John Perry on June 18, 2022
Daniel Ortega’s government in Nicaragua is “laying waste to civil society” according to the Associated Press. The Guardian called it a “sweeping purge of civil society,” while for the New York Times, Nicaragua is “inching toward dictatorship.” According to the Washington Post, the country is already “a dictatorship laid bare.” In a call repeated by the BBC, the UN human rights commissioner urged Nicaragua to stop its “damaging crackdown on civil society.”
What can possibly have provoked such widespread criticism? It turns out that the Nicaraguan national assembly’s “sweeping purge” was the withdrawal of the tax-free legal status of a small proportion of the country’s nonprofit organizations: just 440 over a period of four years. In more than half the cases, these NGOs have simply ceased to function or no longer exist. In other cases, they have failed (or refused) to comply with legal requirements, such as producing annual accounts or declaring the sources of their funding. Modest legal steps that would go unnoticed in most countries are – in Nicaragua’s case – clear evidence that it is “inching toward dictatorship.”
None of the media reports asked basic questions, such as what these nonprofits have done that led to the government taking this action, whether other countries follow similar practices, or what international requirements about the regulation of nonprofits Nicaragua is required to comply with. There is a much bigger story here that corporate media ignore. Let’s fill in some of the gaps.
Three basic questions
There are three basic questions. First, is Nicaragua exceptional in closing nonprofits on this scale? No, the practice is widespread in other nations. While figures are difficult to find, government agencies in the United States, Britain, Australia and elsewhere have closed tens of thousands of nonprofits in the last few years.
For example, between 2006 and 2011, the IRS closed 279,000 nonprofits out of a US total of 1.7 million; it closed 28,000 more in 2020. The Charity Commission in Britain closes around 4,000 per year. And in Australia, some 10,000 nonprofits have been closed since 2014, one-sixth of the total. In Nicaragua, four years of closures have so far affected only 7% of a total of more than 6,000 nonprofits.
Second, does Nicaragua impose tighter rules than other countries? Again, the answer is no. Rules introduced in 2020 required nonprofits to register as “foreign agents” if they receive funds from abroad. The Associated Press report, picked up by the Guardian, puts this in scare quotes, but the term is borrowed from the far heavier requirements that have applied in the US since 1938 under the Foreign Agents Registration Act (FARA).The Financial Times dubbed the Nicaraguan legislation “Putin’s Law,” erroneously linking it to Russia, not the United States.
The US has some of the world’s strongest and most detailed powers, but they are not unique: The Library of Congress has examples of 13 countries with similar legislation. In Britain, the government consulted last year on the introduction of a “Foreign Influence Registration Scheme,” which is similar to FARA. Nicaragua’s law is not exceptional, and nor were its consequences in reducing NGO numbers; when Australia introduced similar laws in 2014, there were 5,000 nonprofit closures in the following year as a result.
An important factor is that Nicaragua, like other countries, has to comply with international regulations that address the risks posed by unregulated nonprofits. These include widespread international concern that nonprofits are susceptible to money-laundering.
Whether deliberately or out of ignorance, media ignore the fact that the Financial Action Task Force (FATF), set up in 1989 by the G7 governments, imposes rules that apply globally. In 2020, Nicaragua was praised by the FATF for “largely complying” with its requirements. FATF specifically endorsed the tougher controls and the sanctions for non-compliance that the government introduced, including the threat of withdrawing an organization’s legal status.
Third, have nonprofits been given time to comply with the rules? According to the Guardian, “the government was not giving them an opportunity to get in line with new legal requirements,” yet I know this to be untrue. I have talked to leaders of several nonprofit organizations who have completed the process or are working their way through it. The rules are tough, and the government ministry is under-resourced for the task it has been given, but hundreds of NGOs are taking steps to comply. Many of those who fail the test are given the option of reconstituting themselves as businesses without tax-free status.
Rules apply to good and bad NGOs
Do the media ask if Nicaragua might have introduced these stringent laws because of obvious transgressions by nonprofits? No: On the contrary, the media assume that the NGOs’ complaints about the rules are justified.
