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Viewing cable 05TEGUCIGALPA866, 2005 EXPROPRIATION REPORT: HONDURAS

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Reference ID Created Released Classification Origin
05TEGUCIGALPA866 2005-04-23 00:24 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Tegucigalpa
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 06 TEGUCIGALPA 000866 
 
SIPDIS 
 
SENSITIVE 
 
FOR L/CID, WHA/EPSC, WHA/CEN 
FOR EB/IFD/OIA (JROSELLI) 
 
E.O. 12958: N/A 
TAGS: EINV EFIN PGOV KIDE KSPR HO
SUBJECT: 2005 EXPROPRIATION REPORT: HONDURAS 
 
REF: Dunn/Roselli telcon of April 6 
 
1. (U) 
HONDURAS 
 
 
     The United States Government (USG) is aware of thirteen (13) 
claims of United States businesses or nationals that may be 
outstanding against the Government of Honduras (GOH).  The USG is 
also aware of numerous other investment disputes involving U.S. 
investors, the majority of which have arisen out of inadequate 
titling procedures and involve private Honduran citizens. 
 
2. (U) Eight of the claims described below involve the Honduran 
National Agrarian Institute (INA) and land invasion by squatters. 
Land invasions are common for both Honduran and foreign 
landowners.  According to the National Agrarian Reform Law, idle 
land fit for farming can be expropriated and awarded to the 
landless poor.  Generally, an INA expropriation case begins after 
squatters target and invade unprotected property. The squatters 
then file for the land with the INA under the Agrarian Reform 
Law.  In most cases, pursuing the subsequent legal avenues have 
proven to be costly, time consuming, and have rarely led to 
positive results.  The U.S. Embassy is actively engaged in 
dialogue with the INA and claimants to encourage resolution of 
outstanding disputes.  Most cases reported below require further 
legal action in Honduran courts by the claimants or decisions by 
the court. 
 
3. (SBU) Claimant A 
 
Claimant A's family land, known as Jerico, was taken over 
by the Mayor of Trujillo in 1985.  That same year, the 
Municipality began titling and selling off parcels of Claimant 
A's land.  By 1991, Claimant A had won every court case up 
through the Supreme Court level, thereby declaring Claimant A's 
family as the legal owners of Jerico lands.  Claimant A requested 
that the public registrar's office inscribe the court's rulings 
and correct the situation in the public registry, having falsely 
registered the illegal titles.  To date, the Municipality of 
Trujillo has not returned the parceled sections of land to 
Claimant A's family.  In May 2002, after Embassy advocacy, the 
public registrar informed the Embassy that Claimant A's lands 
were officially inscribed in the registry.  Legally, that office 
can no longer register titles issued by the Municipality for 
Jerico lands.  Claimant A alleges that the Municipality continues 
to title and sell Jerico lands under a different name (Capiro). 
 
In April 2003, the Embassy informed Claimant A of the GOH's 
temporary arbitration procedure (Decreto No. 349-2002) that 
allowed the government and claimants to jointly submit disputes 
for arbitration as an alternative to continued legal proceedings. 
Claimant A informed the Embassy the family was interested in 
entering into arbitration with the Municipality but did not have 
the agreement of the Municipality.  The Municipality instead 
proposed to draft a private settlement with Claimant A's family. 
 
In early 2004, Claimant A and the Municipality signed an 
agreement to resolve the conflict.  Claimant A agreed to not 
pursue additional legal action and respect the rights of those 
third parties who purchased land from the Municipality, if the 
Municipality would return the remainder of the land.  The 
Municipality agreed to not sell any more of Claimant A's land and 
register and return the remainder of Claimant A's land.  Despite 
this agreement, Post has been informed that the Municipality 
continued selling Claimant A's land. 
 
In March of 2005, the representative of Claimant A informed the 
Embassy that they will take advantage of Decree No. 82-2004 (New 
Property Law, which created the Property Institute) and through 
this entity they will try to resolve this dispute. 
 
4. (SBU) Claimant B 
 
Claimant B inherited 2,417 acres of land from his father. 
Claimant B's dispute started in 1963 when peasant groups squatted 
on his father's land.  Allegedly in 1975, INA signed a letter of 
intent to purchase the land but never did.  In 1984, when small 
farmers began squatting on Claimant B's land near Nacaome, Valle 
Department, Claimant B again offered to sell the land to INA. 
Claimant B reported he has documents showing that the INA 
intended to initiate expropriation proceedings in 1989, though it 
is not entirely clear that this process was ever actually 
started.  Claimant B reports that in 1992, INA responded it was 
no longer interested in purchasing the land.  INA decided not to 
follow through with the expropriation order but instead suggested 
that Claimant B sue to have the squatters removed.  Claimant B 
could remove the liens in civil-court procedures and get a court 
order to remove the squatters.  Due to Claimant B's ill health, 
legal proceedings were never initiated. 
 
