Identifier
Created
Classification
Origin
09MANAGUA537
2009-06-01 13:47:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Managua
Cable title:
NICARAGUA: AMBASSADOR WARNS GON, PROPERTY WAIVER NOT A SURE THING
how-toVZCZCXYZ0027 RR RUEHWEB DE RUEHMU #0537/01 1521347 ZNR UUUUU ZZH R 011347Z JUN 09 FM AMEMBASSY MANAGUA TO RUEHC/SECSTATE WASHDC 4183 INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
UNCLAS MANAGUA 000537
SIPDIS
SENSITIVE
E.O. 12958: N/A
TAGS: EINV ECON NU
SUBJECT: NICARAGUA: AMBASSADOR WARNS GON, PROPERTY WAIVER NOT A SURE THING
REF: A. STATE 51201; B. MANAGUA 389
Summary
-------
UNCLAS MANAGUA 000537
SIPDIS
SENSITIVE
E.O. 12958: N/A
TAGS: EINV ECON NU
SUBJECT: NICARAGUA: AMBASSADOR WARNS GON, PROPERTY WAIVER NOT A SURE THING
REF: A. STATE 51201; B. MANAGUA 389
Summary
--------------
1. (SBU) On May 22, Ambassador Callahan met with Foreign Minister Samuel Santos and Attorney General Hernan Estrada to express serious concerns regarding how U.S. citizen property claims are being handled during the 2008-09 waiver year. He addressed issues such as cooperation, claims under GON control, Decrees 3 and 38 dismissals, claims in court, resolution of claims though official publication, nullification of previously resolved claims, and an alleged recent confiscation of U.S. citizen property. The Ambassador also refuted an argument planted by Santos that the amount of development assistance we provide to Nicaragua is somehow related to the compensation the GON has paid since 1990 for property expropriated from U.S. citizens.
Cooperation
--------------
2. (SBU) On May 22, Ambassador Callahan met with Foreign Minister
Samuel Santos and Attorney General Hernan Estrada to express our
serious concerns regarding how U.S. citizen property claims are
being handled during the 2008-09 waiver year (Ref A). The
Ambassador opened the meeting by thanking Estrada for having
established a Liaison Office for U.S. Claims. He explained that
this office has helped to improve the flow of information between
claimants and the GON. Santos and Estrada also noted their
appreciation for the monthly working group meetings between the
Embassy and the GON on property issues.
Comparing Indemnification with Development Assistance
-------------- --------------
3. (SBU) Santos went on to provide an overview of GON efforts to
resolve claims, asserting that they had finalized 33 as of May 21.
He explained, however, that continuing to pay claims -- so far the
GON has paid out $1.2 billion since 1990 -- was a significant drain
on government resources. In contrast, he calculated U.S. Agency for
International Development (USAID) assistance for Nicaragua at only
$760 million for the period.
4. (SBU) After correcting Santos' math -- the actual figure for USAID assistance is almost $1.4 billion -- the Ambassador spelled out the difference between indemnification and development assistance. While the former is compensation paid to individuals for private property that the Sandinista regime expropriated during the 1980s, the latter represents the commitment of the United States to economic development and democracy in Nicaragua. The Ambassador asked Santos not to confuse the two.
Missing Claimants
--------------
5. (SBU) Estrada complained that the list of U.S. citizens seeking
compensation for expropriated property included as many as 30
claimants who have not responded to GON efforts to settle their
claims. The Ambassador responded that the Embassy has contacted
many of these claimants to encourage them to submit the necessary
paperwork to settle their claims. The Ambassador acknowledged that
there were likely some on the list who had abandoned their claims,
but with more than 90 percent of those on the list still actively
seeking resolution, it would be more constructive to instead focus
on those cases. Estrada asserted that the Embassy continues to add
cases to the list of waiver claims. The Ambassador clarified that
this was not true; several U.S. citizens had received compensation
for a part of their claim, and for this reason they need to stay on
the list.
Claims under GON Control
--------------
6. (SBU) The Ambassador pressed Estrada for information on efforts
to resolve cases under government control, noting that resolving
claims under control of the Army is a benchmark for granting a
waiver this year. In particular, he mentioned that resolving the
Barreto claims, 28 in all, would be a significant milestone.
Estrada said he was making progress on the claim but provided no
further details. [Note: Barreto informed us on May 19 that the GON
had offered him compensation bonds with a face value of $330,000.
Barreto has yet to respond to this offer. End note.]
Decrees 3 and 38
--------------
7. (SBU) The Ambassador asked Estrada and Santos for additional information on the application of Decrees 3 and 38, published in 1979 to authorize the expropriation of property owned by Somoza, his family, and his associates. The Ambassador complained that the process by which these decrees had been applied to dismiss 146 cases in 2007 and 2008 lacked transparency and appeared arbitrary. These cases had been previously accepted as eligible for compensation, the Ambassador said, and there exists no process by which claimants can dispute these dismissals.
