VZCZCXYZ0001
RR RUEHWEB

DE RUEHMU #0602/01 1682206
ZNR UUUUU ZZH
R 172206Z JUN 09
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 4257
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE

UNCLAS MANAGUA 000602 
 
STATE FOR WHA/CEN, EB/IFD/OIA, AND L/CID 
STATE FOR H/RGF AND WHA/PPC 
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 GOVERNMENT ATTACKS SECTION 527 PROPERTY CLAIMS RESOLUTION PROCESS
 
REFS: A) 08 MANAGUA 1414, B) 08 MANAGUA 1546, C) MANAGUA (537), D) MANAGUA (580), E) MANAGUA 599
 
SUMMARY 
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¶1. (SBU) President Daniel Ortega has announced plans to send a 
delegation to Washington to discuss Nicaragua's Section 527 (of the 
Foreign Relations Authorization Act, Fiscal Years 1994 and 1995) 
property claims resolution process with members of Congress.  Ortega 
complained that compensating U.S. claimants was an illegal, unjust 
debt for an impoverished country.  Attorney General Hernan Estrada 
accused the Ambassador of blackmail and alleged that many U.S. 
citizen claimants were Somoza allies and former members of the 
National Guard who do not deserve compensation.  The visit (should 
it actually go forward) appears to be an effort to demonstrate to 
the Nicaraguan public that the government is taking proactive steps 
to help Nicaragua receive a Section 527 waiver and keep much needed 
bilateral and multilateral aid flowing.  End Summary. 
 
ORTEGA ATTACKS SECTION 527 PROCESS 
---------------------------------- 

¶2. (U) On June 12, President Daniel Ortega announced that Attorney 
General Hernan Estrada would lead a delegation to Washington to 
discuss Nicaragua's Section 527 property claims resolution process 
with members of Congress.  He said the delegation would present 
information regarding Nicaragua's efforts to resolve U.S. citizen 
claims and ask Congress to amend Section 527.  Ortega claimed that 
the majority of U.S. citizen claimants were Nicaraguans at the time 
of confiscation from 1979-1990 and that they worked for the Somoza 
family.  He complained that compensating U.S. claimants was an 
illegal, unjust debt for an impoverished country. 
 
ESTRADA ACCUSES THE AMBASSADOR OF BLACKMAIL 
------------------------------------------- 

¶3. (SBU) During a television interview on June 10, Attorney General 
Estrada accused the Ambassador of not complying with Section 527 
(Ref A).  He read a paragraph of official correspondence signed by 
the Ambassador on June 5 which stated that our Section 527 claims 
list is always subject to review.  Estrada took offense at that 
statement and accused the Ambassador of using blackmail to resolve 
U.S. citizen claims.  Estrada said that Nicaragua could no longer 
allow the Section 527 waiver to be used to damage its national 
sovereignty. [Note: Estrada did not read the rest of the 
Ambassador's letter explaining why our list of claims is always 
subject to review.  For example, we have learned that some claims we 
considered fully resolved have only been partially resolved.  Some 
claimants have received compensation for only part of their land. 
In some instances, squatters remain on claimants' property even 
after it was returned to them by the Nicaraguan Government.  Many 
other claimants need the government to issue property titles and 
other important documents to finalize their claims.  End Note.] 
 
ESTRADA DEFENDS DECREES 3 AND 38 DISMISSALS 
------------------------------------------- 

¶4. (U) Estrada claimed that there are over 190 U.S. claims on the 
Section 527 list that fall under Decrees 3 (1979) and 38 (1979), 
which authorized the confiscation of property belonging to Somoza 
family members, former members of the National Guard, and "their 
allies" (Ref B).  He said the United States should respect these 
decrees as they are Nicaraguan law.  He added that the USG and GON 
should work together on U.S. property claims based on mutual respect 
for each country's laws. 
 
AMBASSADOR RESPONDS TO ESTRADA'S ATTACKS 
---------------------------------------- 

¶5. (U) During his June 11 press conference on the termination of the Millennium Challenge Corporation (Ref B), the Ambassador expressed his surprise that Estrada would attack the property claims process. The Ambassador noted that the communication between the Embassy and the GON on U.S. claims had improved during this waiver year. He told the media that he had complimented the GON's efforts to resolve U.S. claims during his May 22 meeting with Foreign Minister Samuel Santos and Estrada (Ref C). The Ambassador emphasized that the USG does not differentiate among U.S. citizens based on when or how they acquired citizenship. He reminded the media that all of the cases registered by the U.S. Embassy are claims that were accepted first by the Nicaraguan Government as legitimate.
 
COMMENT 
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¶6. (SBU) The GON wants to show its public that it is taking proactive steps to receive a Section 527 waiver to protect much needed bilateral and multilateral assistance programs for Nicaragua (Refs D and E). The GON believes it is in good standing to receive a waiver because it has settled 39 claims so far and could possibly resolve an additional 28-35 more claims before the end of the waiver year. We suspect that Estrada's trip to Washington is a calculated attempt to take credit for the waiver should it be granted. The GON will portray any lobbying efforts with the U.S. Congress as critical to our having granted Nicaragua a waiver.

CALLAHAN