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Socialist political party founded in the 1960's
- Overthrew dictator Anastasio Somoza in 1979
- Ruled Nicaragua from 1979-1990
- Iran-Contra Affair (U.S Scandal)
- Height of Cold War, U.S thought Sandinistas were a communist threat

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The Sandinistas are a Nicaraguan political party, the Sandinista National Liberation Front or FSLN ( Frente Sandinista de Liberación Nacional in Spanish). The FSLN overthrew Anastasio Somoza in 1979, ending 42 years of military dictatorship by the Somoza family and ushering in a socialist revolution.

The Sandinistas, under the leadership of Daniel Ortega, governed Nicaragua from 1979 to 1990. Ortega was subsequently re-elected in 2006, 2011 and 2016. Under his current regime, Ortega has demonstrated increasing corruption and authoritarianism, including a violent repression of student protests in 2018.

Key Takeaways: The Sandinistas

The Founding of the FSLN

Who Was Sandino?

The FSLN was named after Augusto César Sandino, the leader of a fight against U.S. imperialism in Nicaragua in the 1920s. Many of Nicaragua's institutions-banks, railroads, customs-had been turned over to American bankers. In 1927, Sandino led an army of peasants on a six-year battle against the U.S. Marines, and succeeded in ousting American troops in 1933. He was assassinated in 1934 on the orders of Anastasio Somoza García, commander of the U.S.-trained National Guard, who would soon become one of Latin America's most notorious dictators.

Carlos Fonseca and FSLN Ideology

The FSLN was founded in 1961 by Carlos Fonseca, Silvio Mayorga, and Tomás Borge. Historian Matilde Zimmerman characterizes Fonseca as the heart, soul, and intellectual leader of the FSLN "who most epitomized the radical and popular character of the revolution, its anti-capitalist and anti-landlord dynamic." Inspired by the Cuban Revolution, Fonseca's two personal heroes were Sandino and Che Guevara. His goals were two-fold: in the vein of Sandino, national liberation and sovereignty, particularly in the face of U.S. imperialism, and secondly, socialism, which he believed would end the exploitation of Nicaraguan workers and peasants.

As a law student in the 1950s, Fonseca organized protests against the Somoza dictatorship, following Fidel Castro's fight against the Cuban dictator Fulgencio Batista closely. In fact, Fonseca traveled to Havana just months after the triumph of the Cuban Revolution in 1959. He and other leftist students began to recognize the need to bring a similar revolution to Nicaragua.

The FSLN was founded while Fonseca, Mayorga, and Borge were in exile in Honduras, and included members who had left the Nicaraguan Socialist Party. The goal was to try and replicate the Cuban Revolution utilizing Guevara's "foco theory" of guerilla warfare, which entailed fighting the National Guard from bases located in the mountains and eventually inspiring a mass uprising against the dictatorship.

Early Actions of the FSLN

The Sandinistas mounted their first armed insurgency against the National Guard in 1963, but were ill-prepared. Among the various factors, the FSLN, unlike the guerillas in the Sierra Maestra mountains of Cuba, did not have a well-established communication network and had limited military experience; many eventually received military training in Cuba. Another factor was the booming economy in 1960s Nicaragua, particularly tied to agricultural production (cotton and beef) and propelled in large part by U.S. aid. As Zimmerman states, the small Nicaraguan middle class "was culturally very much oriented toward the United States."

Nonetheless, there was vast income inequality, particularly in the Nicaraguan countryside, and wide scale migration to the cities in the 1950s and 60s. By the end of the 1960s, half the country's population lived in Managua, and the vast majority survived on less than $100/month.

In 1964, Fonseca was arrested and accused of plotting to assassinate Anastasio Somoza Debayle-the son of the first Anastasio Somoza, who had been assassinated in 1956; his son Luis ruled from 1956 until his death in 1967, and the junior Anastasio took over at that time. Fonseca was deported to Guatemala in 1965. He and other FSLN leaders were forced into exile in Cuba, Panama, and Costa Rica for much of the 1960s. During this time, he researched and wrote about Sandino's ideologies, believing his revolutionary work was destined to be completed by the FSLN.

Meanwhile, in Nicaragua, the FSLN focused on educational work, including literacy classes, and community organizing with the goal of recruiting members. In 1967, the FSLN planned their next insurgency in the remote Pancasán region. Fonseca entered the region and began to identify peasant families who would provide food and shelter. This was tricky, as many of the peasants had relatives in the National Guard, and the Sandinistas' strategy depended upon their movements being clandestine. There were several clashes with the National Guard, which ultimately wiped out Mayorga's entire column, including killing the FSLN leader himself.

Another blow to the Sandinistas was the failed excursion and eventual death of Che Guevara in Bolivia in October 1967. Nonetheless, the FSLN went on the offensive in 1968 in attempting to recruit new members, and Fonseca focused on getting urban students to understand the necessity of armed insurgency and a complete overturning of the capitalist system.

The FSLN in the 1970s

During the early 1970s, many Sandinista leaders were jailed, including eventual president Daniel Ortega, or killed, and the National Guard employed torture and rape. Fonseca was imprisoned again in 1970, and upon his release he fled to Cuba for the next five years. By this time, the FSLN was looking to the examples of China and Vietnam and transitioning to a Maoist military strategy of "protracted people's war" with a base in the countryside. In the cities, a new clandestine insurgency arose, the Proletariat Tendency. The devastating 1972 Managua earthquake killed 10,000 people and destroyed around 75% of the capital's housing and commerce. The Somoza regime pocketed much of the foreign aid, provoking widespread protest, particularly among the upper and middle classes.

