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Viewing cable 09MANAGUA902, NICARAGUAN GOVERNMENT SEEKS USE OF U.S. LAW TO AVOID

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Reference ID Created Released Classification Origin
09MANAGUA902 2009-09-11 16:57 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Managua
VZCZCXYZ0000
RR RUEHWEB

DE RUEHMU #0902/01 2541657
ZNR UUUUU ZZH
R 111657Z SEP 09
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 4554
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
UNCLAS MANAGUA 000902 
 
STATE FOR WHA/CEN, EB/IFD/OIA, AND L/CID 
STATE ALSO FOR WHA/EPSC 
STATE PASS TO USTR 
TREASURY FOR INL AND OWH 
 
SENSITIVE 
 
SIPDIS 
 
 
E.O. 12958: N/A 
TAGS: EINV ECON USTR KIDE NU
SUBJECT: NICARAGUAN GOVERNMENT SEEKS USE OF U.S. LAW TO AVOID 
COMPENSATING U.S. CITIZEN CLAIMANTS 
 
REFS: A) MANAGUA 537, B) MANAGUA 002, C) MANAGUA 542, D) 02 MANAGUA 
877 
 
SUMMARY 
------- 

1. (SBU) During the August 27 Property Working Group 
meeting, Government of Nicaragua (GON)officials told us they were 
reviewing 26 U.S. citizen claims to determine whether they met the 
criteria established in Section 527 of the Foreign Relations 
Authorization Act of Fiscal Years 1994 and 1995.  They informed us 
that 19 U.S. claimants could no longer pursue their claims through 
the administrative process and could either accept the government's 
settlement offer or seek resolution in court.  Officials asked us to 
contact 24 claimants whose claims were dismissed for administrative 
reasons and ask them to submit documents to advance their cases. 
They assured us that the government would resolve the 28 claims of 
U.S. citizen Juan Barreto, whose property is under the control of 
the Nicaraguan Army.  During the first working group meeting of the 
2009-2010 waiver year, the GON made it clear that their strategy is 
to compel U.S. claimants to accept whatever compensation the 
government offers without negotiation and use any mechanism at its 
disposal to dismiss claims or pay inadequate compensation. 
 
MISINTERPRETATION OF SECTION 527 
-------------------------------- 

2. (U) On August 27, Econoff held the monthly Property Working Group 
meeting with Ruth Zapata, Head of the Office of Assessment and 
Quantification (OCI); Jeanette Garcia, President of the National 
Confiscations Review Commission (CNRC); Magally Bravo, the Attorney 
General4s Executive Coordinator for Property Issues; Alfonso 
Solorzano, CNRC member; and Rebeca Zuniga, Coordinator of the Office 
of U.S. Citizen Claims.  Zapata and Bravo told us that the GON was 
reviewing 26 U.S. citizen claims to determine whether they complied 
with paragraph (h) of Section 527 of the Foreign Relations 
Authorization Act of Fiscal Years 1994 and 1995.  Paragraph (h) 
defines a United States person as a U.S. citizen, corporation, 
partnership, or association at least 50 percent beneficially owned 
by United States citizens. 
3. (SBU) Econoff explained that at this time, the only 
operable paragraph of Section 527 is (g), which authorizes the U.S. 
Government to grant a waiver to Nicaragua based on U.S. national 
interests.  He explained that the criteria applicable in evaluating 
Nicaragua's progress in resolving U.S. citizen claims during this 
waiver year are the benchmarks laid out in the Secretary's 2009-2010 
Section 527 waiver notification letter to Foreign Minister Samuel 
Santos.  Econoff emphasized that the USG only considers a property 
claim resolved when a U.S. citizen has determined that he/she has 
received adequate and effective compensation. 
 
GON SETTLEMENT OFFERS: TAKE IT OR LEAVE IT 
------------------------------------------ 

4. (SBU) Zapata provided Econoff a list of 19 U.S. claimants 
who could no longer pursue their claims through the administrative 
process.  She added that they could either accept the government's 
settlement offer or seek resolution in court.  Econoff said the 
Property Office would contact claimants but he asked for additional 
information about the status of these claims.  He urged GON 
officials to work with claimants to resolve outstanding claims, 
underscoring that the USG does not consider a claim resolved when 
the GON publishes case resolutions in the Official Gazette and 
deposits compensation in an escrow account (Ref A). 
 
GON REDUCES ADMINISTRATIVE DISMISSALS 
------------------------------------- 

5. (SBU) Bravo provided Econoff a revised list of 24 U.S. claimants 
whose claims the GON dismissed for administrative reasons; some lack 
of proof of ownership and/or confiscation of the property in 
question, and other claims were never filed with the CNRC.  Econoff 
responded that the Property Office would follow up with these 
claimants, but he also asked GON officials to exercise patience and 
flexibility.  He noted that some claimants were physically forced 
from their property without possessions, while others lost documents 
located at regional cadastral registry offices that had been 
destroyed by fire, as was the case in Matagalpa, or during the civil 
war, as occurred in Chinandega and Masaya (Ref B).  [Note: On May 
22, Attorney General Hernan Estrada sent the Ambassador a list of 52 
U.S. claimants whose claims the GON had dismissed for administrative 
reasons.  The Property Office contacted the majority of these 
claimants, and they provided the necessary paperwork to the CNRC. 
The GON subsequently reduced the number of administrative dismissals 
from 52 to 24 (Ref C).  End Note.] 
 
STATUS OF THE BARRETO CASE 
-------------------------- 

6. (SBU) Econoff raised the case of U.S. citizen Juan Barreto, whose 
28 properties are under control of the Nicaraguan Army (Ref D). 
Zuniga said she awaited additional paperwork from the Barreto family 
to finalize the case.  Zapata assured Econoff that the GON would 
settle the case as soon as possible. 
 
COMMENT 
------- 

7. (SBU) During the first working group meeting of the 2009-2010 
waiver year, GON officials made it clear that their strategy is to 
compel U.S. claimants to accept whatever compensation the government 
offers without negotiation.  The government will also use any 
mechanism at its disposal, including misinterpretation of U.S. law, 
to dismiss claims or pay inadequate compensation.  This approach 
complicates our efforts to cooperate with the GON and U.S. claimants 
to advance case resolution during this waiver year.  We will 
encourage the GON to work with us and U.S. claimants to find 
reasonable solutions to advance claims.  We will emphasiQ to the 
GON that we are also interested in reducing the number of 
outstanding claims, as long as cases are addressed in a fair and 
transparent manner.  End Comment. 
 
CALLAHAN