Nicaragua’s Secretive Ruling Family Reaches Out Quietly to the U.S.

Sanctions intended to thwart the president’s dictatorial actions have hit his family and inner circle hard. More pain is expected as sanctions hit Russia, an ally.

Nicaragua’s ruling family has largely weathered sanctions imposed by the United States in recent years as American officials accused the country’s government of sliding toward autocracy.

Now, it seems, the family’s resolve may be breaking.

Shortly after Russia’s invasion of Ukraine, the most prominent son of Nicaragua’s autocratic president, Daniel Ortega, quietly approached Washington to restart dialogue, according to officials and diplomats familiar with the outreach, as the Biden administration levied sanctions against Moscow, one of the Central American nation’s few remaining allies.

The key topic on his mind: sanctions relief for the family.

The meteoric rise of the son, Laureano Ortega, has helped the family consolidate power; he now manages Nicaragua’s most important relationships, forging landmark diplomatic and energy agreements with high-level Chinese and Russian diplomats.

A senior U.S. State Department official was dispatched to Managua to meet with Laureano Ortega in March, but the meeting never took place after the Ortegas seemingly got cold feet. Mr. Ortega, 40, is seen by some analysts as a favorite to succeed his father, 76, a former revolutionary leader who is said to be in poor health.

Despite Daniel Ortega’s frequent denunciations of Washington, Nicaragua’s economy relies heavily on the United States, its largest trading partner by far. Russia, Venezuela and Cuba, Mr. Ortega’s stalwart allies, do not make the list of Nicaragua’s top five trading partners.

But sanctions intended to thwart Mr. Ortega’s dictatorial tendencies have hit the family and its inner circle hard; top generals and several of the president’s children, including Laureano, have been sanctioned by Washington, their businesses blacklisted and accused of laundering money for the regime.

The high-level nature of the overture was taken as a signal by Washington that Latin America’s autocracies may be rethinking their alliance to Russia’s president, Vladimir V. Putin, as his country’s military is bogged down in Ukraine and its economy ravaged by sanctions.

The Biden administration hopes to make inroads with Mr. Putin’s Latin American partners by portraying Russia as a declining power with little to offer.

On March 5, shortly after Russia’s invasion, senior American officials flew to Venezuela for talks, the highest-level negotiations between the countries in years. Those talks secured the release of two imprisoned Americans while President Nicolás Maduro of Venezuela signaled a willingness to increase his country’s oil production if Russian oil exports were banned.

The United States was quick to ban Russian oil, and the European Union is just now on the verge of imposing its own embargo.

The ruling Nicaraguan regime finds itself in a precarious financial state.

Inti Ocon for The New York Times

“Russia cannot give them money now and the Venezuelan wallet is closed,” said Arturo McFields, Nicaragua’s former ambassador to the Organization of American States, who resigned in March to protest Mr. Ortega’s dictatorial rule.

Mr. McFields said he was briefed on Nicaragua’s outreach to Washington before he resigned and added that the Ortega family and its inner circle were reeling under American sanctions.

The president’s children are unable to live the comfortable lives to which they have grown accustomed, while the money needed to pay pro-government paramilitaries or expand the police force to manage growing dissent is dwindling every month, Mr. McFields and a former senior American official said.

With Russia and Venezuela suffering under their own sanctions, Nicaragua has nowhere to turn to for economic relief, Mr. McFields said.

Speaking of the Ortegas, he said, the “family needs money to keep their cronies, the police and their paramilitaries happy because they have nothing to offer but repression.” He added, “But they know that’s not good because they are creating a melting pot for another April 2018,” a reference to massive protests against Mr. Ortega’s rule that were violently quelled by police and pro-government paramilitary groups.

Laureano Ortega aimed to secure sanctions relief for the Ortega family and its inner circle in exchange for releasing political prisoners, a priority for the Biden administration, according to American officials with knowledge of the talks.

Inti Ocon/Agence France-Presse — Getty Images

Mr. Ortega’s spokeswoman and vice president, his wife, Rosario Murillo, did not respond to questions about the talks, instead emailing revolutionary slogans. In the past she has denounced the sanctions as imperial aggressions.