In 1974, the Sandinistas launched an "insurrectional offensive" and began to make political alliances with the bourgeoisie in order to gain more widespread support. In December 1974, 13 guerillas attacked a party thrown by elites and took hostages. The Somoza regime was forced to meet the FSLN's demands and recruitment skyrocketed.

Fonseca returned to Nicaragua in March 1976 to mediate between the two factions within the FSLN (the prolonged people's war and urban proletariat groups) and was killed in the mountains in November. The FSLN subsequently split into three factions, with the third called the "Terceristas," led by Daniel Ortega and his brother Humberto. Between 1976 and 1978, there was virtually no communication between the factions.

The Nicaraguan Revolution

By 1978, the Terceristas had reunited the three FSLN factions, apparently with guidance from Fidel Castro, and the guerilla fighters numbered around 5,000. In August, 25 Terceristas disguised as National Guardsmen assaulted the National Palace and took the entire Nicaraguan Congress hostage. They demanded money and the release of all FSLN prisoners, which the government eventually agreed to. The Sandinistas called for a national uprising on September 9, which kicked off the Nicaraguan Revolution.

By spring 1979, the FSLN controlled various rural regions and major uprisings were beginning in the cities. In June, the Sandinistas called for a general strike and named members of a post-Somoza government, including Ortega and two other FSLN members. The Battle for Managua began in late June, and the Sandinistas entered the capital on July 19. The National Guard collapsed and many fled into exile into Guatemala, Honduras, and Costa Rica. The Sandinistas had gained complete control.

The Sandinistas in Power

The FSLN set up a nine-member national directorate composed of three leaders of each previous faction, with Ortega at the head. The Sandinistas shored up their grassroots support and equipped their military, with help from the USSR. Although ideologically the Sandinistas were Marxist, they did not impose Soviet-style centralized communism, but rather retained elements of a free-market economy. According to political scientist Thomas Walker, "During the entire [first] seven years, the Sandinistas promoted (1) a mixed economy with heavy participation by the private sector, (2) political pluralism featuring interclass dialogue and efforts to institutionalize input and feedback from all sectors, (3) ambitious social programs, based in large part on grass roots voluntarism, and (4) the maintenance of diplomatic and economic relations with as many nations as possible regardless of ideology."

With Jimmy Carter in office, the Sandinistas were not immediately threatened, but all that changed with the election of Ronald Reagan in late 1980. Economic assistance to Nicaragua was halted in early 1981, and later that year Reagan authorized the CIA to fund an exile paramilitary force in Honduras to harass Nicaragua. The U.S. also leaned on international organizations, such as the World Bank, to cut off loans to Nicaragua.

The Contras

Peter Kornbluh states of the Reagan administration's covert war, "The strategy was to force the Sandinistas to become in reality what [U.S.] administration officials called them rhetorically: aggressive abroad, repressive at home, and hostile to the United States." Predictably, when the CIA-backed "Contras" (short for "counterrevolutionaries") began to engage in sabotage in 1982-blowing up a bridge near the Honduran border-the Sandinistas reacted with repressive measures, which confirmed the Reagan administration's claims.

By 1984, the Contras numbered 15,000 and U.S. military personnel were becoming directly involved in acts of sabotage against Nicaraguan infrastructure. Also that year, Congress passed a law banning the funding of the Contras, so the Reagan administration resorted to covert funding through the illegal sale of arms to Iran, what was eventually referred to as the Iran-Contra affair. By late 1985, the Nicaraguan Ministry of Health estimated that over 3,600 civilians had been killed by Contra action, with many more being kidnapped or wounded. The U.S. was also economically strangling the Sandinistas, blocking approval of their loan requests to the World Bank and, in 1985, instituting a full economic embargo.

The mid-1980s were also a time of economic crisis in Nicaragua due to Venezuela and Mexico cutting oil supply to the country, and the Sandinistas were forced to rely increasingly on the Soviets. National funding for social programs was cut and redirected toward defense (to take on the Contras). Walker asserts that Nicaraguans rallied around their government in the face of the this imperialist threat. When elections were held in 1984 and the Sandinistas captured 63% of the vote, the U.S. unsurprisingly denounced it as fraud, but it was certified as a fair election by international bodies.

The Fall of the Sandinistas

The war against the Contras and U.S. aggression resulted in the national directorate pushing aside non-FSLN voices and becoming more authoritarian. According to Alejandro Bendaña, "Signs of decomposition were rife in the FSLN. With the unabashedly vertical command structure came arrogance, luxurious lifestyles, and personal and institutional vices...The relentless U.S. destabilization campaign and the crippling economic embargo embittered much of the population against the Sandinista government."

The Church, then Costa Rican President Oscar Arias, and Congressional Democrats mediated a political transition and the organization of free elections in 1990. The FSLN lost the presidential election to a U.S.-assembled coalition headed by Violeta Chamorro.

The Sandinista Front became an opposition party, and many members were left disillusioned with the leadership. Throughout the 1990s, the remaining FSLN leaders rallied around Ortega, who consolidated power. In the meantime, the country was subjected to neoliberal economic reforms and austerity measures that resulted in increasing rates of poverty and international debt.

The Sandinistas Today

After running for president in 1996 and 2001, Ortega was reelected in 2006. Among the parties he beat out was an FSLN breakaway group called the Sandinista Renovation Movement. His victory was made possible by a pact he made with the conservative, famously corrupt president Arnoldo Alemán, a former bitter rival of Ortega's who was found guilty of embezzlement in 2003 and sentenced to 20 years in jail; the sentence was overturned in 2009. Bendaña suggests this marriage of convenience can be explained by both parties wanting to evade criminal charges-Ortega has been accused of sexual assault by his stepdaughter-and as an attempt to shut out all other political parties.

