The Cold War History Behind Nicaragua’s Break With Taiwan

We touched down in Managua, Nicaragua, shortly before 7:50 p.m. on July 18, 2014. The tickets were originally booked for a cheaper flight the following day, but Pablo Morales was having none of it.

“It’s Liberation Day,” he said. “You have to be here. It will be special.”

He greeted me with a clasp befitting his ursine physique and insisted on carrying my luggage – a solitary battered backpack – to the car. Whispering in from the Pacific, the evening breeze had taken the heat down a notch from oppressive to somewhere just above sultry.

The previous afternoon, on a tour of Panama City’s old Chinatown with a local historian, I had mentioned my plans to attend the celebrations in Managua. My guide raised a startled eyebrow. “Be careful with those Sandinistas,” he said. “They’ll try to convert you for sure.”

Perhaps Morales discerned a ripple of that warning in my furrowed brow as he navigated the downtown traffic enroute to his home in the suburbs. “First thing to know,” he said. “I’m a Sandinista, but I won’t try to make you one.”

Pablo Morales (a pseudonym) was as good as his word, but his word wasn’t the problem.

Propaganda is everywhere in Nicaragua; the cult of President Daniel Ortega and his Sandinista National Liberation Front (FSLN) is pervasive. Spray-painted images of El Comandante, fist clenched as he hollers a clarion call to the masses; constant updates from the president’s office running as banners at the bottom of the screen during daytime lifestyle programs on state TV channels; the utopian spin on almost every action or event in which the government plays a hand; and Stalinesque accusations of sabotage carried out by nebulous malefactors when things are not quite up to scratch.

The Liberation Day 2014 celebrations were a perfect example. I’d been led to believe that it was Nicaragua’s independence day, which it’s not, and that it was an event joyously celebrated by all Nicaraguans, which it isn’t. The distinctly underwhelming attendance at Plaza de la Revolución, formerly Plaza de la República – further demonstrating how the FSLN has bound the country’s identity to the party – was explained away by the revelation that a bus from the Sandinista Youth wing had been attacked by “right-wing terrorists.”

Several Sandinistas insisted this was a regular occurrence, and indeed, there were two more reports of attacks against party supporters in the next few days. One of these I caught over breakfast in the Morales family home. Coincidentally – considering I had come to Nicaragua to probe the country’s relations with Taiwan – the banner announcing the news ran along the bottom of the screen during a segment about a Taiwanese woman who ran a KTV in Managua.

Elsewhere, other Nicaraguans poured scorn on the claims. “Any time things don’t turn out the way they want, it’s a right-wing plot,” said a contact with ties to opposition groups.

Yet if Ortega and his followers saw enemies everywhere, it was not completely without reason. The causes of this paranoia lie at the heart of my decision to make that trip in 2014. I was not investigating the present-day claims of conspiracy, but skulduggery that dated back decades. Eventually, I found that the two coincided in the unlikeliest of manners.

***

When Ortega broke off relations with Taipei on December 9, 2021, he ended more than 90 years of official ties with the Republic of China. The relationship had been briefly interrupted in 1985 when El Comandante switched recognition to Beijing during his first official term as president. Relations with Taipei were restored in 1990, after the FSLN was ousted. On returning to power in 2007, Ortega’s decision to maintain the ties with Taipei that his successor Violeta Chamorro had reinstated may, prima facie, appeared odd.

Under Taiwan’s dictator Chiang Kai-shek and his son and successor Chiang Ching-kuo, Taiwan enjoyed cosy relations with the Somoza clan in Nicaragua, another hereditary dictatorship. The last scion of that rotten dynasty, Anastasio Somoza Debayle, visited Taiwan many times to procure funding under the guise of trade deals and development assistance.

In addition to propping the Somozas up financially, Taipei offered training to Nicaraguan military personnel at the notorious Political Warfare Cadres Academy at Fu Hsing Kang College. Expenses were covered in part by the World Anti-Communist League (WACL), cofounded by Chiang Kai-shek with U.S. backing. Courses in “counterrevolutionary techniques” proved a hit with right-wing regimes across Latin America. Many prominent figures among the U.S.-backed Contras, rebel groups that attempted to overthrow the Sandinista government in the 1980s, had trained there.

After Somoza’s ouster in 1979, Taipei continued to train and fund the Contras, even while maintaining ties with the nascent Sandinista government. Along with Israel, South Africa, Saudi Arabia, and a host of shady front companies, Taiwan served as a U.S. proxy, helping then-President Ronald Reagan circumvent the Boland Amendment – a congressional ban on support for these “freedom fighters.”

