NICARAGUA: NO PROPERTY RESOLUTIONS IN FIRST

UNCLAS MANAGUA 001029 SIPDIS STATE FOR WHA/CEN, EB/IFD/OIA, WHA/EPSC L/LEI/EDAUGHTRY TREASURY FOR INL/MDONOVAN, GCHRISTOPOLUS, OWH/ASCHWARTZMAN SENSITIVE SIPDIS E.O. 12958: N/A TAGS: EINV ECON NU SUBJECT: NICARAGUA: NO PROPERTY RESOLUTIONS IN FIRST QUARTER 2007 REF: ¶A. MANAGUA 00626 ¶B. MANAGUA 00381 ¶C. MANAGUA 00591 ¶D. MANAGUA 00862 ¶1. (SBU) Summary: In the three-month period following the January 10th inauguration of President Daniel Ortega, the Government of Nicaragua has failed to resolve any claim involving the restitution of or compensation for U.S. citizen property illegally expropriated in the 1980s. Since 1995, when Section 527 of the Foreign Relations Authorization Act (FY 1994 and 1995) came into effect, there has been only one month without the resolution of a claim, so the current lack of progress is unprecedented. Deputy Attorney General Yara Perez explained to Emboffs that no new property claims would be settled until a thorough review of property resolution procedures by the new Attorney General had been completed. EconCouns is requesting a meeting with Property Superintendent Molina during the month of April to stress the importance of making progress on property claims in the remaining months of this waiver year. End Summary. ¶2. (SBU) In the three-month period following the January 10th inauguration of President Daniel Ortega, the Government of Nicaragua has failed to resolve a single claim involving the restitution of or compensation for U.S. citizen property illegally expropriated in the 1980s (Refs A, B, and C Q i.e., monthly reports). Section 527 of the Foreign Relations Authorization Act (FY 1994 and 1995) prohibits certain U.S. assistance and support for a government of a country that has confiscated U.S. citizen property, unless the government has taken sufficient remedial steps. Since 1995, when Section 527 came into effect, there has been only one month without the resolution of a claim. ¶3. (SBU) The year began on an optimistic note. Property Superintendent-designate Mireya Molina paid an unexpected courtesy call to the Embassy on January 18, 2007, a week before she assumed office (Ref A). A lawyer by profession, Molina told Emboffs that she wanted to work cooperatively to resolve outstanding property claims, and that it was the full intention of the Ortega Administration to advance the claims process. ¶4. (SBU) On January 18, Emboffs provided Molina with a list of claims closest to resolution. During the discussion that ensued, Molina displayed intimate knowledge of many of the claims on the list. Molina expressed her desire to engage all parties, encourage compromise, and resolve all claims as soon as possible. ¶5. (SBU) In subsequent meetings, Emboffs distributed the aforementioned list to the Minister of Foreign Affairs, the Attorney General and Deputy Attorney General, and President of the National Confiscations Review Commission. On January 29, Emboffs supplied the list to Ambassador-designate to Washington Arturo Cruz. Cruz stated that he understood the importance of resolving all outstanding claims, and promised to assist as much as possible from his end. We continue to pursue this angle. ¶6. (SBU) Embassy staff requested a meeting in February with Attorney General Hernan Estrada, who passed the meeting to Deputy Attorney General Yara Perez. On March 1, Perez told Emboffs that the government could not work on new resolutions until a review of agencies involved in the process had been completed, whenever that might be. Perez said that priority attention was being given to claims settled after the November 5 presidential elections, especially those involving unexplained increases in settlement values that had been previously rejected or estimated at lower levels. Comment -------------- ¶7. (SBU) Post believes there may be three reasons for the governmentQs inactivity during the past three months. One, new appointees are learning their jobs, including the Property Superintendent, her assistant, the Property Assessment Director, and the Assistant to the Minister of Finance for Property Issues. Two, the Ortega administration wants to assert authority and control over all agencies to accomplish a clean break with the Bolanos Administration. Three, new officeholders are reluctant to move on outstanding claims involving properties in the possession of military authorities, Sandinista party members, or the government. ¶8. (SBU) One way or another, inaction brings government intentions into doubt. EconCouns is requesting a meeting with Property Superintendent Molina in April to stress the importance of making progress in the remaining months of this waiver year. Post will report on the outcome of that meeting septel. TRIVELLI