Ortega's political ideology in the new millennium has been less stridently socialist, and he began to seek foreign investment to address Nicaragua's poverty. He also rediscovered his Catholicism, and just before he was reelected he refused to oppose a complete abortion ban. In 2009, the Nicaraguan Supreme Court removed constitutional barriers to Ortega running for another term, and he was reelected in 2011. Further amendments were made to allow him to run (and win) in 2016; his wife, Rosario Murillo, was his running mate and she is currently the vice president. In addition, Ortega's family owns three TV channels and harassment of the media is common.

Ortega was widely condemned for the brutal repression of student protests in May 2018 related to proposed cuts to the pension and social security systems. By July, over 300 people were reported killed during the demonstrations. In September 2018, in a move that increasingly paints Ortega as a dictator, his government outlawed protest, and human rights violations, from illegal detention to torture, have been reported.

Born as a revolutionary group seeking to overthrow a repressive dictator, the Sandinistas under Ortega appear to have become an oppressive force in their own right.

Bendaña, Alejandro. "The Rise and Fall of the FSLN." NACLA, September 25, 2007. https://nacla.org/article/rise-and-fall-fsln, accessed 1 December 2019.

Meráz García, Martín, Martha L. Cottam, and Bruno Baltodano. The Role of Female Combatants in the Nicaraguan Revolution and Counter Revolutionary War. New York: Routledge, 2019.

"Sandinista." Encyclopaedia Brittanica.

Walker, Thomas W, editor. Reagan versus the Sandinistas: The Undeclared War on Nicaragua. Boulder, CO: Westview Press, 1987.

Zimmermann, Matilde. Sandinista: Carlos Fonseca and the Nicaraguan Revolution. Durham, NC: Duke University Press, 2000.

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The Sandinistas are a Nicaraguan political party, the Sandinista National Liberation Front or FSLN ( Frente Sandinista de Liberación Nacional in Spanish). The FSLN overthrew Anastasio Somoza in 1979, ending 42 years of military dictatorship by the Somoza family and ushering in a socialist revolution.

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Fought with the Sandinistas to overthrow dictatorship
Elected in 1984 as leader
Lost elections throughout the 90's
Won elections in 2006, 2011, 2016
Uprisings against him in 2018

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Daniel Ortega: From revolutionary leader to opposition hate figure

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Daniel Ortega, the veteran Sandinista revolutionary, is sworn in for a fourth term as president.

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A rally to support the Roman Catholic Church, which has been accused of supporting the opposition to President Daniel Ortega, in Managua, Nicaragua, July 28, 2018. (Daniele Volpe/The New York Times)

Leer en español
Is Nicaragua's descent into dictatorship irreversible? USIP's Keith Mines and Mary Speck examine the strengths and weaknesses of the Ortega government, the state of the domestic opposition, the implications for rule of law in the rest of Central America and options for U.S. policymakers.

How solid is President Ortega's control of the country post-election, and where does the opposition stand?

Ortega's victory was pre-ordained, but also precarious. Only one in five registered voters cast ballots, according to an electoral watchdog. Independent Nicaraguan media reported that polling places were almost empty, and the streets nearly deserted. A recent Gallup poll found that four out of five Nicaraguans consider the election illegitimate.

Opposition groups claimed a moral victory, calling the high abstention rate an act of protest. "The people rule and today made their decision: not to legitimate this masquerade," said the dissident Civic Alliance. "The citizenry did not believe Ortega's claim that this was a serious election," said Jesús Téfel, an exiled analyst affiliated with the Blue and White Unity coalition. "It was also a call for help to the international community." But at the end of the day the opposition is weakened and in disarray.

Thus far Ortega has remained defiant, dismissing his opponents as the "sons of Yankee imperialist bitches." His government has detained a laundry list of opponents, including presidential hopefuls Cristiana Chamorro and Juan Sebastian Chamorro, the daughter and nephew-in-law of ex-president Violeta Chamorro; Arturo Cruz, a former foreign minister; and Félix Maradiaga, an academic and activist.

Ortega knows that he cannot maintain control without promoting economic growth in one of the region's poorest countries. Nicaragua's GDP shrank nearly 9 percent between 2017 and 2020, under the pressure of political turmoil compounded by the COVID pandemic. Economic activity started to rebound in early 2021, fueled by remittances, rising exports and renewed investment. The International Monetary Fund also helped, sending the country more than $350 million in August 2021 to fight hunger and the COVID pandemic. But it is all very tenuous.

What about the international and regional reaction to the elections? Are there fears that other Central American leaders could take a page out of Ortega's playbook in bids to maintain their own power?

The United States, United Kingdom, and the European Union (EU) have all condemned the election as illegitimate, along with Chile, Colombia, Ecuador and Peru. Russia, Cuba, Venezuela and Bolivia sent congratulations.

Within Central America, reactions were mixed. President Carlos Alvarado of Costa Rica said his government would not recognize the results as did the foreign minister of Panama. President Nayib Bukele of El Salvador dismissed the Nicaraguan vote as a "farce." Guatemala expressed "concern" but joined Honduras, Argentina and Mexico in abstaining from an Organization of American States (OAS) resolution in October demanding that Nicaragua release political prisoners and ensure free elections.

Though neither has gone as far as Ortega, Presidents Alejandro Giammattei of Guatemala and Juan Orlando Hernández of Honduras have presided over democratic backsliding, undermining anti-corruption investigations and threatening civil society. And although El Salvador's president criticizes Ortega, his government has also passed measures that threaten judicial independence.

