Opposition leader Eduardo Montealegre along with five other former board members of the Central Bank could face criminal charges for their alleged role in a $500 million bank fraud that has been called “the biggest fraud in Nicaragua’s history.”
The Comptroller General’s office last week presented the conclusions of its investigation into the 2000-2001 banking scandal involving the Central Bank’s issuing of Negotiable Investment Certificates (CENIs) to cover the collapse of private banks at the end of the Arnoldo Alemán administration.
The investigation alleges criminal involvement by ex-Finance Minister Montealegre, as well as former Central Bank President Mario Alonso and four other former Central Bank directors, including Sandinista banker Silvio Conrado, who now represents the Ortega administration before the Central American Bank for Economic Integration (CABEI).
The Government Prosecutor’s Office will now conduct its own investigation to determine whether to pursue criminal charges against the six men.
According to the Comptroller’s investigation, the Central Bank’s board of directors sold the certificates for less than their market value, and then increased the interest rates to benefit the major purchaser, Bancentro, a bank in which Montealegre had been a major stockholder.
Montealegre, who heads the Nicaraguan Liberal Alliance (ALN), has long claimed he is innocent. He insists he had nothing to do with the CENIs scandal because at the time of the initial bank interventions he was serving as Foreign Minister. However, Montealegre later served as Minister of Finance in 2002, when he helped the new government of President Enrique Bolaños negotiate a deal with the International Monetary Fund (IMF) making payment on the CENIs a priority for the new administration, thereby ensuring that bankers were the first to get their money.
In 2003, the interest rates on the CENIs were again renegotiated and dropped around six points to lower the government’s bill.
The controversy that led to Nicaragua’s enormous domestic debt plagued Montealegre during his bid to become President last year. He has dismissed the latest accusations as a continuation of a political witch hunt (NT, Aug. 11, 2006).
As an opposition lawmaker, Montealegre has recently formed a tentative alliance with the Liberal Constitutional Party and the Sandinista Renovation Movement to vote as a bloc against President Daniel Ortega’s Sandinista Front.