The reports make only dismissive reference to the recent history of abuses by some Nicaraguan NGOs. They ignore the key fact that some of them existed principally to channel millions of dollars in US funding into activities that blatantly interfered in Nicaraguan politics. They ignore the largesse of agencies funded by the US government, such as the National Endowment for Democracy (NED) and USAID, which poured money into Nicaraguan NGOs after President Daniel Ortega was voted back into office in 2007, with the specific aim of training people to oppose his government and create the conditions for regime change.
That the NED, USAID and other US agencies use national NGOs in this way is hardly a secret. Global Americans reported that the NED was “laying the groundwork for insurrection” in Nicaragua in 2018; Lobelog revealed that the National Endowment for Democracy had bragged to Congress about its efforts to create young disciples of regime change, and the Council on Hemispheric Affairs described in detail the indoctrination process in which they took part.
Of course, this interference has been happening for decades across the world. Six years ago, Telesur showed how it worked in Venezuela, Ecuador and Bolivia. Similar activities funded by the NED and allied agencies have been carried out in Croatia, Russia, Ukraine, Poland and many other countries.
Thailand is currently introducing similar laws to those in Nicaragua to restrict foreign manipulation of NGOs; it is far from the first to do so. Sen. Edward J. Markey of Massachusetts and Sen. Jeff Merkley of Oregon are urging that Thailand’s new laws be dropped, as they “would harm civil society” – just the kind of warning that media have echoed in the case of Nicaragua.
The Financial Times went so far as to quote the NED’s Aimel Ríos, who urged tougher international pressure on Nicaragua: “It does seem that is the only language the regime will understand,” he said. The obvious conflict of interest went unchallenged. Contrast this with the media’s hypervigilance about any suggested interference by Russia or China in Western politics.
Apart from the political issues, there is a wider question of the value of nonprofit organizations to Nicaraguan society. It must be said, of course, that many nonprofits do excellent humanitarian work. But there are significant exceptions, quite apart from the examples above.
For example, local “human rights” bodies have been totally partial in their work, becoming little more than propaganda merchants, as I have shown elsewhere. Many of the medical bodies now closed also existed mainly as propaganda organizations, rather than as genuine professional institutions – particularly during the pandemic, when they attempted (with some initial success) to deter people from using the public health service.
Some private universities have lost their status for failing to produce accounts, and have been taken over by the state. Far from the impression given by the New York Times, I have been told by various academics working with their former students that they are much happier now that they have access to better, state-run facilities, their fees are fixed and they no longer have to pay extortionate fees (in some cases, $1,000) to graduate.
The Washington Post picked out for criticism the closure of the “94-year-old” Nicaraguan Academy of Letters. Yet one of its board members admitted that it was in “total administrative disorder” and had never complied with requirements to file its accounts, even though it was receiving $62,000 in government funds each year.
Western propaganda vs. facts
Perhaps the wildest claims about the importance of NGOs have been made by Open Democracy, a nonprofit web outlet that claims it “challenges power, inspires change and builds leadership among groups underrepresented in the media.” Many services for woman, such as reproductive health services, “are vanishing,” it says, repeating claims made by a Nicaraguan NGO that refuses to comply with the new laws. Without them, apparently, “prospects…are bleak.”
The article seriously misrepresented the situation of women’s health in Nicaragua, which has one of the best public health services in Central America, free to all. It has, for example, reduced maternal mortality from 92.8 deaths per 100,000 live births in 2006, to 31.6 in 2021, a reduction of 66%. In part, this is due to its 180 casas maternas, which offer dedicated care to pregnant women. The state also provides family planning free of charge in all health centers, including tubal ligations for women who do not wish to have more children.
It is true that many NGOs provide healthcare, often with foreign funding, and most of these are perfectly happy to register under the new legislation and continue working in cooperation with the health ministry.
It is of course almost inconceivable that Nicaragua can be given any credit in the media for its achievements in healthcare, or many other aspects of social provision. As FAIR has pointed out on various occasions, corporate media are consistent in making every news story an attack on Nicaragua’s Sandinista government, with no attempt at balance or genuine investigation of stories presented to them by the government’s opponents, especially those coming from the hostile Nicaraguan media.
The US State Department begins its summary of its policy on “US Relations With Nicaragua,” updated last September, with the surprisingly honest statement that “The US government works to advance US interests in Nicaragua.” Sadly, the international media appear to do the same.