Assembly Passes Transparency Law

June 20, 2008

Amid increasing controversy surrounding several government contracts that have benefited top Ortega administration officials and their families, the National Assembly last week by unanimous vote approved a transparency law to require public officials to come clean about their use of public funds.

According to the new law, state institutions that award contracts of $250,000 or more are obliged to hire external auditing companies and publish the results online and in the local press, according to Sandinista legislator Enrique Savaria, a member of the National Assembly’s Transparency Commission.

The new transparency law comes as the Comptroller General’s Office investigates a series of public contracts that were awarded to companies owned by top government officials and their family members. The media has questioned the contracts and raised doubts about whether they comply with public bidding laws.

Comptroller General Guillermo Argüello Poessy, a Liberal Party member, told reporters last week that the Comptroller’s Office has requested more information from the Education Ministry (MINED) regarding a $700,000 contract the ministry awarded to Tecnosa, a company run by family members of Sandinista party treasurer Francisco López, to renovate 65 schools in different parts of the country. Tecnosa in turn subcontracted to the company TESA, which is owned by López.

López’s Tecnosa also received a contract from the Housing Institute to build some 900 homes with Venezuelan funds in a part of northern Managua that was left in ruins by a 1972 earthquake. López is also the director of the state-run oil company PETRONIC, and is the vice president of ALBANISA, a company co-owned by Venezuela and Petronic (NT, June 6).

Sandinista legislators, including Savaria, say the new transparency law wouldn’t necessarily apply to entities such as ALBANISA or even Petronic.

“It depends on whether those are determined to be mixed or private businesses,” Savaria told The Nica Times.

He said the law definitely shouldn’t apply to ALBANISA, which he called a “private company.”

Opposition leaders have questioned how much of the estimated $520 million the Ortega government has received in aid and financing from Venezuela has been siphoned through ALBANISA (NT,May 23).

Poessy told the local press that the Comptroller’s Office hasn’t received enough information from the parties involved to determine whether the contracts were awarded based on bidding processes as defined by Nicaraguan law. The Comptroller’s Office will also audit Petronic, Poessy said.

López, along with Tourism Minister Mario Salinas, whose construction company Sinergia was subcontracted by Tecnosa in the school construction projects, have said that they would be open to an investigation from the Comptroller’s Office, which is controlled by the Liberals and Sandinistas.

Savaria explained that the new law requires public officials to provide the National Assembly information about public funds when called upon to do so. Public officials who don’t follow the law can be fined or sentenced to jail time, Savaria said.

“We’re trying to clear up all the doubts. We don’t want to have the same (transparency) problems as did the past government,” he said.

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