BULGARIA: END GAME IN SIGHT ON JEWISH RESTITUTION

C O N F I D E N T I A L SECTION 01 OF 02 SOFIA 001494 SIPDIS SIPDIS EUR/OHI FOR JOHN BECKER E.O. 12958: DECL: 10/26/2016 TAGS: PREL PGOV KNAR BU SUBJECT: BULGARIA: END GAME IN SIGHT ON JEWISH RESTITUTION REF: 05 SOFIA 1318 Classified By: Ambassador John Beyrle, for reasons 1.4 B & D ¶1. (C) SUMMARY: A report submitted to the Prime Minister by the government-appointed Restitution Commission sidesteps the controversial Rila hotel case (reftel),but recognizes Jewish claims on MOD property in Varna and urges the Ministry of Health (MOH) to give Shalom some space at the already-restituted hospital (which it has so far refused to relinquish). Jewish community leader Kalo and JDC local rep Djerassi seemed in complete agreement in their assessment: the government is open to finally settling the Varna and Rila claims (Rila through a creative "gift" arrangement),but MOH's unresponsiveness is a major roadblock. The DCM reiterated our readiness to help but stressed the need for all -- the Jewish community here and the American JDC -- to speak with one voice and seek one outcome. All agreed that the community will approach the government to set timelines, and we will follow to make sure the government sticks to them. With the implementation of the Commission's recommendations, this long and frustrating battle may finally come to the end. END SUMMARY. ¶2. (C) The DCM met with Shalom's Kalo and JDC's (JOINT Distribution Committee) Djerassi to discuss their response to the Commission's report. (PM Stanishev formed the Commission in March, following President Parvanov's informal commitment to review all outstanding claims of the Jewish community.) The DCM noted that with the report in the PM's hands, now was the time for the Jewish community and JDC, both here and in NY, to speak with one voice on the issue. He encouraged all to share information, to clarify their goals, and to develop a common strategy. ¶3. (U) The three main properties addressed in the report were the Rila hotel, the Varna property occupied by MOD, and the Sofia hospital, restituted in 1997 but still occupied by MOH. The following are the Commission's recommendations, the community's reactions, and our proposed way forward. Our unofficial copy of the report will be sent via septel email. ¶4. (SBU) Rila hotel: The Commission considers the case closed. Since the court decided against restitution, the Commission sees no grounds to reopen the case (reftel). The community expected this and is reconciled to it. 
Nevertheless, it is looking for a "gift" (not compensation -- they specifically want to avoid the term because it implies circumventing the judicial system) from the Bulgarian government. Under Bulgarian law, the state can gift properties to NGOs. ¶5. (SBU) The "gift" Shalom and Djerassi identified is the top two floors of the Saborna street building, near the site of the former U.S. Embassy. The bottom four floors had previously been restituted, but the top two had not been part of that settlement since they had been added during the period of state ownership. Gaining control of the whole building is an enviable deal, especially considering its location in the center of town and the current boom in property values. The alternative, given the court decision, is to get nothing. We found that Kalo and Djerassi were in complete agreement that Saborna was the optimum, and perhaps only, way to settle the Rila issue with the community getting something of value. ¶6. (SBU) Varna Property (Synagogue and Rabbi's House): The Commission acknowledges Shalom's rightful claim to the property. Since MOD opposes returning it for national security reasons, the Commission recommends compensating Shalom with comparable value property elsewhere. The MOD has already proposed several options and seems open to negotiate with Shalom. The key, however, is for the MOD to offer suitable properties rather than leaving the onus on Shalom to try to identify them. ¶7. (SBU) Hospital: The Commission recognizes the community's unequivocal claim to the property and recommends the Ministry of Health gives Shalom at least six rooms while it vacates the property. This is a clearly egregious case. The cash-strapped MOH has failed to abide by the court decision that restituted the property, has stopped paying rent, and is avoiding giving Shalom the six rooms it requested to start a hospice. The community has been reasonable in not trying to identify or specify which rooms it will receive, but the MOH has been completely unresponsive. Djerassi and Kalo agreed that getting the six rooms will be their first priority. ¶8. (C) COMMENT: This has been a long, complicated, and often frustrating battle, but we may be approaching the end SOFIA 00001494 002 OF 002 game. Shalom and the local JDC rep seem to be in sync on what they want -- the two floors on Saborna, comparable compensation from the MOD, and the six hospital rooms -- and are ready to approach the government for concrete timelines. If Shalom and JDC are united, they will have a better shot at success. We will push Bulgarians to live up to their commitments in both letter and spirit in our upcoming meetings with the President and Prime Minister. BEYRLE