All three leaders have rebuffed U.S. criticism. Bukele brags that he's the " world's coolest dictator." Giammattei continues to back his attorney general despite the U.S. decision to suspend cooperation with her office. And Hernández, labeled a co-conspirator in the drug case against his brother (now serving a life sentence in New York), has denounced prosecutors' allegations as "vile lies." The three countries have all disbanded the internationally supported anti-corruption commissions that were beginning to investigate and prosecute high-level offenders.

There is no doubt they are testing the limits of U.S. influence and will be watching what the Biden administration does in neighboring Nicaragua.

President Biden denounced the elections as "a pantomime" and Congress has approved legislation to ramp up diplomatic pressure on the Ortega government. After the polls, what other options might the Biden administration pursue?

The Biden administration faces a dilemma: Targeted, individual U.S. sanctions have failed to significantly change the Sandinista regime's behavior. The United States has already blacklisted high-level officials, including the president of the Nicaraguan Central Bank, the general in charge of the military's pension fund and the president's daughter. The EU has also sanctioned Nicaraguan officials.

The RENACER Act, passed by Congress in early November, instructs the Biden administration to consider wider measures, including Nicaragua's expulsion from CAFTA-DR, a regional free-trade agreement. But comprehensive sanctions would hurt ordinary Nicaraguans, forcing more of them to seek political sanctuary and economic opportunity abroad. More than 100,000 Nicaraguans have formally sought refuge in Costa Rica since 2018, joining an expatriate community that numbers more than 300,000.

The number of Nicaraguans arriving at the U.S. border has also increased. The U.S. border patrol stopped about 50,000 Nicaraguans at the southern border in the first nine months of 2021.

So how can the United States encourage the government to change its behavior without punishing the Nicaraguan people?

The United States should work with foreign allies and Nicaraguan democratic actors to craft an approach that offers both pressure and relief. Targeted sanctions remain the easiest option, but they must be coordinated with other countries and better synchronized internally with other U.S. policy tools. There may be an opening at some point for more of a roadmap type approach that better links specific pressure relief by the United States or EU to tangible actions on the part of the Ortega regime, as opposed to the current system of generalized sanctions in search of total change.

Lines of communication must remain open - through international mediators, such as the Vatican, the U.N. or the OAS - so the government understands there is a way forward. Ortega knows that multilateral aid, trade and investment are in jeopardy unless his government convinces economic partners that he can ensure stability by working with the business community and broader civil society. To bring them to the table Ortega must guarantee that his government will release political prisoners, respect human rights and civil liberties, and allow for the opening of genuine dialogue spaces. The United States and others should reinforce the fact that the Nicaraguan government must work with domestic opponents and allow democratic space to flourish.

International supporters of democracy in Nicaragua must be prepared to walk a long and frustrating road alongside the resilient and courageous democratic actors they support. They must know when their assistance will do more harm than good and measure success in small openings of democratic space as opposed to free and fair presidential elections, even if the latter remains the ultimate objective. Standing firm in the face of this long struggle will pay dividends not only for the Nicaraguan democratic actors, but for those standing for democracy and against corruption in the rest of the region, who will take note of what is done there.

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Is Nicaragua's Descent into Dictatorship Irreversible?

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After claiming a decisive win in the November 7 elections, Daniel Ortega - who has been in office since 2007 - could now lead Nicaragua until 2027, making him Latin America's longest serving ruler. The Sandinista government ensured its victory by shutting down dissent and arresting dozens of regime opponents.

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Ortega "overwhelmingly" won the election in Nov 2021
- Many other countries find the election was illegitimate, including the U.S
- Ortega jailed 7 of his opponents prior to the election
- U.S and other E.U countries have implemented sanctions
- In 2009, the government amended it's constitution to allow him to be reelected for a third term

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Daniel Ortega sworn in for 4th straight term as Nicaragua's leader

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MANAGUA, Nicaragua - Nicaragua President Daniel Ortega was sworn in for a fourth consecutive term Monday following elections considered rigged and on a day marked by sanctions from the United States and European Union against members of his government. Alongside him was first lady Rosario Murillo, sworn in for her second term as his vice president.

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Poor Ratings Among:
Judicial System
Police
Public Services
Land Administration
Tax Administration
Customs Administration
Public Procurement

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Snapshot

Rampant corruption within Nicaragua's political circles impairs the functioning of state institutions and limits foreign investment. International companies report widespread favoritism and impunity among public officials. The judicial system functions under heavy political pressure, and courts are susceptible to corruption and manipulation by politicians and criminal organizations. High-risk areas for bribery include Nicaragua's tax and customs sectors, where the application of regulations and procedures is arbitrary and is plagued by extortion, facilitation payments, and kickbacks. Nicaragua's anti-corruption legislation is comprehensive and addresses all major forms of corruption; including bribery, abuse of office, facilitation payments and gifts to public officials. Nevertheless, the law is not enforced effectively, allowing for pervasive corruption and creating a challenging business environment for foreign companies.

Last updated: August 2017
GAN Integrity

Judicial System

Nicaragua's legal system is burdensome and involves very high risks of corruption. Three out of five businesses perceive significant corruption in Nicaragua's judiciary ( Miller & Chevalier 2016). Bribes and irregular payments in return for favorable judicial decisions are commonplace ( GCR 2015-2016). Corrupt practices are found at all levels of the judiciary and mechanisms to protect judges from political influence do not exist ( BTI 2016). Accordingly, companies have extremely low confidence in the independence of the courts and report that the legal framework is inefficient when it comes to settling disputes and challenging regulations ( GCR 2016-2017). The quality of judicial services is very low (BTI 2016). Investors allege that authorities apply laws in an arbitrary, negligent, or slow manner in an apparent effort to favor one competitor over the other ( ICS 2017). Foreign entities are often at a disadvantage in disputes against Nicaraguans with political or personal connections (ICS 2017). Uncertainty exists over whether local courts will enforce awards from local and international proceedings (ICS 2017). Enforcing a contract takes significantly less time and is slightly less costly compared to the regional average ( DB 2017).

