be a political issue."

The pact did not succeed in eliminating every opposition party. The Conservative Party survived, and is determined to run its own slate in the upcoming elections. That would likely split the anti-Sandinista vote, opening the path to a possible Ortega victory. But few expect his election to make any difference, given the extent of the current economic devastation. "The Sandinistas will have little margin of maneuver if they win," says former Sandinista General Joaquín Cuadra. "The Sandinistas might be able to manage the crisis, but they can't resolve it."

Cuadra and other former Sandinistas, along with dissidents from the right, have been struggling for the past two years to build a "third way" alternative to Ortega and Alemán. "Neither right nor left, but rather democratic and modern," says Cuadra. The idea had attracted an impressive list of supporters—including Manuel Ignacio Lacayo, the wealthy and outspoken businessman known as MIL—but the power-sharing pact scuttled efforts to legalize a party representing the new coalition.

Things have grown worse during the campaign.In June, protesters staged hunger strikes in the lobby of the Supreme Electoral Council to denounce its attempts to disqualify third-party candidates. Coffee farmers, shaken by falling prices, threatened to blockade major roads. Bus owners, pressed by soaring gasoline prices, raised fares by almost 50 percent. That, in turn, brought thousands of students into the streets to demand lower fares. Riot police responded with tear gas and rubber bullets. Then bus owners went out on their own strike, forcing many maquiladora employees to get to work aboard ox-drawn carts.

"The number of people who have fallen into extreme poverty here is a ticking time bomb," says Lacayo. "In the days ahead, there is either going to be a whole lot more apathyÑor a whole lot more anarchy."