Indeed, Taiwan played a little-known part in the infamous Iran-Contra affair, funneling two payments of $1 million to the Nicaraguan Democratic Force (FDN) – the main Contra group – through disgraced National Security Council staffer Oliver North in 1985 and 1986. There’s no doubt the FSLN government was aware of Taipei’s support for the Contras, including the alleged presence of Taiwanese “advisers” on the ground in Nicaragua. This made Ortega’s decision to sever ties in 1985 unremarkable.

So why the change of heart when he regained power in 2007?

Several related explanations suggest themselves: the end to the Cold War polarization that saw Taipei follow Washington’s lead on almost everything in an attempt to ingratiate itself; the fizzling out of the Kuomintang government’s fiery anti-communist stance, as the regime’s old guard realized it had a lot more in common with the “bandits” across the strait than with democracy activists on home soil; the ascent to power in Taiwan of said activists whose values, while not revolutionary in the Sandinista sense, were much closer to those of the FSLN (which had to move toward the center to reclaim power); and, finally, quite simply, financial incentives.

Under Taiwanese President Chen Shui-bian (2000-2008), the Democratic Progressive Party (DPP) certainly tried to play on commonalities with the FSLN. Both parties emerged as reactions to repression, and the DPP could justifiably claim that, in defeating the KMT, it had helped expunge Taipei’s past sins against the Sandinistas.

Chen attended the inauguration for Ortega’s second stint as president and was back in Managua for another meeting with El Comandante seven months later, at which he referred to the Sandinista leader as a “brother” and fellow revolutionary. A classified cable from U.S. Ambassador to Nicaragua Paul Trivelli, released by WikiLeaks, quoted Taipei’s Deputy Chief of Mission Ishmael Wang as saying Chen even dressed casually “to appeal more to Sandinista sensibilities.”

Ortega reportedly remained aloof and even offhand with DPP officials and hinted at rapprochement with Beijing even as Chen was in Managua. Rather than rock the boat, Chen continued the fawning by saying that Ortega deserved the Nobel Peace Prize if he could achieve recognition of both China and Taiwan. The KMT opposition was not alone in thinking Chen’s obsequious overtures made him a laughingstock.

Money was the primary motivation for maintaining ties. Chamorro’s successor Arnoldo Alemán ostentatiously demonstrated the potential of Taiwanese largesse by having Taipei foot the $10-million bill for the Orange House – the suitably garish presidential building constructed in 1999. (Citing exorbitant maintenance fees, Ortega closed the building upon regaining power, and it is now used officially only for select events such as entertaining visiting heads of state.)

Like most of Taiwan’s allies under Chen, Managua was the recipient of a steady stream of “development assistance.” While some of this aid did go to worthwhile initiatives in agriculture and industry – most notably the technical assistance of Taiwan’s International Cooperation and Development Fund (ICDF) – huge chunks were reportedly siphoned off by Ortega and his cronies.

The well did not run completely dry under Chen’s successor, President Ma Ying-jeou of the KMT, but an unofficial diplomatic truce under which Beijing agreed to stop poaching Taipei’s few remaining diplomatic allies left Ortega with little leverage. This resulted in a degree of churlishness greater even than that exhibited toward the Chen administration, with Ortega regularly snubbing KMT officials and even Ma himself.

In June 2009, Ortega twice postponed a meeting with Ma in San Salvador. Exasperated, the Taiwanese president canceled the appointment and flew home. The following month in Managua, Ortega failed to show at a banquet in honor of his Taiwanese counterpart. When he did finally meet Ma, El Comandante declared that the 80-minute discussion would be broadcast live on state TV. With no prior warning, Ma looked on uncomfortably as Ortega requested assistance with irrigation and construction projects. Taiwanese media referred to Ma’s “surprise” at the impromptu nature of proceedings.

***

Fu Hsing Kang College is located in Beitou District, on the outskirts of Taipei. In the 1970s, dozens of Central American soldiers “graduated” from the political warfare program there. Some of those men went on to be implicated in horrific human rights abuses in their homelands.

The more sensational aspects of this dark chapter in Taiwan’s foreign relations history are documented in books such as “Inside the League” by brothers Scott Anderson and Jon Lee Anderson and “Fires of the Dragon” by David E. Kaplan. Elsewhere, in “Counterrevolution in China,” Thomas A. Marks has dismissed claims that the program included “enhanced interrogation” techniques, calling Kaplan’s work “a hunt for scandal.”

The truth lies somewhere in between. While the Fu Hsing Kang philosophy emphasized winning hearts and minds, there is strong evidence of Taiwanese involvement in the excesses perpetrated by the Contras in Nicaragua and Rightist death squads in Guatemala, Honduras, and El Salvador.

