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Cablegate: Nicaragua: Gon Resists More Transparency in Property Claims

VZCZCXYZ0026
RR RUEHWEB

DE RUEHMU #1244 2841932
ZNR UUUUU ZZH
R 101932Z OCT 08
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 3244
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE

UNCLAS MANAGUA 001244

STATE FOR WHA/CEN, EB/IFD/OIA, AND L/CID
STATE ALSO FOR WHA/EPSC
STATE PASS TO USTR
TREASURY FOR INL AND OWH

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: EINV ECON USTR KIDE NU
SUBJECT: NICARAGUA: GON RESISTS MORE TRANSPARENCY IN PROPERTY CLAIMS
COMPENSATION PROCESS

REF: A) MANAGUA 1243, B) MANAGUA 564, C) 02 MANAGUA 877

SUMMARY
-------

1. (SBU) During the October 2 Property Working Group meeting,
Econoff urged Government of Nicaragua (GON) officials to provide
clear explanations on how they determine settlement offers. Ruth
Zapata, head of the Office of Assessment and Indemnification (OCI),
was aware of the frustration that some claimants experience but
explained that "it was more a matter of style" than substance.
Zapata complained that the Nicaraguan Army is not sharing
information on claims under its control. Following the Working
Group meeting, a U.S. claimant reported that the GON is attempting
to reverse settlements on nine of his properties. The U.S. citizen
initiated court action to protect himself against possible
litigation from the buyers of six of these properties. End Summary.


TRANSPARENCY AND FAIRNESS IN PROPERTY APPRAISALS
--------------------------------------------- -----

2. (SBU) On October 2, Econoff met with Ruth Zapata, head of the
Office of Assessment and Indemnification (OCI), Jeanette Garcia,
director of the National Confiscations Review Commission (CNRC), and
Magally Bravo, an official from the Office of the Attorney General,
to hold the September Property Working Group meeting. Attorney
General Hernan Estrada had requested that the September 25 Property
Working Group meeting be postponed until October 2 because he wanted
to meet first with the Ambassador on September 30 (ref A).

3. (SBU) Econoff urged GON officials to develop a transparent
process to explain to U.S. claimants how the government determines
settlement offers. As it stands, many U.S. claimants complain about
the lack of transparency and fairness in appraising confiscated
properties (Ref B). Specifically, they do not understand how OCI
determines values, or in some instances, why OCI reduces settlement
offers when previous governments proposed higher compensation
awards. Zapata was aware of the frustration that some claimants
experience but explained that "it was more a matter of style" than
substance. Econoff explained that while this may be true, a clearer
explanation of how OCI determines settlement offers would advance
the resolution of claims.

ARMY NOT SHARING INFORMATION ON CLAIMS
--------------------------------------

4. (SBU) Zapata complained that the Nicaraguan Army had not shared
information on claims under its control. She asserted that the
Attorney General's Office had repeatedly requested information on
the Las Serranias complex case, involving 29 properties confiscated
from the Barreto family (Ref C). Econoff pointed out that the Army
seems to think otherwise: i.e., that Estrada is reluctant to take on
these claims. We believe that the truth may be somewhere in
between.

GON ATTEMPTS TO RECONFISCATE U.S. PROPERTY
------------------------------------------

5. (SBU) On October 3, U.S. citizen Jose Arguello Cardenal informed
Econoff that the GON is attempting to reverse decisions on
settlements on nine of his properties. He told us that the Attorney
General's website listed his properties as having been dismissed
based on Decree 38/1979, which authorizes the government to
confiscate property belonging to the "allies of Somoza." Arguello
Cardenal considers the applications of Decree 38 as a new method of
confiscation because the properties had been legally returned to him
in the 1990s. He added that he sold six of the nine properties and
worries about possible legal action from his buyers should the GON
insist on the return of the property. Arguello Cardenal filed a
suit in civil court to request that the Attorney General's Office
remove his properties from the list of dismissed claims based on
Decree 38.

COMMENT:
--------

6. (SBU) The GON's resistance to provide clear explanations as to
how it determines settlement offers stifles progress on resolving
many claims. This lack of transparency fits with the GON's policies
to protect the interests of the beneficiaries of confiscation, lower
the level of compensation per claim, and administratively dismiss
claims whenever possible. We continue to press the GON to explain
how settlement offers are calculated, the criteria and procedures
for dismissing claims, and the application of Nicaraguan law.


CALLAHAN

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