In June 2002, Claimant B's son reported that a court case is 
still an option. In April 2003, the Embassy informed Claimant B 
of the GOH's temporary arbitration procedure (Decreto No. 349- 
2002) that allowed the government and claimants to jointly submit 
disputes for arbitration as an alternative to continued legal 
proceedings.  Claimant B indicated he will not pursue arbitration 
due to reservations about the arbitration procedure.  The Embassy 
considers this case inactive at this time, pending further action 
by Claimant B. 
 
5. (SBU) Claimant C 
 
In 1990, Claimant C's land in Cofradia, Cortes Department, was 
invaded by a group of squatters.  In 1992, the INA issued a 
certification of occupation (title) to the squatters.  Claimant C 
reports difficulty in discussing the case with GOH officials, who 
claim not to have taken action against the land.  In 1995, INA 
realized this land is classified as urban and, therefore, claimed 
to have no authority to resolve the dispute.  The agency said it 
can neither give the land to the squatters nor evict them.  In 
1996, the INA also reported that others have claims to the land 
in addition to the squatters and Claimant C.  In December 1998, 
INA issued a resolution denying a petition presented by Claimant 
C to annul the title (formerly issued by INA) held by the 
campesino squatters.  Claimant C has not contested the granting 
of this title in court. 
 
At various times in recent years, the Embassy has assisted 
Claimant C in communicating with INA concerning his claim.  In 
June 2002, Claimant C reported that he may seek to evict the 
squatters in court.  In April 2003, the Embassy informed Claimant 
C of the GOH's temporary arbitration procedure (Decreto No. 349- 
2002) that allowed the government and claimants to jointly submit 
disputes for arbitration as an alternative to continued legal 
proceedings.  The Embassy did not receive a response from 
Claimant C concerning arbitration before the time to file 
expired.  To date the Embassy has not received any information 
from Claimant C and considers this case inactive at this time, 
pending further action by the claimant. 
 
6. (SBU) Claimant D 
 
Claimants D are a U.S. citizen brother and sister with 42 
hectares of property near Balfate, Atlantida Department. 
Claimants D report squatter problems beginning in 1974 when the 
INA reportedly placed squatters "temporarily" on their land. 
Despite repeated promises from GOH officials, no action has been 
taken to evict these squatters.  A group of squatters, who 
arrived more recently and who repeatedly threatened the owners, 
was removed by Honduran authorities at the request of the 
Embassy, which has worked extensively on Claimants' behalf. 
According to INA attorneys, INA began proceedings in 1974 to 
expropriate much of the land belonging to Claimants D. 
 
In late 1995, INA officials told the Embassy that it was planning 
to formally expropriate a portion of the property, not including 
valuable beachfront, and compensate Claimants D.  In 1997, GOH 
officials confirmed this remained their intention.  One of the 
Claimants visited the Embassy and reiterated opposition to the 
expropriation.  While in the past Claimants D had reportedly 
contracted with a lawyer to prosecute their claim, the Embassy 
has no current knowledge regarding the status of Claimants D's 
legal actions.  The most recent information received by the 
Embassy confirms that INA is in the final stages of expropriating 
the property.  In April 2003, the Embassy informed Claimants D of 
the GOH's temporary arbitration procedure (Decreto No. 349-2002) 
that allowed the government and claimants to jointly submit 
disputes for arbitration as an alternative to continued legal 
proceedings. Claimants D decided against pursuing arbitration, 
citing reservations about the procedure.  Claimants D have not 
requested Embassy assistance since 1996.  The Embassy considers 
this case inactive at this time, pending further action by the 
claimant. 
 
7. (SBU) Claimant E 
 
Claimant E contacted the Department of State in July 1996, 
alleging that his property, which he had leased from INA and then 
developed into a large banana plantation, had been invaded by 
squatters in 1975 with the encouragement of GOH officials. 
Claimant E explained that he had previously filed a lawsuit in 
Honduran courts and lost.  Claimant E has exhausted all 
administrative and legal avenues of recourse, culminating in an 
unfavorable Supreme Court ruling.  Over the years, the Embassy 
has helped arrange meetings between Claimant E and the President 
of the Supreme Court, the Vice-President of the country, and the 
INA Director. 
Current Honduran government officials maintain that while 
Honduran law requires the payment of compensation for 
improvements made on leased land that is expropriated under 
Honduras' land reform laws, the Honduran Supreme Court decision 
against compensation for Claimant E makes such a settlement 
impossible.  In 2002, the Embassy met with several high-level 
representatives in the Honduran government to push for 
consideration of possible forms of resolution of this and similar 
cases.  GOH officials, however, repeatedly state that since this 
case has been decided at the Supreme Court level, there is 
nothing more that can be done for Claimant E, and they consider 
this case closed. 
 
