NICARAGUA: ATTRONEY GENERAL CLAIMS PROGRESS ON PROPERTY CLAIMS

UNCLAS MANAGUA 000313 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: ATTRONEY GENERAL CLAIMS PROGRESS ON PROPERTY CLAIMS REFS: A) 08 MANAGUA 1546, B) 08 MANAGUA 1352, C) 02 MANAGUA 877, D) MANAGUA 228, E) 08 MANAGUA 1120, F) 08 MANAGUA 287, G) MANAGUA 235 SUMMARY -------------- ¶1. (SBU) During the mid-year review of the 2008-09 waiver year, Attorney General Estrada took the opportunity to assert that he had fulfilled all of the commitments he made during the bilateral review, such the establishment of a Liaison Office, a committee to review claims in court, and a committee to review claims under government control, as well as the publication of the claims resolution process on the Attorney General's website. He also pledged to re-examine 70 U.S. citizen claims dismissed under Decrees 3 and 38 to determine whether they could be resolved favorably. The Ambassador raised concerns about the nullification of previously resolved claims and pressed for detailed explanation of how final settlement offers are made. Econoff passed U.S. claimants' concerns surrounding the Attorney General's policy of no longer pursuing court claims filed on behalf of claimants and, instead, arguing in favor of illegal occupants. Throughout the mid-year review, Estrada stressed that he was doing all he could to improve Nicaragua's chances at receiving a Section 527 waiver this year and avoid further tension in our bilateral relationship. End Summary. AMBASSADOR DISCUSSES SECTION 527 BENCHMARKS -------------- ¶2. (SBU) On March 12, the Ambassador met with Attorney General Hernan Estrada to review the first six months of the 2008-09 waiver year and to follow up on issues raised during the bilateral review (Ref A). The DCM, Economics Counselor, and Econoff participated in the meeting. Rebeca Zuniga, Coordinator of the Liaison Office for U.S. Citizen Claims, also attended the meeting. ¶3. (SBU) The Ambassador observed that the GON had settled only 14 claims during the first half of the waiver year, and that there had been little progress in resolving claims under the government's control. So far, the GON had resolved one claim under the control of the Nicaraguan National Police (Ref B),and a local court returned to a U.S. claimant property that was under the control of a former Nicaraguan Army officer (septel). Estrada responded that the GON is working diligently on U.S. citizen claims, adding that his staff is negotiating a settlement with U.S. citizen Juan Barreto to solve the Las Serranias case, which consists of 28 claims under the control of the Nicaraguan Army (Ref C). Estrada noted that he had instructed Ruth Zapata, Head of the Office of Assessment and Indemnification (OCI),to meet with the Barreto family as soon as possible to iron out issues to pave the way for a final settlement this waiver year. COOPERATION -------------- ¶4. (SBU) The Ambassador expressed his appreciation for the creation of the Liaison Office for U.S. Citizen Claims, noting that the office had improved communication between the Embassy Property Office. Estrada seized the opportunity to assert that he had fulfilled all of the commitments he made during the bilateral review, such the establishment of a Liaison Office, a committee to review claims in court, a committee to review claims under government control, and the publication of the claims resolution process on the Attorney General's website (Ref A). The Ambassador welcomed these positive developments and expressed the desire to continue the effort to deal with unresolved claims and other property-related issues. REVIEW OF DECREE 3 AND 38 DISMISSALS -------------- ¶5. (SBU) Estrada told the Ambassador that he planned to review 70 of the 98 U.S citizen claims dismissed under Decree 3 (1979) and Decree 38 (1979),which authorized the government to confiscate property of Somoza family members and "their close allies," to determine whether they could be resolved favorably. The Ambassador welcomed this development and pressed him for quick action. The Ambassador reiterated the assertion that the USG does not recognize Decree 3 and 38 dismissals and urged Estrada to develop a fair and transparent process to allow claimants due process. NULLIFICATION OF SETTLED CLAIMS -------------- ¶6. (SBU) The Ambassador raised concern about the National Confiscation Review Commission's (CNRC) recent notices to two U.S. citizens that their previously settled claims had been nullified (Ref D). The Ambassador reminded Estrada of the pledge that he had made during the bilateral review, i.e., to leave previously settled claims alone. Estrada tried to clarify his position, stating that some claims needed to be reviewed for legal or administrative reasons. The Ambassador pointed out that the Embassy had already counted these claims as having been resolved; nullifying them would be a serious setback to our efforts to reduce the case load. Estrada instructed Zuniga to review the two cases in question for errors or misunderstandings. Econoff suggested that should the CNRC revoke the nullification notices, that it recognize this publicly to relieve fears among the U.S. claimant community. TRANSPARENCY IN FINAL SETTLEMENT OFFERS -------------- ¶7. (SBU) The DCM pressed Estrada to develop a clear, detailed explanation of final settlement offers to help claimants understand the appraisal process (Ref E). The DCM explained that if claimants understood how the government determined offers under Nicaraguan law, they might be more willing to accept the offer. Estrada did not engage on this point. CLAIMS IN COURT -------------- ¶8. (SBU) Econoff raised U.S. claimant concerns surrounding the Attorney General's policy of no longer pursuing court claims filed on behalf of claimants, and, instead, arguing in favor of illegal occupants, and awarding them titles based on Laws 85 (1990),86 (1990) and 88 (1990),known as the "Pinata Laws" (Ref F). Estrada retorted that property claims are complex issues, and that he must apply the law to protect the rights of all Nicaraguans, not just the rights of foreigners. Econoff highlighted the Attorney General Office's role in petitioning the highest court for property issues, the National Property Appeals Court, to rule against the lawsuit of U.S. citizen claimant Sylvia Sanchez (who sought the return of her property) and the subsequent transfer of ownership of her property to the occupant who was not even considered a beneficiary under the "Pinata Laws." Estrada instructed Zuniga to look into the case. [Note: On March 16, Zuniga corroborated to us on March 16 that the National Property Appeals Court had indeed ruled against Ms. Sanchez. End Note.] PROPERTY INVASIONS -------------- ¶9. (SBU) The Ambassador urged Estrada to help U.S. citizen landowners dealing with recent land invasions against their property (Ref G). Estrada asserted that his government had "zero tolerance" when it came to land invasions, but when pressed to take action on specific cases, he deferred to law enforcement officials and the courts. Econoff pointed out that the Attorney General's Office had assisted some U.S. citizen landowners in the past by issuing dicta clarifying their legal ownership of the property in question. At this point, the Ambassador handed Estrada a list of U.S. citizen landowners who are requesting assistance to remove squatters from their land. Estrada instructed Zuniga to look into these cases. COMMENT -------------- ¶10. (SBU) Throughout the mid-year review, Estrada stressed that he was doing all that he could to work on Embassy-registered claims and address issues raised during the bilateral review. It appears that he is making at least a modest effort to meet all three Section 527 benchmarks this waiver year, if only to avoid further tension in the bilateral relationship. We remain concerned about Estrada's unwillingness to 1) establish a fair and transparent process to allow claimants to contest Decree 3 and 38 dismissals, 2) improve transparency in the calculation of settlement offers, 3) support U.S. citizen cases in court, 4) reevaluate his policy of arguing on behalf of illegal occupants in court in order to transfer to them titles to property belonging to U.S. citizens, and 5) reconsider the CNRC's nullification of previously resolved claims. SANDERS