The Four Horsemen of Corruption and US Sanctions

Headline news February 10th was the fact that the Ortega government rushed through a bill approving four new businesses related to the import, processing and sale of hydrocarbons. It was largely viewed as a work-around US sanctions on existing companies that handled that trade, all related to the ruling family. The obvious question was why wouldn´t the US just sanction these new companies? Three days prior the Nicaraguan public was surprised by the news that the Government had suddenly allowed newspaper supplies belonging to La Prensa to be released from customs, after being detained without legal justification for over 500 days. It raised the question about whether the two events were related, suggesting some kind of exchange where the US agreed not to sanction the new enterprises in exchange for Ortega making some concessions on his part?

What has been clear since Ortega came back to power in 2007 is that the US has prioritized stability over ideology, as it regularly praised Ortega´s management of the economy. Is this a sign that the US is questioning whether to “get off the horse it rode in on”, if it is not clear the next horse will be any more stable?  A well- known economist, essayist and past president of the Movement for Sandinista Renovation addresses the issues raised by these new businesses in the following article.

The Four Horsemen of Corruption and the US Sanctions

By Enrique Sáenz, February 19, 2020 in Confidencial

[original Spanish]

Last week Ortega offered another demonstration of why his regime is described by prestigious international organizations as the most corrupt in Central America; the third worst in Latin America, only bested by Venezuela and Haiti; and located in the most corrupt stretch in the world.

The servants of the dictator in a pen-stroke approved four laws whose purpose was to continue benefitting fraudulent businesses of the ruling family. Another demonstration, as if it were needed, that our ill-fated country is the only one in the world, or in any case, one of the very few, where corruption is granted legal status.

In any moderately, or rather, minimally civilized country, corruption constitutes a crime. Depending on the degree of corruption in a country, the courts pursue fraud with greater or lesser determination, but they do not cease to be crimes. Here no. Here in the most shameless manner they grant legal hierarchy to his atrocities. It is enough to recall the concessions for the Tumarín dam, the custom scanners or the interoceanic canal project, all turned into laws.

To what do these four laws refer?  Through these laws they created four state enterprises that will handle the oil and fuel business, beginning with their importation, passing through storage, distribution and commercialization. They include even oil exploration. From here on they will be known by their acronyms: ENIH, ENIGAS, ENICOM and ENIPLANH.

What is the purpose of the creation of these enterprises?

Let us recall that some months ago the US Administration sanctioned the DNP company, which concentrated a good part of the trade in hydrocarbons.  Up to some years ago the company was State owned, but magically became the private property of the ruling family. The sanctions opened up a big hole in the lucrative business of the mafia in power.

Anyone will wonder,  if the DNP was private property, on what basis are public businesses now founded to take charge over trade in hydrocarbons?

Simple. Because Ortega thinks that Nicaragua is his farm, and that he can do, and undo  whatever he wants here. It would be difficult to find another country where a similar confusion might reign between State interests and the private interests of the family in power.

The next question that emerges is: if PETRONIC already exists, whose creating law assigned it the same powers as the new businesses…Why were they created? The response is that PETRONIC is now tinted by its connection with ALBANISA.

Let us go then to the specific issues. After reading the texts approved by Ortega´s deputies, it is evident that these new four horsemen of corruption pursue the following purposes:

  • The first purpose is to get around the sanctions imposed by the US government on the DNP company. Since this business is now contaminated, they are inventing others, this time under the shield of the State.
  • The new enterprises will serve as a screen so that the governing family can continue milking the lucrative fuel business. The control of the business and abuse of political power allows them to impose prices that amply surpass prices prevalent in the rest of the Central American countries. Hundreds of millions of dollars have been pocketed in overpricing.
  • In terms of the company that will handle oil exploration, let us remember that they already began the business of granting concessions to companies under the responsibility of front men, so that they can go and trade internationally. Pan American is one of those companies.
  • Fourthly, and this is extremely dangerous, they established the legal and institutional infrastructure to transfer, in an underhanded way, the oil debt with Venezuela, which is around 4 billion dollars. In an unprecedented heist they have roughly pocketed the funds of the oil aid that was the key pivotal point for building one of the wealthiest economic groups in the country, forging alliances, buying consciences, and feeding patronage policies.

It is worth remembering that the same stunt they tried to use with BANCORP, the bank of the ruling family- also sanctioned by the US administration under accusations of money laundering. On that occasion they approved the law to sell the bank to the State, but the sanctions arrived before-hand, and they did not have any other option than liquidating the bank.

What ruses will they use to achieve their purposes?

There is no need to be a fortune teller to know. In the texts that they approved, they empowered the four companies to establish alliances, partnerships and even new companies with national or foreign private businesses. This is the pathway that they will surely follow: establish forms of partnerships with covert businesses of the ruling mafia. At this juncture of the party, with the protection of Ortega´s servants in the Supreme Court, that turned the public property registry into clandestine records, you can bet that the companies that will mask the business have already been created and registered. In this way they will try to escape the sanctions, and following its previsions, will be able to continue to profit from the business. In the process they will even be able to remain formally exempt from paying taxes.

Finally, we should not be surprised that they form partnerships with companies derived from ALBANISA, under forms of association that incorporate liabilities and assets, as a means to unload portions of the debt with Venezuela on the State.

Anything can be expected from these deadbeats.

It will have to be seen if the US authorities swallow the story.


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