Courts are prone to corruption and manipulation by organized crime groups, drug cartels and a democratic socialist political party, the Sandinista National Liberation Front (FSLN), which allegedly accepts bribes from drug traffickers for campaign financing in return for judicial favors ( InSightCrime, July 2014). Several of these cases involving illegal business deals have been resolved in secrecy (BTI 2016).

Nicaragua is a signatory to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and it is a member state to the International Centre for the Settlement of Investment Disputes (ICSID).

Police

There is a high risk of corruption when dealing with the Nicaraguan police. A third of companies report significant corruption in the police (Miller & Chevalier 2016). Over half of firms report paying for private security ( ES 2014). A perception exists that police officers act with impunity because of corruption, inefficiency and a lack of transparency in the judicial system ( HRR 2016). Companies cannot rely on Nicaragua's police to protect them from crime, theft, and disorder (GCR 2016-2017). The Law of Organisation, Functions, Career and Special Regimen of Security of the National Police entitles the president to be the 'supreme commander' of the Nicaraguan police force, centralizing power over all executive decisions - including recruitment of police officials - in the hands of the presidential administration ( InSightCrime, July 2014). Such exceptional control over Nicaragua's police decreases its independence and raises the levels of corruption and patronage through political ties ( InSightCrime, Jan. 2014).

Public Services

There is a high prevalence of corruption in Nicaragua's public services. Foreign companies encounter red tape and corruption when dealing with Nicaragua's public services administration. Bribes and irregular payments when dealing with public utility companies are fairly rare (GCR 2015-2016). Inefficient government bureaucracy is ranked as the most problematic factor for doing business in Nicaragua (GCR 2016-2017). The public administration is intensely politicized and has limited capacity and lacks professionalism and effective monitoring (BTI 2016). There is an absence of a career-based civil service, meaning that people are not hired on the basis of merits (BTI 2016). Starting a business in Nicaragua takes fewer steps and requires less time than the regional average (DB 2017). Getting electricity is slightly less time-consuming than the regional average (DB 2017).

Land Administration

The land administration carries high corruption risks for foreign investors. Companies report that property rights are insufficiently protected (GCR 2016-2017). Due to poor record keeping, establishing a claim to a land title might be problematic (ICS 2017). Extensive due diligence and caution are advised before investing in a property (ICS 2017). President Ortega has declared that the government will not evict those who have taken illegal possession of property; the police similarly often refuse to assist in property eviction cases (ICS 2017). There have been reports of U.S. citizens subjected to false accusations in an effort to expropriate their properties; some have been threatened with incarceration if they do not voluntarily surrender their property (ICS 2017).

The Nicaraguan government has granted a Hong Kong-based company a 100-year concession to construct a canal through Nicaragua (ICS 2017). The concession includes a law that allows the Canal Authority to expropriate any land, with compensation paid at "cadastral value" needed for the purposes of constructing the canal, including land outside the proposed route of the canal (ICS 2017). Investors have expressed fears that expropriation compensation will be paid below fair market rates and in violation of the CAFTA-DR agreement (ICS 2017).

Registering a property takes nine steps, which is two more than the regional average, but the total time required is significantly shorter (DB 2017).

Tax Administration

There is a high risk of corruption in Nicaragua's tax administration. Companies count tax regulations and tax rates among the most problematic factors for doing business in Nicaragua (GCR 2016-2017). Foreign investors have raised concerns about corrupt practices in the tax administration (ICS 2017). Irregular payments and bribes when dealing with annual tax payments are reported by businesses to be common (GCR 2015-2016). Companies face a much higher number of tax payments every year compared to the regional average, but the total time companies spend on paying taxes is far below the regional average (DB 2017).

Customs Administration

Nicaragua's customs administration is plagued by a high prevalence of corruption. A third of companies perceive significant corruption in the customs sector (Miller & Chevalier 2016). Companies report that bribes and irregular payments are commonly exchanged when dealing with customs officials ( GETR 2016). Companies rate the efficiency of the clearance process and the time predictability of import procedures as poor (GETR 2016). Burdensome import procedures and corruption at the border are among the most problematic factors for importing (GETR 2016). Bribery of officials, arbitrary assessments, and unlawful seizures by customs authorities are common (ICS 2017).

The time and costs required to comply with import requirements are generally significantly lower than regional averages (DB 2017).

Public Procurement

Risks of corruption in Nicaragua's public procurement sector are high. Companies report that irregular payments and bribes in the process of awarding government contracts are very common (GCR 2015-2016). Companies also report that public funds are often diverted due to corruption (GCR 2016-2017). Legislation is not adequately enforced in the public procurement sector (BTI 2016). There are insufficient mechanisms in Nicaragua to ensure the transparency and accountability of the state's business decisions (ICS 2017); excessive exemptions are made to procedures and requirements in public procurement (BTI 2016).

The government has established the Sistema de Contrataciones Administrativas del Estado (SISCAE), a portal for public contracts where investors can register and obtain information and bid on public contracts. More information on procurement rules in Nicaragua may be found here. Companies are recommended to use a specialized public procurement due diligence tool to reduce corruption risks related to procurement in Nicaragua.

Natural Resources

There is a moderately high risk of corruption in Nicaragua's natural resources sector. It is estimated that thirteen percent of Nicaragua's gold is produced illegally and laundered and exported to other countries with the help of corrupt government officials ( Verité 2016). It is estimated that up to thirty percent of illegal logging in Central American, including in Nicaragua, is linked to illegal drug trafficking; weak government is identified as a major cause ( Insight Crime, May 2017).

