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Ahmadinejad in Managua: WikiLeaks Reveals U.S. Fears of Nicaraguan-Iranian Rapprochement

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As the west tightens sanctions and ratchets up pressure on Iran, Mahmoud Ahmadinejad has struck back at the United States in an unusual manner by touring through Latin America. This week, the Iranian leader was in Venezuela where he received political support from Hugo Chávez [for a complete rundown of the Chávez-Iranian relationship, see my previous article here] and yesterday Ahmadinejad moved on to Nicaragua where he attended the inauguration of Daniel Ortega, a Sandinista hero of the 1979 revolution who was recently reelected to a third presidential term.

The agreeable reception from Chávez and Ortega comes at a welcome time for Ahmadinejad, whose country has become increasingly isolated diplomatically. Needless to say, however, the U.S. has not been amused by such geopolitical theater. Last week, the Obama administration remarked that Ahmadinejad's trip was a sign of desperation. The tour, remarked the State Department, signified that Iran was "flailing" for new friends as sanctions inflict real economic damage on the Islamic Republic. "We are making absolutely clear to countries around the world that now is not the time to be deepening ties, not security ties, not economic ties, with Iran," warned State Department spokeswoman Victoria Nuland.

Sounding the Alarm Bell over Ahmadinejad

As part of its charm offensive in Latin America, Iran has opened an embassy in Nicaragua and says it will invest $1 billion in agriculture projects in addition to building a deep water port in the small Central American nation. In addition, the Islamic Republic will grant a loan for a hydroelectric plant. Nicaragua belongs to Chávez's left-leaning ALBA alliance in Latin America, and currently Iran enjoys "observer status" in the group. In Teheran recently, ALBA member states set up a trade exhibition of their products and Ahmadinejad no less showed up to the event. Thankful for Iran's largesse, ALBA nations have responded in kind by defending Iran's right to pursue an ostensibly peaceful nuclear program.

Predictably, Republican lawmakers have sounded the alarm bell about Ahmadinejad's trip to Central America, a region which the U.S. likes to call its own "backyard." Representative Ileana Ros-Lehtinen, the chairwoman of the House Foreign Affairs Committee, has remarked that Ahmadinejad is conducting a "tour of tyrants" which demonstrates Iran's expanding interest in Latin America. "Ahmadinejad's desire to strengthen ties with anti-American dictators and expand Iranian influence in the Western Hemisphere directly threatens U.S. security interests," she remarked, adding "This is a threat which we cannot ignore." Ros-Lehtinen has pledged to hold hearings on the matter to discuss what Obama is doing to counteract Iranian influence in the Western Hemisphere.

From Bolaños to Ortega

Judging from secret State Department cables recently released by whistle-blowing outfit WikiLeaks, the situation in Central America was quite different just a few short years ago and the U.S. had a willing diplomatic partner in the conservative government of Enrique Bolaños. In 2006, the Nicaraguan Foreign Minister told the American ambassador in Managua that he was "personally horrified" at the prospect of Iran becoming a nuclear power, adding that he would not support Iran's bid for a seat on the UN Human Rights Council.

With Ortega's second reelection in late 2006, however, alarm bells started to go off at the U.S. Embassy. Writing Washington, U.S. Ambassador Paul Trivelli noted that while Ortega "needs us much more than we need him," and the new Nicaraguan leader relied on U.S. assistance programs and much-needed foreign investment, nevertheless the Sandinista might strike a more independent foreign policy toward Iran. While predecessor Bolaños had worked closely with the International Monetary Fund and World Bank, Ortega struck a number of economic agreements with Ahmadinejad.

Turning up the heat, Trivelli met with Ortega's new Finance Minister to declare that "U.S. investors had begun questioning what sort of economic model the new government plans to pursue." Defensively, the Nicaraguans countered that they would be willing to work with the IMF and World Bank, but the "overriding objective of the Ortega administration is to reduce poverty."

In a testy follow up meeting with U.S. diplomats, the new President of Nicaragua's Central Bank reassured Trivelli that his country would "pursue prudent macroeconomic policy as a way of sending the right signals to investors." Recent economic agreements with Iran, the Nicaraguan noted, weren't a reflection of Sandinista foreign policy but rather represented "an acknowledgment that Nicaragua depends upon the largesse" of the Islamic Republic for oil.

