MANAGUA – Central Bank President Antenor Rosales this week insisted that the government still plans on paying down its monstrous internal debt accrued in a controversial 2001 bank bailout. He said the two sides plan to reach a payment agreement by April.
“How are we not going to pay?” he told The Nica Times of the $500 million debt. Rosales’ remarks come after President Daniel Ortega said in his State of the Nation address earlier this month that the government may not pay the remainder of the debt.
Accusing the debt holders of “delay tactics,” Ortega threatened to “withdraw from those banks the billions of dollars that the Nicaraguan state has invested in them” if his opponents continue trying to politicize what he called a “delinquent act.”
The Nicaraguan government issued controversial bond-like Negotiable Investment Certificates, or CENIs, to cover the collapse of the private banks at the end of President Arnoldo Alemán’s administration (NT, Aug. 11, 2006).
The investigation alleges criminal involvement by several bankers, including ex- Finance Minister and Liberal lawmaker Eduardo Montealegre, who heads an opposition bloc in the Legislative Assembly that is stalling approval of Ortega’s 2008 budget proposal.
The investigation also implicates former Central Bank President Mario Alonso and four other former Central Bank directors, including Sandinista banker Silvio Conrado, who now represents the Ortega administration before the Central American Bank for Economic Integration (CABEI).
Despite Ortega and others’ repeated insistence that the debt is illegal, Rosales reassured The Nica Times that the debt is still being renegotiated.
“We have time. It’s not that we’re not going to pay it; it’s that we’re going to renegotiate it,” Rosales said.
Nicaragua‘s first debt payment of $20.6 million is due in April.
The Government Prosecutor’s Office is now conducting its own investigation to determine whether to pursue criminal charges against the six men. Earlier this month, they called Montealegre to testify.
According to the Comptroller General’s investigation, the Central Bank’s board of directors sold the certificates for less than their market value, and then increased the interest rates to benefit the major purchaser, Bancentro, a bank in which Montealegre had been a major stockholder. The former bankers were also allegedly involved in some shady real estate deals, whereby they sold to their colleagues at deflated costs prime properties that had been repossessed from the collapsed banks (NT, Sept. 21).
Montealegre, however, insists that he was not involved in the scandal at all, and that the investigation of him and his wife, Eliza Mcgregor, is a political witch hunt authored by Ortega and “those who want to reestablish a dictatorship in this country.”
Montealegre insists he had nothing to do with the CENIs scandal. In a recent meeting with the foreign press, he said that when the banking certificates were first issued in 2001, he had already resigned from government to work as the campaign chief of Enrique Bolaños, and that he was still out of government when the debt was reclassified Dec. 31, 2001.
In 2003, when Montealegre was the finance minister and a member of the Central Bank’s board of directors, he said, he was part of an effort to refinance debt payments and extend the term, which he said saved Nicaragua $24 million a year.
As for the alleged real estate boondoggle, Montealegre said that “the properties couldn’t be liquidated because no one would pay what they said they were worth.”
Montealegre, often depicted in editorial cartoons as Mickey Mouse, claims that Ortega is using the investigation by the Prosecutor’s Office and the judicial system to intimidate him but claims he won’t run from it.
Although he claims sources close to Ortega have threatened him and warned him that a jail cell is waiting for him,Montealegre says he is going to stay and fight.
“I am not leaving the country,” he said.
“The threats are strong, and anything can happen here. But I am not going to cede or hand over Nicaragua to Ortega and deceive thousands of Nicaraguans.
“Ortega is wrong about me,”Montealegre insisted. “The fact that I don’t yell or burn tires doesn’t mean I am not strong.”