Source: Reuters reporting.

The International Monetary Fund, in a 2017 report, estimated that Nicaragua received as much as $3.2 billion from Venezuela before the South American country’s economy imploded in recent years. Nicaragua’s own central bank has said the figure reached as much as $5 billion. But neither government has ever given a full accounting of the financing or how Ortega spent the money, which is equivalent to as much as a third of Nicaragua’s annual economic output.

Spokespeople at Venezuela’s information ministry and PDVSA didn’t respond to Reuters requests for comment. 

By 2008, Ortega’s family and close associates had begun building what today is a business empire with assets in energy, security and other sectors. Juan Carlos that year launched Difuso Comunicaciones SA, an advertising agency.

The agency quickly attracted clients eager to do business with those in power. People familiar with the ad agency’s operations say it serves as a conduit for much of the government’s advertising. Difuso produces commercials for state tourism, the ports agency, the electricity authority and other agencies, these people say, and places the ads on channels controlled by the family.

Government documents reviewed by Reuters show that Difuso’s owners include María Luisa Mejía, who is regularly referred to in Nicaragua as one of first lady Murillo’s attorneys. Another Difuso owner is Nestor Moncada Lau, an advisor to President Ortega. In 2018, the U.S. sanctioned Moncada for allegedly paying counter-demonstrators to clash with protestors that year and bribing other Nicaraguans to keep them from opposing the government.

“They’ve created a system in which the money comes out of the national budget, runs through their holdings, and all stays in their pockets.”

Mejía has never publicly addressed her reported role as Murillo’s attorney. She didn’t respond to requests for comment for this story. Moncada, though widely considered a close aide of Ortega, has never given an interview. Reuters was unable to reach him.

When Juan Carlos took the reins at Canal 8, workers were surprised by what suddenly seemed like a bottomless budget, according to five former employees of the channel. He bought modern studio equipment, they said, and wooed rival journalists with good salaries. He sent iPads and other gifts to the heads of ad agencies from which he hoped to win non-government business.

Questions began circulating in Nicaragua about the source of the money in Canal 8’s newly fat wallet. Rafael Paniagua, the Venezuelan then in charge of Albanisa, told a Managua newspaper in 2010 that Canal 8 was purchased for roughly $10 million by the Nicaragua-Venezuela joint venture. Paniagua left Nicaragua abruptly afterward and never returned. Reuters was unable to determine how ownership of the channel was transferred from Albanisa to Leets Marín. Paniagua couldn’t be reached for comment.

Rodrigo Obregón, another former Albanisa executive who retired in 2014, recently supported Paniagua’s assertion. The Canal 8 acquisition, Obregón told Reuters in an interview, was part of a plan by Ortega to replicate Chávez’s strategy of bringing the media under state control to “indoctrinate” the masses. “They were interested in all the radio and TV broadcasters they could buy,” Obregón said.

“Ignore everything”

Throughout Ortega’s second and third terms, his family took control of more broadcasters, often with close associates as owners. Generous compensation made jobs at these outlets attractive for some journalists. The perks included discounted homes at subsidized housing developments, according to four people familiar with the benefits.

In exchange, Murillo expected reporters to toe the Sandinista line.

In 2011, Noel Miranda, a reporter at Radio Ya, a Managua station, asked Murillo at a press conference about allegations by local academics that the government was growing autocratic. Radio Ya is owned by Entretenimiento Digital SA, a company controlled by Rafael Ortega, according to previously undisclosed ownership documents reviewed by Reuters.

Murillo looked at the reporter’s identification card, stared him down, and ignored the question. The following day, Miranda said, he wasn’t allowed back at work. The station didn’t renew the six-month contract he was on, and Miranda is now a reporter for an online news site in Managua. “We knew there were limits,” Miranda told Reuters.

Miranda’s account was substantiated by several former colleagues. Executives at Radio Ya and Entretenimiento Digital didn’t respond to emails and phone calls from Reuters for comment.

That same year, the Ortegas launched a new television station, Canal 13, managed by three other Ortega Murillo children: Camila, Maurice and Luciana. One of the channel’s owners, according to government documents reviewed by Reuters, is Mejía, the attorney who also is part-owner of Difuso, the advertising agency.

Three years later, in 2014, Maurice Ortega also began managing the news operations of Canal 2, another major station owned by Ortega allies.

With more platforms in the hands of the family, the Ortega government increased state spending on advertising more than tenfold, according to data compiled by Media Gurú, the advertising consultancy. The data, independently reviewed by Reuters, is based on market rates for advertising on channels across the country. Media Gurú, which has offices in Managua and elsewhere in Central America, declined to comment.