Legislation

The overall implementation and enforcement of Nicaragua's anti-corruption legislation are weak, and the level of compliance with the law is poor among Nicaragua's public officials. The Criminal Code of Nicaragua and the Law on Bribery and Crimes Against International Trade and Foreign investment (in Spanish) criminalize all major forms of corruption, including active and passive bribery, abuse of office, money laundering and extortion. The criminal penalty for offering or accepting a bribe is a minimum of three years in prison and a fine. The bribery of foreign public officials is forbidden and punishable by a minimum of five years' imprisonment. Companies may be held subsidiarily liable for civil damage resulting from corruption offenses ( UNODC 2015). Likewise, individuals acting on behalf of a company may be held personally liable (UNODC 2015). Article 130 of the Constitution and the Civil Service Probity Law provide the legal framework for conflicts of interest and asset declarations by public officials. Some aspects of private sector bribery are criminalized under the Criminal Code; these provisions, however, do not refer specifically to promising, offering or providing, nor soliciting or accepting an undue advantage by any person working in the private sector (UNODC 2015). Private sector embezzlement is criminalized (UNODC 2015). Facilitation payments and gifts are addressed in the Decree No 124-99. The Government Procurement Law (in Spanish) and the Municipal Procurement Law (in Spanish) require open and competitive bidding, as well as fairness and transparency in procurement procedures. Limited whistleblower protection is contained in Law No 735. The Access to Information Law (in Spanish) requires institutions that receive or oversee state funds to make their documents publicly available; however, the Law preserves the government's right to protect information related to state security. A lack of access to information is a serious problem (HRR 2016).

Nicaragua has ratified the United Nations Convention against Corruption (UNCAC) and the Inter-American Convention Against Corruption, which imposes direct obligations on the government of Nicaragua to adopt institutional and legal measures against corruption. Nicaragua is not a party to the OECD Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions.

Civil Society

The Constitution of Nicaragua provides for freedom of the press, but the government has frequently used its administrative and judicial means to limit these rights (HRR 2016). Media freedom is restricted through arbitrary application of libel and defamation laws and judicial harassment ( FotP 2016). Legal cases against the press have been decreasing, but this appears to largely be a consequence of an increase of self-censorship and a corresponding decrease in critical reporting (FotP 2016). Reporters increasingly face threats, harassment, and physical violence from both the government and other actors (FotP 2016). Favoritism is widespread, and journalists loyal to the ruling party receive favorable treatment; the government has denied critical outlets millions of dollars worth of official advertising (FotP 2016). Almost all television broadcasters are owned and controlled by allies of FSLN (FotP 2016). There are no restrictions on access to the Internet, but illegal government monitoring of email correspondence is reported by some civil society groups (CSOs) (FotP 2016). The media environment in Nicaragua is considered 'partly free' (FotP 2016).

Freedom of association is often undermined by Nicaragua's National Assembly, whose accreditation is mandatory for NGOs to be able to receive donations (HRR 2016). Freedom of assembly is permitted under the law, but in practice, the police give preferential treatment to pro-government demonstrations and the police frequently fail to protect opposition protesters from harassment (HRR 2016). Civil society participation in decision-making processes radically diminished in recent years; the government now harasses CSOs critical of the regime (HRR 2016). The anti-corruption segment of civil society enjoys significant mobilizing capacity (BTI 2016). Opposition rallies and protests organized by CSOs are often suppressed by pro-government supporters to silence opponents of the government (HRR 2016).

Sources

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(Want to receive more corruption report updates? Subscribe here!) Snapshot Rampant corruption within Nicaragua's political circles impairs the functioning of state institutions and limits foreign investment. International companies report widespread favoritism and impunity among public officials. The judicial system functions

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CPI 2021: Corruption, Human Rights + Democracy

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CPI 2021: Corruption, Human Rights + Democracy

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Corruption in government impedes that government to enact civil rights laws.

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Lagos, Nigeria - Activists protest against the controversial anti-social media bill introduced in the parliament, November 2019. Photo: Oluwafemi Dawodu/Shutterstock

Research analysis by Jon Vrushi and Roberto Martínez B. Kukutschka

More than 60 years ago, states approved, almost unanimously, the Universal Declaration of Human Rights. This document outlines 30 rights and freedoms that every human should enjoy, including the right to be free from torture, the right to freedom of expression and other civil and political rights. Many of these inalienable rights and freedoms continue to be under threat today, as democracy retreats and authoritarian regimes take their place.

From the arrests of activists and journalists in Belarus, to the closing of media outlets and civil society organisations in Nicaragua, the deadly violence against protesters in Sudan and the killing of human rights defenders in the Philippines - human rights and democracy are in retreat around the world.

Last year, Freedom House highlighted that 86 per cent of countries stagnated or registered a decline in human rights and democracy. Further, analysis by the Economist Intelligence Unit shows that 90 per cent of countries have stagnated or declined in their civil liberties score since 2012; while Amnesty International highlights repression of dissent as one of the key global trends in human rights abuses in 2021 and emphasises the attacks on journalists and activists, many of whom were exposing or protesting against corruption.

Corruption enables both human rights abuses and democratic decline. In turn, these factors lead to higher levels of corruption, setting off a vicious cycle.

While all states have a responsibility to respect, protect and fulfil the human rights of all people, the presence of corruption can weaken a government's ability to do so by undermining the overall functioning of the state - from the delivery of public services, to the dispensation of justice and the provision of safety for everyone.

