NICARAGUA: GON RESISTS MORE TRANSPARENCY IN PROPERTY CLAIMS

UNCLAS MANAGUA 001244 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 RESISTS MORE TRANSPARENCY IN PROPERTY CLAIMS COMPENSATION PROCESS REF: A) MANAGUA 1243, B) MANAGUA 564, C) 02 MANAGUA 877 SUMMARY -------------- ¶1. (SBU) During the October 2 Property Working Group meeting, Econoff urged Government of Nicaragua (GON) officials to provide clear explanations on how they determine settlement offers. Ruth Zapata, head of the Office of Assessment and Indemnification (OCI), was aware of the frustration that some claimants experience but explained that "it was more a matter of style" than substance. Zapata complained that the Nicaraguan Army is not sharing information on claims under its control. Following the Working Group meeting, a U.S. claimant reported that the GON is attempting to reverse settlements on nine of his properties. The U.S. citizen initiated court action to protect himself against possible litigation from the buyers of six of these properties. End Summary. TRANSPARENCY AND FAIRNESS IN PROPERTY APPRAISALS -------------- -------------- ¶2. (SBU) On October 2, 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 Magally Bravo, an official from the Office of the Attorney General, to hold the September Property Working Group meeting. Attorney General Hernan Estrada had requested that the September 25 Property Working Group meeting be postponed until October 2 because he wanted to meet first with the Ambassador on September 30 (ref A). ¶3. (SBU) Econoff urged GON officials to develop a transparent process to explain to U.S. claimants how the government determines settlement offers. As it stands, many U.S. claimants complain about the lack of transparency and fairness in appraising confiscated properties (Ref B). Specifically, they do not understand how OCI determines values, or in some instances, why OCI reduces settlement offers when previous governments proposed higher compensation awards. Zapata was aware of the frustration that some claimants experience but explained that "it was more a matter of style" than substance. Econoff explained that while this may be true, a clearer explanation of how OCI determines settlement offers would advance the resolution of claims. ARMY NOT SHARING INFORMATION ON CLAIMS -------------- ¶4. (SBU) Zapata complained that the Nicaraguan Army had not shared information on claims under its control. She asserted that the Attorney General's Office had repeatedly requested information on the Las Serranias complex case, involving 29 properties confiscated from the Barreto family (Ref C). Econoff pointed out that the Army seems to think otherwise: i.e., that Estrada is reluctant to take on these claims. We believe that the truth may be somewhere in between. GON ATTEMPTS TO RECONFISCATE U.S. PROPERTY -------------- ¶5. (SBU) On October 3, U.S. citizen Jose Arguello Cardenal informed Econoff that the GON is attempting to reverse decisions on settlements on nine of his properties. He told us that the Attorney General's website listed his properties as having been dismissed based on Decree 38/1979, which authorizes the government to confiscate property belonging to the "allies of Somoza." Arguello Cardenal considers the applications of Decree 38 as a new method of confiscation because the properties had been legally returned to him in the 1990s. He added that he sold six of the nine properties and worries about possible legal action from his buyers should the GON insist on the return of the property. Arguello Cardenal filed a suit in civil court to request that the Attorney General's Office remove his properties from the list of dismissed claims based on Decree 38. COMMENT: -------------- ¶6. (SBU) The GON's resistance to provide clear explanations as to how it determines settlement offers stifles progress on resolving many claims. This lack of transparency fits with the GON's policies to protect the interests of the beneficiaries of confiscation, lower the level of compensation per claim, and administratively dismiss claims whenever possible. We continue to press the GON to explain how settlement offers are calculated, the criteria and procedures for dismissing claims, and the application of Nicaraguan law. CALLAHAN