VZCZCXYZ0011
RR RUEHWEB

DE RUEHMU #0228 0621355
ZNR UUUUU ZZH
R 031355Z MAR 09
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 3820
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE

UNCLAS MANAGUA 000228 
 
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 "RECONFISCATES" U.S. CITIZEN PROPERTY 
 
REFS: A) 08 MANAGUA 1546, B) 08 MANAGUA 1244 
 
SUMMARY 
------- 

¶1. (SBU) The Government of Nicaragua (GON) has recently sent notices 
to several U.S. citizens to "reconfiscate" their properties.  The 
notices said the administrative action had been based upon Decrees 3 
(1979) and 38 (1979), which authorize the confiscation of property 
belonging to the Somoza family and their allies.  With this action, 
Attorney General Estrada has broken his pledge issued in our 
bilateral review of December 2008 (Ref A) not to review previously 
settled claims.  The decision to review previously settled U.S. 
citizen claims is a serious setback to our efforts to resolve U.S. 
citizen cases.  End Summary. 
 
RECONFISCATION OF RESOLVED CLAIMS 
--------------------------------- 

¶2. (SBU) In February, two U.S. citizens informed the Embassy 
Property Office that the National Confiscations Review Commission 
(CNRC) had notified them that their previously resolved claims had 
been ruled null.  The notices said the administrative action had 
been based upon Decrees 3 (1979) and 38 (1979), which authorize the 
confiscation of property belonging to the Somoza family and their 
allies. 
 
¶3. (SBU) On February 3, U.S. citizen Otto Zamora reported that  he 
received a CNRC notification stating that his two claims had been 
dismissed under Decree 38.  Mr. Zamora had already received 
indemnification bonds (BPIs) for one of his claims ten years ago and 
was waiting to settle the other claim.  He believes that he will be 
forced to return the bonds he received, and that his pending claim 
will be dismissed. 
 
¶4. (SBU) On February 10, U.S. citizen Frances Guillen received a 
CNRC notification dated July 2008.  The notification said the CNRC 
determined that her property in the city of Somoto, northern 
Nicaragua, was subject to Decree 3.  The notification stated that 
this decision overrides a September 21, 1995, CNRC resolution that 
returned the property to her.  Mrs. Guillen's family sold the 
property in June 2008 and the new owner has a clear title to the 
land.  The Assistant Attorney General in Somoto recently filed a 
lawsuit against Mrs. Guillen for selling "state-owned property" and 
has threatened to evict the new owner. 
 
¶5. (SBU) In October 2008, post reported that nine resolved claims 
belonging to U.S. citizen Jose Arguello Cardenal were listed on the 
Attorney General's website as Decree 38 dismissals (Ref B).  Mr. 
Arguello Cardenal told us that he had sold six of the nine 
properties and worried about possible legal action from his buyers 
should the GON insist on the return of the property.  He filed a 
suit in civil court in October 2008 to request that the Attorney 
General's Office remove his properties from the list of dismissed 
claims.  During October, November, and December 2008 Property 
Working Group meetings, CNRC President Jeanette Garcia insisted that 
the listing of Arguello Cardenal's claims was a mistake. 
Notwithstanding, the Attorney General's Office has not yet removed 
the properties from its website. 
 
BROKEN PROMISE 
-------------- 

¶6. (SBU) During the bilateral review of Nicaragua's property claims 
resolution process on December 11-12, 2008, Attorney General Estrada 
promised that he would not review previously settled claims, 
including those cases that were Decree 3 and 38 dismissals but 
subsequently resolved in favor of U.S. claimants.  To date, we have 
not recognized these dismissals because they have not been 
accompanied by due process and the dismissals have not been properly 
substantiated. 
 
COMMENT 
------- 

¶7. (SBU) The GON's actions to "reconfiscate" U.S. citizen properties 
are a serious setback to our effort to resolve cases.  We believe 
that more "reconfiscation" notices are on the way.  We will raise 
the issue with Attorney General Estrada during the Ambassador's 
mid-year review, which we are seeking in March. 
 
CALLAHAN