More specifically, the duty to respect means that the state must not act in violation of human rights, for example, by using violence against peaceful demonstrators. Corruption can undermine this obligation when, for example, the government instrumentalises the police or judiciary to unfairly detain, arrest or intimidate opponents or dissidents. Corruption in law enforcement can jeopardise people's safety and victims' access to justice. On the one hand, corruption in law enforcement can drive human right violations such as ill-treatment or torture in the hands of officers including in detention settings or through police practices. In other cases, corruption might permeate the administration of justice including by slowing investigations into human rights violations and affecting due process.

What is more, corruption and impunity contribute to an unsafe climate for human rights defenders to operate in. Having examined the data collected by Frontline Defenders, we found that out of the 331 cases of murdered human rights defenders in 25 countries in 2020, 98 per cent of those deaths occurred in 23 countries with high levels of public sector corruption, or a CPI score below 45. Moreover, at least 20 of all cases were registered as killings of human rights defenders dealing with anti-corruption issues.

Corruption and murdered human rights defenders

The second state obligation, to protect, means that governments should ensure that no one infringes the rights of its people. Corruption can also undermine this obligation. Organised criminal groups routinely murder journalists and human rights defenders and the state often fails to protect their safety. Similarly, private actors can rely on bribery and/or personal connections to ensure that the state turns a blind eye to human rights abuses. If the state fails to prevent a company, which has made a large campaign donation, from polluting a water source on which people depend on and puts their health at risk, the state is effectively failing in its obligation to protect.

Finally, corruption can directly undermine a government's ability to fulfil its human rights obligations to take positive actions to guarantee the enjoyment of basic human rights. When states allow the embezzlement of public funds meant to be spent on providing healthcare or when rigged public procurement processes fail to deliver the necessary goods and services for education, states fail in their responsibility to fulfil the rights to health and education.

While all three obligations are equally important, state failure to respect human rights can lead to catastrophic consequences for democracy and the rule of law, as it can subvert fundamental rights which are critical for government accountability, such as freedom of expression, assembly and association. This, in turn, makes it harder to keep corruption in check and can lead to a vicious cycle of corruption, human rights abuses and democratic decline.

The graph below shows how corruption and abuse of civil liberties go hand-in-hand. The civil liberties score, a dimension of the Democracy Index from the Economist Intelligence Unit, contains indicators on freedom of expression, association, assembly, personal safety and access to justice, among others. What we observe is that there is a strong and positive correlation between good governance and the respect of human rights and that very few countries have managed to establish effective control of corruption without also respecting human rights. This relationship holds even when controlling for the level of development (see Annex).

Corruption and breaches of civil liberties

Corruption, civil liberties and rule of law

Keeping corruption out of the public eye is essential to ensure that those who participate in it face no consequences. Restricting freedoms of expression, association and assembly is thus a popular tactic to weaken societal checks on corruption, reducing the chances of being denounced for engaging in corruption and facing consequences. Simultaneously, this helps to perpetuate corrupt networks and practices. To ensure they face no legal consequences, in some cases corrupt officials also capture the judiciary and independent oversight institutions. To prevent loss of their privileges, corrupt and their cronies often resort to oppressive measures, curtailing civil liberties.

Take Nicaragua, for example, where President Daniel Ortega has ruled since 2007 and the country has experienced democratic decline, along with restrictions to fundamental freedoms and rampant corruption. Nicaragua is one of the significant decliners on the 2021 CPI, having dropped from a score of 29 in 2012 to 20 in 2021.

Nicaragua now ranks in the bottom 20 countries on the Index. At the same time, Nicaragua's scores on V-Dem's "Freedom of Expression", "Freedom of Association" and "Access to Justice" indicators have dropped to record low levels. Corruption in the justice system and total capture of the courts by the executive means that human rights abuses go unchecked, providing no access to justice or remedy for victims in the country. At the same time, politically motivated corruption charges against opposition figures further impinge on political rights and liberties while government officials face virtually no accountability for acts of corruption. This climate of total impunity allows the government to further restrict fundamental rights, like freedom of expression, association and assembly. In some cases, they become direct attacks.

In 2019, one of the oldest newspapers in Nicaragua, El Nuevo Diario, reported that it was forced to close after authorities prevented it from obtaining newsprint and ink. Furthermore, between March and July 2020, Nicaragua's Observatory of Aggressions on the Independent Press reported 351 attacks including unjust prosecutions, arbitrary detentions and harassment of media workers and their families. Human rights abuses continue, including bans on protests, attacks on freedom of expression, and the stigmatisation and persecution of journalists and human rights defenders.

Attacks on checks and balances as well as on civil liberties do not only occur in countries with systemic corruption and weak democratic institutions, but also in consolidated democracies. Hungary serves as a cautionary tale where following corruption and full capture of the state, the country has fallen to the lowest score in the Freedom in the World Index since the end of the communist regime in 1989. The abuse of media, civic space and the judiciary by democratic governments alleged to be involved in corruption has also been prevalent in Czechia, Slovenia and Brazil, among others.

What is more, not everyone is equally able to challenge corruption. Repressive officials or those seeking to silence anti-corruption campaigners are less likely to fear being held to account when they target individuals from marginalised groups. People from discriminated groups are therefore more exposed to potential backlashes and human rights abuses when they try to make their voices heard. The enhanced level of danger also applies to anti-corruption campaigners who champion the cause of discriminated groups, such as Transparency International's chapter in Guatemala who seeks to uncover and challenge acts of collusive corruption between state officials and mining companies that harm Indigenous Peoples.

Transnational corruption as enabler of human rights abuses

Various actors in the top-scoring countries are all too eager to help authoritarian and kleptocratic regimes clean their reputations - not just their money.

