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Cablegate: Nicaragua: Gon Prepares for Bilateral Property Claims

VZCZCXYZ0002
RR RUEHWEB

DE RUEHMU #1445/01 3391342
ZNR UUUUU ZZH
R 041342Z DEC 08
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 3475
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE

UNCLAS MANAGUA 001445

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 PREPARES FOR BILATERAL PROPERTY CLAIMS
REVIEW

REF: MANAGUA 1370

SUMMARY
-------

1. (SBU) During the November 26 Property Working Group meeting, Ruth
Zapata, Head of the Office of Assessment and Indemnification (OCI),
said that she and her colleagues were looking forward to the
bilateral review to clarify issues of concern to the USG and GON.
Jeanette Garcia, President of the National Confiscations Review
Commission (CNRC) complained that the suspension of the Millennium
Challenge Account's assistance for the title restitution program
would result in the loss of staff at the CNRC. Econoff noted that
the dismissal a U.S. citizen claim under Decree 38 was nothing more
than a politically-motivated, arbitrary act that lacked transparency
and a formal appeals process. Throughout the meeting, Zapata
asserted that the Attorney General's Office was working diligently
to resolve claims, and pleaded for patience and understanding. GON
officials will find it difficult to explain, however, Decree 3 and
38 and administrative dismissals, and the lack of fairness and
transparency in determining settlement offers. End Summary.

PREPARING FOR BILATERAL REVIEW
------------------------------

2. (SBU) On November 26, Econoff met with Ruth Zapata, Head of the
Office of Assessment and Indemnification (OCI), Jeanette Garcia,
President of the National Confiscations Review Commission (CNRC),
and Magally Bravo, an official from the Office of the Property
Superintendent, to hold the November Property Working Group meeting.
Zapata said they were not fully prepared to discuss the list of 60
claims that the Embassy Property Office sent to Attorney General
Hernan Estrada on November 12. Her excuse was that her work and
that of her colleagues had focused on preparing for the bilateral
review on December 11-12. Zapata said that the GON was looking
forward to the bilateral review to clarify issues of concern to the
USG and GON. Zapata declined to share which issues she was
referring to.

SUSPENSION OF MCC FUNDING IMPACTS CNRC
--------------------------------------

3. (SBU) Garcia complained that the suspension of Millennium
Challenge Corporation assistance for the property restitution
program (reftel) would result in the loss of four employees at the
CNRC. She said that these employees conducted land surveys that the
CNRC used to evaluate claims filed against the GON. She thought
that these employees would likely be less willing to work on U.S.
property claims in the time before they lose their jobs. We expect
the GON to raise this issue during the bilateral review.

NO CREDIBLE DEFENSE OF DECREES 3 AND 38
---------------------------------------

4. (SBU) Econoff raised several claims that received recent U.S.
congressional attention, particularly those of Domingo Calero, whose
four claims the Attorney General dismissed based on Decree 38 (1979)
in February. Decree 38 mandated the confiscation of property of
individuals deemed as "allies of Somoza." Attorney General Hernan
Estrada reaffirmed these dismissals in a November 11 letter to the
Ambassador. Econoff criticized GON officials for dismissing
Calero's claims, noting that the application of Decree 38 was
nothing more than a politically motivated, arbitrary act that lacked
transparency. Econoff pointed out that there was no formal appeals
process to challenge Decree 3 (1979) or 38 dismissals. Zapata and
her colleagues sat silently, responding that only Attorney General
Estrada had the authority to overturn these decisions. Decrees 3
and 38 dismissals will be contentious issues during the bilateral
review.

PATIENCE, UNDERSTANDING, AND MORE EXCUSES
-----------------------------------------

5. (SBU) Throughout the meeting, Zapata asserted that the GON was
working diligently to resolve claims, but doing so required patience
and understanding. For example, she explained that the software
that calculates compensation appraisals needed to be upgraded to
allow a detailed explanation of data used to generate the settlement
offers. She complained that the Nicaraguan Army does not cooperate
much with Attorney General's Office, and that this limits her
ability to work on the property claims under its control. Zapata
also blamed U.S. claimants for delays in resolving claims, noting
that U.S. claimant Juan Barreto, co-owner of the Las Serranias
complex (this case involves 29 properties confiscated from the
Barreto family by the Army), has failed to provide the documents
needed to resolve his claims [Note: We will follow up with Mr.
Barreto to see if he has provided the documents requested by the
GON. End Note.] We expect the GON to ask for patience and
understanding during the bilateral review.

COMMENT
-------

6. (SBU) During the December 11-12 bilateral review, we believe GON
officials will plead for patience and understanding. They will
proclaim that property claims are complex and difficult, that their
resources are few, that past administrations have mismanaged the
process, but they are working diligently to "resolve" U.S. claims in
a fair and timely manner. Estrada and his staff will find it
difficult to explain, however, dismissing 141 claims for
administrative reasons and as a consequence of their interpretation
of Decrees 3 and 38, as well as the lack of fairness and
transparency in determining settlement offers.

SANDERS

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