The Secret off Manzanillo

By George Russell

Publicly hostile, the U.S. and Nicaragua are privately talking

While rancor flew between Washington and Moscow, the Reagan Administration was making optimistic noises last week about another troublesome foreign relationship. The signals hinted encouragingly at progress in a two-month-old series of secretive bilateral talks aimed at easing the undeclared hostilities between the U.S. and the Sandinista government of Nicaragua. Said a U.S. official familiar with the talks: "You can say we've taken the first step toward improving relations."

Sandinista leaders appeared to confirm that view. Following the latest round of discreetly private meetings between the two sides in the Mexican resort town of Manzanillo, Sergio Ramirez Mercado, a member of Nicaragua's governing junta and the Sandinista candidate for Vice President in national elections set for Nov. 4, declared, "For the first time, we're talking with the U.S. and not just listening to the US."

At the same time, however, Secretary of State George Shultz last week was taking a major public swipe at the Sandinistas. During his speech to the Veterans of Foreign Wars in Chicago, he charged that Nicaragua's November vote looks "more and more like sham elections on the Soviet model." As Shultz spoke, U.S. warships, including the battleship Iowa, cruised off the Nicaraguan coast. Their mission: to serve as reminders of the Reagan Administration's determination to stop the spread of Marxism-Leninism from Nicaragua to the rest of Central America. Meanwhile, leaders of the 10,000-member Nicaraguan Democratic Force of anti-Sandinista rebels known as contras declared they would intensify their guerrilla attacks against the Nicaraguan regime, despite a U.S. congressional cutoff in May of covert Administration aid to the war effort.

Confusing as the situation appeared to be, U.S.-Nicaraguan relations had indeed entered a new and intriguing phase. Neither the Administration nor the Sandinistas have yet revealed any concessions in their quiet discussions. The chance that the two countries will resolve their differences any time soon remains, as a U.S. official put it, "slim." Nonetheless, both the Administration and the Sandinistas are working hard to demonstrate their seriousness and flexibility in the closed-door conversations. In particular, the U.S. is challenging the Sandinistas to come to terms before the U.S. presidential election. In Washington, State Department officials were exuding confidence that the situation was stacked heavily in the Administration's favor. Says a U.S. diplomat: "The question boils down to whether these guys know a good deal when they see one, and are capable of taking it."

The negotiating drama has been heating up since June, when Secretary of State Shultz paid a surprise visit to Managua, Nicaragua's capital, largely at the urging of Mexican President Miguel de la Madrid Hurtado. In discussions with Junta Coordinator Daniel Ortega Saavedra, Shultz inaugurated what amounts to a fight-and-talk approach to U.S.-Nicaraguan diplomacy. After years of shunning direct negotiations with the Sandinistas, Shultz agreed to open formal channels of discussion on improving relations. But the Administration made no move to abandon its pressure tactics toward Nicaragua, notably covert support for the contras and the scheduling of nearly continuous U.S. military maneuvers in neighboring Honduras and off the Central American coast. Washington still considered those measures essential for forcing the Sandinistas to halt their export of Marxist revolution, particularly to nearby El Salvador.

Since Shultz's visit, the U.S. representative at the talks has been Ambassador Harry Shlaudeman, a highly regarded career diplomat. Shlaudeman has held four meetings with his opposite number, Nicaraguan Deputy Foreign Minister Victor Hugo Tinoco: three in Manzanillo and a fourth at a motel on the outskirts of Atlanta. As a sign of good faith, both sides have remained determinedly close-mouthed about the discussions. U.S. diplomats in Washington, however, have revealed that only two of the meetings were spent on minor procedural issues. Says a U.S. official: "There has been no grandstanding or stalling. The talks moved quickly into a serious discussion of the issues that divide us."

The Administration has been asking for four concessions from Nicaragua: 1) an end to the Sandinistas' military ties with Cuba and the Soviet Union, including the removal from the country of some 3,500 Communist military advisers; 2) an end to Nicaraguan support for the Marxist guerrillas in El Salvador; 3) curtailment of the country's formidable military arsenal and of any plans to use Nicaragua's Punta Huete airport, still under construction, as a base for advanced military aircraft; 4) fulfillment of Sandinista promises to support political pluralism, meaning reversal of the country's drift toward a Marxist-Leninist dictatorship.

Officially, Reagan Administration policy is that all four demands are inseparable. A U.S. aide said, "We're not prepared to assign priorities to them." In reality, however, it has been an article of faith among many in Washington that the demand for democracy is paramount. As a senior U.S. official in Managua put it in June, "Internal democracy solves all the other problems...if there isn't any, Nicaragua's threat to its Central American neighbors will not abate."

