The New Democracy (1991–2006)

Violeta Barrios de Chamorro, widow of the slain journalist Pedro Joaquín Chamorro, became president with a coalition of Sandinista opposition groups called the Unión Nacional Opositora (UNO). Her charisma and leadership led the nation through a period of reconciliation and rebuilding. She reestablished diplomatic and economic ties with the rest of the world, ended the draft, reestablished the army and the police under civil control, and disarmed the Contras.

To help them reassimilate into the agrarian workforce, they were offered 1,600 square kilometers of land, including much of the Río San Juan [1] area and some parts of Jinotega and Matagalpa. Failure to live up to some of these land promises set the stage for further unrest in the 21st century. The international donor community pardoned much of Nicaragua [2]’s debt, but did little else to help: Once the proxy war ended, it seemed as though the world had lost interest in Nicaragua.

The elections of 1996, run without the massive international funding that characterized previous elections, were rife with abnormalities, near-riots, and chronic disorder: Polling places opened hours late, bags of discarded ballots were found afterward in the houses of officials, and the communication network failed.

Not surprisingly, in the aftermath, all sides had reason to accuse the others of vote-rigging and fraud. Even so, Nicaraguans turned out in record numbers and elected Managua’s slippery mayor, Arnoldo Alemán.

Arnoldo Alemán was a political conservative and hard-core capitalist lawyer with a sworn aversion to all things Sandinista and a professed admiration for the Somozas. Alemán oversaw the continued growth of the economy, boosted the development of zonas francas (free trade zones) and the construction of maquiladoras (export clothing assembly plants).

Politics returned to the back room, where endless scandals of kickbacks, insider deals, and frenzied pocket-filling embarrassed and infuriated the nation. His personal fortune soared from $20,000 when he took office as mayor of Managua [3], to $250 million, when he was voted out in 2001. But as he came under increased political and popular pressure for corruption, he and Ortega (accused of allegedly molesting his stepdaughter Zoilamerica Narvaez) engineered the infamous El Pacto.

The agreement provided them both diplomatic immunity and a lifetime seat in the Assembly, and divided up the government’s most important roles between the FSLN and PLC, including the Supreme Court and the Consejo Supremo Electoral (which runs elections). Other political parties were excluded from the power sharing arrangement. Together, Nicaragua’s top two caudillos (political strongmen) had eviscerated Nicaraguan democracy and divided the spoils.

Enrique Geyer Bolaños, Arnoldo Alemán’s nondescript vice-president and former head of COSEP (the Nicaraguan private industry association) won the 2001 election for the PLC party on an anticorruption platform that resonated with Nicaraguans appalled with Alemán’s avarice and duplicity. Upon entering office, Bolaños moved quickly to bring indictments against high-ranking PLC officials, including Alemán himself.

Alemán, under other conditions, might have been able to muster the support to resist the charges, but, as his allies slipped away, he was found guilty of corruption and money laundering, and sentenced in December 2003 to 20 years in prison. This was the first time in recent Latin American history that a overtly corrupt leader had been convicted and punished. But Alemán continued to wield considerable political influence even from house arrest, and the majority of the PLC turned against Bolaños in retribution for biting the hand that fed him.

Congress, evenly divided between PLC and FSLN members, mostly opposed Bolaños’s legislation, and the PLC mounted a vindictive effort to convict him of corruption himself. Ironically, Enrique Bolaños had better political support from the outside world than he did from his own political party, and relinquished his mandate in 2006 having accomplished very little of value despite the best of intentions.