Iran's Invisible Nicaragua Embassy
Feared Stronghold Never Materialized

By Anne-Marie O'Connor and Mary Beth Sheridan
Washington Post Staff Writers
Monday, July 13, 2009

MANAGUA, Nicaragua -- For months, the reports percolated in Washington and other capitals. Iran was constructing a major beachhead in Nicaragua as part of a diplomatic push into Latin America, featuring huge investment deals, new embassies and even TV programming from the Islamic republic.

"The Iranians are building a huge embassy in Managua," Secretary of State Hillary Rodham Clinton warned in May. "And you can only imagine what that's for."

But here in Nicaragua, no one can find any super-embassy.

Nicaraguan reporters scoured the sprawling tropical city in search of the embassy construction site. Nothing. Nicaraguan Chamber of Commerce chief Ernesto Porta laughed and said: "It doesn't exist." Government officials say the U.S. Embassy complex is the only "mega-embassy" in Managua. A U.S. diplomat in Managua conceded: "There is no huge Iranian Embassy being built as far as we can tell."

The mysterious, unseen giant embassy underscores how Iran's expansion into Latin America may be less substantive than some in Washington fear.

Iran's proposed investments in Nicaragua -- for a deep-water port, hydroelectric plants and a tractor factory -- have also failed to materialize, Nicaraguan officials say. At a time when Iran's oil revenue is falling, the same is true of many projects planned for Latin America, according to analysts.

U.S. officials emphasized that there is plenty of reason to be concerned about Iran, which they consider a state sponsor of terrorism. But the Iranian activity has revived Cold War-style rhetoric in Washington that at times doesn't match what is evident in places such as Managua.

Last month, Rep. Connie Mack (R-Fla.) even told reporters in a call organized by the Israel Project that "the growing influence of Iran in the Western Hemisphere reminds me of the relationship between Russia and Cuba when we dealt with the Cuban missile crisis."

It is not clear where the report of the embassy in Managua began. But in the past two years, it has made its way into congressional testimony, think tank reports, press accounts, and diplomatic events in the United States and elsewhere.

"Iran recently established a huge embassy in Managua," Nancy Menges of the Center for Security Policy told a House committee last year. "Iran's embassy in Managua is now the largest diplomatic mission in the city," wrote Michael Rubin of the American Enterprise Institute.

State Department spokesman Philip J. Crowley said that Clinton heard about the embassy during a recent meeting in the region. "If it turns out this is not happening, that's good news," he said.

"It perhaps suggests the Iranians are talking about investments and influence that they don't yet have," he said. "But they are certainly feeling their oats, and they are certainly trying to exploit opportunities where they think they exist."

But Bayardo Arce, a senior economic adviser to Nicaraguan President Daniel Ortega, likened the elusive "mega-embassy" to the nonexistent weapons of mass destruction in Iraq. "It doesn't exist. They deceived the secretary of state," Arce said. "We don't have an Iranian mega-embassy. We have an ambassador in a rented house with his wife."

If anything, Arce said, Iranian investment in Nicaragua has fallen far short of the expectations of the cash-strapped government. Nicaragua can't even persuade Iran to pardon its $160 million debt, he said.

"They haven't invested anything. They haven't built anything," Arce said. "We haven't even been able to renegotiate the debt. They say the Koran doesn't permit them to. We'll have to study the Koran to see if we can find something that condones it."

In a country that President Ronald Reagan once famously said was just a 48-hour drive from Brownsville, Tex., even opponents of the Sandinista government are irritated by the report.

"Who told Hillary that? Someone misinformed her," said Francisco Aguirre Sacasa, a leader of the opposition Constitutionalist Liberal Party and head of a legislative foreign affairs committee. "I never cease to be astonished that a country with such intelligence-gathering capacities could fall for such a canard. What now? Is Obama going to start talking about the Axis of Evil?"

Analysts say Iran has not yet come through on multiple accords to invest billions of dollars in energy exploration, factories and other projects in Latin America.

Iranian President Mahmoud Ahmadinejad "can go around and sign all these things, but ultimately it's the Iranian parliament that has to decide whether it's going to give Managua $350 million to develop its port, and they haven't done so," said Farideh Farhi, an expert on Iran's foreign policy at the University of Hawaii at Manoa.

