Saudi Arabia used to finance the enemies of Nicaragua’s dictator Daniel Ortega. Today, Riyadh is funding the despot himself. In April 1984, National Security Adviser Robert “Bud” McFarlane convinced the Saudi regime to bankroll Nicaragua’s Contra rebels, securing a $1 million monthly subsidy funneled through an account managed by Oliver North. Between 1984 and 1986, Saudi Arabia contributed $32 million to help the Contras acquire weapons. While Washington’s foreign policy establishment worries about the Iranian arms pipeline, it ignores Riyadh’s checkbook.
The Riyadh that once helped Washington coerce Ortega now dilutes the financial pressure the United States applies to constrain his policies.
Saudi money sustained President Ronald Reagan’s pressure after Congress restricted aid, allowing America to project its power beyond the appropriations process. Fast-forward to the present: The Riyadh that once helped Washington coerce Ortega now dilutes the financial pressure the United States applies to constrain his policies. In June 2024, the Saudi Fund for Development delivered a $103 million development loan for Nicaragua. The authoritarian, murderous Ortega regime argues that it will use the funds to build and equip the Carlos Centeno hospital. Official plans describe a 25,000-square-meter medical center with 310 beds and four operating rooms for the 290,000 residents of Siuna and adjacent municipalities. Although Nicaraguans need medical care, the humanitarian component of this transaction does not erase the consequences of international backing for Ortega.
Siuna is one of the three mining centers in Nicaragua’s Mining Triangle, alongside Rosita and Bonanza. The profits from gold mining there provide the local “Caudillo” with hard currency and political power. In April 2026, the U.S. Department of the Treasury sanctioned five individuals and seven entities involved in Nicaragua’s gold industry. The designation described a regime-controlled network that launders sanctioned assets, finances repression, and confiscates American property. Despite all this, Saudi financing continues in projects and infrastructure inside Nicaragua’s strategically vital Mining Triangle.
Ortega no longer hides his autocratic tendencies. In July 2026, he announced that Nicaragua no longer will hold elections. His regime shuttered more than 5,000 civic organizations, has stripped citizenship from hundreds of critics, and continues to hold at least 60 political prisoners. Nicaragua severed ties with Israel in October 2024, has now strengthens its ties with Iran, even exploring stronger military cooperation with Tehran. Saudi Arabia, therefore, is aiding a government aligning with an adversary that consistently launches missiles against its territory and supports the proxy Houthis, who actively attack Saudi Arabia as well.
Riyadh—alongside Washington’s support—must redirect all future hospital disbursements into a payment-in-kind escrow account to disburse only to verified international contractors. To prevent Sandinista misappropriation, Riyadh should disclose all billing and beneficial ownership data, with oversight integrated by both the future new Nicaraguan leadership and exiled medical professionals. The escrow should include a kill switch that would freeze any payments to entities sanctioned by the United States Office of Foreign Assets Control (OFAC) for facilitating gold smuggling, human rights abuses, or targeting of maritime commerce.
Washington must turn this impasse into an opportunity by offering Nicaragua an OFAC-protected channel and American-made medical equipment, but only after Saudi mediators secure three verifiable concessions from Managua: first, the unconditional release of all political prisoners; second, the creation of a binding international-monitored electoral calendar; and third, the immediate termination and audit of all military and security talks with Tehran. By making these demands, Saudi Arabia—shielded by the United States—would shift responsibility for the humanitarian crisis onto the Nicaraguan dictatorship, forcing Ortega to choose between receiving essential medical supplies and maintaining his alliance with Iran.
Congress should put in place barriers for foreign sovereign wealth funds that want to invest in infrastructure in states that have ties with Iran.
To trigger the collapse of the financial ceiling held by Ortega, the White House should form a coalition to deprive the Nicaraguan government of its Dominican Republic-Central America Free Trade Agreement privileges by linking this move to the delisting of Saudi investments from Western markets. In addition, the State Department must consider Managua’s alignment with an adversary state to be a violation of the treaty’s security exception, thereby further isolating the Nicaraguan government. Concurrently, Congress should put in place barriers for foreign sovereign wealth funds that want to invest in infrastructure in states that have ties with Iran, such as the hospital that the Saudis are financing in Nicaragua. By forcing countries like Saudi Arabia to choose between subsidizing a dictator in Managua or protecting its huge investments in Wall Street, the Trump administration will turn Ortega into a liability rather than an asset.
Forty years ago, Saudi money helped armed Nicaraguans challenge the Sandinistas. Today, Riyadh’s financial assistance keeps Ortega’s dictatorship afloat. The Trump administration should not allow Saudi Crown Prince Mohammed bin Salman to feign alliance when he actively supports one of the most anti-American and antagonistic regimes in the Western hemisphere.
