- The Washington Times - Wednesday, November 26, 2008

MANAGUA, NICARAGUA (AP) - The U.S. says it will freeze about $64 million in anti-poverty aid to Nicaragua amid accusations that local elections were fraudulent.

Nicaragua dismissed the move on Wednesday, saying it could easily find aid elsewhere.

The Millennium Challenge Corp, a U.S. development program working in some of the world’s poorest countries, will hold back $64 million that had yet to be contracted out as part of a $175 million, five-year anti-poverty program.

The rest of the money has already been committed to projects begun in 2005 to improve incomes and conditions for rural families.

“We had hoped, for the sake of the Nicaraguan people, that the government would continue the country’s trend toward peaceful, democratic and credible elections,” Millennium Challenge executive director John Danilovich said Tuesday. “I am afraid recent evidence shows that this is not the case.”

The dispute involves the Nov. 9 municipal elections, in which President Daniel Ortega’s Sandinista party won a majority of the country’s mayorships.

The opposition has proposed legislation to cancel the election results, arguing the vote was fraudulent and that the government refused to allow international observers.

Ortega responded by issuing a presidential decree declaring the opposition effort unconstitutional.

“We have friends, we have allies who, with just one signature, can replace this charity the U.S. was giving us to attack misery and poverty in the region,” said Nelson Artola, president of the government’s Emergency Social Investment Fund.

The U.S., European Union and Organization of American States all expressed concern that outside observers were not allowed to monitor the vote.

Ortega, who led the country’s Marxist-leaning government in the 1980s, has had rocky relations with the U.S. since returning to power in January 2007. He has maintained ties with the Americans while courting close relations with U.S. foes such as Venezuelan President Hugo Chavez and the government of Iran.

But suspending new aid is the largest sign so far that Nicaragua and the U.S. could once again become the enemies they were during Ortega’s first term in office, when the U.S.-backed Contra rebels tried to overthrow him.

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