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U.S.-linked business group takes sides in Nicaragua

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WASHINGTON >> As president of the American Chamber of Commerce of Nicaragua, Roger Arteaga Cano routinely dealt with business issues and trade practices affecting members like ExxonMobil or Citigroup. But he also led an unusual campaign: organizing secret meetings with opposition party leaders in an effort to oust President Daniel Ortega in an election this year.

A former official in the previous government led by a rival party, Arteaga turned the chamber into a harsh critic of Ortega, the leftist Sandinista party leader and longtime adversary of the United States.

On the group’s behalf, Arteaga issued fiery denunciations of the Nicaraguan government and its governing party, calling its policies unconstitutional and its style that of “gangsters” or “terrorists.” He briefed officials at the U.S. Embassy in Managua, the capital, and in Washington on his efforts to spur an effective challenge to Ortega, winning their tacit approval.

The chamber’s activities over the past two years — detailed in interviews with Nicaraguan officials and business executives and in State Department cables obtained by WikiLeaks — illuminate the remarkable role the foreign affiliates of the U.S. Chamber of Commerce sometimes play in the politics of their host nations. Occasionally they are at odds with U.S. policy. But often, the chamber groups are so aligned with it that they appear to act as unofficial instruments to advance the U.S. government’s goals.

Created more than a century ago to promote the interests of U.S. corporations, the groups — nicknamed AmChams — today operate in more than 100 countries. While many affiliates appear to restrict their activities to issues like opening access to government contracts or combating the counterfeiting of name-brand goods, others, like the Nicaraguan group, seek broader influence, echoing the role increasingly played in Washington by the U.S. Chamber of Commerce.

In Honduras, for example, executives at the U.S.-affiliated chamber expressed support for the June 2009 coup d’etat that forced out President Jose Manuel Zelaya, the State Department cables say. After leaders in the group applied pressure on the Obama administration, U.S. officials retreated from their initial demands that Zelaya be allowed to return to power.

In Taiwan, the chamber got into a nasty public dispute with a pro-independence party there, suggesting that the party was holding the nation hostage to its belief that trade between China and Taiwan should be limited, the cables say.

Kevin Casas-Zamora, who served as a minister of economic policy and second vice president of Costa Rica until 2007, said that overt political action by a U.S.-affiliated business group was almost always counterproductive.

“It is a really bad idea, and it tends to backfire,” he said, noting that the logo for the American Chamber of Commerce of Nicaragua included the U.S. flag. “You are simply handing on a platter a rhetorical weapon that someone like Ortega will surely use against you.”

Indeed, the political intervention embraced by Arteaga — he has just stepped down after his two-year term as the chamber’s president — has been denounced by the Nicaraguan government and other supporters of Ortega as unwelcome meddling by the United States.

“Every time outside forces have sought to interfere in Nicaragua’s internal affairs, the result has been harmful to the Nicaraguan people,” Francisco Campbell, Nicaraguan ambassador to the United States, said in an interview.

Executives at the U.S. Chamber of Commerce in Washington, who came under scrutiny last year for spending tens of millions of dollars on advertising that helped Republicans in the midterm congressional elections, said it had played no role in instigating political activity by foreign chamber groups.

“AmChams are independent of the U.S. Chamber of Commerce in terms of the policies they advocate,” a chamber spokeswoman said in a statement. The U.S. chamber collects dues from its international members and approves the creation of any new foreign affiliate.

DRIVEN BY DISDAIN

In 2009, when Arteaga took over as the unpaid president of the chamber in Nicaragua — his small consulting firm has a corporate client based in the United States, making him eligible for membership — he began challenging Ortega almost from the start. The former top federal tax official under a previous administration, Arteaga was driven by disdain for Ortega, who was elected in 2006, after serving as president from 1985 to 1990 and as a leader of the post-revolution junta from 1979 to 1985.

The animosity only grew as the Ortega government took actions that the chamber — along with many other groups in Nicaragua — viewed as violating the rule of law in an effort to expand its power, like a ruling that Ortega could run again for president this year, even though the constitution prohibits a sitting president from seeking re-election.

“He has violated the constitution of this country so many times he deserves a spot in the Guinness record book,” Arteaga said, adding that such steps discouraged investment by U.S. companies. “The business community is worried. There is bread now, but there will be hunger tomorrow.”

