NICARAGUA: GON UNDER PRESSURE TO RESOLVE CLAIMS

UNCLAS MANAGUA 000465

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 UNDER PRESSURE TO RESOLVE CLAIMS

REFS: A) 08 MANAGUA 1370, B) 08 MANAGUA 1243, C) MANAGUA 160, D) 08 MANAGUA 274, E) 08 MANAGUA 1546,

SUMMARY
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1. (SBU) During the April 30 Property Working Group meeting, Ruth
Zapata, Head of the Office of Assessment and Indemnification, said
the Government of Nicaragua (GON) is taking a more flexible approach
to work on U.S. citizen claims. Rebeca Zuniga, Coordinator of the
Liaison Office for U.S. Citizen Claims, told us that the GON is
working diligently to resolve claims subject to U.S. congressional
attention and those that had been dismissed under Decrees 3 (1979)
and 38 (1979). Econoff raised concerns about a reported
confiscation involving the property of a U.S. citizen, and the
Attorney General's policy of arguing in favor of illegal occupants
in court. As the end of the 2008-09 waiver year draws near, GON
officials seem to be feeling the pressure to qualify for another
Section 527 waiver. End Summary.

MORE FLEXIBILITY IN ADVANCING CLAIMS
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2. (SBU) On April 30, 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 for the monthly Property
Working Group meeting. Zapata asserted that the GON is adopting a
more flexible approach in working on U.S. citizen claims. She
acknowledged pressure from Attorney General Hernan Estrada to
resolve as many claims as possible before the end of the waiver
year. For this reason, OCI was willing to pay the higher
settlements proposed by previous governments (Ref A). Zapata
instructed Zuniga to draft detailed explanations of settlement
offers to claimants, such as Bayardo Alfaro and Uri Kollnesher, so
that they understood the offers or to propose alternative solutions
to settle their claims (Ref B).

ADVANCING CLAIMS WITH USG ATTENTION
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3. (SBU) Zuniga told us that the GON is working diligently to
resolve claims that have received significant U.S. congressional
attention and those that had been dismissed under Decrees 3 (1979)
and 38 (1979),which authorized the confiscation of property
belonging to Somoza family members and "their allies." Zuniga said
the she hopes to settle the cases of Domingo Calero, Juan Barreto
and Eddy Viquez during this waiver year (Ref C). Zuniga added that
she would propose final settlements to five U.S. citizens subject to
Decrees 3 and 38 with a total of 12 dismissed claims in May and June
[Note: The claims of Domingo Calero are also subject to Decree 38.
End Note.]

PROPERTY CONFISCATION AGAINST A U.S. CITIZEN
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4. (SBU) Econoff raised concern about a reported property
confiscation against U.S. citizen Leonidas Guadamuz (Ref D). On
April 15, the legal representative of Mr. Guadamuz told the Embassy
Property Office that the GON had confiscated his property without
compensation. On April 23, the Ambassador inquired about the case
in a letter to Attorney General Estrada. Econoff asked CNRC
President Garcia to look into it, noting that any confiscation
against U.S. citizen property would negatively impact the GON's
effort to get a Section 527 waiver. Garcia assured Econoff that she
would investigate the case and that Estrada would formally respond
to the Ambassador's letter.

CLAIMS IN COURT
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5. (SBU) Econoff also raised the claim of U.S. citizen Yolando Diaz,
who went to court to recover possession of her property only to have
the National Property Appeals Court, the highest court for property
matters, rule in favor of the illegal occupant. Econoff highlighted
that the Attorney General's Office withdrew its support on behalf of
Mrs. Diaz and instead filed a petition on behalf of the illegal
occupant. Econoff noted that this is the third court case where
U.S. claimants have complained about the Attorney General switching
sides in court [Note: Under Nicaraguan law, the Attorney General is
supposed to pursue property restitution on behalf of aggrieved
claimants. End Note.] Econoff argued that this action undermines
the rule of law in Nicaragua and discourages claimants from using
the GON to advance claims in court (E). Bravo promised to look into
the case.

COMMENT
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6. (SBU) As the end of waiver year draws near, GON officials are
feeling the pressure. GON officials have started contacting the
Property Office to request that we persuade claimants to accept
compensation offers. During the Working Group meeting, GON
officials asked the Embassy to contact several U.S. claimants to
inform them that their compensation offers are ready. We suspect
that Estrada believes that Nicaragua would be in a good position to
receive a waiver if he can equal or better the number of claims
resolved last year, i.e., 42.

CALLAHAN