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The Rebirth of a Rebel: Nicaragua Sandinista leader Daniel Ortega, on the verge of capping a remarkable political comeback, is still Washington's bete noire.

By Joseph Contreras

Newsweek International

Nov. 6, 2006 issue - On a balmy autumn evening thousands of Nicaraguans mill about the main plaza of the city of León, waiting for a glimpse of their hero. Guerrilla turned president Daniel Ortega, once the scourge of the Reagan administration, has been out of power for 16 years. But León has been a stronghold of Ortega's Sandinista National Liberation Front (FSLN) since 1978, when many residents of the city joined an armed revolt that toppled the late dictator Anastasio Somoza Debayle, and its citizens recall Ortega fondly. "He has always been my candidate," says Francisca Baca, a 49-year-old mother of five. "He gave us what we never had?housing, jobs, streetlights."

He also brought his country 30,000 percent inflation, was accused by his stepdaughter in 1998 of sexually abusing her from the age of 11, a claim both he and his wife deny, and has lost the last three presidential elections. Yet memories like those in León are strong enough?and his opponents weak enough?that Ortega is leading a five-man field in next week's presidential election. Three new polls give the 60-year-old Sandinista a lead of at least five percentage points over his nearest rival, which would be enough to avoid a runoff vote.

At first glance Ortega's rebirth would seem to herald a return to the Yanqui-bashing confrontations of the 1980s, when the Sandinistas' battle against U.S.-backed contra rebels captured the imagination of leftists worldwide. The struggle led to the downfall of several Reagan administration officials, implicated in the sale of weapons to Iran to raise money for the contras. (One of those figures, Oliver North, was in Managua last week railing against Ortega, whom he likened to Mussolini and Hitler.) Venezuela's Bush-baiting President Hugo Chávez has signed a deal to provide up to 10 million barrels of cheap diesel to Sandinista mayors as a sign of support.

True, a real or imagined endorsement from Chávez backfired on populist candidates in Peru and Mexico earlier this year. But in smaller Latin American countries where the poor have yet to benefit from the regionwide commodities boom, a current of anger against the rich West still runs strong. "A string of democratic governments hasn't really delivered results, and there is enormous discontent," says Michael Shifter of the Washington-based Inter-American Dialogue policy-research group. "Though people are keenly aware that things weren't great under Ortega, there are some who are prepared to give him a second chance."

Nicaragua, the poorest country in the Western Hemisphere after Haiti, is ripe for Ortega's promises to fight poverty, distribute property to landless peasants and end the country's acute electricity shortages. According to government figures, the number of Nicaraguans scraping by on $2 a day or less rose to more than 47 percent of the population between 2001 and 2005. At least 800,000 children have no access to formal education, and a recent poll found that 59 percent of Nicaraguans would emigrate if given the chance. Ortega never misses an opportunity to highlight the country's profound social inequities. "There is economic growth, but in whose hands is the wealth?" he asks the faithful in León. "This is the savage capitalism that concentrates wealth among the few and spreads poverty among the vast majority of the people."

That kind of talk doesn't worry Bush administration officials so much as Ortega's allegedly suspect democratic credentials and opposition to free-trade economics. Diplomats at the U.S. Embassy in Managua first tried to broker a unity deal between two center-right parties to field a single candidate against the Sandinista nominee. When that effort failed, U.S. officials stepped up their rhetorical offensive. Commerce Secretary Carlos Gutierrez warned two weeks ago that an Ortega triumph would scare off foreign investors and endanger Nicaragua's participation in a regional free-trade treaty with the United States. "We've made clear we want to have a close, positive, constructive relationship with Nicaragua, and up to this point that's been reciprocated," says U.S. Assistant Secretary of State Thomas Shannon. "I'm not sure that would be the case with Daniel Ortega."

Washington may be reading from an old script, however. In both physical and ideological terms, Ortega is a shadow of the fiery comandante in olive-green fatigues who captured headlines 20 years ago. The balding, pudgy politician who now tours the country in jeans and a white shirt pledges to respect private property and appeals for national unity and reconciliation. In front of a microphone, Ortega these days is far more likely to invoke God than Fidel Castro; last week his party supported a measure to ban all abortions in Nicaragua, something he refused to do while president. Even his theme music has changed: the shrill, '80s-era Sandinista anthem that branded the "Yankee" as "the enemy of humanity" has given way to a ponderous, Spanish-language adaptation of John Lennon's "Give Peace a Chance."

As he enters his seventh decade Ortega seems more obsessed with regaining power than pushing a political agenda. In 2000 Ortega negotiated a controversial power-sharing pact with then President Arnoldo Alemán, a staunch anti-Sandinista, who was later sentenced to 20 years in prison for embezzling $100 million in government funds. His current running mate is a prominent banker who actually represented the contras in peace talks with the Sandinistas (and whose Managua mansion Ortega has appropriated for his personal use). "He is not an ideological person; he has always been pragmatic," says Carlos Chamorro, editor of the weekly newsmagazine Confidencial, who once headed the now defunct Sandinista organ Barricada. "He has no scruples."

A second Ortega presidency is hardly a done deal. A widespread anyone-but-Ortega sentiment among voters outside the Sandinista fold means he would almost certainly lose a second-round vote against the leading center-right candidate, Eduardo Montealegre. But under a change to the electoral laws that Ortega helped engineer, he would be spared a runoff if he garners 35 percent of the ballots cast and beats out Montealegre by at least five percentage points. The power-sharing deal Ortega cut with Alemán also gave the Sandinistas informal control over the government body that regulates elections, and if he falls short of either statistical threshold, some of Ortega's erstwhile allies believe him capable of doctoring the results. "The possibility of an electoral fraud is present," cautioned his former vice president Sergio Ramírez in a recent column for the Managua newspaper La Prensa. "The electoral authority is partisan from top to bottom." The biggest loser in that case would surely be Nicaragua's still-fragile democracy.

© 2006 Newsweek, Inc.