UNCLAS MANAGUA 001186

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 SAYS IT WILL FOCUS ON CLAIMS UNDER ARMY CONTROL

REF: A) 02 MANAGUA 877, B) MANAGUA 564, C) MANAGUA 1120

SUMMARY
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1. (SBU) During the August 28 monthly Working Group meeting on
property issues, GON officials reported the establishment of an "ad
hoc" committee to settle claims under the control of the Nicaraguan
Army. Econoff urged GON officials to explain how they determine
settlement offers. Econoff discussed a number of high profile U.S.
citizens' property claims that had attracted U.S. Congressional
interest and informed GON officials of the upcoming visit of a U.S.
Government delegation to discuss government policies pertaining to
U.S. property claims. It appears that the GON is committed to
resolving U.S. claims under army control during this waiver year.


"AD HOC" COMMITTEE TO REVIEW ARMY CONTROLLED CLAIMS
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2. (SBU) During the August 28 monthly Property Working Group
meeting, Econoff met with Ruth Zapata, head of the Office of
Assessment and Indemnification (OCI), Jeanette Garcia, director of
the National Confiscations Review Commission (CNRC), and Maysella
Bravo, an official from the Office of the Attorney General, to
review the claims of U.S. citizens who have requested assistance
from the Embassy. GON officials informed Econoff that President
Daniel Ortega had established an ad hoc committee, including
representatives from the Attorney General's Office and the
Nicaraguan Army, to resolve claims on properties under Army control.
Zapata explained that the committee has been working since early
August on the Las Serranias residential complex case. This case
involves 29 properties confiscated from the Barreto family (Ref B).


TRANSPARENCY AND FAIRNESS IN PROPERTY APPRAISALS
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3. (SBU) Econoff urged GON officials to explain to U.S. claimants
how the government determines settlement offers, noting that many
U.S. claimants complain about OCI's lack of transparency and
fairness in appraising confiscated properties (Ref A). Zapata
asserted that according to the law, appraisals are prepared on the
basis of historical values recorded in property registries, not
current market values. She added that property values are public
information that claimants can request this information from the
National Cadastral Registry Office or its regional offices.

CONGRESSIONAL INQUIRIES AND BILATERAL REVIEW
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4. (SBU) Econoff raised several U.S. claims that have recently
received U.S. congressional attention, namely citizens Fidelina
Arauz and Uri Kollnesher. Zapata replied that these claims are
under review. Econoff broached the subject of an upcoming bilateral
review by a U.S. Government delegation from Washington in October
(Ref C). Zapata said they look forward to holding bilateral
discussions with the delegation.

COMMENT:
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5. (SBU) The formation of a committee to review claims under Army
control signals that the GON is committed to resolving these cases
during this waiver year. On August 19, our Defense Attache met with
a high-ranking general, who occupies a house in Las Serranias that
is claimed by the Barreto family. He told our Defense Attache that
the Army wanted to resolve these claims during the past waiver year,
but Attorney General Hernan Estrada was dragging his feet. We plan
to keep this avenue of communication with the Army open while we
continue to press Estrada to resolve these claims.

CALLAHAN