The Anatomy of Business Investments in Nicaragua, And A Question

peterchristopher's picture

I've been reminded recently about a story about one Sandinista I knew.  We were on a walk with one man who did not appreciate the Sandinista's unfair business tactics.  I asked the Sandinista, what examples can you give me of honest work you have done?  The first example he came up with was that he bought and sold coffee in the 80s.  The other man said, "You call that honest business?  The law stated that only you and a few other Sandinistas could buy and sell coffee, and you got to set the prices?  You sure did earn some money!  But the farmers couldn't get competing bids, they got nothing.  You got it all!"  The Sandinista said, you have to know how to operate, the farmers wouldn't have gotten squat for their coffee beans without me! 

Well, that is just a story, and nothing like that is happening now of course.  Have you ever wondered why so many Sandinistas wear dark glasses?

But the point of this forum topic is to raise a question.

I was reminded of the story because I received an email reminding me of how these things work.  The investor comes in, and either from his own idealistic desire to make friends of Reds, or by favors or potential favors - or as a last resort, by indirect violence that can only be "stopped" by the mafia - the investor takes on mafia (Sandinistas and/or related others) as business partners.  Maybe he writes a contract guaranteeing them a certain share of business, maybe they actually invest a small amount of money for a share... in any case, as long as the investor keeps pumping in the cash, those local business partners do well, because the contractors work through them.  If the investment in any way turns sour (Nicaraguans can send in prostitutes to destroy a family, send in mercenaries to attack, lawyers to put people in jail, all without remorse) - the foreigner realizes he is dependent on those partners more than he had ever dreamed.  If a contract states that the partner will come up with some payment (or share of revenue for selling some lumber) and then it never happens, there should be a default on their "shares", right?  But if the investor tries to take the partner to court, then the lawyers and judges all hold out their hands and take more money, then explain they can do nothing.  On the other hand, if the partners feel it's time, they go to the same lawyers and judges and pay them less money, but their case is actually going to win and the partners are going to own the whole investment.  Maybe the investor can negotiate some trivial payment of "feel-good" to think he is not being robbed.  The Sandinistas can pull these "transitions" off much more easily than the PLC because they control all branches of government, but that doesn't necessarily mean that a government fully-controlled by Aleman would be different in character.

From what I have heard, current investors are currently getting the calls to begin this multi-step process.  And they are taking on the local investors as partners.  I won't say which ones, but I will simply ask a few who either have gotten the call, or will soon.

Mr Fleming of Seaside Mariana, have you taken on local partners?  What are the apparent terms?  When you calculate the prospective investment return on the $350,000 "shares" you are offering, is this before or after the "partner" take?

Mr Hughes of Cooltop, have you taken on local partners?  What are the apparent terms?  If so, why haven't you stated the truth on your website so that others will know how Nicaragua actually works?

It reminds me of the Godfather, when Michael gets the advice from his dying father: "Whoever comes to you to propose the meeting, he's the traitor."

The question is: Have you received the call?

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Hi Chale

Hi Chale, 

Sharing information is exactly what I am doing.

When Ortega was in the race three years ago, I made predictions based upon my knowledge of Nicaraguan culture and politics:

You May Have Your Assets Taken Submitted by peterchristopher on 22 April, 2006 - 14:51.

... if they have their way, the politicians will make it an even bigger scam, taking more of your property, whether you are a US citizen or just a non-party-line Nicaraguan.

Trivelli is doing what is best for Americans and for Nicaraguans, trying to support a genuine economy and politics that are not a scam. Those of you who don't appreciate his work nevertheless benefit from it....

Ortega is going to win. Why? Because Nicaraguan people love drama more than progress. And he knows it and knows how to play it.

This time, Nicaragua will be the warzone between Venezuela and the US... If you are smart, you will liquidate as soon as you can. Your property values will be ten cents on the dollar.

