U.S. Rushing Economic Aid to Nicaragua

The Bush Administration, acting on its own before Congress completes work on a $300-million assistance package, presented the new government of Nicaragua with an inaugural gift Wednesday marking the end of Sandinista rule: emergency medical aid, eligibility for financial credits and loan guarantees, and permission to resume sugar sales to the United States.

But even as a high-level delegation led by Vice President Dan Quayle represented President Bush at the inauguration of Violeta Barrios de Chamorro, the new U.S.-Nicaraguan rela- tionship got off to a turbulent start over her willingness to let the Sandinista military chief, Gen. Humberto Ortega, lead the Nicaraguan army.

Bush is said to have complained, through Assistant Secretary of State Bernard W. Aronson, about the agreement that would give a Sandinista leader such a crucial role while Chamorro takes on the separate job of defense minister.

Chamorro announced in Managua that she had given the key post to Ortega, whose brother, Daniel, was defeated by Chamorro in the Nicaraguan presidential election. The balloting succeeded where the Contra war did not--in ousting the Sandinista government after a decade of leftist rule.

“We think it would be best if she were not saddled with all that old baggage,” a White House official said. “It will obviously be a problem for her to have the Contras trust her defense organization. I’m sure she’s aware of all the potential pitfalls.”

Chamorro’s appointment of Ortega stirred political crosscurrents. On one hand, it demonstrated an effort to achieve a degree of reconciliation in the war-torn society. On the other, it was seen as particularly contentious for some in the successful Nicaraguan opposition coalition, who balked at turning over a crucial role to the powerful symbol of the defeated Sandinistas. That concern was echoed by some in Washington.

“I don’t think there would be much doubt in her mind that we would not like to see any of the Sandinistas in positions of power,” said a State Department official.

Quayle, however, said as he traveled to Nicaragua: “It’s her decision. She knows what’s necessary to bring people together.”

“She really was left with a choice of turning him loose in the night with his mobs or keeping him on board where she could keep an eye on him,” said California Rep. Robert K. Dornan (R-Garden Grove), a member of the U.S. delegation to the inauguration.

But in the long run, said Sen. Patrick J. Leahy (D-Vt.), chairman of the Senate Appropriations subcommittee on foreign operations, a central role for Humberto Ortega could cool U.S. support for Nicaragua if he undermines Chamorro’s control of the armed forces and the country as a whole.

Meanwhile, the Senate appeared ready to approve today the Administration’s $300-million aid package for Nicaragua after numerous delays. The bill, already approved by the House, also contains $420 million for Panama.

The separate aid package that the Administration offered Nicaragua on Wednesday took three forms: Export-Import Bank credits and guarantees, a restored sugar quota of 54,000 tons per year and $2.5 million in medical supplies for hospitals and public health clinics.

Under the Export-Import program, the United States would guarantee loans to help Nicaraguan enterprises obtain bank financing for purchases of U.S.-made products.

President Ronald Reagan reduced the 54,000-ton quota for sugar shipments to the United States in 1983 as part of an economic embargo against Daniel Ortega’s government, and then cut it off entirely in 1985. The restored quota will represent 2.1% of the U.S. market.

Quayle led a 30-member U.S. delegation to Chamorro’s inauguration in the highest-ranking U.S. visit to Nicaragua in more than a decade.

Quayle had planned to inspect an aid shipment of 1,000 metric tons of flour and cooking oil at a distribution center on the outskirts of Managua. But the shipment was missing. Officials said it was on a truck somewhere in Honduras.

The vice president made the best of the situation, posing with his wife, Marilyn, for photographers alongside a few cans of oil, two sacks of flour and some wheelchairs he had brought with him on Air Force II.

He promised that the rest of the aid would arrive soon, enough to feed “36,000 people in the poorest barrios of Managua,” a city with an estimated population of 1 million.

Gerstenzang reported from Washington and Lauter reported from Managua. Times staff writers John M. Broder, Michael Ross, Norman Kempster and Art Pine also contributed to this report.