In return for those changes, the U.S. is prepared to offer infusions of assistance, especially to replace whatever funds Nicaragua would lose by cutting its ties with the East bloc. Says a U.S. diplomat: "As far as money, aid and investment go, they know we've got more to offer." U.S. officials also argue that the Sandinistas would win increased assistance from Western Europe, where aid to Nicaragua has dried up as once friendly governments have grown skeptical about the junta's intentions for installing pluralistic democracy.

In a bid to appear reasonable, U.S. officials dangle the possibility that the Administration's demand for internal democracy in Nicaragua is still open to interpretation. Says a senior Washington policymaker: "The question that concerns us is the way the regime holds power. That does not mean the Sandinistas have to go." What he has in mind is a Nicaraguan election that would include such figures as the contra leaders, who are currently banned from the country as traitors. In return, the election results would receive Washington's blessing, even if, as State Department officials expect, the Sandinistas win. Says a Washington diplomat: "We are pushing for something that would probably legitimize them. It is stupid for them not to concede."

Behind such expressions of State Department impatience is a feeling that Nicaragua's ruling nine-member National Directorate is split over the strategy that it should pursue in the negotiations. The prevailing speculation among U.S. policymakers is that Junta Coordinator Ortega, who is also the Sandinista candidate for President in the November elections, leads a pragmatic faction that is tempted to make concessions. According to that analysis, Ortega's hard-line opponents on the Directorate are led by Interior Minister Tomas Borge Martinez. Other experts are less certain of the Ortega-Borge division, but according to a U.S. analyst, "Ortega is the dominant personality, though he's not in charge of [Sandinista] policy yet. They've got to get out of that somehow if we're to make a deal."

Ultimately, that point of view depends on the assumption that Nicaragua is a country backed close to the wall and that the Sandinistas are aware that their plight might worsen if Ronald Reagan is reelected. There is, in fact, little doubt that Nicaragua is now in trouble economically, and has suffered from attacks by the marauding contras. Robert Leiken, a senior fellow with the Washington-based Carnegie Endowment for International Peace, describes Nicaragua's economic situation as "really rough, just unbelievable." Leiken cites food shortages in the countryside, wildcat strikes in Sandinista-controlled trade unions and widespread protests against the Sandinistas' use of national conscription to defend the country against the contras. Says a State Department policymaker: "We and the Sandinistas both know they could get a better deal before rather than after the U.S. election. This is probably the best opportunity both of us will have for some time."

That may still be either wishful or self-serving thinking. Whatever the Sandinistas may be saying in the discussions with Shlaudeman, they served notice last week that the issue of internal democracy may be beyond such negotiation. The Managua regime announced that it would uphold a ban on political privileges for a coalition of opposition parties, labor unions and business groups known as the coordinadora. The coalition, led by Arturo Cruz Sequeira, a onetime junta member, had refused to register for the Nov. 4 elections, charging that Sandinista restrictions on political freedom made a truly democratic race impossible. Said Democratic Representative John Bryant of Texas, an opponent of Reagan Administration policies who was in Nicaragua last week on a fact-finding trip: "The signs of a [democratic] election are pretty negative, and that's discouraging to me as someone who voted against aid for the contras."

Meanwhile, in Nicaragua's northern border regions, the Nicaraguan Democratic Force (F.D.N.) was forging ahead with a new campaign. TIME's Jon Lee Anderson traveled to meet the rebels in the remote Bocay River valley in the department of Jinotega. Ferried to a rendezvous point controlled by the rebels about 50 miles from the border with Honduras, he met with the F.D.N.'s top military commander, Enrique Bermudez Varela. Anderson reported that the rebel troops appeared "well fed, well armed and confident of eventual victory," despite their apparent loss of U.S. covert support. According to Bermudez, the F.D.N. has the supplies to keep its 10,000 members fighting for at least six more months. Some of the support comes from sympathetic Latin American nations, some from private U.S. religious, political and relief organizations. Within the next few weeks, Bermudez said, he intends to move the F.D.N.'s command structure into Nicaragua from its long-established sanctuaries in Honduras. Bermudez also threatened to carry out attacks against unspecified Nicaraguan cities. The faint prospect of peace might be blowing in the wind at Manzanillo, but in the Nicaraguan countryside, the air was still heavy with the fumes of war. --By George Russell.

Reported by Barrett Seaman/Washington and Janice C. Simpson/Managua

With reporting by Barrett Seaman/Washington, Janice C. Simpson/Managua