NICARAGUA: GON SEEKS MORE USG COOPERATION DURING MARCH

UNCLAS MANAGUA 000424 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 USTR KIDE NU SUBJECT: NICARAGUA: GON SEEKS MORE USG COOPERATION DURING MARCH MEETING ON PROPERTY CLAIMS REF: A) MANAGUA 287, B) MANAGUA 274, C) MANAGUA 173, D) MANAGUA 0106, E) MANAGUA 0002, F) 07 MANAGUA 2581, G) 01 MANAGUA 2313, H) 04 MANAGUA 2442, I) 04 MANAGUA 2324, J) 02 MANAGUA 877 SUMMARY -------------- ¶1. (SBU) During the March 27 monthly Working Group meeting on property issues, Government of Nicaragua (GON) officials handed Econoff a list of 11 "dismissed" cases that they would continue to process if the U.S. claimants provided additional information to defend their claims. GON officials asked the Embassy to participate in an inspection of U.S. citizen property under control of the Nicaraguan Army to seek our help in advancing the resolution of this case. Econoff raised concerns about the GON's lack of customer service when dealing with U.S. claimants eager to resolve their claims. The GON also reported that Attorney General Estrada is exploring legal options that might allow some U.S. claimants deemed "allies of Somoza" the opportunity to defend their claims. SOME FLEXIBILITY ON DISMISSED CLAIMS -------------- ¶2. (SBU) During the March 27 monthly Working Group meeting, Econoff pressed two members of the National Confiscations Review Commission (CNRC) and the head of the Office of Assessment and Indemnification (OCI) to allow U.S. claimants to defend 23 claims the GON had recently dismissed. GON officials responded that they were unprepared to discuss the 23 dismissed claims. Instead, they presented a separate list of 11 dismissed property claims that they would continue to process if U.S. claimants provide additional documentation to show proof of ownership. Econoff asked the GON for a precise list of documents that would serve this purpose. He added that the Property Office will follow up with the U.S. claimants to inform them of this opportunity. OCI SEEKS USG HELP ON LAS SERRANIAS CLAIMS -------------- ¶3. (SBU) Ruth Zapata, head of OCI, asked Econoff to participate in a site inspection to advance the resolution of 29 claims pertaining to the Las Serranias residential complex that ended up being controlled by the Nicaraguan Army after being confiscated in 1980 from U.S. claimant Juan Barreto (Ref J). She noted that Attorney General 
Hernan Estrada has met with the Nicaraguan Army and Mr. Barreto's legal representative, Mr. Samuel Barreto (brother),but neither the Army nor Mr. Barreto appears willing to negotiate. ¶4. (SBU) Zapata explained that Mr. Barreto seeks the return of property not used by the military and indemnification bonds (BPIs) for the rest. The Nicaraguan Army does not wish to return any of the property to Mr. Barreto and has urged the GON to settle the claims with BPIs. Econoff welcomed Zapata's offer, but he requested more information regarding the goals of the inspection, assurance that Mr. Samuel Barreto would participate in it, and agreement that the findings would compel the GON to lead serious negotiations between the parties to resolve these claims. POOR TREATMENT OF U.S. CLAIMANTS -------------- ¶5. (SBU) Econoff raised concerns about the GON's lack of customer service when dealing with U.S. claimants. He noted that during the February 28, 2008, Property Working Group meeting (ref A),GON officials requested the Embassy to contact claimants to ask that they come to the Attorney General's Office to provide documents to advance their claims or to sign the settlement offer to finalize them. The Embassy Property Office staff provided several examples of U.S. claimants who went to the Attorney General's Office to follow up on their claims, but found officials unwilling to meet with them. Zapata said that claimants who come to the Attorney General's Office in the future to advance or resolve their claims could ask for her and she would assist them [Note: Attorney General Estrada has also told the Ambassador that he would personally meet with any U.S. claimant willing to resolve their cases. End Note]. CNRC UNABLE TO RULE ON "ALLY OF SOMOZA" CLAIMS -------------- - ¶6. (SBU) CNRC official Alfonso Solorzano Icabalseca said that his agency lacks the legal authority to overturn a confiscation based on Decree 38, also known as the "allies of Somoza" decree. CNRC officials explained that Attorney General Estrada is exploring alternative legal options that might allow some U.S. claimants the opportunity to defend their claims. Solorzano noted that Decrees 172/1979 and 282/1980 establish a procedure to contest confiscations under Decree 38. Econoff responded that several U.S. claimants have certificates of non-confiscation ("certificados de desconfiscacion") that the GON should recognize as evidence of this process to allow for compensation via BPIs or the return of the property. ¶7. (U) Note: Decree 172/1979 halted the application of Decree 38. Decree 282/1980 established a procedure for claimants to contest the confiscation of their property under Decree 38. After the publication of Decree 282 in the Official Gazette on February 7, 1980, claimants were granted 30 days to prove that they were not allies of Somoza. Claimants also had to demonstrate that they did not owe back taxes. Claimants had to personally file their claims. The Attorney General's Office then reviewed the evidence to decide if the property should be returned to the claimant. In some cases, the GON approved land swaps and monetary compensation to compensate claimants for the loss of their property. End Note. ¶8. (SBU) In a separate conversation with Econoff, Nicaraguan legal scholars and attorneys argued that the Decree 282 did not establish a fair and transparent process to contest confiscations under Decree ¶38. Many claimants fled Nicaragua because they were concerned for their safety; they refused to return to personally claim their assets. A legal scholar noted that the Attorney General's Office, which administered the appeals process under Decree 282, was the same institution that confiscated property under Decree 38. One attorney added that 30 days was not sufficient time for claimants to collect evidence that they were not "allies of Somoza" or they had any outstanding tax obligations. COMMENT -------------- ¶9. (SBU) Property Superintendent Yara Perez, who has been difficult, did not attend the meeting. This absence allowed for constructive casework and a frank discussion concerning GON policies. GON efforts to enhance cooperation with the Embassy on U.S. claims may reflect some concern that they are not doing enough to receive a Section 527 waiver this year. We believe that the GON is cooperating with us only to the effect that it can eventually blame the USG for the lack of progress. TRIVELLI