Rampant corruption alleged in Chamorro's government


MANAGUA -- A U.S. Senate panel's report on Nicaragua paints a picture of a government riddled with nepotism that doles out fat loans to friends without expecting repayment.

The report says President Violeta Chamorro's top aide may be profiteering off U.S. donations, buying votes in the Nicaraguan Congress and backing a Sandinista army chief who is stashing millions in bank accounts in Canada.

The broad allegations, often supported by unnamed sources or based on press accounts, begin with a demand by the Republican staff of the Senate Foreign Relations Committee for stricter oversight of U.S. aid to Nicaragua.

Nicaragua has received more than $1 billion in economic aid from the U.S. government since Ms. Chamorro came to office in February 1990, the report says, and is the highest per-capita recipient of U.S. aid after Israel.

"There is increasing evidence that corruption is rampant at the highest levels of the Chamorro government," the report charges.

Nicaraguan officials declined repeated requests for comment on the report, which will be released in Washington today.

In the report's assertions on corruption, it says:

* Nepotism is rampant. "Dozens of relatives of President Chamorro and (chief of staff and son-in-law) Antonio Lacayo have been appointed to the most prestigious government posts."

* U.S. money bankrolled state-owned banks that offered scores of bad loans, some of them to repay political favors. A State Department source said banks gave out $167 million in loans in 1991 that were never repaid.

* The Sandinista-run army and its leader are pocketing huge amounts of cash. The report cites a source "very close" to Ms. Chamorro alleging that Gen. Humberto Ortega "has secret bank accounts in Canada in which $1 million were deposited monthly in 1991. $500,000 allegedly has been deposited monthly in 1992."

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