A HISTORY OF UNSUBTLE AID

During the Reagan administration, the CIA secretly provided aid to right-wing rebels who tried to overthrow Ortega, assistance that ultimately resulted in the Iran-contra scandal. Since then, Washington has tried to play its hand more subtly, the State Department cables show, in part by encouraging business and civic leaders in Nicaragua to rally behind pro-U.S. candidates or take stances supporting U.S. views.

During the administration of President George W. Bush, for example, U.S. officials considered asking General Electric’s corporate financing division to pressure Carlos Pellas, a prominent Nicaraguan banker and sugar mill executive, to support one of Ortega’s rivals, according to a March 2006 cable. (The cables do not make it clear whether the proposal was ever carried out.)

While the Obama administration has tried to refrain from intervening in domestic politics, Arteaga was not so shy. Working behind the scenes, he helped organize meetings among leaders of opposition parties, urging them to put aside their personal political ambitions and together support a single candidate or party to challenge the president.

After one such gathering in December 2009, the U.S. Embassy noted Arteaga’s role in cables to Washington.

“The group has been working for the last several months to bring opposition groups, civil society, and the business community together to confront President Daniel Ortega, preserve democratic space and form a united bloc to challenge Ortega and/or the Sandinista National Liberation Front (FSLN) in the 2011 national elections,” the cable said. An earlier cable, in August 2009, called Arteaga one of the two primary leaders of the opposition unity effort.

Robert J. Callahan, the U.S. ambassador to Nicaragua, confirmed in a telephone interview that he had attended the December 2009 meeting with Arteaga at the home of Cesar Zamora, Arteaga’s predecessor as chamber president and an executive of AEI, a Houston-based energy company.

But the U.S. government did not request any of the actions taken by Arteaga and other business executives, he said.

“If they are articulating policies that we agree with, then fine, it is a coincidence of views there,” he said.

Callahan added that the goal of the United States was to encourage a vibrant democracy in Nicaragua.

Yet cables sent by Callahan to Washington go a bit further, suggesting that the embassy at least indirectly encouraged groups like the chamber to work to unify the opposition to Ortega and his party.

“We will continue to encourage all pro-democratic groups to work together to advance their common goals, including uniting for 2011,” said an August 2009 cable, which also mentions Arteaga and his role as American Chamber president. “It is clear that this message has been understood by some in the political and business community, fostering the above unity efforts.”

Arteaga, in an interview, said his effort to unify the opposition was supported by some chamber members and representatives on its board, an assertion confirmed by several chamber members. Arteaga added that his intervention came not at the request of any U.S. corporation, but reflected a consensus of chamber members. But in a second interview, he said he was acting on his own, particularly in endorsing an opposition presidential candidate.

POLITICS AND APPEARANCES

Such a distinction was not always recognized by others. Arteaga said he was investigated by Nicaraguan officials who asked for the chamber’s financial records as well as his own to see if he was secretly being paid $10,000 a month by the CIA. (Both Arteaga and Callahan denied any payments.)

But the appearance that the United States was intervening in Nicaraguan affairs — through actions by the American Chamber or the embassy there — provoked an angry response.

In October 2009, after Callahan spoke at an event sponsored by the American Chamber of Commerce and echoed comments by chamber leaders condemning a Supreme Court decision allowing Ortega to run for re-election despite term limits, hundreds of demonstrators appeared outside the U.S. Embassy in Managua. Holding up signs saying “Death to Empire” and “Yankee Go Home,” some protesters even launched explosive projectiles at the building, according to a State Department cable.

Last month, a newspaper in Nicaragua accused Arteaga of turning the chamber into a “political conspiracies’ nest,” a charge that drew a defense from the U.S. ambassador, who said the story falsely claimed that he believed that Arteaga had gone too far.

“We reiterate our excellent working relationship with the AmCham and excellent and fluid relations and friendship with its director, Roger Arteaga,” an embassy statement said.

Yali Molina Palacios, an international lawyer who just succeeded Arteaga as the chamber president, said in an interview that the chamber’s efforts to unify the opposition to Ortega had not succeeded and that he would curtail them.

Molina said that the American Chamber would continue to speak up if the Ortega administration took actions that violated the constitution. But his own reading of the organization’s bylaws makes clear that the chamber is prohibited from endorsing political candidates, he said.

He pointed out that Nicaragua’s economy appeared to be growing and that foreign investment was on the rise. And Ortega is likely to win re-election in November.

“Don’t get enemies,” Molina said. “Get friends.”

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