In 2013, my apartment faced the back wall of the college. I frequently encountered military personnel from Taiwan’s then diplomatic allies who were attending the courses that Fu Hsing Kang continued to offer. By this time, it was mundane stuff. A pair of Dominican soldiers lugging their shopping back to the campus from the local Carrefour supermarket described logistics and maneuvers training in bored tones. At a local stir-fry joint, a team of Paraguayans considered their time in Taiwan an all-expenses jaunt; a Guatemalan youngster mentioned Taiwan’s donation of a pair of choppers to help access his country’s remote highlands before turning the discussion to the best dating apps.

On several occasions, I broached the bad old days. In some cases, the younger trainees appeared oblivious to the history; at other times frowns and frosty silence ensued. When I mentioned Taiwan’s funding of the Contras to a team of Nicaraguan soldiers outside a metro station one evening, our chat was abruptly terminated.

This was understandable. As with its neighbors, Nicaragua continues to wrestle with the legacy of its civil war. Yet, before I’d arrived in Managua in 2014, Morales had suggested I wouldn’t have difficulty finding people to talk to.

Once I was there, he changed his tune. In fact, as I quickly discovered, the “C” word was off limits among the FSLN faithful, and it gradually became clear that this was not just about reopening old wounds. “Please don’t mention the Contras,” Morales urged me, as we boarded a private bus to the Liberation Day celebrations, military figures among the passengers. “Some people here won’t like that.”

It was a chance conversation with a member of the Chinese Nicaraguan Association at a restaurant close to the Taiwanese embassy in Managua that laid the problem bare. Touching his nose in conspiratorial fashion as we spoke of the corruption allegations against Ortega, my interlocutor indicated that any dig into transgressions under Somoza would be “like a mirror” to the Sandinistas, reflecting their own descent into venality.

The parallels with Taiwan’s DPP under Chen were obvious: movements that had fought rotten regimes, only to end up succumbing to the same vices. In Chen’s case, the maintenance of a foreign relations slush fund played a role in his party’s fall from grace; Ortega’s crackdown on the press and opposition, and policies geared toward key constituents, assured he wouldn’t go the same way.

***

On December 10, 2021, the day after Managua broke off ties with Taiwan, Morales was finally ready to talk.

Having spent a year as a scholarship student in Taipei starting in 2010, Morales regretted the rupture on a personal level but said the relationship was no longer tenable. “It’s a shame because I love Taiwan and the people, but we have to be realistic: It’s dumb to be with Taiwan if that blocks us from relations with China,” said Morales, who is now a practicing lawyer.

Morales cited American meddling as the key factor in the break. “We’ve been under attack by the United States since 2018,” he said. Morales was referring to sanctions against Nicaraguan officials following Ortega’s bloody crackdown on nationwide protests against his rule that year.

“They are trying to overthrow our government by force and break the economy, and Taiwan is one of their allies. You have to understand that Taiwan is anti-communist, right-wing in its roots.”

The attempt to link Ortega’s decision to Taiwan’s alleged support for U.S. interference seems odd. Far from condemning the 2018 violence, Tsai Ing-wen’s administration continued to back Ortega, offering a $3 million donation to the National Nicaraguan Police Force at the very moment it was arresting journalists and media owners on trumped-up charges. These were hardly the actions of an American patsy.

Yet some analysts agree that the tightness of the Taipei-Washington bond was a factor in Nicaragua’s decision. Official aid from Taiwan had ebbed and, after years of vacillating, Ortega now saw China as the better option. “Perhaps, in the context of heightened international polarization, China was in a position to make Ortega an offer he regarded as more reliable,” wrote Jonah Walters in The News Lens, the week after ties were severed.

Even Taiwan’s Minister of Foreign Affairs Joseph Wu conceded that Taipei’s closeness to Washington had played a role, noting that Managua’s announcement appeared deliberately timed to coincide with the first day of the virtual Summit for Democracy hosted by the U.S., in which Taiwan had notably been invited to participate and Nicaragua had not.

“There’s more,” said Morales. “The anti-communist league tried to recruit me.”

This was unexpected. Despite once being infamous as a gathering place for fascists, assassins, and right-wing crackpots, the WACL, or the World League for Freedom and Democracy (WLFD), as it is now known, had supposedly long ago lapsed into obsolescence. In Taiwan, where it is still headquartered, it seemed at worst just an old boys club where former KMT bigwigs reminisced over a few too many glasses of kaoliang liquor about the good old days when right-wing authoritarianism was synonymous with “democracy” and those who disagreed disappeared.

“No, no,” said Morales. “They are still trying to undermine left-wing governments. Believe me, I can tell you a lot more.”

And he did. The first overtures, said Morales, were made shortly after his return from Taiwan in 2011, under the guise of a student association meeting at the private residence of Ingrid Hsing, Taiwan’s ambassador to Nicaragua from 2011 to 2015. After attending a couple of meetings, Morales stopped responding to the invitations as he felt uncomfortable with the “corrupt” atmosphere.

