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Cablegate: Nicaraguan Army Threatens to Expropriate U.S. Citizen

VZCZCXYZ0159
RR RUEHWEB

DE RUEHMU #1130/01 3101632
ZNR UUUUU ZZH
R 061631Z NOV 09
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 0100
INFO WHA CENTRAL AMERICAN COLLECTIVE
RHEFDIA/DIA WASHINGTON DC
RHMFISS/USSOCOM INTEL MACDILL AFB FL
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS MANAGUA 001130

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

E.O. 12958: N/A
TAGS: EINV ECON KIDE NU
SUBJECT: NICARAGUAN ARMY THREATENS TO EXPROPRIATE U.S. CITIZEN
PROPERTY

REF: MANAGUA 1052; 02 MANAGUA 877

SUMMARY
--------------

1. (SBU) The Nicaraguan Army has threatened to expropriate property
owned by U.S. citizen Gloria Molina to extend a military airstrip.
Mrs. Molina and her family have attempted to meet with the
Nicaraguan Army and the Attorney General's Office to resolve this
dispute, but neither government agency has taken any action to
protect her property. If the Army takes over Mrs. Molina's
property, this would be the first time since the 1980's that the
Nicaraguan military has directly expropriated land owned by a U.S.
citizen.

GENESIS OF DISPUTE
---------------------------

2. (SBU) In February 1955, the husband of U.S. citizen Gloria
Molina purchased 2,710 acres of property in a farming area called
Punta Huete located in San Francisco Libre municipality (Department
of Managua), central Nicaragua. In 1983, the Government of
Nicaragua (GON) declared eminent domain over 1,454 acres of their
property for a forestry and wildlife preservation project. This
project never materialized, however, as 468 acres of the property
were transferred to a local agricultural cooperative and another
300 acres were granted to a Nicaraguan-Libyan agricultural project
called ANILIB. The remainder of the property, 686 acres, was ceded
to the Sandinista People's Army (EPS), which later became the
Nicaraguan Army. The EPS built an airstrip on 234 acres of the
land and had planned to give the rest to retired officers.

3. (SBU) In 1991, the National Confiscations Review Commission
ruled that the Army had to return the property to Mrs. Molina. In
1993, the GON offered Mrs. Molina 1,740 acres of farmland in a land
swap that would allow the Army to maintain possession of her
property. That deal fell through, but in 1996 Mrs. Molina signed a
settlement with the Nicaraguan Army and the Ministry of Finance to
recover 1,184 acres of her property. The Army still controls 36
acres and the GON has not made any effort to either return the
property nor provide compensation to Mrs. Molina.

ARMY PLANS TO EXPROPRIATE MORE LAND
--------------------------------------------- ------------

4. (SBU) Since 2007, Mrs. Molina and her family have been
negotiating a settlement with the GON for the remaining 36 acres of
her property and for the land the Army used to build an airstrip.
Her family complains that without access to the 36 acre property,
her cattle cannot graze freely on the land she has recovered
already. In May 2008, the Attorney General's Office proposed a
land swap that would make her property contiguous, but the deal has
not been finalized. In October 2009, the Molina family reported
that lower-ranking officers told them that the Army plans to
expropriate more of her land to expand the airstrip. This
expropriation would further fragment her property.

CLAIMANT SEEKS AMICABLE RESOLUTION
--------------------------------------------- ----------

5. (SBU) On October 24, Ramon Gonzalez, the son of Mrs. Molina,
asked for Embassy assistance to press Attorney General Hernan
Estrada to protect his family's property rights. Mr. Gonzalez
noted that he has attempted to meet with Army officers on several
occasions but he has been unable to obtain a meeting. On October
29, the Ambassador wrote Attorney General Estrada to urge him to
review Mrs. Molina's case. On November 3, Econoff contacted Rebeca
Zuniga, Coordinator of the Office of U.S. Citizen Claims, to
request a meeting for Mr. Gonzalez to discuss ways to settle the
case.

COMMENT
--------------

6. (SBU) The Army's threat to expropriate Mrs. Molina's property
without the GON offering prompt, adequate compensation is a serious
concern. If the Army takes possession of her land, this would be
the first time that the Nicaraguan military has directly
expropriated U.S. citizen property since the 1980's. In the past,
the GON has transferred expropriated property to the Army through
agrarian reform titles and to officers for private use by applying
Laws 85/1990 and 88/1990, also known as the Pinata Laws (Ref A).
In other instances, the Army simply seized private property, as in
the case of U.S. citizen Juan Barreto (Ref B). We will press
Attorney General Estrada to defend Mrs. Molina's property rights
and remind him that any expropriation of U.S. citizen property
without due process hurts Nicaragua's chances of receiving a
Section 527 waiver.
SANDERS

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