In May of 2004, Claimant E came back to Honduras and visited 
INA's offices to confirm whether the GOH was going to compensate 
him.  They informed Claimant E that he was not going to be able 
to receive compensation.  The Department of State has reviewed 
information and evidence provided by Claimant E pertaining to 
this claim and Claimant E's efforts to resolve it and agreed in 
March 2005 to undertake a U.S. Government espousal action based 
upon a denial of justice claim. 
 
8. (SBU) Claimant F 
 
In 1991, a squatter group invaded Claimant F's property 
near Guaimaca, Francisco Morazan Department.  INA issued the 
squatters a "certificate of occupation" for the land in 1992. 
The INA subsequently revoked the certificate when Claimant F 
contested it, but the squatter group remained.  Claimant F later 
offered to give the group a portion of the property to resolve 
the dispute.  The squatters declined the offer and did not allow 
anyone to enter the land.  They threatened violence against 
people seeking to evict them and several times threatened to kill 
Claimant F. 
 
Claimant F contacted the Embassy in February 1998 to ask for 
assistance in resolving the case. In April 1998, Claimant F, 
Embassy officers, and Claimant F's attorney met with the INA's 
attorney several times to discuss the case.  The INA agreed to 
work with Claimant F to persuade the squatters to accept Claimant 
F's prior offer to avoid a court battle. 
 
Working closely with the Embassy, the INA accepted Claimant F's 
offer to donate 176 hectares of agricultural land to the INA to 
give to the campesino squatters in return for INA's help in 
evicting the squatters from the rest of his land.  In May 2001, 
Claimant F filed a criminal suit against the squatters, who were 
summarily evicted from the property.  However, a few of the 
original squatters reinvaded the land several weeks later. 
Claimant F indicated that the offer to donate substitute land was 
conditioned on certain actions by the INA and that the offer had 
expired. 
 
In January 2003, INA expropriated 176 hectares of Claimant F's 
land and granted him 80,020.36 lempiras in compensation (USD 
4,644.25 - roughly USD 10 per acre).  Claimant F's appeal to the 
National Agrarian Council, for an overturning of the INA's 
resolution to expropriate his land, was denied.  In April 2003, 
the Embassy informed Claimant F of the GOH's temporary 
arbitration procedure (Decreto No. 349-2002) that allowed the 
government and claimants to jointly submit disputes for 
arbitration as an alternative to continued legal proceedings. 
Claimant F decided not to pursue arbitration. 
 
Claimant F died in a car accident in early 2005.  Soon after his 
death, the land was invaded again.  Claimant F's brother 
communicated his interest to come to Honduras and try to resolve 
this problem.  Claimant F's brother has not had any contact with 
the Embassy since. 
 
9. (SBU) Claimant G 
 
Claimant G purchased land in Comayagua, Comayagua Department, in 
1993.  A group of campesino squatters subsequently invaded the 
land and allegedly received INA support.  Claimant G won a 
complaint before the INA and paid the squatters for improvements 
they made on the land in anticipation of their removal.  However, 
the INA ignored its own ruling, gave title to the squatters, and 
moved to annul Claimant G's title.  On June 30, 1998, a court 
ruled against Claimant G and ordered revocation of the title. 
Subsequently, INA accepted the court's ruling and 
annulled Claimant G's title.  In May 2000, Claimant G filed a 
legal procedure asking for the Supreme Court to review the case. 
The Embassy understands that this case is still pending.  In 
April 2003, the Embassy informed Claimant G of the GOH's 
temporary arbitration procedure (Decreto No. 349-2002) that 
allowed the government and claimants to jointly submit disputes 
for arbitration as an alternative to continued legal proceedings. 
Claimant G filed for arbitration, but the request was denied by 
the Attorney General's office, citing lack of evidence.  The 
Embassy considers this case inactive at this time, pending 
further action by the claimant. 
 
10. (SBU) Claimant H 
Claimant H owned a fishing boat registered in Florida. When the 
boat arrived in Roatan, Bay Islands, Honduras, in 1987, the 
Honduran Navy allegedly seized it without justification (the 
claim that there was no justification for the seizure remains 
unsubstantiated).  After years of litigation to recover the boat, 
Claimant H was notified in 1996 that the Navy had sold the boat 
in 1989 by executive decree.  However, the decree was not 
published in the official La Gaceta until 1996.  Claimant H 
appealed through the Honduran court system up to the Supreme 
Court, losing each time on procedural grounds.  The Embassy is 
not aware of any recent developments in this case and considers 
this case inactive and recommends closure. 
 