8. (SBU) Santos explained that the effective application of these
decrees was a priority for the current government, and that the
government will continue to dismiss claims from U.S. citizens who
are subject to the decrees. He and Estrada were both survivors, he
claimed. Santos alleged that he was tortured by a Somoza associate
-- who he acknowledged did not appear in the list of registered U.S.
claims -- while Estrada had survived a recent attempt on his life
(Ref B). Estrada assured the Ambassador that his office had
established administrative procedures to review cases and apply the
decrees, which are still in effect. Nevertheless, he refused to
share information on those procedures with us. He finally admitted
that the application of Decrees 3 and 38 was, by its nature,
somewhat subjective. [Note: On March 12, Estrada had promised to
review 70 of the cases dismissed on the basis of these decrees, but
that commitment now appears in question. End note.]
Claims in Court
--------------
9. (SBU) Santos complained that among the list of U.S. claims were a
number of cases in the courts and, therefore, outside his
government's control. The Ambassador responded that while these
cases are working their way through the courts, the GON can still be
helpful. The Ambassador expressed concern that, in fact, the
opposite had occurred on several occasions, when the Attorney
General had petitioned local courts in favor of the illegal
occupants of U.S. citizen property. Estrada did not answer the
Ambassador's complaint directly, instead asserting that the GON
cannot interfere in judicial proceedings. He further argued that
those claims should be removed from the waiver list.
Resolution of Claims through Official Publication
-------------- --------------
10. (SBU) The Ambassador noted our concern that instead of
negotiating with U.S. citizens to resolve claims to each party's
satisfaction, the GON considered claims resolved after having
published case resolutions in the Official Gazette and depositing
compensation in an escrow account. Estrada replied that in many
cases, negotiations had stalled because claimants had sentimental
attachment to their properties and were looking for compensation
that would exceed cadastral value. He suggested that claimants who
were unsatisfied with the compensation offered should pursue their
claims in court. The Ambassador reiterated our position that we do
not consider a case resolved until a claimant notifies us that
he/she has been compensated fairly.
Confiscation of U.S. Citizen Property
--------------
11. (SBU) In response to the Ambassador's request for additional information on allegations that the government had recently expropriated the property of a U.S. citizen without providing compensation, Santos and Estrada categorically denied that GON would take such measures. Estrada promised to look into the issues and provide additional information at the next property working group meeting scheduled for May 28, 2009. The Ambassador emphasized that a new confiscation could jeopardize Nicaragua's chance for a waiver this year.
Comment
--------------
12. (SBU) The GON's weak defense of its property claims resolution
process and policies illustrates the level of cooperation we have
received in advancing U.S. citizen claims during this waiver year.
The Ambassador's meeting with Foreign Minister Santos and Attorney
General Estrada served notice to the GON that more work needs to be
done on advancing U.S. claims and that this year's waiver decision
is not a "done deal." We anticipate that Attorney General Estrada
and his staff will work diligently to resolve more claims in the
next two months. GON officials have privately told us that Estrada
is under pressure to do all that he can to ensure that Nicaragua is
granted a Section 527 waiver for 2008-2009.
CALLAHAN
SIPDIS
SENSITIVE
E.O. 12958: N/A
TAGS: EINV ECON NU
SUBJECT: NICARAGUA: AMBASSADOR WARNS GON, PROPERTY WAIVER NOT A SURE THING
REF: A. STATE 51201; B. MANAGUA 389
Summary
--------------
1. (SBU) On May 22, Ambassador Callahan met with Foreign Minister Samuel Santos and Attorney General Hernan Estrada to express serious concerns regarding how U.S. citizen property claims are being handled during the 2008-09 waiver year. He addressed issues such as cooperation, claims under GON control, Decrees 3 and 38 dismissals, claims in court, resolution of claims though official publication, nullification of previously resolved claims, and an alleged recent confiscation of U.S. citizen property. The Ambassador also refuted an argument planted by Santos that the amount of development assistance we provide to Nicaragua is somehow related to the compensation the GON has paid since 1990 for property expropriated from U.S. citizens.
Cooperation
--------------
2. (SBU) On May 22, Ambassador Callahan met with Foreign Minister
Samuel Santos and Attorney General Hernan Estrada to express our
serious concerns regarding how U.S. citizen property claims are
being handled during the 2008-09 waiver year (Ref A). The
Ambassador opened the meeting by thanking Estrada for having
established a Liaison Office for U.S. Claims. He explained that
this office has helped to improve the flow of information between
claimants and the GON. Santos and Estrada also noted their
appreciation for the monthly working group meetings between the
Embassy and the GON on property issues.
Comparing Indemnification with Development Assistance
-------------- --------------
3. (SBU) Santos went on to provide an overview of GON efforts to
resolve claims, asserting that they had finalized 33 as of May 21.
He explained, however, that continuing to pay claims -- so far the
GON has paid out $1.2 billion since 1990 -- was a significant drain
on government resources. In contrast, he calculated U.S. Agency for
International Development (USAID) assistance for Nicaragua at only
$760 million for the period.