If you actually have spent any time in Nicaragua, the Sandinistas have already stolen from you. If you haven't figured this out yet, you are in for even more losses. Everybody steals, but the Sandinistas are absolutely without morals. The liberals look you in the face and say "Pay me a bribe and I will do such-and-such a thing." The Sandinistas never say that a bribe is involved; their methods are much more subtle. (http://www.nicaliving.com/node/4175#comment-20228)

Some information I have is from reading typical reports from Nicaragua (http://www.washingtontimes.com/news/2009/feb/17/president-ortega-spurs-worries-about-the-future/ gives a report of how dissent is treated in Nicaragua) together with five years of experience in Nicaragua (three years) and communicating with Nicaraguans about their country (two years).

When Jimmy Carter sanctioned the election of Ortega a few years ago, I wrote that it was foolishly naive: he had been fooled once by Daniel Ortega's promises of a coalition government almost thirty years earlier and had refused to learn, supporting him once again.  I can just imagine Jimmy meeting with Ortega three years ago: "Now Mr. Ortega, I'll give you the pass on the election, but you've got to promise to work towards Democracy by continuing the tradition of free elections."  Now in the recent mayoral elections, Ortega gave Jimmy the figurative middle finger in appreciation, barring the Carter Center from observing the elections.

The Sandinistas and other politicians have been writing laws for five years now increasing their rights to confiscate land - land near the Ocean, "underutilized land", etc - this is all public information.  Their history is consistent abuse of power - from their original betrayal of the Nicaraguan people who supported them, not understanding their true nature, Nicaraguan people who died in 1978 and 1979 fighting for Ortega's cause as Ortega ate gallina jovencita in Costa Rica - through the Piñata of 1990, the convenient disappearance of Herty, the non-audited funds from Venezuela, and continuing through the pacts and farces in the papers today.

There is no insider information here.  Phil Hughes's investments in a new resort called Cooltop near Esteli are public knowledge; Mr Fleming's investment proposal is on the internet.  He hopes to raise roughly 20 million USD from investors at London financial fairs.  How much is he budgeting for Ortega?  If he is not budgeting anything, he's in for a nasty surprise: the Sandinistas always get a share of the profits, or else the entire business.  If he is budgeting a share for them, he ought to put that on his website: we recognize that in order to do business in Nicaragua, we must make significant payouts under the table to government members for the right to do business, but we trust that the terms of these unwritten contracts will be respected, that the officials will not "nationalize" our business as they have historically done by hook or by crook in other cases.

If I understand your profile correctly, you are a native Spanish speaker living in Nicaragua but not Nicaraguan yourself.  Your questions sound genuine.  You might consider dedicating some time to finding someone who will tell you the truth about Nicaragua: when you drive around with them, ask them which properties on both sides of the street were stolen, and how, by whom; ask them whether associates of Lenin Cerna are likely to have a social conscience to respect contracts; ask what happens to those who speak out in opposition to injustice; ask what happens when a business man takes on Sandinista partners; ask what happens when a business man refuses to take on Sandinista partners; and ask them whether it is safe for a foreigner to invest in Nicaragua.

There are a variety of reasons why you do not hear about the huge numbers of people who over the past thirty years have lost their hats to the Sandinistas: among them, the "investors" are ashamed of their poor choices and even in denial about the extent to which they were not victims of random bad luck, but systematic countrywide extortion.

Perhaps you might also consider arranging an interview with Mr. Fleming and Mr. Hughes and asking them the questions I posed above.  While there are many who have read that Mr. Hughes ran and sold a media company in the U.S. and put his substantial assets in offshore bank accounts, there is less visibility thus far about his interactions with local and national politicians in his new investments, and whether those interactions precipitated his censor-and-ban crackdown on nicaliving of posters who exposed the Nicaraguan reality in coordination with the Sandinista media blitz at election time.

The Anatomy of Business Investments in Nicaragua, And A Question

Mr. Christopher,  

Reading your article you lead the reader to think that you have some inside information, that some of us donot.   Please, we would appreciate you share with us what you know so we may be prepared to face, whatever there is to face.

Thanks and look forward to your info.

 

Regards

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