Sanctions Against Rafael Ortega and Petronic, “Deep Blow” to the Regime’s Finances

US sanctions against Rafael Ortega Murillo, eldest son of the Nicaraguan presidential couple, are a deep blow to the regime’s economic power. Ortega Murillo is among those who had a free hand in managing funds from Venezuela for the benefit of the governing family since 2007, with the return of the Sandinista Front to the presidency.

Money laundering and supporting corruption are the reasons behind the US Treasury Department’s sanctioning of Rafael Ortega Murillo, as well as Distribuidora Nicaragüense de Petróleo (DNP Petronic), El Goliat, a security company, and Inversiones Zanzíbar.

The presidential couple’s eldest son used DNP, a commercial enterprise acquired with public funds and later transferred to the family, for their personal enrichment “through non-competitive contracts with Nicaraguan governmental institutions”.

In addition to “striking at the head of the regime’s economic framework”, the sanctions also represent a clear message for the Sandinista Front’s base, particularly “all those mayors, paramilitaries and judges who have made a career out of criminalizing the innocent”, signaling to them that “Ortega is not going to defend them, that Ortega can’t even defend his own family,” says guerrilla commander and historian, Dora Maria Tellez.

The third member of the family to be sanctioned

Rafael Ortega Murillo is the third member of the family to be sanctioned by the United States. His brother, Laureano Ortega Murillo, has already been sanctioned. Laureano represents “the political power (of the family), and has been considered the successor, or heir apparent,” explains Tellez. Rosario Murillo, Vice President and wife of Daniel Ortega, was also previously sanctioned.

As a consequence of sanctions for money laundering, all assets within the US of the presidential family’s eldest son are frozen; and he is now unable to do business with any US citizens, who, in maintaining or establishing a commercial relationship with him also risk being sanctioned.

The sanctions against Rafael Ortega were applied in conformance with US Executive Order 13851, “Blocking Property of Certain Persons Contributing to the Situation in Nicaragua”.

The regime has “ignored the warnings”

US sanctions have placed the Ortega Murillo family “in a grave situation”, according to Tellez. DNP “is one of the largest and most profitable enterprises of the Ortega Murillo family, and already the target of a broad citizen boycott,” when thousands of Nicaraguans refused to buy gasoline or other supplies from their service stations. Tellez surmises that the new blow to this commercial enterprise might simply “lead it to ruin”.

Jose Pallais, a member of the Civic Alliance for Justice and Democracy, believes that sanctions against Ortega Murillo come on the heels of various warnings from the US directed at the regime, which doesn’t appear to “grow tired” of  repressing the population.

“The US has gradually been intensifying its message, showing weariness towards the attitude of the Nicaraguan government, which doesn’t seek a negotiated solution to the nation’s crisis; and continues to act as a repressive State with continued massive and repeated violations of human rights. The Ortega Murillo government has not listened to those messages from the United States,” he noted.

According to Pallais, actions such as the desecration of Managua’s Cathedral, isolation of the mothers who participated in a hunger strike in the San Miguel parish church in Masaya; and the arbitrary arrest and imprisonment of 16 youths who brought humanitarian aid in the form of water to that church, were the reasons behind the new sanctions. Pallais warns that sanctions are going to continue as long as the regime continues its repression.

Katherine Ramirez, a member of the Blue and White National Unity group, agrees that sanctions against Ortega Murillo are “a heavy blow to the regime’s finances,” as the eldest son of the family is also the “money manager”, according to the Treasury Department.

“We hope (the sanctions) have a substantial economic impact on them, and that, as a result, they reduce the mobilization of paramilitary forces, the police and paid gangs, because we know that all these people don’t operate on their own,” says Ramirez

The newly sanctioned

Treasury Department Secretary, Steven T. Mnuchin, stated in a press release that, “Rafael Ortega is the key money manager behind the Ortega family’s illicit financial schemes. Treasury is targeting Rafael and the companies he owns and uses to launder money to prop up the Ortega regime at the expense of the Nicaraguan people.” Rafael Ortega has “materially assisted, sponsored, or provided financial, material, or technological support for, or goods and services in support of the Vice President of Nicaragua … who was designated (sanctioned) on November 27, 2018…”.

Rafael Ortega Murillo’s modus operandi consisted of using “at least two companies he owns or controls, Inversiones Zanzíbar, S.A and Servicio De Protección y Vigilancia, S.A. to generate profits, launder money, and gain preferential access to markets for the Ortega regime,” noted the Treasury Department’s statement.

Zanzíbar and money laundering

The DNP Petronic had previously changed their name and logo to avoid sanctions. In the days following the new sanctions they were nationalized by the Ortega government. Foto: Carlos Herrera

Inversiones Zanzíbar, S.A. is the commercial enterprise used by Ortega Murillo “to obscure the transfer of profits from Distribuidor Nicaragüense de Petróleo, S.A.,” says the Treasury. The company is also used “as a front company to procure fuel stations used to avoid sanctions against the regime.” “In early 2019, Rafael Ortega diversified Ortega family financial holdings by purchasing gas stations under figurehead names ahead of expected sanctions against the regime,” the Treasury statement continues.  

According to data revealed by the United States, Inversiones Zanzíbar, S.A. is located in the El Carmen neighborhood of Managua, with the address, “from the statue of Montoya, 2 blocks east and half a block south”, exactly where the governing family’s residence and the presidential offices are located.

According to the Nicaraguan Ministry of Energy and Mining (MEM) website, beginning in 2014, Inversiones Zanzíbar, SA, was the registered license holder of at least 22 service stations operating under the name of Petronic. Information regarding licensing has now been removed from the ministry’s website. However, an investigation carried out by CONNECTAS of Latin America, found that until September 2018, the licenses for DNP were held by Yadira Julieta Leets Marin, currently the ex-wife of Rafael Ortega Murillo.

Rafael Ortega also controls Servicio de Protección y Vigilancia, SA, “El Goliat”, “a security firm that has received millions in government contracts and provides protection services for Ortega family businesses,” states the Treasury.

The list of those sanctioned continues to grow

With these new sanctions, Rafael Ortega Murillo becomes the 16th Nicaraguan official to be sanctioned by the United States. On November 7th of this year, those joining the ignoble list included National Police Sub-Director, General Ramon Avellan; President of the Supreme Electoral Council (CSE), Judge Lumberto Campbell; and Director of the Nicaraguan Social Security Institute (INSS), Roberto Lopez.

Others sanctioned by the United States include the son of the Vice President of ALBANISA[1], Francisco Lopez Centeno; General Secretary of the Managua Mayor’s Office, Fidel Moreno; Director General of the National Police, Francisco Diaz; another son of the presidential couple, Laureano Ortega Murillo; former Health Minister, Sonia Castro; and the President of Nicaragua’s National Assembly, Gustavo Porras.

A similar fate was meted out to Ortega’s Banco Corporativo (Bancorp) and ALBANISA; Retired General and Minister of Transportation, Oscar Mojica; Former President of the CSE, Roberto Rivas; Director of Nicaragua’s Telecommunications and Mail Institute (TELCOR), Orlando Castillo; presidential advisor, Nestor Moncada Lau; and Vice President Rosario Murillo.

[1] ALBA de Nicaragua, a subsidiary of Venezuela’s state-owned oil company, PDVSA.