The modus operandi of 21st century dictatorships presents greater sophistication to remain in power. Their success does not lie solely in the kleptocratic model, but in the method they use to evade international and popular scrutiny of the underhanded way in which a regime represses; and how it manages to keep the population unaware of the systemic way in which corruption or state capture operates, while keeping the middle and upper class of the country on a short leash so that it does not fall off the hook.
As long as they manage to operate successfully in this way, international pressure will be moderate and there will not be much probability of a social uprising, in the face of obsolete leadership, to overthrow a dictatorship.
The Ortega-Murillo dynasty controls state capture; and disguises a kind of low-intensity dictatorship so that external pressure does not escalate, and the people do not rise up. It is not that they do not repress and even murder, nor that they do not rob ruthlessly, but that the method they use means that they get away with what they do so that not much is known about what they do. When, in most cases, street people do not realize the magnitude of the theft they commit, the regime continues to take advantage of the people. It is almost a perfect kleptocracy, however, there are always gaps that show the rotten fruit of Murillo’s business.
State capture in Nicaragua
The International Monetary Fund (IMF) defines state capture as the situation in which there exist “efforts by corporations or clans to shape state laws, policies, and regulations for their own benefit, providing illicit private gains to public officials“The Ortega-Murillo clan has established its own mechanism that generates a minimum annual profitability of $200 million, but it happens silently, so that people on the street do not realize the process of corruption, the trafficking of influences and favors that these operations entail among the elites linked to the circle of power.
Kleptocracy and privilege
The dynastic family has co-opted access to the resources of the State and its public institutions. The most emblematic case is that of Rafael “Payo” Ortega, a businessman who enriches himself with State funds, and who as administrator and manager of the oil distribution companies, Distribuidora Nicaragüense de Petróleos (DNP, a quasi-state entity), at the time had control of more than 30% of the market for at least ten consecutive years (of an annual business of US$500 million in the purchase of crude oil) until being sanctioned. There it was relocated through service contracts to the State of Nicaragua and, eventually, it was absorbed by the State, compensating “Payo” Ortega.
Laureano Ortega, since Daniel Ortega’s first presidency, within the framework of the pact with private companies, the so-called Dialogue and Consensus Model, has taken advantage of the customs apparatus to authorize the removal of merchandise without charging tariffs to his businesses and friends. Although China and Nicaragua signed a free trade agreement in 2024, there are tariffs on certain products and costs of storage and freight, among others, in which Ortega facilitates the exemption for companies in which he has an investment participation—imports grew from $600 in 2019 to $2,000 million in 2025. Laureano Ortega dilutes his favors through imports without costs (which can be around at least 10% of the imported value) in businesses where it has a presence and maintains a clientele network that ranges from more than a thousand businesses, from importing companies, insurance companies, to merchandise distributors and micro-businesses (meanwhile, people on the street have to resort to paying ‘fees’ demanded by public officials so that their customs or police procedures can be carried out without setbacks or denial). Juan Carlos Ortega, Camila Ortega and her husband Noé Salas (protege of Fidel Moreno, right arm of Rosario Murillo) and the son of Rafael “Payo” Ortega, are other actors with commercial operations supported by the use of the State for private benefit.
Together, without considering the wealth accumulated before 2018, these kleptocratic ‘opportunities’ can leave the family (partners aside) a minimum of $100 million annually in income from sales operations, financial compensation for the State’s formal acquisition of DNP, annual income from oil distribution businesses, tariff and tax exemptions for companies that import from China, among others.
Armed loan robbery
External debt to benefit the economic and political elite is another of the most obvious forms of state capture. The regime resorts to external debt to finance operations of partners in the circle of power, choosing to invest in activities that do not have a direct impact on social development. More than three quarters of public investment is carried out in public road construction works, and not in social investment. Meanwhile, public spending on education remains below $600 million.
Nicaragua’s indebtedness since 2018 has amounted to an annual loan disbursement of more than US$400 million, which falls on a few companies, mostly construction companies, which leave minimum profits of 15% of the contracted amount. At the same time, the State of Nicaragua, with the taxes it collects from the people, is paying off that debt for $600 million annually. That is, Murillo authorizes the use of the State to enrich his partners, and uses taxes to pay the debt assumed for these investments.
Extortion and underhanded confiscation
Tax extortion (or terrorism), (apart from the ‘extra’ charges, and the bribes that the people have to cover), affects about a hundred medium and large companies cited by the DGI or by the Attorney General’s Office itself for ‘unpaid taxes’. There is also extortion directed at the middle and upper class to pay to return to their country, through which charges of $1000 or more are made to resolve the case of refusal of entry and allow them to return to their country.
Rosario Murillo has been implementing a ‘property recovery program’ against purged businessmen and partners for about five years. As an example, the properties of former allies of the regime, such as Bayardo Arce, Álvaro Baltodano and Néstor Moncada Lau, have been confiscated in trials for money laundering and tax evasion, while in other cases (Jaime Wheelock), they have been seized without allowing them to carry out any financial purchase, sale or investment operation.
There are also confiscations of the properties of businessmen considered “traitors to the country”, which have been intervened, reused and even destroyed to resell them to their partners. The total amount of these overlapping withholdings and seizures since 2021 exceeds $1 billion in fixed assets.
The intervention of BHMB Mining, a company with American and British capital, demonstrates the ‘urgent procedure’ modality: confiscating the property through immediate intervention and transferring it to partners or allies; in the case of BHMB, to Zhong Fu Development and Santa Rita Mining, Chinese companies.
Favors allowed
Murillo has been willing to use supporters and mayors as pieces for persecution and populism. While her children are in charge of doing business and Daniel Ortega set up his cob of clients with a queue, she has managed clientelist forms, such as authorizing funds to the mayor’s offices in exchange for loyalty in the neighborhoods. These funds are part of the process of influence peddling, in which mayors decide to invest in what benefits them in exchange for supporting their colleague. Just like the purged big businessmen, many mayors are punished if they are caught stealing more than allowed.
Corruption that is not seen on the street
These and other forms of corruption do not occur at the base of the social pyramid, but at its top. Financial and commercial operations are carried out from above, through contracts between its partners, who dine in hotel restaurants with wines and liquor equivalent to several months of income for an informal worker. The middle class does not speak because they are threatened if they do, and the people on the street do not realize the magnitude of the theft that occurs.
There is not much employment that results from these operations, people only see ‘the investment’ of Chinese businesses, the new roads that do not connect with schools, the million-dollar properties in beach areas when they go to clean the houses, but they do not know the origin of all these operations and how they are paying directly with their taxes for the profits of that elite. But the way in which they steal from a people that, in itself, is already poor, is perverse, outrageous and vulgar.
The IMF remains silent in the face of this reality, despite the evidence that has been presented to them. People suspect that there is corruption, they recognize some cases, but they cannot point it out if they do not see it and do not know how systemic it is. Hence, the work of political actors, professionals and businessmen, journalists and communicators, should prioritize informing and exposing who is who in the new kleptocracy that is stealing their future from Nicaraguan families.
