Secretary of State George P. Shultz personally has intervened with the president of the Inter-American Development Bank in an attempt to block a vote on a $58 million loan to Nicaragua in what bank officials and Latin American diplomats described yesterday as an unprecedented Reagan administration effort to pressure the institution.
In a Jan. 30 letter to bank President Antonio Ortiz Mena, Shultz expressed the administration's "strong" opposition to the loan, and the "hope that the bank's management will be able to defer the release of the documentation" compiled by the bank's technical staff in support of the loan.
Detailing the administration's belief that Nicaragua is "not creditworthy," Shultz also noted "concern about the possible misuse by Nicaragua of the proceeds from such a loan." He said the money would "relieve financial pressures on [Nicaragua] and free up other monies that could be used to help consolidate the Marxist regime and finance Nicaragua's aggression against its neighbors, who are members in good standing of the bank."
The letter went on to point out that bank approval of the loan would make administration efforts to provide new financial contributions to the bank "even more difficult" and would "undercut" more general efforts to expand the institution's resource base.
The United States, which contributes the largest portion of bank resources, currently is nearly $1 billion in arrears in payment of pledged contributions. The administration has requested a supplemental appropriation, awaiting congressional action, that is likely to require administration testimony. Other bank members, including a number in Western Europe, also have delayed payment because of the U.S. delay and all bank loans now are being approved on a conditional basis.
The Shultz letter, which sources said yesterday was preceded by a personal telephone call to Ortiz Mena, follows more than two years of controversy over the loan to Nicaragua. The $58 million would provide financial credits for small and medium-sized farms and for purchase of supplies needed in the production of basic foods.
A number of the bank's Latin American members are unsympathetic to Nicaragua's leftist government, and some privately support the administration's efforts against the ruling Sandinistas.
But earlier, less direct U.S. efforts to delay processing of the loan to Nicaragua led early this year to concern among the Latin Americans that the bank's reputation for impartiality was being undermined by the appearance of a politically motivated delay. At the same time, several Latin diplomats said, there is concern that the precedent could be applied to their own countries should they become involved in a dispute with the United States.
The situation became more uncomfortable early this year when bank directors from the member countries realized that, despite technical approval of the loan, the technical documents never had been circulated among the Governing Board directors and thus the loan had never been placed on the agenda for a final vote.
On Jan. 17, all 25 Latin American members of the bank, representing a voting majority, took the unprecedented step of jointly requesting that the Nicaraguan loan be placed on the board's agenda, indicating they would approve it. Under the bank's rules, Ortiz Mena then was required to take action on the matter.
When Shultz's letter arrived two weeks later, "we read . . . [it] is a threat," said a bank official yesterday. "You have to go back to the days of [former Chilean president Salvador Allende,] and even during the time of Allende, there was never such a communication from the secretary of state."
Allende, a Marxist, was overthrown by the Chilean military in 1973 following strong internal upheavals and economic difficulties that were exacerbated by economic pressure from the Nixon administration, including opposition to loans to his government.
Usually, the official said, member opposition to a loan for whatever reason is expressed by one of the 12 directors, representing 43 member countries, "on the basis of the loans not being technically justified. There has never been anything like this."
A copy of the letter was obtained by The Washington Post, and its contents were verified both by bank officials and by the State Department. A department statement yesterday said that the letter was a "reiteration of longstanding U.S. policy to weigh heavily when evaluating loans proposed by multilateral development banks the macroeconomic policies pursued by the benefiting countries."
For the past four years, the administration has maintained a policy of economic, political and military pressure against the Sandinistas on grounds that they have attempted to export their leftist revolution to neighboring Central American countries. In international lending institutions, U.S. officials have argued that the Nicaraguan economy is in such bad shape, and its leftist economic policies so destined to failure, that lending is unadvisable.
"Our pressure on Nicaragua, of course, is multifaceted," said a State Department official who declined to be identified yesterday. "It is not devoted to any particular area."
The Shultz letter, the official said, "shouldn't come as a great surprise to anybody that we favor loans to friendly countries and discourage them to unfriendly countries."
Should the loan, despite U.S. pressure, actually come to a vote, he said, "I wouldn't rule out the possibility" that the administration would exert pressure on individual Latin American countries to vote against it.
"You see the kind of pressure they are under," said a senior diplomat from one of South America's largest countries yesterday, noting that it was "safe to say that the Latin Americans all are very uncomfortable" about the issue.
A number of Latin American countries currently are undergoing extreme economic difficulties and depend heavily on private American banks as well as U.S. aid, bilateral and through contributions to international banks.
There were strong indications yesterday, sources at the Inter-American Bank said, that the U.S. effort had succeeded in stalling, perhaps indefinitely, board consideration of the loan. Sources said Ortiz Mena had ordered technical committee reconsideration of the loan based on new adjustments in the Nicaraguan economy.
There were similar indications that the Latin American bank members, despite their earlier strong support of bringing the loan to a vote, had decided to acquiesce in its deferral after coming under what one diplomat called "very strong pressure." While maintaining that no individual Latin American country was responsible for breaking the earlier "solidarity" on the question, the diplomat noted that there was "general embarrassment" in the Latin bloc over the issue.