Ortega’s ‘Slush Fund’
In March 2019, members of an indigenous community cooperative in Nicaragua’s North Caribbean Coast Autonomous Region wrote to Inafor seeking help.
Their cooperative, Bloque Sipbaa, was having trouble getting permits to log and transport wood from lands that collectively belonged to their communities. The delays had chased away a financial backer and “left us indebted to the investor and without credibility as a cooperative,” the letter said.
Just a few years earlier, wrote Bloque Sipbaa’s representatives, the forests in the area had been cleared by another company without approval from Inafor. That company, however, had high-level political connections.
Alba Forestal, as it was called, was part of a sprawling group of joint ventures set up by late Venezuelan president Hugo Chávez as a conduit to provide aid to his close ally Ortega. In 2019 the U.S. sanctioned the group, named Albanisa, with U.S. National Security Adviser John Bolton describing it as a “slush fund of the corrupt regime of Daniel Ortega.”
Alba Forestal was created with the intention of helping rural communities — most of them indigenous — to benefit from trees felled by Hurricane Felix, which ravaged Nicaragua in 2007.
But a 2020 report by El Confidencial and Armando.info found the project was in fact used to clear healthy trees to reap profits for Albanisa. Between 2009 and 2016, Alba Forestal cut down more than 12.4 million cubic meters of timber across Nicaragua, according to Rodrigo Obregon, a former deputy manager in the group.
REUTERS/Oswaldo Rivas/Alamy Stock Photo
A Miskito youth rides a bicycle near trees and telegraph poles felled by Hurricane Felix in Puerto Cabezas town, on Nicaragua's Caribbean Coast, September 4, 2007.
“The Alba Forestal project in reality was national deforestation,” Obregon told independent Nicaraguan paper Confidencial.
Another report from Connectas and Nicaraguan outlet Divergentes found that between 2012 and 2016, Alba Forestal made almost $6 million by exploiting land belonging to indigenous communities in northern Nicaragua.
A spreadsheet in the leaked Inafor documents shows Alba Forestal was handed six permits covering two areas in Puerto Cabezas, near where Bloque Sipbaa was based, between 2011 and 2013.
Alba Forestal’s business had a devastating impact on Bloque Sipbaa. Its former manager, Juan Carlos Ocampo, said that Alba Forestal undercut the cooperative’s business model, forcing them to sell raw timber for a fraction of the price of the processed wood it had been selling.
When Alba Forestal opened a road into the forest starting in 2007, land-grabbers poured into the community’s territory, seizing plots of land and cutting down trees, according to Mateo Ocampo, who was Bloque Sipbaa’s president at the time.
“Now practically the entire area of the cooperative is ruined,” said Ocampo.
Nidia Matamoros, a former World Wildlife Fund staffer who worked with the Bloque Sipbaa for years, said that the cooperative’s land is now mostly cattle pastures operated by settlers.
“Ecologically, it’s a crime,” Matamoros said.
‘A Complete Network’
Most deforestation in Nicaragua is not caused by state entities, however, but by private companies, and the illegal land-grabbers that often pave their way.
The government has named agribusiness and cattle ranching as the top drivers of forest loss. Environmentalists say Nicaragua’s booming gold industry is also a growing problem, with mining projects causing deforestation and pollution, and driving violence against indigenous people.
Despite presenting itself as anti-deforestation — Ortega even refused to sign the Paris Agreement for two years on the basis it did not go far enough — Nicaragua’s government has worked hard to promote these sectors. From 2006 to 2017, mining concessions more than tripled as environmental regulations were slashed and the government created a state mining company to cash in, according to Nicaraguan environmental group Centro Humboldt.
State investment agency ProNicaragua has also been criticized for offering vast amounts of land for plantations and seeking to attract foreign agribusiness with the “Most Aggressive Fiscal Incentives in the Region.” ProNicaragua is run by Ortega and Murillo’s son, Laureano Ortega Murillo, who the U.S. sanctioned in 2019 for engaging in “corrupt business deals”.
Mining and agribusiness also encourage land grabbing, where settlers illegally clear land that they later sell to these companies. Buitrago estimated 80 percent of deforestation in Nicaragua is illegal, much of which experts say is enabled by corrupt local officials.
The former Inafor official, who spoke on condition of anonymity, said the central government has tried to eliminate authorities in indigenous territories that do not do their bidding. “It’s a complete network, that is why they guarantee control over the elected territorial authorities,” they said.
Incer, the former environment minister, said local government officials also play a critical role in this network of environmental corruption.
“Local authorities in those municipalities and those departments are the ones in charge of giving permits, or turning a blind eye, or submitting to a payment to let the trucks go through,” he said.
“It is a whole skein of corruption that is destroying the survival capacities of Nicaraguans and making Nicaragua a poorer country.”