VZCZCXYZ0012
RR RUEHWEB

DE RUEHMU #2376/01 2962001
ZNR UUUUU ZZH
R 232001Z OCT 07
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 1558
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE

UNCLAS MANAGUA 002376 
 
SIPDIS 
 
STATE PASS USTR 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EINV ECON USTR KIDE NU
SUBJECT: NICARAGUA: PROPERTY DISPUTE EXPOSES FSLN INFIGHTING 
 
Refs:  A) Managua 2324 B) Managua 626 
 
¶1. (SBU) Summary: A dispute over valuable coastal property at 
Amarillo Beach may be shedding light on political intrigue and 
infighting among senior FSLN officials.  An internal rift appears to 
have contributed to the September 20th dismissal of Property 
Superintendent Mireya Molina.  While Attorney General Hernan Estrada 
has assumed a more forceful, leading role on property matters, he 
has refused to pre-judge the legal maneuverings surrounding property 
rights to Amarillo Beach.  Further FSLN political infighting may 
well only complicate our efforts to help American citizens obtain 
just compensation for properties confiscated by the Nicaraguan 
government in the 1980s.  End Summary. 
 
THE CONFLICTING CLAIMS OF THREE PARTIES 
--------------------------------------- 
 
¶2. (SBU) Extensive local media coverage of a multilayered dispute 
over valuable coastal property is shedding light on possible 
corruption and infighting among senior FSLN officials.  Three 
separate parties are disputing rights to Amarillo Beach, a 123-acre 
coastal tract on the Pacific coast near Tola.  Each party alleges 
ownership of overlapping properties, and has accused the others of 
using FSLN influence to advance their claims. 
 
--Cesar Ibarra, a retired policeman, claims ownership of Amarillo 
Beach property based on a title issued in 1988, but not registered 
until 2005.  He is rumored to have the backing of FSLN heavyweight 
Lenin Cerna and other senior members of the FSLN.  Earlier this 
year, former Property Superintendent Mireya Molina approved and 
signed a title conferring ownership of property in question to 
Ibarra.  Molina's actions may have contributed to her abrupt 
dismissal on September 20 (see Para 5). 
 
--Ex-"contra" rebels say they possess fourteen separate titles to 
Amarillo Beach, all issued in 1993 by the government of Violeta 
Chamarro, and subsequently reaffirmed by the governments of Arnoldo 
Aleman and Enrique Bolanos.  Property Superintendent Mireya Molina 
effectively annulled these titles in September, when she conferred 
ownership upon Cesar Ibarra. 
 
--Bayardo Arguello, a Granada businessman with a history of shady 
deals, alleges that he bought Amarillo Beach property from the 
Nicaraguan Government in 1993.  Arguello appears to have the backing 
of Alba Luz Ramos, an FSLN party member and Supreme Court Justice. 
 
IBARRA VERSUS ARGUELLO 
---------------------- 
 
¶3. (SBU) Ibarra and the ex-contras accuse Arguello of using Justice 
Ramos' strong position within the FSLN and her influence as a 
Supreme Court Justice to persuade Tola Judge Jeny Chavez to declare 
void the title that former Superintendent Molina issued to Ibarra. 
Ramos categorically denies any involvement in the case, publicly 
stating that, before becoming President in January, President Ortega 
had made the "political decision" that Amarillo Beach property 
should revert to the Tola Municipality [Comment: We see no clear 
evidence that Ortega had made such a decision or that subsequent 
actions have been based on such a decision. End Comment]. 
 
¶4. (SBU) Reportedly, Ibarra plans to file a complaint with the 
Judicial and Administrative Council of the Supreme Court, alleging 
that Chavez and Ramos exercised inappropriate influence, and thus 
violated the law when Chavez ruled that Ibarra had no right to 
Amarillo Beach property.  Taking the case to the Supreme Court is 
not likely to separate the dispute from political influence, as the 
FSLN and PLC appointees which comprise the court enjoy a long 
history of politicizing cases [Note: This is not the first time that 
Ramos has been accused of influence peddling.  In 2003, 
Embassy-registered Amcit property claimant Emma Lugo publicly 
accused Ramos of pulling strings to have an Appeals Court rule 
against Lugo's property claim. End Note]. 
 