Between 2000 and 2010, according to a person familiar with the data, Nicaragua’s government spent an estimated $2.6 million a year on advertising. By 2019, the data show, the figure had soared to an estimated $29 million annually. Last year, all but roughly $128,000, or 0.44% of that amount, went toward advertising with Ortega family outlets, according to a Reuters calculation based on the data. The ads are purchased by government agencies and by state-run companies like the gas-station chain controlled by Rafael Ortega.

“It was a brutal attack to make us change our editorial line or to make us bankrupt.”

At Canal 8 alone, advertising placed by the state jumped from roughly $400,000 in 2009 to an estimated annual average of more than $6 million over the past decade, according to the person familiar with the data. Last year, the government placed ads worth an estimated $16.8 million with the channel, the data show.

By comparison, Canal 10, Nicaragua’s most popular station and a channel not controlled by the Ortegas, in 2019 received less than $9,000 in state advertising, according to the data. Executives at Canal 10 didn’t respond to requests for comment.

The person familiar with the Media Gurú data confirmed the accuracy of the spending figures reported here. Separately, three advertising executives in Nicaragua told Reuters the estimates are realistic.

With unrivaled reach, the Ortega family’s messaging permeated the country.

Murillo grew especially visible, appearing on family-run channels, often daily, and issuing orders about coverage and editorial priorities through offspring at the helm of each broadcaster. “She is like the head of an octopus, her children the tentacles,” said one journalist who formerly worked at one of the broadcasters.

In 2014, Sandinista legislators scrapped presidential term limits. Two years later, Ortega won a fourth term and Murillo, now his running mate, the vice presidency. Ortega barred international observers from the election.

In 2018, an Ortega plan to increase social security contributions and lower pension payouts sparked demonstrations. At first, Murillo told state and allied outlets not to cover the unrest. “The order was to ignore everything,” said Carlos Mikel Espinosa, then an editor at El 19 Digital, a state-controlled online news portal. Espinosa quit when the upheaval intensified and the government response grew violent.

Foreign governments, the United Nations, and human rights groups denounced Ortega and Sandinista allies for reported killings, beatings, detentions and torture of many protesters. Police raided newsrooms of opposition media, seizing equipment and supplies needed for publishing.

They arrested Miguel Mora, founder of 100% Noticias, a Managua television station, and shut its broadcasts. The government, Mora told Reuters, claimed the channel owed unpaid taxes, an assertion he denied. “It was a brutal attack to make us change our editorial line or to make us bankrupt,” said Mora, who was released but has since left the media business.

Some outlets controlled by the Ortegas, meanwhile, are shortchanging the government on taxes, Reuters found.

Documents reviewed by Reuters from the General Revenue Directorate, Nicaragua’s tax collection agency, show that Canal 8 hasn’t paid taxes and interest amounting to about $4 million since 2010, the year Juan Carlos took over. Canal 4, the Sandinista channel managed by Daniel Edmundo Ortega, owes about $380,000 in back taxes, the documents show.

Nicaragua’s tax agency didn’t respond to requests for comment.

It isn’t clear why the taxes have gone unpaid or whether the government has sought to collect them. Tax specialists who reviewed the documents told Reuters both stations are in clear violation of Nicaraguan tax law. “Any other company would have already been seized,” one of the experts said.

Consider the case of Canal 12, a private television station owned by Mariano Valle, a Managua businessman. Valle has sought to keep his channel independent, and its journalists and on-air guests have criticized Ortega policies. In September, Ortega’s government said the channel owes about $800,000 in unpaid taxes. A judge, pending ongoing litigation, authorized the state to seize the station’s offices and cars, and Valle’s home, and keep them if the channel loses in court.

The channel in a statement called the moves “arbitrary and illegal.” In September Valle told a local radio station, “we don’t owe anything.” He didn’t respond to requests for comment.

Eduardo Enríquez, editor of La Prensa, the last large independent newspaper still operating in Nicaragua, told Reuters that during the protests, tax authorities used their power to block imports of newsprint and ink.

The suffocating reach of pro-Ortega propaganda, Enríquez said, means La Prensa and the handful other independent outlets are operating in a “news desert.” If the Ortegas remain in power, he predicts, “independent media won’t survive.”

Additional reporting by Daphne Psaledakis in Washington.

Sandinista Stations

By Drazen Jorgic and Ismael López

Graphics: Aditi Bhandari

Photo editing: Tomas Bravo

Design: Pete Hausler

Edited by Paulo Prada

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