A senior State Department official said it was unclear whether Laureano Ortega’s outreach was prompted by fears that Russia’s growing isolation would affect the Ortega regime, which is increasingly seen as a pariah state by much of Latin America, or whether it was the byproduct of internal dissent between the family and the “old guard” — the president’s allies from his Sandinista days who currently serve in his government.

As the family increases its grip over the state, members of the old guard are increasingly at odds with the Ortega family — uncomfortable with their growing dynastic ambitions — and are also affected by Washington’s sanctions, according to the American official and Mr. McFields. The State Department official spoke on condition of anonymity to discuss a sensitive matter that has not been reported.

“A key takeaway from this outreach is that the U.S. sanctions on Nicaragua clearly have the family’s attention,’’ said Dan Restrepo, a former national security adviser for Latin America under President Barack Obama. “Probably even more so as the U.S. ramps up its sanctions regime against Russia. That combination is clearly hitting pretty hard when it comes to regime insiders.”

If the Ortega family is willing to discuss releasing political prisoners, Washington will engage, the State Department official added. If not, Washington is preparing to apply additional pressure on the regime with more sanctions.

Laureano Ortega approached Washington through a third party, the official said, but declined to comment further. Another person familiar with the talks said Mr. Ortega approached the State Department through Nicaragua’s ambassador to Washington, Francisco Obadiah Campbell Hooker.

When reached by telephone, Mr. Campbell denied that and said he had no knowledge of the matter.

Laureano Ortega currently serves as a presidential adviser managing Nicaragua’s trade, investment and international relationships. Last year, he met with China’s deputy foreign minister to sign an agreement withdrawing Nicaragua’s recognition of Taiwan and he forged the first nuclear cooperation agreement with Russia.

Xinhua

Mr. Restrepo said the high-level outreach reinforced “the administration’s approach to lean into sanctions to indicate that the anti-democratic way forward is a dead end and it will only get more intense.’’

Daniel Ortega, a former Marxist guerrilla leader who rose to power after helping overthrow another notorious Nicaraguan dictator, Anastasio Somoza, in 1979, spent the 1980s fighting off American-funded paramilitary groups that sought his overthrow.

He then served in Nicaragua’s opposition in the 1990s, until he clinched victory in elections in 2006, after adopting a pro-business platform and reconciling with the Catholic Church, which had long opposed him.

He then steadily began to consolidate his family’s grip on power. In 2017, Mr. Ortega appointed his wife as vice president as his children began taking larger roles in business and politics.

Mr. Ortega often consults his wife, Ms. Murillo, before making major political decisions, Mr. McFields and an American official said, a relationship so close, the couple is often referred to in Nicaragua as “OrMu,” a mash-up of their names.

It is unclear whether Laureano Ortega or Ms. Murillo will eventually take over from Mr. Ortega, according to analysts and American officials. Ms. Murillo is in her 70s and, if chosen, may hold the presidency for a period before handing the reins to her son.

“Laureano is not autonomous enough to move a finger without having the full agreement from both Ortega and Murillo,” said Carlos Fernando Chamorro Barrios, a Nicaraguan journalist who fled last year, just months before his sister, Cristiana Chamorro Barrios, a presidential candidate, was jailed.

“Laureano is used as the messenger for his mother and father. This is as high up as possible.”

As dissent against Mr. Ortega has intensified, the government has deployed all levers of the state to brutally crush it.

When a powerful student movement helped lead nationwide antigovernment protests in 2018, it was violently put down by the police and pro-government paramilitary groups, leaving at least 350 dead, according to human rights groups.

Diana Ulloa/Agence France-Presse — Getty Images

After Mr. Ortega locked up his most credible challengers, banned large political events and closed voting stations en masse in the run-up up to his re-election last year, the Biden administration slapped sanctions on Nicaragua’s mining sector and the military’s investment arm. “The government has grown into a Frankenstein, it has grown into a family dictatorship with no clear ideology,” said Mr. McFields, the former Nicaraguan ambassador.

“Over time the government has shown that everything rests on the family model and your relation to it,” he said. “Even the people in government are tired of the situation. They are tired of a regime that can’t seem to solve anything unless it’s through repression.”

Oscar Lopez contributed reporting.

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