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President Reshuffles Nicaraguan Cabinet

January 10, 1992

MANAGUA, Nicaragua (AP) _ President Violeta Chamorro named a new foreign minister and shifted economic portfolios Thursday in a major Cabinet shakeup.

Deputy Foreign Minister Ernesto Leal, 46, replaced Enrique Dreyfus, a wealthy businessman and old friend of Mrs. Chamorro who quit because of a heart ailment.

She named Silvio de Franco, now economy minister, to head the Central Bank replacing Raul Lacayo. Julio Cardenas, an economist, was named to replace de Franco.

No explanation was given for the shakeup, but sources who spoke on condition of anonymity said Lacayo had run afoul of Mrs. Chamorro by favoring relatives in granting operating charters for four new private banks that opened recently. Lacayo was unavailable to comment.

Changes also were made in Mrs. Chamorro’s office staff. Antonio Ibarra, her deputy chief of staff, was sacked amid accusations of corruption.

Mrs. Chamorro urged the new ministers to ″exercise your functions honestly, efficiently and with love for Nicaragua.″

The leftist Sandinistas, who ruled for a decade before Mrs. Chamorro’s 14- party coalition was voted into office in February 1990, expropriated private banks as part of a policy of state ownership of much of the economy.

As chief of the Central Bank, Lacayo returned much of the banking system to private ownership.

Sandinista mismanagement, and the long war against U.S.-backed Contra rebels, ruined the economy of this Central American country of 3.5 million people.

Sporadic violence between rebel Contra holdouts and Sandinista activists continues to plague Nicaragua’s countryside and the economy is still feeble.

Interior Mininistry spokeswoman Lt. Consuelo Sandoval announced Thursday that a leader of a rearmed Contra group was killed, and two others were badly wounded in an ambush Wednesday in La Laguna, 95 miles north of Managua.

Sandoval identified the slain man as Leonel Benavides, known by his nom de guerre ″Freddy.″ The wounded men were Encarnacion Valdivia, ″Tigrillo,″ and Jacinto Tercero, ″Commander Campeon,″ she said.

Three women passengers in the ambushed pickup truck were slightly wounded. Sandoval said a Sandinista unit apparently was responsible.

Groups of Contra rebels have rearmed to protest the government’s failure to deliver on promises of aid. The rearmed Contras and Sandinista renegades have been harassing coffee growers in northern Jinotega and Matagalpa provinces, taking over farms and robbing vehicles.

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