Historical Ties

Nicaragua was last linked to Iran during the Iran-contra scandal in the 1980s, when U.S. officials secretly sold arms to Iran -- a Sandinista ally -- and used profits to fund rebels fighting Ortega's leftist Sandinista National Liberation Front government, whom they accused of supporting regional revolution.

Iran and Nicaragua closed their embassies when Ortega left office in 1990 but reopened them after Ortega returned to office in January 2007.

"In our Iranian brothers, we have a people, a government, a president willing to join with the Nicaraguan people in the great battle against poverty," Ortega said after the election during a visit by Ahmadinejad.

Shortly after that, Iran rented a villa in Managua that is now the Iranian Embassy.

The embassy remains the most visible symbol of a relationship that Nicaraguan reporters complain has been shrouded in secrecy. After the Nicaraguan media reported that Iranians had entered the country in 2007 without obtaining visas, officials removed Iran from the list of countries whose citizens must get visas in advance.

The Iranian reappearance in Latin America has drawn concern from U.S. officials, who say Iran is involved in and supporting international terrorism, backing violent opposition to the Middle East peace process and possibly developing nuclear weapons.

"The Iranian presence here, as elsewhere, is a concern to us," a U.S. official in Managua said. "So, naturally, we pay attention to what they're doing. But although they are here, we haven't seen a lot of activity on their part."

Since Ahmadinejad was elected in 2005, Iran has opened six new Latin American embassies -- in Colombia, Nicaragua, Chile, Ecuador, Uruguay and Bolivia -- adding to embassies in Cuba, Argentina, Brazil, Mexico and Venezuela.

Analysts say Venezuelan President Hugo Chávez has encouraged Iran's Latin American expansion. Iran has signed scores of economic and political accords with Chávez's populist government, and the Islamic republic has invested in factories in Venezuela producing tractors, bicycles and "anti-imperialist" cars.

U.S. officials have complained to Venezuela about the reportedly lax controls on passengers arriving in Caracas on weekly flights from Iran that began two years ago. The U.S. Treasury has slapped sanctions on an Iranian-owned bank with an office in Caracas that allegedly helped Iran avoid sanctions on its nuclear program. The Iranian-backed group Hezbollah, also on the U.S. terrorism-sponsor list, raises funds in Latin America, although it is not known to have an operational presence, according to State Department reports.

U.S. officials say there is ample cause for concern. Iran was accused of involvement in the 1994 bombing of a Buenos Aires community center that killed 85 people. Iran has denied any role in that attack. The 1992 bombing of the Israeli Embassy in the Argentine capital, which left 29 dead, has been blamed on Hezbollah.

U.S. Assistant Secretary of State Thomas A. Shannon Jr. told Reuters last year that U.S. officials "worried that in the event of a conflict with Iran, that it would attempt to use its presence in the region to conduct such activities against us."

Platform Built, at Least

In Iran, Mir Hossein Mousavi, who lost a disputed election against Ahmadinejad last month, has criticized the resources devoted to Latin America.

Ahmadinejad has defended his focus, saying that when Western states were "trying to isolate Iran, we went to the U.S. back yard, and I even delivered my strongest anti-U.S. speech in Nicaragua."

Iranian Ambassador Akbar Esmaeil Pour, who declined requests for an interview, continues to use Nicaragua as a platform.

"Iran has the right to develop this peaceful nuclear technology," Esmaeil Pour said in a May television interview. "Global climate change means all of us must search for clean atomic energy. We are here in peace."

In another television appearance, Esmaeil Pour said that "though some people might not like it," Iran will break ground on a clinic in Managua in June.

"We are taking the first steps, strengthening relations to undertake other projects," he said.

And a new Iranian Embassy may be on the drawing board.

Plinio Suárez, executive president of Canal de Noticias television, said he went to a party at the Iranian Embassy some months ago and saw an architectural model of a three-story building that an Iranian staffer said was the prototype of a future embassy.

"There is an intention of Iran to build their own embassy," said Sandinista deputy Edwin Castro Rivera, leader of the Sandinista bloc in the General Assembly. "But it doesn't exist. And it won't be mega."

For now, "we don't think there's much Iranian investment here," a U.S. official said.

An Iranian-born businessman in Managua said the handful of Iranian embassy staffers he sees are mostly Iranian Nicaraguans. Trade delegates have arrived just a few times, in contrast to the high expectations.

"They expected more," he said. "They expected them to deliver a lot."

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