“It all went through Hsing. The students were taking orders from her,” he said. “Then I found out they were offering scholarships to people in Taiwan who followed their ideas.”

Just what these ideas were did not become apparent until several years later. In 2014, just over a month after I had left Nicaragua, Morales was invited to a WLFD meeting in Managua. Although I had spoken to him about the WACL during my visit, Morales admitted that he didn’t make the connection and assumed the WLFD was simply a platform for cooperation between the two countries.

“Once I was there, they tried to get me to join,” he says. “Most of the students they recruited were middle class or wealthy. I don’t think they realized I was a Sandinista.”

They certainly knew the politics of their most prized asset: As an official adviser to Ortega on the abortive Nicaraguan Canal project, Telémaco Talavera was a high-profile figure. Morales was stunned to learn that Talavera had accepted a post as honorary president of the new Nicaragua chapter of the WLFD.

***

At WLFD headquarters in Taipei’s Zhongzheng District, Peter Lee refuted Morales’ claims of bribery and corruption. “This is the first time I’ve heard this,” said Lee, who is director of the organization’s department of information services. “We have no involvement with scholarships. Maybe she [Ingrid Hsing] tried to include scholarship students, but that was on behalf of the government, not the league.”

However, Lee admitted that Hsing was active in trying to establish the WLFD Nicaragua chapter. “She worked hard to help us promote freedom and democracy, because Nicaragua is not a very democratic country,” he said. “After the Sandinista government took power, we came into the country to have a chapter. It was difficult because they’re very aggressive and authoritarian.”

The irony of this statement coming from an organization that ranked some of the most autocratic leaders of the 20th century among its number should be obvious.

Talavera, said Lee, was approached via covert channels. “We contacted him through the secretary general of the chapter who is the head of a women’s group in Nicaragua,” he says. (Morales confirms that the person in question was Xanthis Suárez, director of Bolsa de Mujeres, a women’s rights foundation.) “After he was appointed as adviser on the canal, he said ‘I’m sorry, but because of my position, I cannot do this publicly. I’ll have to stay underground.’”

Morales told a different version of events. “I revealed Talavera’s WLFD role,” he said. “Once the president knew, he asked Talavera about it, and he got out of there.”

This tentative attempt by the WLFD to make inroads in Nicaragua was the “first move” in a grand strategy, Morales said. “Talavera was involved in the plan to betray the FSLN in 2018,” says Morales. “I can tell you certainly, that this was a group with U.S. direction, and later similar groups of right-wing radicals tried to create a coup.”

And here we stray into paranoia once more. Of course, just because you’re paranoid doesn’t mean they’re not out to get you.

***

Following the publication of my rather unflattering article about the WACL in late January 2022, pegged to the league’s World Freedom Day event, Peter Lee was keen to get together. A little too keen.

The Lunar New Year holiday interceded. Once it was over, a proposed informal chat over coffee between the two of us became a lavish spread in an opulent setting. A couple of days prior, Lee had casually mentioned that two of the organization’s bigwigs would be present. My son was also invited, which made me more comfortable, but I was still not sure what to expect. The urgency of Lee’s correspondence had put me on guard.

On February 8, we arrived early at the Yuan Yuan Restaurant at Taipei’s iconic Grand Hotel. Our hosts were already waiting for us at a table by the window.

In the 1970s, Chiang Kai-shek built a network of tunnels under the hotel to facilitate a hasty exit in case of a communist invasion. While now open to the public, advance booking is required to see the tunnels, which ruled out that escape route if things had turned sour in our meeting.

As we took our seats, Lee surreptitiously clicked a small recording device and slipped it into his inside jacket pocket. My phone recorder was already on.

Aside from a brief opening statement about the values of “freedom and democracy” that the WLFD claims to represent, our two-hour meal mainly comprised of innocuous chit-chat. The league’s Republic of China (Taiwan) chapter president, Tseng Yung-chuan, asked about my background and held forth with anecdotes from his career as a KMT legislator and former secretary-general of the party. Assisted by Lee, he spun the lazy susan in our direction, encouraging us to sample the various dishes. Secretary General David Liu, a career diplomat who was based in the U.S. for much of his life, was also present. Wrapped in a zipped-up puffer jacket, despite the clement weather outside, he cut a forlorn, slightly jittery figure.

When we were done, Tseng presented me with a special edition gift box of top-notch kaoliang from Kinmen, the Taiwan-administered island off the coast of China’s Fujian Province, which is famed for this strong liquor. Representing the front line against “communist” aggression, the island has long been a motif in the Chinese Nationalist historical narrative that the KMT imposed on Taiwan.

On the metro home, I messaged Morales. “They didn’t try to recruit me,” I told him.

“Not yet,” he replied. “But give it time.”