NICARAGUA: ATTORNEY GENERAL PROMISES AMBASSADOR PROGRESS ON

UNCLAS MANAGUA 000274

SIPDIS

STATE FOR WHA/CEN, EB/IFD/OIA and L/CID
STATE FOR WHA/EPSC
STATE PLEASE PASS TO USTR
TREASURY FOR INL AND OWH

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EINV ECON KIDE USTR CVIS NU
SUBJECT: NICARAGUA: ATTORNEY GENERAL PROMISES AMBASSADOR PROGRESS ON
PROPERTY CLAIMS

REFS: A) MANAGUA 0173 B) MANAGUA 106 C) MANAGUA 0002 D) 07

MANAGUA 2581 E) 07 MANAGUA 2494

SUMMARY
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1. (SBU) During the six-month review of the 2007-08 waiver year,
Attorney General Estrada provided the Ambassador with a list of 62
U.S. citizen claims that the Government of Nicaragua (GON) considers
resolved or close to resolution. Estrada also delivered an update on
GON efforts to resolve claims under government control. The
Ambassador highlighted that the GON has settled only 3 claims during
this waiver year and there has been no progress in resolving
property claims under the government's control. The Ambassador
asked the GON for more time to allow U.S. citizens the opportunity
to defend claims the Attorney General has dismissed. To ensure a
more open dialogue on property issues, the Ambassador and Estrada
agreed to meet every month to review progress on case resolutions.
We are concerned that the GON's renewed interest in cooperating with
us actually represents a strategy to shift blame from the GON to the
USG and claimants should few cases be resolved in the remaining five
months of the waiver year.


AMBASSADOR DISCUSSES LACK OF PROGRESS DURING WAIVER YEAR


2. (SBU) On February 26, the Ambassador met with Attorney General
Hernan Estrada to review the first six months of the 2007-08 waiver
year. Ruth Zapata, Chief of the Office of Assessment and
Indemnification (OCI),also attended the meeting. The Ambassador
reviewed Section 527 of the Foreign Relations Act, Fiscal Years 1994
and 1995, and the Secretary's three benchmarks for Nicaragua during
the 2007-2008 waiver year.


3. (SBU) The Ambassador highlighted that the GON has settled only 3
claims during this waiver year and there has been no progress in
resolving property claims under the government's control. The
Ambassador voiced concern about the GON's dismissal of U.S. citizen
claims without a clear explanation of these decisions, the GON's
lack of flexibility with regard to allowing U.S. claimants the
opportunity to defend their claims, and the denial of the Embassy's
right to accompany U.S. claimants to meetings with GON officials.
The Ambassador explained that he wants to establish a way forward to
resolve a significant number of claims as soon as possible to avoid
a "train wreck" when the current waiver year closes in July 2008.

GON FINALLY SEEKS USG COOPERATION ON PROPERTY CLAIMS


4. (SBU) Estrada listened to the Ambassador's comments and countered
that the Ortega administration is working diligently on U.S. citizen
claims, adding that the GON wants to cooperate with the Embassy to
resolve these cases. Estrada passed the Ambassador a list of 62
U.S. claims compiled by OCI which the GON considers either resolved
or close to resolution.


5. (SBU) OCI Chief Zapata delivered a presentation that divided the
U.S. property claims into five categories: a) 21 claims dismissed
because the GON determined that the claimants were allies of Somoza
(Ref B); b) 15 claims awaiting notification about advances in their
cases but requiring the claimant's signature to accept the
settlement offer; c) 15 claims that would be resolved in favor of
the claimants if certain documents were provided; d) 6 claims that
were previously resolved in favor of the claimant but for which the
claimant rejected the settlement offer; and e) 5 claims settled via
indemnification bonds [Note: Of these last five, the Embassy
recognizes only three claims as resolved. We have received neither
the settlement document or confirmation from the claimant for one of
the claims the GON asserts is resolved. The other claim is not
registered with the Property Office. End Note.].


6. (SBU) Estada asked the Embassy to contact claimants for the cases
listed in the presentation to advise them on what they must do for
the GON to favorably resolve their claims. During the February 28
monthly Property Working Group meeting, Zapata promised to provide
the Property Office detailed information on what claimants must
provide to OCI or the National Confiscations Review Commission
(CNRC) to advance and resolve their claims (septel).

NO RESOLUTION OF CLAIMS UNDER GOVERNMENT CONTROL


7. (SBU) The Ambassador urged Estrada to do more to resolve U.S.
claims under government control. Zapata gave a 15-minute
presentation on GON efforts to resolve these claims. The Ambassador
reminded Estrada that the resolution of U.S. claims under government
control is one of the benchmarks set forth in the Secretary's July

31, 2007, letter to Foreign Minister Santos. The Ambassador noted
that the GON has yet to resolve a claim under government control
during this waiver year.

MORE FLEXIBILITY AND TRANSPARENCY FOR "DISMISSED CLAIMS"


8. (SBU) The Ambassador emphasized the need for the Attorney General
to conduct a transparent review process and to allow U.S. claimants
enough time to contest dismissed claims. The Ambassador argued that
it was unreasonable for the GON to simply dismiss claims that have
been pending 10 years and then grants claimants only 10 days to
appeal these decisions. The Ambassador also questioned the lack of
transparency in the Attorney General's decision to dismiss claims
that belong to alleged former Somoza allies (Ref B),noting that
there is a lack of information available to the public on this
topic.

AMBASSADOR AND ESTRADA AGREE TO MEET ON MONTHLY BASIS



9. (SBU) Throughout the meeting, the Ambassador pressed Estrada for
cooperation between working-level contacts outside the monthly
Working Group meeting, noting that monthly sessions are not
resulting in sufficient progress. To ensure that there is open
dialogue between the Property Office and the GON on property claims,
the Ambassador and Estrada agreed to meet after every Working Group
meeting to review progress, if necessary. The Ambassador also
requested copies of final settlement documents to confirm the
resolution of a claim, but Estrada was noncommittal.

COMMENT


10. (SBU) The GON sought to take the sting out of the six-month
review by providing the Ambassador good news on the resolutions for
U.S. claims and better communication between the Property Office and
its counterparts at the CNRC and OCI. We are concerned, however,
that the GON's renewed interest in cooperating with us actually
represents a strategy to shift blame from the GON to the USG and
claimants should few cases be resolved successfully during the five
months that remain in the waiver year. The Property Office will
work with the CNRC and OCI to resolve U.S. claims, but we will also
press the GON to uphold Estrada's commitments for the remainder of
this waiver year or run the risk of a "train wreck."

TRIVELLI