NICARAGUA: GON ASSERTS FLEXIBILITY IN RESOLVING U.S. CLAIMS

UNCLAS MANAGUA 000160 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 ASSERTS FLEXIBILITY IN RESOLVING U.S. CLAIMS REFS: (A) MANAGUA 002, (B) 08 MANAGUA 1243, (C) 08 MANAGUA 1546, (D) 08 MANAGUA 1441 SUMMARY -------------- ¶1. (SBU) During the January 29 Property Working Group meeting, Ruth Zapata, Head of the Office of Assessment and Indemnification (OCI), asserted the government's willingness to find different solutions for U.S. claims. Rebeca Zuniga, coordinator of the liaison office for U.S. citizen claims, stated that she would meet with claimants without a formal request from the Ambassador to Attorney General Hernan Estrada. Econoff also pressed Zapata to work on claims with significant congressional attention. The GON's change in attitude is encouraging, but it remains to be seen whether this cooperation translates into the resolution of claims. We are concerned that the government's budget shortfall, as a result of the reduction in donor assistance because of the fraudulent November 9, 2008 municipal elections, might be used as an excuse not to actively resolve claims during the 2009 Nicaraguan fiscal year. End Summary. FINDING DIFFERENT SOLUTIONS -------------- ¶2. (SBU) On January 29, Econoff met with Ruth Zapata, Head of the Office of Assessment and Indemnification (OCI),Jeanette Garcia, President of the National Confiscations Review Commission (CNRC), Magally Bravo, Executive Coordinator for property issues for the Attorney General's Office, and Rebeca Zuniga, coordinator of the liaison office for U.S. citizen claims, to hold the Property Working Group meeting. Zapata asserted that the Government of Nicaragua (GON) was willing to find different solutions to resolve claims, such as removing squatters, engaging in land swaps, and encouraging the courts to clarify the ownership of U.S. citizen property already controlled by the rightful owner. Econoff welcomed the government's willingness to work with the courts, but pressed for assurances that the GON would not transfer the property to squatters or individuals who wrongfully asserted control (Ref A). SCHEDULING MEETINGS WITHOUT FORMAL REQUESTS -------------- ¶3. (SBU) Zuniga said that she would meet with claimants without a formal request to Attorney General Hernan Estrada, as long as the Property Office requested the meeting. She stipulated that a claimant seeking an appointment with Estrada still required a formal request from the Ambassador. Econoff asserted that claimants should be able to request meetings with GON officials without Embassy assistance. CLAIMS WITH CONGRESSIONAL ATTENTION -------------- ¶4. (SBU) Econoff pressed Zapata to resolve claims that have received significant U.S. congressional attention, namely Uri Kollnesher, Domingo Calero, Fidelina Arauz, Mary Ruth Silva, Eddy Viquez, and Elmer Hidalgo. Econoff reminded Zapata that the Ambassador had raised this objective with Estrada on September 30, 2008 (ref B),as did WHA/CEN Office Director Christopher Webster during the bilateral review on December 11-12, 2008 (Ref C). BUDGETARY WOES COULD IMPEDE CLAIMS RESOLUTIONS -------------- - ¶5. (SBU) On February 2, the GON paid $100 million to service indemnification bonds used to pay property claimants, including U.S. citizen proprietors, whose property was confiscated during the first Sandinista government from 1979-1990. However, the government's recent budget shortfall, as a result of the reduction in donor assistance to the GON because of the fraudulent November 9 municipal elections, might be used as an excuse not to resolve and compensate claims during the 2009 Nicaraguan fiscal year which runs from January 1 until December 31. GON officials had already stated that the suspension of Millennium Challenge Corporation assistance for the property restitution program would result in a loss of employment and likely limit ability to their work on U.S. citizen claims (Ref D). COMMENT -------------- ¶6. (SBU) The GON's professed change in attitude is encouraging, but it remains to been seen whether this attributes to the resolution of claims. We reminded GON officials that they had resolved only 10 claims during the current waiver year. We expect that we will have to hammer this point home during the Ambassador's upcoming mid-year review with Estrada, probably in early March. We are concerned that the government's budget shortfall, as a result of the reduction in donor assistance because of the fraudulent November 9, 2008 municipal elections, might be used as an excuse not to actively resolve claims during the 2009 Nicaraguan fiscal year. End Comment. CALLAHAN