11. (SBU) Claimant I 
 
Claimant I owns land near El Progreso, Yoro Department.  The land 
suffered from squatter invasions for more than 30 years. In 1969, 
Claimant I's now-deceased husband signed an agreement with INA, 
donating some land to distribute to squatters in return for INA's 
promise to protect the rest of the land from further invasions. 
Notwithstanding the 1969 agreement, the INA expropriated an 
additional parcel of land in 1987 that had been occupied by a 
separate group of squatters.  The new group of squatters 
subsequently illegally sold the land to a third party not 
eligible to buy it under the land reform law. 
 
In 1999, INA confirmed that the property belongs to Claimant I 
and in 2000 issued an eviction order to evict the third-party 
occupants.  The police refused to recognize INA's eviction order. 
In 2001, the local court rejected Claimant I's request for an 
eviction, and in June 2002, the Appeals court again ruled against 
Claimant I.  Claimant I informed the Embassy in late 2001 that 
her attorney had received death threats regarding the case and 
that the attorney's property had been damaged.  The Embassy 
routinely raises this case with Honduran court and government 
officials and will continue to assist Claimant I's efforts to 
recover the land.  In April 2003, the Embassy informed Claimant I 
of the GOH's temporary arbitration procedure (Decreto No. 349- 
2002) that allowed the government and claimants to jointly submit 
disputes for arbitration as an alternative to continued legal 
proceedings. Claimant I responded she is not interested in 
pursuing arbitration, nor does Claimant I wish to consider 
pursuing legal action in Honduran courts.  Claimant I indicated 
the possibility of filing for espousal with the USG. 
 
12. (SBU) Claimant J 
 
Since 1927, Claimant J's Honduran wife's family has owned 
the title to 44 hectares of urban land in Trujillo, Colon 
Department.  Beginning in the mid 1990s, the land was invaded by 
squatters.  Over the years, Claimant J's family won a total of 
seven eviction judgments, only to see the land invaded anew after 
each eviction.  In 1999, Claimant J requested from the 
Municipality of Trujillo permission to divide the property into 
lots for development.  The permission was never granted.  In 
2000, the property was invaded for the eighth time.  In late 
2000, before the court ruled on the eviction, the Municipality 
began expropriation proceedings, effectively freezing the 
eviction procedure. 
 
Claimant J suspects that the squatters invaded the land with the 
tacit approval of local political leaders.  In a May 2001 meeting 
with an Embassy officer, the Mayor of Trujillo admitted that the 
Municipality was expropriating the land but contradicted himself 
on the justification for the expropriation.  Legal documents and 
correspondence show that Claimant J has not been offered 
compensation.  While the Municipality has finished its 
administrative procedure to expropriate the property, the case is 
still pending resolution in court.  In a May 2002 meeting with 
the Ambassador, municipal officials admitted that the previous 
municipal administration may have made a mistake in expropriating 
Claimant J's property.  The officials stated that the 
Municipality of Trujillo would respect the decision of the court. 
Embassy officers consistently urge Honduran court and government 
officials to reach a fair resolution of this case.  Embassy staff 
has stayed in touch with local law enforcement officials when the 
situation appears to have potential for violence. 
 
In April 2003, the Embassy informed Claimant J of the GOH's 
temporary arbitration procedure (Decreto No. 349-2002) that 
allowed the government and claimants to jointly submit disputes 
for arbitration as an alternative to continued legal proceedings. 
Claimant J showed some interest concerning arbitration but did 
not file a request with the Attorney General's office.  He said 
he would rather wait for the court ruling.  Since then, the 
Claimant has not contacted the Embassy with additional 
information. 
 
13. (SBU) Claimant K 
 
Claimant K owned 41 hectares of property on Utila, Bay 
Islands, to be used to develop a tourism project.  Claimant K 
estimates the value of the property at approximately USD 2.9 
million.  In 1999, the Ministry of Public Works announced the 
public tender to build a new airport in Utila on Claimant K's 
land and subsequently expropriated Claimant K's property without 
paying compensation.  Claimant K requested compensation from the 
Ministry of Public Works in late 2001.  Embassy officials urged 
the Ministry on four occasions in 2002 and 2003 to effect prompt 
and effective compensation.  Ministry officials solicited the 
court in Utila to confirm the legal background regarding the 
expropriated property.  The court has not yet issued its opinion. 
In June 2002, Ministry officials said that Claimant K's case will 
be submitted to an inter-agency commission for a determination of 
the value of the land.  In a January 2003 meeting with Embassy 
officials, Presidential legal advisors were informed of Claimant 
K's case.  The advisors said that they would address the issue of 
compensating Claimant K with the Minister of Public Works.  At 
the beginning of 2004, this claim was still pending resolution 
from the Ministry of Public Works.  The Embassy did not receive 
any confirmation that this was done. 
 