INFIGHTING LEADS TO SUPERINTENDENT MOLINA'S DISMISSAL 
--------------------------------------------- -------- 
 
¶5. (SBU) On September 20, Attorney General Hernan Estrada abruptly 
fired Property Superintendent Mireya Molina.  Local media reported 
that Molina was dismissed because she crossed FSLN leadership when 
it came to Amarillo Beach property.  Sources close to Molina, 
however, told Emboff that the real reason may have been linked to a 
conflict of interest.  Apparently, Molina had approved compensation 
for clients whom she represented as a private attorney before 
becoming Property Superintendent.  These clients were pursuing 
compensation for property that the government had improperly 
confiscated during the 1980s.  Under Molina, their compensation 
reportedly exceeded limits set by FSLN leadership, i.e., $2 million 
per year for total property compensation to all claimants.  Estrada 
immediately announced the appointment of Deputy Attorney General 
Yara Perez as Property Superintendent (Ref A). 
 
MOLINA'S FALL FROM GRACE 
------------------------ 
 
¶6. (SBU) Shortly after the Sandinista Government came to power and a 
week before she assumed her duties as Property Superintendent, 
Molina visited the Embassy to express her intention to cooperate on 
settling pending Amcit claims (Ref B).  In subsequent meetings, 
Molina used her contacts within the GON to advance resolutions in 
complex cases, particularly those involving the Nicaraguan Army, the 
National Police, and the Ministry of Government.  This experience 
led us to believe that we could work with Molina in a positive way. 
 
 
¶7. (SBU) By May 2007, however, we could see Molina's authority 
diminishing, as Attorney General Hernan Estrada assumed a more 
forceful, leading role on property matters.  On May 16, Foreign 
Minister Samuel Santos penned a letter to the Ambassador stating 
that Attorney General Estrada was the only channel through which the 
Embassy should work to address Amcit property claims.  During a 
phone conversation with Embassy staff in June, Molina privately 
admitted that by continuing to work with us on a particular case, 
she was going beyond her authority vis-a-vis Attorney General 
Estrada.  In short, Molina was operating on a very short leash. 
 
¶8. (U) On October 9, after Molina's dismissal on September 20, 
President Ortega referred to "former property superintendents" as 
"land traffickers" who were "dishonest, irresponsible, or not 
serious about performing their jobs well."  On October 11, the 
Nicaraguan newspaper "El Nuevo Diario" published an expletive-filled 
interview with Molina in which she complained fervently about the 
harsh treatment she received by the FSLN, noting that her office and 
files were ransacked by FSLN officials as if she were a common 
criminal.  Molina also accused "El Nuevo Diario" and the FSLN party 
of trying to ruin her reputation as a professional lawyer. 
 
¶9. (SBU) Molina's fall from grace was both dramatic, and given her 
background, surprising.  She is a recognized militant Sandinista, 
having played a role in the Nicaraguan revolution in the 1970s.  As 
Jaime Wheelock's assistant, Molina was a key player in the agrarian 
reform process of the 1980s and the confiscation of properties under 
various decrees designed to create a post-Somoza, socialist 
Nicaragua.  Under three successive Liberal governments, Molina 
toiled as an attorney in the private sector, while holding fast to 
her FSLN party membership.  Once appointed Property Superintendent, 
she seemed intent to redress at least some of the inequities of the 
past for which she was responsible, in accordance with President 
Ortega's campaign themes of "peace and reconciliation," as well as 
his pledge that all property rights would be respected during his 
administration. 
 
ESTRADA EVADES TAKING ACTION ON AMARILLO 
---------------------------------------- 
 
¶10. (SBU) Estrada has told the press he will not take any steps to 
resolve Amarillo Beach property disputes until expected legal 
actions have run their course, particularly Ibarra's complaint 
before the Judicial and Administrative Council of the Supreme Court 
against Judge Chavez and Justice Ramos.  He explained that he would 
have to wait for a decision from the Supreme Court before he could 
take action on Amarillo Beach. 
 
COMMENT 
------- 
 
¶11. (SBU) We have not been able to confirm rumors of a serious 
difference of opinion between President Daniel Ortega and FSLN 
Secretary for Party Organization Lenin Cerna on how property issues 
 
SIPDIS 
surrounding Amarillo Beach and the Tola Municipality should be 
resolved.  We have little doubt, however, that the political 
intrigue surrounding property issues will surely grow, particularly 
in cases involving more valuable beachfront property lots.  Further 
infighting may well only complicate our efforts to help American 
citizens obtain just compensation for properties confiscated by the 
Nicaraguan government in the 1980s. 
 
TRIVELLI