The case of Kazakhstan and the United Kingdom shows this corrupt backscratching at work. The heavy-handed response to protests in the country in early January made international headlines, echoing events of the Zhanaozen massacre from 10 years ago. Nursultan Nazarbayev, the country's president at that time turned to the UK's former prime minister Tony Blair to help him with his image. In a leaked letter Blair reportedly advised and provided Nazarbayev with talking points on how to handle critical questions about Zhanaozen. Months later, the government jailed an opposition leader for allegedly orchestrating the events. Blair continued to defend Kazakhstan's regime on various occasions.

More international coordination is needed to ensure that foreign dictators and western enablers do not circumvent anti-money laundering and sanctions regimes.

Transnational corruption enables human rights abuses and exacerbates repression by allowing autocrats to:

1. Enjoy looted funds and reward cronies. Without the help of professional enablers like complicit bankers, lawyers, accountants, real-estate brokers etc, kleptocrats would not be able to enjoy their funds and pay off those who support them. In turn this means that they can stay in powerby buying support and dispensing patronage to cronies.

2. Launder their reputation abroad. By employing western public relations firms, lobby professionals and even funding universities kleptocrats and autocrats ensure that little pressure will come to bear from the international community on their human rights abuses record.

3. Evade accountability. By hiding their financial transactions, autocrats make it almost impossible for law enforcement or judicial bodies, at home or abroad, to find traces of their malfeasance, ensuring they stay in power and unscathed. They can also bypass sanctions regimes, such as those aimed directly at human rights abusers through the Global Magnitsky Act or similar legislation.

In 2017, the Azerbaijani Laundromat investigations found how a network of slush funds financed Azerbaijan's bribe-induced foreign policy and reputation. Three Spanish delegates to the Parliamentary Assembly of the Council of Europe (PACE) are suspected of benefiting from the Laundromat. In return, they allegedly watered down the human rights body's criticism of events in Azerbaijan under the country's repressive authoritarian regime. In 2021, authorities in Germany expanded their previous investigations into the Azerbaijani Laundromat. Another (now former) German parliamentarian is under investigation for similar reasons. Transnational corruption schemes allowed the Azerbaijani government to conduct a type of caviar diplomacy, bribing abroad and shoring up support from cronies at home.

Effects on democracy and corruption

Civil and political rights including freedom of expression, freedom of association and assembly, as well as access to justice are integral to healthy democracies. They guarantee the participation of citizens and groups in democratic and policy processes and can help keep corruption in check. The current wave of autocratisation is not primarily driven by coups and violence, but rather by efforts to undermine democracy gradually. The descent into authoritarianism usually begins with violations to people's civil and political rights, attacks on civil and political rights, efforts to undermine the autonomy of oversight institutions and attempts to control or direct attacks on the media to help disseminate the regime's ideology while supressing criticism.

The case of Belarus, which this year fell 6 points in the CPI score this year, perfectly illustrates the limits of this top-down model and how the apparent successes in controlling corruption can quickly prove illusory where they are subject to the whims of a dictator or a regime that does not allow criticism, opposition or political competition. The country also serves as a cautionary tale for similar regimes.

While examples of successful top-down anti-corruption reforms exist in countries like China, Cuba and Singapore, these efforts are few and far apart. Furthermore, some of the most successful anti-corruption reforms that started with top-down interventions, eventually had to incorporate more bottom-up approaches to ensure their sustainability. Hence, sustainable anti-corruption strategies go hand in hand with the protection of universal human rights and fundamental freedoms.

For these reasons, in its Strategy 2030, Transparency International recognises that corruption cannot be countered without fundamental human freedoms to organise, associate, access information and speak up as well as a free and independent media.

To end the vicious cycle of corruption, human rights violations and democratic decline, people should demand that their governments:

1. Uphold the rights needed to hold power to account. Governments should roll back any disproportionate restrictions on freedoms of expression, association and assembly introduced since the onset of the pandemic. Ensuring justice for crimes against human rights defenders must also be an urgent priority.

2. Restore and strengthen institutional checks on power. Public oversight bodies such as anti-corruption agencies and supreme audit institutions need to be independent, well- resourced and empowered to detect and sanction wrongdoing. Parliaments and the courts should also be vigilant in preventing executive overreach.

3. Combat transnational forms of corruption. Governments in advanced economies need to fix the systemic weaknesses that allow cross-border corruption to go undetected or unsanctioned. They must close legal loopholes, regulate professional enablers of financial crime, and ensure that the corrupt and their accomplices cannot escape justice.

4. Uphold the right to information in government spending. As part of their COVID-19 recovery efforts, governments must make good on their pledge contained in the June 2021 UNGASS political declaration to include anti-corruption safeguards in public procurement. Maximum transparency in public spending protects lives and livelihoods.

Annex

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Lagos, Nigeria - Activists protest against the controversial anti-social media bill introduced in the parliament, November 2019. Photo: Oluwafemi Dawodu/Shutterstock Research analysis by Jon Vrushi and Roberto Martínez B. Kukutschka More than 60 years ago, states approved, almost unanimously, the Universal Declaration of Human Rights.

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2021 Rank:
164/180

2021 Score:
20/100

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Find out more about corruption in Nicaragua: Latest news, Corruption Perceptions Index score & local chapter's contact information.

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U.S Action Against Corruption in Nicaragua

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U.S Action Against Corruption in Nicaragua

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March 9, 2022
- Added 9 Nicaraguans to the Corrupt and Undemocratic List
- Makes them ineligible for visas and admission into the U.S

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U.S. Action Against Corruption and Attacks on Democracy in Nicaragua - United States Department of State

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The U.S. government is deeply concerned by the injustice and lack of transparency on display at the trials of political prisoners in Nicaragua. We remain committed to supporting the people of Nicaragua by fighting corruption and promoting democracy, the rule of law, and accountability, which are key…