In April 2003, the Embassy informed Claimant K of the GOH's 
temporary arbitration procedure (Decreto No. 349-2002) that 
allowed the government and claimants to jointly submit disputes 
for arbitration as an alternative to continued legal proceedings. 
In early 2004, Claimant K's attorneys informed the Embassy that 
this case was in its final stages.  They are waiting on a final 
evaluation to calculate the economic compensation to be awarded. 
On March 2005, Claimant K's attorney informed the Embassy that 
the claim has not been resolved yet. 
 
14. (SBU) Claimant L 
 
Claimant L owns land on the southeastern edge of Honduras 
in territory that was Nicaraguan until the two governments moved 
the border in 1960.  In 1976, Claimant L's father (then owner) 
filed to register his land with the corresponding land registry 
office in Honduras but never received any reply.  In 2003, when 
Claimant L inherited the property, she discovered the INA had 
parceled off and sold almost half of the 3,460 acres of land. In 
April 2003, the Embassy informed Claimant L of the GOH's 
temporary arbitration procedure (Decreto No. 349-2002) that 
allowed the government and claimants to jointly submit disputes 
for arbitration as an alternative to continued legal proceedings. 
On April 10, 2003, Claimant L filed an administrative proceeding 
with the INA and filed for arbitration.  In April 2004, Claimant 
L's attorney informed the Embassy that the local registrar's 
office had refused to register the property.  Responding to 
Embassy inquiries, the Supreme Court indicated that the report 
from the registrar's office stated they were unable to register 
the land due to a third party registry dating back to 1912, 
raising additional questions requiring further investigation by 
Claimant L's attorneys.  In March 2005, Claimant L's appeal to 
the Property Institute was denied.  Claimant L's attorneys have 
indicated they intend to present other legal filings against this 
resolution. 
 
15. (SBU) Claimant M 
 
In 1995, the Municipality of La Ceiba issued a title for 
land owned by Claimant M to a local Honduran family.  This family 
in turn sold the land to a third-party family with political 
influence.  Claimant M's attorney filed a lawsuit to cancel said 
transaction, without success.  Only after continued Embassy 
advocacy was the case finally sent to the Attorney General's 
office in early 2002. In May 2002, the Attorney General sent the 
case back to the Municipality of La Ceiba for final resolution, 
having issued his opinion in favor of Claimant M.  On March 28, 
2003, the Municipality voted to cancel the title originally 
issued to the local Honduran family.  In April 2003, the Embassy 
informed Claimant M of the GOH's temporary arbitration procedure 
(Decreto No. 349-2002) that allowed the government and claimants 
to jointly submit disputes for arbitration as an alternative to 
continued legal proceedings, but Claimant M decided not to apply. 
In May 2003, the Honduran party appealed the March decision to 
cancel the title.  In October 2003, the Interior Ministry upheld 
the ruling in favor of Claimant M.  To date, however, the 
municipality has failed to actually revoke the title. At the end 
of 2004, M's lawyer presented the case before the Supreme Court. 
To date, this case has not been resolved by the Court. 
 
16. (SBU) Key to Claimants' Identities: 
Claimant A: Eduardo Valenzuela, U.S. citizen, waiver received 
Claimant B: Gustavo Valle, U.S. citizen, limited waiver 
Claimant C: Carlos Madrid, U.S. citizen, waiver received 
Claimant D: Lily Jones Bourne and Edward Purcell Jones, U.S. 
          citizens, no waiver 
Claimant E: Alfred McDaniel, U.S. citizen, waiver received 
Claimant F: Mark Latty, U.S. citizen, no waiver 
Claimant G: Antonia Fajardo de Hubert, U.S. citizen, waiver 
          received 
Claimant H: Anthony Fish Company, U.S. company, no waiver 
Claimant I: Norma Bogran, U.S. citizen, no waiver 
Claimant J: Jaime Castano, U.S. citizen, no waiver 
Claimant K: James Harley Crockett, U.S. citizen, no waiver 
Claimant L: Maria Cecilia Cerna, U.S. citizen, waiver received 
Claimant M: Yolanda Guite, U.S. citizen, no waiver 
 
PIERCE