VZCZCXYZ0001
RR RUEHWEB

DE RUEHMU #0659/01 1831425
ZNR UUUUU ZZH
R 021425Z JUL 09
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 4303
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE

UNCLAS MANAGUA 000659 
 
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: GOVERNMENT OFFICIALS CONFIDENT NICARAGUA WILL GET A SECTION 527 WAIVER
 
REFS: A) 02 MANAGUA 877, B) 08 MANAGUA 002, C) 08 MANAGUA 1546
 
SUMMARY 
------- 

¶1. (SBU) During the June 25 Property Working Group meeting, 
Ruth Zapata, Head of the Office of Assessment and Indemnification 
(OCI), suggested that the case of U.S. citizen Juan Barreto would 
not likely be resolved this waiver year because he had requested 
additional land surveys.  Rebeca Zuniga, Coordinator for the Office 
of U.S. Citizen Claims, asserted that the Government of Nicaragua 
(GON) has resolved 42 claims and urged the Embassy to consider the 
GON4s efforts to resolve difficult claims when deciding whether to 
grant a Section 527 waiver to Nicaragua.  Zapata mentioned that 
Attorney General Hernan Estrada would send a letter to the 
Ambassador regarding his trip to Washington to discuss the GON's 
property claims resolution process with members of Congress and 
State Department officials.  Magally Bravo, Administrative Director 
for Property Claims for the Attorney General4s Office, reiterated 
the GON4s goal to resolve all property claims by 2011.  We sense 
that the GON believes it is in good standing to receive a waiver 
despite limited progress on claims under the control of the 
government and the Nicaraguan Army. 
 
DELAYS IN RESOLVING THE BARRETO CASE 
------------------------------------- 

¶2. (U) On June 25, 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 suggested that the GON might not resolve the claims of U.S. citizen Juan Barreto during this waiver year. Mr. Barreto has 28 claims filed with the Embassy for property now under the control of the Nicaraguan Army (Ref A). Zapata blamed Mr. Barreto for the delays in advancing the case because he requested additional land surveys to ensure fair compensation and wanted the return of some property not under the Army's control.
 
¶3. (SBU) Econoff pointed out that the Barreto family has repeatedly 
expressed its willingness to work with the GON to resolve this case 
during this waiver year.  Econoff emphasized that the Barreto case 
represents an important benchmark in the Section 527 process -- 
claims under Nicaraguan Army control -- and urged the GON to work 
with the Barretos to resolve this case during this waiver year. 
[Note: On June 26, Mr. Barreto met with Zapata and Zuniga. In his 
view, the GON does not have a sense of urgency to resolve his 
claims.  End Note.] 
 
GON CONFIDENT OF WAIVER PROSPECTS 
--------------------------------- 

¶4. (SBU) Zuniga claimed that the GON has resolved 42 claims 
during this waiver year and argued that Nicaragua should be in good 
standing to receive a waiver.  She asked Econoff to consider the 
GON4s efforts to resolve complex claims such as the Barreto case, 
and those with significant U.S. congressional attention, for 
example, U.S. citizen Domingo Calero.  Zapata added that the GON is 
taking on more public debt to resolve claims given the current 
budgetary and economic difficulties confronting the government. 
 
¶5. (SBU) Econoff acknowledged that communication on casework has 
improved between the Embassy and GON, but genuine cooperation on 
advancing U.S. claims remains limited.  For example, he highlighted 
that the GON has not resolved any U.S. claims under the control of 
the Nicaraguan Army since 2006.  The GON continues to advocate for 
the dismissal of U.S claims, without regard for due process, under 
Decrees 3 (1979) and 38 (1979), which authorized the GON to 
confiscate property belonging to the Somoza family and "their 
allies."  Attorney General Estrada has petitioned the courts to rule 
against the lawsuits of at least three U.S. claimants who sought to 
recover their property from illegal occupants.  The GON is also 
attempting to resolve U.S. claims by publishing the resolutions in 
the Official Gazette and depositing the bonds offered as 
compensation in escrow with the Ministry of Finance.  Econoff 
asserted that the GON could resolve more claims through the return 
of property, land swaps, and leasing agreements. 

ESTRADA SEEKS HELP FOR WASHINGTON D.C. TRIP 
------------------------------------------- 

¶6. (SBU) Zapata said that Attorney General Hernan Estrada would send a letter to the Ambassador about his upcoming trip to Washington D.C. She mentioned that Estrada would like to meet with members of the U.S. Congress and senior State Department officials to discuss the GON4s accomplishments during the 2008-2009 waiver year. Zapata was unable to confirm the dates of his travel. GON TO RESOLVE ALL CLAIMS BY 2011
 
------------------------------------ 

¶7. (SBU) Bravo reiterated the GON4s goal to resolve all 
property claims against the government by 2011 (Ref B).  Econoff 
reminded GON officials that the U.S. Government considers claims 
resolved only when claimants believe that they have received 
adequate and effective compensation.  He noted that the GON4s 
interpretation of when a claim is resolved is different than ours, 
and he urged the GON to continue working with the Embassy Property 
Office and U.S. claimants to advance casework. 
 
COMMENT 
------- 

¶8. (SBU) We sense that GON officials believe that Nicaragua is in 
good standing to receive a Section 527 waiver despite limited 
progress on claims under control of the government and Army.  We 
have reminded GON officials that during the bilateral review it was 
our understanding that Attorney General Estrada would make progress 
in advancing claims under these Section 527 benchmarks (Ref C).  We 
will continue to pressure the GON to resolve claims under government 
and Army control until the end of this waiver year and emphasize 
that a Section 527 waiver to Nicaragua for 2009-2010 is not yet a 
done deal. 

CALLAHAN