BY CATHERINE ELTON
                      Special to The Herald

                      MANAGUA - Nearly three months ago, as ceremonial cannon fire tore through the humid Managua air,
                      then-President Arnoldo Alemán handed over Nicaragua's blue and white presidential sash to his
                      one-time vice president, Enrique Bolaños, the man who had made anti-corruption a cornerstone of his
                      campaign platform.

                      Today, former President Alemán -- now president of the nation's legislature -- is in the cross hairs of the
                      new administration's first corruption probe and at the center of political scandal that has rocked the
                      nation.

                      A judge has ruled she has found sufficient evidence to open an investigation into the alleged
                      involvement of Alemán and various current and former members of government in a $1.3 million fraud at
                      the state-owned television station.

                      The court will submit today a request that the National Assembly strip Alemán and two other legislators
                      of the immunity from prosecution all legislators enjoy, so they can be investigated.

                      Already, the judge has indicted six others, including Alemán's former spokesperson, on corruption
                      charges. Four of them are being held without bail and two are fugitives.

                      The judge's rulings are being hailed as groundbreaking in a nation long plagued by corruption and
                      impunity for those responsible. The move coincides with, and has been bolstered by, increasing calls
                      from the Bush administration to combat corruption across the region.

                      ''This is a monumental case. Those implicated in this case are members of the most elite power circles in
                      this country. This has never happened here before,'' says Roberto Courtney, the executive director of
                      Ethics and Transparency, a corruption watchdog group. ``The current stand of the Bush administration
                      has strengthened the hand of the Bolaños administration's fight against corruption.''

                      Long before this case surfaced, Alemán had been widely perceived as corrupt. A man who entered
                      political life a decade ago with scarce economic resources, he has amassed a fortune, including various
                      properties, that some estimate is worth as much as $250 million.

                      His obesity has only contributed to the bitter image of a corrupt leader living off the fat of the land in a
                      nation beset by malnutrition and desperate poverty. Images aside, however, his record, thus far, has
                      been clean.

                      ''There is a great perception that Alemán is corrupt and this image has stuck to him,'' said legislator
                      Jaime Morales, who was Alemán's principal political advisor during his administration. ``But to date
                      there has been no proof presented.''

                      Soon after Bolaños came to office, officials in his administration noticed irregularities in the handling of
                      funds at the state television station.

                      ''We found that there were funds collected for Channel 6 from various state institutions that never
                      made it into the channel's bank accounts. We have no idea where the money is now,'' said the acting
                      attorney general, Francisco Fiallos. ``Testimony from those involved in handling the funds say they
                      took instructions from Alemán.''

                      For his part, Alemán has denied any wrongdoing. He says he was trying to modernize a failing state
                      channel and that he delegated responsibility to his subordinates.

                      Many of Alemán's supporters in the national assembly maintain that the judge's decision to open an
                      investigation into Alemán's involvement was based on political grounds and lacks a strong legal basis.

                      Corruption in Nicaragua is nothing new. The Somoza dynasty that ruled the nation for over 40 years
                      committed acts of corruption as did the decade-long Sandinista government that came to power after a
                      1979 revolution. Yet during those governments, acts of corruption were dwarfed by gross human rights
                      violations and war. During Violeta Chamorro's rule, after ousting the Sandinistas from power in 1990
                      elections, the public's main concern was the peace process.

                      ''Now with free elections and democratic freedoms in place, people have shifted their attention to
                      economic issues where corruption plays an important role,'' Courtney said. ``That is why people
                      demand [an attack on corruption]. This government has tapped into that desire and is beginning to give
                      the people what they want.''

                      The current administration's policy of pursuing corruption anywhere -- Alemán and Bolaños belong to
                      the same party -- has coincided with and been buoyed by a growing international concern for corruption
                      in the region, especially from the United States. This is something positive for U.S. foreign policy, many
                      say, given past U.S. support of corrupt dictators in the region.

                      ''Since the Sept. 11 attacks and the Patriot Act that followed, the U.S. has adopted a strong foreign
                      policy stance not only against terrorism, but against other illegal acts that it has equated to terrorism,
                      including corruption, money laundering and drug trafficking -- the U.S. needs an ethical image to sell its
                      new crusade,'' says Emilio Alvarez, a board member of Fundemos, a Managua-based civic education
                      organization, and a former foreign minister.

                      Indeed, on his recent trip through the region, President Bush emphasized the fight against corruption
                      as a condition for continued foreign aid.

                      For an investigation of Alemán to proceed, the National Assembly would have to vote to strip him of his
                      immunity first, something many see as unlikely in a legislature where Alemán is the leader of the
                      majority party.

                      Regardless of his ultimate fate, many here say the country has already made great strides.