4. (SBU) After correcting Santos' math -- the actual figure for USAID assistance is almost $1.4 billion -- the Ambassador spelled out the difference between indemnification and development assistance. While the former is compensation paid to individuals for private property that the Sandinista regime expropriated during the 1980s, the latter represents the commitment of the United States to economic development and democracy in Nicaragua. The Ambassador asked Santos not to confuse the two.
Missing Claimants
--------------
5. (SBU) Estrada complained that the list of U.S. citizens seeking
compensation for expropriated property included as many as 30
claimants who have not responded to GON efforts to settle their
claims. The Ambassador responded that the Embassy has contacted
many of these claimants to encourage them to submit the necessary
paperwork to settle their claims. The Ambassador acknowledged that
there were likely some on the list who had abandoned their claims,
but with more than 90 percent of those on the list still actively
seeking resolution, it would be more constructive to instead focus
on those cases. Estrada asserted that the Embassy continues to add
cases to the list of waiver claims. The Ambassador clarified that
this was not true; several U.S. citizens had received compensation
for a part of their claim, and for this reason they need to stay on
the list.
Claims under GON Control
--------------
6. (SBU) The Ambassador pressed Estrada for information on efforts
to resolve cases under government control, noting that resolving
claims under control of the Army is a benchmark for granting a
waiver this year. In particular, he mentioned that resolving the
Barreto claims, 28 in all, would be a significant milestone.
Estrada said he was making progress on the claim but provided no
further details. [Note: Barreto informed us on May 19 that the GON
had offered him compensation bonds with a face value of $330,000.
Barreto has yet to respond to this offer. End note.]
Decrees 3 and 38
--------------
7. (SBU) The Ambassador asked Estrada and Santos for additional information on the application of Decrees 3 and 38, published in 1979 to authorize the expropriation of property owned by Somoza, his family, and his associates. The Ambassador complained that the process by which these decrees had been applied to dismiss 146 cases in 2007 and 2008 lacked transparency and appeared arbitrary. These cases had been previously accepted as eligible for compensation, the Ambassador said, and there exists no process by which claimants can dispute these dismissals.
8. (SBU) Santos explained that the effective application of these
decrees was a priority for the current government, and that the
government will continue to dismiss claims from U.S. citizens who
are subject to the decrees. He and Estrada were both survivors, he
claimed. Santos alleged that he was tortured by a Somoza associate
-- who he acknowledged did not appear in the list of registered U.S.
claims -- while Estrada had survived a recent attempt on his life
(Ref B). Estrada assured the Ambassador that his office had
established administrative procedures to review cases and apply the
decrees, which are still in effect. Nevertheless, he refused to
share information on those procedures with us. He finally admitted
that the application of Decrees 3 and 38 was, by its nature,
somewhat subjective. [Note: On March 12, Estrada had promised to
review 70 of the cases dismissed on the basis of these decrees, but
that commitment now appears in question. End note.]
Claims in Court
--------------
9. (SBU) Santos complained that among the list of U.S. claims were a
number of cases in the courts and, therefore, outside his
government's control. The Ambassador responded that while these
cases are working their way through the courts, the GON can still be
helpful. The Ambassador expressed concern that, in fact, the
opposite had occurred on several occasions, when the Attorney
General had petitioned local courts in favor of the illegal
occupants of U.S. citizen property. Estrada did not answer the
Ambassador's complaint directly, instead asserting that the GON
cannot interfere in judicial proceedings. He further argued that
those claims should be removed from the waiver list.
Resolution of Claims through Official Publication
-------------- --------------
10. (SBU) The Ambassador noted our concern that instead of
negotiating with U.S. citizens to resolve claims to each party's
satisfaction, the GON considered claims resolved after having
published case resolutions in the Official Gazette and depositing
compensation in an escrow account. Estrada replied that in many
cases, negotiations had stalled because claimants had sentimental
attachment to their properties and were looking for compensation
that would exceed cadastral value. He suggested that claimants who
were unsatisfied with the compensation offered should pursue their
claims in court. The Ambassador reiterated our position that we do
not consider a case resolved until a claimant notifies us that
he/she has been compensated fairly.
Confiscation of U.S. Citizen Property
--------------
11. (SBU) In response to the Ambassador's request for additional information on allegations that the government had recently expropriated the property of a U.S. citizen without providing compensation, Santos and Estrada categorically denied that GON would take such measures. Estrada promised to look into the issues and provide additional information at the next property working group meeting scheduled for May 28, 2009. The Ambassador emphasized that a new confiscation could jeopardize Nicaragua's chance for a waiver this year.
Comment
--------------
12. (SBU) The GON's weak defense of its property claims resolution
process and policies illustrates the level of cooperation we have
received in advancing U.S. citizen claims during this waiver year.
The Ambassador's meeting with Foreign Minister Santos and Attorney
General Estrada served notice to the GON that more work needs to be
done on advancing U.S. claims and that this year's waiver decision
is not a "done deal." We anticipate that Attorney General Estrada
and his staff will work diligently to resolve more claims in the
next two months. GON officials have privately told us that Estrada
is under pressure to do all that he can to ensure that Nicaragua is
granted a Section 527 waiver for 2008-2009.
CALLAHAN