By TRACI CARL
The Associated Press
Wednesday, January 10, 2007; 12:16 AM
MANAGUA, Nicaragua -- Daniel Ortega, who led a Marxist government that spent the 1980s fighting U.S.-backed insurgents, returns to power Wednesday promising to respect free trade and private business and maintain relations with Washington.
The inauguration is a reflection of Ortega's delicate balancing act. He has pledged to remain close to his leftist allies while assuring opponents he is no longer the radical who imposed a state-run economy, sparked runaway inflation and fought off a bloody, decade-long rebel movement.
The U.S., which openly opposed Ortega during his presidential campaign, has grudgingly welcomed the president-elect's more moderate stance. On Monday, President Bush called Ortega and said he wanted to put the past aside and strengthen the Central American nation's democracy.
Gordon Johndroe, a White House spokesman, said Bush "expressed his strong commitment to the well-being of the Nicaraguan people and our continued interest in a relationship with Nicaragua."
The U.S. government so despised Ortega during the 1980s that aides to President Reagan secretly sold arms to Iran's radical Islamic government to finance clandestine aid for the Contra rebels who were trying to overthrow Ortega.
Bush's father, who followed Reagan as president, sneeringly described Ortega as "this little man" and as an "unwanted animal at a garden party" when both attended a Central American summit in 1989 _ a year before Nicaraguans voted Ortega out of office.
U.S. Health and Human Services Secretary Michael Leavitt will head the U.S. delegation at Wednesday's inauguration.
Ortega met privately Tuesday with Leavitt. Chatting amicably together in front of reporters beforehand, Leavitt told Ortega he wanted to "make clear that our desire is to work with you."
Ortega replied that he "hopes that this will be the first of several visits."
But one of the most high-profile guests will be Chavez, Venezuela's socialist president who plans a whirlwind visit with offers of economic and political support for Nicaragua, the second-poorest in the Western Hemisphere after Haiti.
Chavez, who calls Bush "the devil," has promised Nicaragua 32 desperately needed electricity plants, low-interest loans to the poor from a branch of his state development bank and help in improving health and education.
Chavez also will receive an honorary doctorate from Nicaragua's National Engineering University.
Other inauguration guests include Bolivian President Evo Morales, an ally of Chavez and Cuban leader Fidel Castro. Morales has expressed doubts about the U.S. drug war in the Andean region and recently announced that U.S. citizens would have to obtain visas to visit Bolivia. The U.S. is wary of Morales' ties to Chavez and Castro.
Nicaraguan officials earlier said that hardline Iranian President Mahmoud Ahmadinejad, who has defied international criticism of his country's nuclear program, also planned to attend.
They later said Ahmadinejad would not be coming, and that a lower-level representative would take his place.
The president-elect has been guarded about the direction his new government will take.
While repeatedly assuring investors he doesn't plan radical changes, he also refused to name most of his Cabinet until inauguration day.
He has made few public comments since the week of his Nov. 5 election, speaking mostly through his wife and spokeswoman, Rosario Murillo.
Ortega will be sworn in at the Omar Torrijos Nonaligned Plaza, which he constructed as president in the 1980s after his Sandinista movement drove out dictator Anastasio Somoza.
It is the same plaza where Ortega conceded defeat to Violeta Chamorro after losing the presidential election on Feb. 25, 1990.
Ortega's Sandinista party has the largest number of lawmakers in Congress, but it is short of the majority needed to pass legislation on its own.
Analysts speculate he might try to renew his past coalition with the party of former President Arnoldo Aleman, who was convicted in 2003 of money laundering and embezzlement.
During the new Congress' first session Tuesday, lawmakers from all opposition parties repeatedly warned Ortega not to try to return Nicaragua to the dark days of his previous leadership.
"The Sandinistas better not fall victim to the totalitarian temptations of before," warned Wilfredo Navarro of Aleman's party.
In an exclusive interview with The Associated Press, outgoing President Enrique Bolanos predicted Ortega's government would be "as strong as it was in the 1980s."
"It won't be a democracy, because democracy requires divided power," said Bolanos, who was jailed twice under Ortega's previous rule and had much of his property seized. "We will see what happens."
Many of Ortega's opponents had threatened to leave the country if he returned to power, but that hasn't happened. Many seem to be waiting to see what his new government will do.
Private security guard Leonel Zuniga, 32, said he is optimistic Ortega will make good on his promises to help the poor without radical policies.
"If he cuts off ties with the United States, he won't be able to do anything," Zuniga said. "Without their support, the country is paralyzed."
Associated Press writer Filadelfo Aleman contributed to this story.