Turning up the Pressure

The Sandinistas continued to adopt a defensive posture with the Americans. In early 2007, officials at the Ministry of Foreign Affairs in Managua asserted that Ortega wanted constructive relations with the U.S., but "some Sandinista party hardliners object." To be sure, Ortega sought a "sovereign foreign policy," but Nicaragua differed with Iran over the Holocaust and had made its position known at the United Nations no less. Trivelli was apparently unconvinced by such sincere arguments, however, and later joined with Spanish and German diplomats to express displeasure over "Ortega's contradictory statements and actions regarding foreign affairs."

At a private breakfast with Nicaraguan officials, the U.S. ambassador remarked that Ortega's efforts to "engage pariah regimes such as Iran raise questions about the new government's commitment to maintain an open democracy and friendly relations with all." The breakfast, Trivelli noted, served to put the Nicaraguans on notice that "we and other embassies are monitoring investor relations closely, a message they can use to push back against party radicals urging Ortega to strengthen alliances with Venezuela and Iran."

Lingering Suspicions over Financial Transactions

The cables suggest that the Americans lacked hard evidence about Iranian intentions, but were still paranoid that Ortega would branch out and conduct a more independent foreign policy. While the Embassy lacked reports of "suspicious transactions involving Iran from any of Nicaragua's financial institutions," Trivelli pledged to revisit the question "if Iran steps up its presence in Nicaragua."

What really seems to have concerned Trivelli and his peers was the possibility that Iran might displace U.S. financial influence in Nicaragua. The ambassador remarked that U.S. financial institutions Citibank and GE Financial maintained a controlling interest in two of Nicaragua's top four banks, and an American owned a controlling interest in a third. HSBC meanwhile had recently purchased another bank with operations in Nicaragua.

Shortly after being reelected, however Ortega made disturbing comments contrasting Iranian promises of "unconditional" assistance with the targeted projects of western donors. In an effort to head off Ahmadinejad, U.S. officials warned Nicaragua not to do any business with Iranian financial entities. While the Nicaraguan Ministry of Foreign Affairs pledged to pass U.S. concerns on to Ortega, other officials were not as amenable to U.S. entreaties. According to the cables, one "stalwart" Sandinista official at the Ministry of Finance argued that the issue of Iranian finances was "not relevant to his institution."

The documents suggest that Ortega became more and more combative toward the U.S. over Iran and relations became testy. In 2009, the Nicaraguans said "the region was losing patience with the Obama administration" and expected the U.S. to move faster to change development policies and increase aid to the region. Defiantly, Ortega asserted the right of Nicaragua to develop relations "with whomever we want" as a sovereign country. One Nicaraguan official railed that "we don't accept the imperialism of the U.S. to say who is good and who is bad," and Nicaragua would continue to pursue deeper relations with Iran regardless of the U.S. position.

All Revolutions are Not Created Equal

In making overtures toward Nicaragua, Iran has sought to play up the Islamic Republic's revolutionary tradition. In 2007, Mohammed Roohi Sefat, the Iranian Ambassador to Mexico, conducted a revealing interview with a Salvadoran paper about Ahmadinejad's intentions in Central America. "The Iranian revolution," Sefat remarked, "took place the same year of the victory of the Sandinistas." Sefat's remarks echo those of Ahmadinejad, who remarked in Nicaragua that the two countries were joined by a "common enemy."

To be sure, Iran and Nicaragua both staged anti-U.S. revolutions in 1979. However, aside from this common history the two countries share very little in common and I suspect that the alliance will not prove very enduring. If the Arab Spring should pick up steam and spread to Iran, then more moderate elements might take power. Mir-Hossein Moussavi, Ahmadinejad's rival in Iran's previously marred presidential election, said that Ahmadinejad's foreign policy moves had "isolated" and "disgraced" Iranians in the international arena. "Instead of investing in Iran's neighboring countries, the government has fixed eyes and poured money into Latin American states," Mousavi quipped. "The President has obviously failed to get his priorities right."

Nevertheless, as Ahmadinejad continues his tour in Nicaragua and elsewhere, we can probably expect the usual saber rattling from U.S. officials and the mainstream media making the case that Iran represents a true threat to the hemisphere. The bottom line, however, is this: though U.S. diplomats would like to make alarmist claims about Iran's footprint in Central America, the evidence is pretty thin thus far. That won't stop hyperbolic statements from the Republicans and others, however, who still regard Nicaragua as a virtual U.S. enclave.

Nikolas Kozloff is the author of Revolution! South America and the Rise of the New Left.