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Cablegate: Nicaraguans Seek New Ground Rules for Property Claims

VZCZCXYZ0018
RR RUEHWEB

DE RUEHMU #2006/01 2421649
ZNR UUUUU ZZH
R 301649Z AUG 07
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 1124
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE

UNCLAS MANAGUA 002006

SIPDIS

STATE PASS USTR

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EINV ECON USTR KIDE NU

SUBJECT: NICARAGUANS SEEK NEW GROUND RULES FOR PROPERTY CLAIMS

REF: MANAGUA 1359

1. (SBU) Summary. In an August 23 meeting with Econoff, Attorney
General Estrada said that in processing property claims, his
government will now distinguish between those who were U.S. citizens
at the time of expropriation and those who were not. In the
meeting, Nicaraguan officials alleged that U.S. citizens have filed
innumerable fraudulent claims, and these should be removed from the
U.S. Embassy property registry. Finally, they asked us to remove
cases from the registry once a government resolution on a case is
issued, rather than wait for a final contract signed by both the
claimant and the government, as is current practice. We have pushed
back on these proposals and suggested that the Nicaraguan government
focus on resolving specific claims rather than attempting to
renegotiate the ground rules for working with us on this issue. End
Summary.

2. (SBU) In an August 23 monthly "working-level" meeting on property
claims, Attorney General Hernan Estrada, Property Superintendent
Mireya Molina, and Member of the Attorney General's National
Confiscation Review Commission (CNRC) Alfonso Solorzano sought to
renegotiate the ground rules for resolving U.S. citizen property
cases. Estrada, who attended the first half of the meeting, sought
U.S. acquiescence on a proposal to differentiate between claimants
who were U.S. citizens at the time of expropriation and those who
have acquired citizenship since expropriation. He argued that
citizenship should not be applied retroactively. Estrada declared
that the Nicaraguan government will prioritize claims filed by U.S.
citizens at the time of expropriation, with all other claims handled
as if they were filed by Nicaraguan citizens. He contended that
those cases filed by U.S. citizens who were Nicaraguan at the time
of expropriation should not be included in the list of waiver cases
maintained by the U.S. government.

3. (SBU) Econoff replied that the United States does not
differentiate between those who were citizens at the time of
expropriation and those who were not. We will continue to press for
the resolution of all registered cases. He noted that Section 527
of the Foreign Relations Authorization Act, which prohibits economic
assistance to countries that have not compensated U.S. citizens for
confiscated property, makes no distinction between those who were
U.S. citizens at the time of expropriation and those who were not.
Econoff made it clear that all U.S. citizens, regardless of how or
when they acquired citizenship, will receive support from the U.S.
Embassy in securing compensation for confiscated property. Econoff
also pointed out that Nicaraguan law establishes the same set of
procedures for the resolution of expropriation cases whether or not
the claimant is Nicaraguan.

4. (SBU) In separate meetings with Minister of Foreign Affairs
Samuel Santos, the Ambassador has been on the receiving end of a
similar complaint regarding citizenship at the time of
expropriation. The Ambassador has responded that the U.S. Embassy
will continue to provide support and guidance to claimants without
distinction, as is consistent with U.S. and Nicaraguan law. On
several occasions, Santos has noted his displeasure with the waiver
process, alleging that he was once tortured by an individual who is
a claimant on the U.S. Embassy registry. Santos has declined to
offer additional details on this issue.

5. (SBU) In the August 23 meeting with Econoff, CNRC Member
Solorzano claimed that there were "innumerable irresolvable cases in
the U.S. Embassy's registry." Solorzano and Property Superintendent
Molina, who together led the Nicaraguan side after Estrada's
departure, argued that many U.S. citizens have sought compensation
for property never expropriated or already returned. Others have
manipulated the value of their assets to demand higher compensation,
according to Solorzano and Molina.

6. (SBU) Econoff replied that he doubted that there were
"innumerable" cases of fraudulent claims filed by U.S. citizens. He
acknowledged that with 678 claims still unresolved, it is possible
there are a few who have misrepresented their claims. He cautioned
Solorzano and Molina against sweeping judgments against all U.S.
claimants. Econoff added that the U.S. Embassy does not condone
fraud and will cooperate with Nicaraguan authorities in
communicating with claimants when fraud is suspected in specific
cases. The Embassy has already notified three claimants of
purported irregularities identified by the Attorney General's
Office.

7. (SBU) Molina claimed there are many cases where claimants had not
met legal requirements to continue processing their cases. She and
her staff said that claimants often lack clear title, proof of
expropriation, powers of attorney for local legal representation, or
financial information required to assess the property's value.
Econoff offered assistance in communicating these issues to
claimants, as they have done with previous administrations. Econoff
proposed renewing working-level communications with Nicaraguan
officials to facilitate this process. Molina agreed and said her
staff would be available to exchange information on specific cases.
[Note: In response to telephone inquiries made by Embassy staff
since the August 23 meeting, Molina's staff has claimed to be too
busy reviewing already resolved claims for "irregularities." End
Note.]

8. (SBU) Molina asked Econoff to revise the criteria for removing
cases from the U.S. Embassy registry. She suggested that when the
CNRC issues a resolution on a case and the claimant agrees to the
resolution, the case is resolved and should be removed. Molina
claimed that the current administration had resolved at least 55
cases that fit into this category. She said that claimants are
responsible for delays in preparing a final contract or "finiquito,"
executed between the government and the claimant, because they fail
to provide necessary documentation. She thought that it may be
necessary to establish a deadline for the preparation of finiquitos
to hasten the process.

9. (SBU) In response, Econoff recognized the government's effort in
resolving 55 cases, but noted that the U.S. Embassy would remove
from the registry only those cases for which a finiquito has been
signed. In many cases, finiquitos are delayed because other
government agencies have not provided necessary documentation. He
cautioned that any deadline for the preparation of finiquitos must
accommodate circumstances beyond the control of the claimant.
Econoff concluded by reminding his Nicaraguan counterparts that it
would be more productive to concentrate on successfully resolving
the many cases still included in the registry rather than attempting
to pare down the list of claims by other means.

10. (SBU) Comment: Rather than focus on resolving specific claims,
the Sandinista Administration is attempting to renegotiate the
ground rules for working with us on these cases. They ignore the
fact that this is a problem of their own creation and resent our
intrusion in Nicaraguan affairs. U.S. citizen claimants, no doubt,
recognize the irony that they must now negotiate for the return of
their property with those who took it from them in the first place.
We will continue to push back on attempts to renegotiate the ground
rules for property claim resolutions. We will also seek to revive
working-level communication on specific cases. End Comment.

TRIVELLI

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