VZCZCXYZ0026
RR RUEHWEB

DE RUEHMU #1244 2841932
ZNR UUUUU ZZH
R 101932Z OCT 08
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 3244
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE

UNCLAS MANAGUA 001244 
 
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 RESISTS MORE TRANSPARENCY IN PROPERTY CLAIMS 
COMPENSATION PROCESS 
 
REF: A) MANAGUA 1243, B) MANAGUA 564, C) 02 MANAGUA 877 
 
SUMMARY 
------- 

¶1. (SBU) During the October 2 Property Working Group meeting, 
Econoff urged Government of Nicaragua (GON) officials to provide 
clear explanations on how they determine settlement offers.  Ruth 
Zapata, head of the Office of Assessment and Indemnification (OCI), 
was aware of the frustration that some claimants experience but 
explained that "it was more a matter of style" than substance. 
Zapata complained that the Nicaraguan Army is not sharing 
information on claims under its control.  Following the Working 
Group meeting, a U.S. claimant reported that the GON is attempting 
to reverse settlements on nine of his properties.  The U.S. citizen 
initiated court action to protect himself against possible 
litigation from the buyers of six of these properties.  End Summary. 
 
 
TRANSPARENCY AND FAIRNESS IN PROPERTY APPRAISALS 
--------------------------------------------- ----- 

¶2. (SBU) On October 2, Econoff met with Ruth Zapata, head of the 
Office of Assessment and Indemnification (OCI), Jeanette Garcia, 
director of the National Confiscations Review Commission (CNRC), and 
Magally Bravo, an official from the Office of the Attorney General, 
to hold the September Property Working Group meeting.  Attorney 
General Hernan Estrada had requested that the September 25 Property 
Working Group meeting be postponed until October 2 because he wanted 
to meet first with the Ambassador on September 30 (ref A). 
 
¶3. (SBU) Econoff urged GON officials to develop a transparent 
process to explain to U.S. claimants how the government determines 
settlement offers.  As it stands, many U.S. claimants complain about 
the lack of transparency and fairness in appraising confiscated 
properties (Ref B).  Specifically, they do not understand how OCI 
determines values, or in some instances, why OCI reduces settlement 
offers when previous governments proposed higher compensation 
awards.  Zapata was aware of the frustration that some claimants 
experience but explained that "it was more a matter of style" than 
substance.  Econoff explained that while this may be true, a clearer 
explanation of how OCI determines settlement offers would advance 
the resolution of claims. 
 
ARMY NOT SHARING INFORMATION ON CLAIMS 
-------------------------------------- 

¶4. (SBU) Zapata complained that the Nicaraguan Army had not shared 
information on claims under its control.  She asserted that the 
Attorney General's Office had repeatedly requested information on 
the Las Serranias complex case, involving 29 properties confiscated 
from the Barreto family (Ref C).  Econoff pointed out that the Army 
seems to think otherwise: i.e., that Estrada is reluctant to take on 
these claims.  We believe that the truth may be somewhere in 
between. 
 
GON ATTEMPTS TO RECONFISCATE U.S. PROPERTY 
------------------------------------------ 

¶5. (SBU) On October 3, U.S. citizen Jose Arguello Cardenal  informed 
Econoff that the GON is attempting to reverse decisions on 
settlements on nine of his properties.  He told us that the Attorney 
General's website listed his properties as having been dismissed 
based on Decree 38/1979, which authorizes the government to 
confiscate property belonging to the "allies of Somoza."  Arguello 
Cardenal considers the applications of Decree 38 as a new method of 
confiscation because the properties had been legally returned to him 
in the 1990s.  He added that he sold six of the nine properties and 
worries about possible legal action from his buyers should the GON 
insist on the return of the property.  Arguello Cardenal filed a 
suit in civil court to request that the Attorney General's Office 
remove his properties from the list of dismissed claims based on 
Decree 38. 
 
COMMENT: 
-------- 
 
¶6. (SBU) The GON's resistance to provide clear explanations as to 
how it determines settlement offers stifles progress on resolving 
many claims.  This lack of transparency fits with the GON's policies 
to protect the interests of the beneficiaries of confiscation, lower 
the level of compensation per claim, and administratively dismiss 
claims whenever possible.  We continue to press the GON to explain 
how settlement offers are calculated, the criteria and procedures 
for dismissing claims, and the application of Nicaraguan law. 
 
 
CALLAHAN