Envío Digital
Central American University - UCA  
  Number 189 | Abril 1997



All Threads Lead to The Property Tangle

Are we experiencing a return to Somocismo? For the moment, some heirs of Somoza have returned to the stage, as have certain styles of governing that are worrisome. At the base of it all is the intricate maze of property problems.

Nitlápan-Envío team

Two months into president Arnoldo Alemán's term in office, he is still mainly posturing for a population that is showing signs of being tired, more mature, desirous of peace and enormously patient. Each day the President tries to strike some blow for effect, to project himself as a man with a firm hand and a sure step, clear about his goals and unbending in his determination to reach them. (See "In Brief" for a rundown of some of these blows and their effects.) But sometimes he interprets his role on stage without measuring the effect of the blow. When he steps off stage, the doubts return.

After 60 days of Liberal government, there has been little for the public other than this succession of gestures aimed at consolidating a new government style and the image of a determined leader. Meanwhile, the most loyal members of Alemán's Constitutionalist Liberal Party (PLC) and their close associates continue hoarding all posts that offer the power to act and decide. But the dearth of economic resources seriously hinders their ability to act, and their own inexperience in consulting society hinders their ability to make good and acceptable decisions.

These obstacles have not, however, slowed down their decision-making. They are deciding things in an authoritarian fashion, reconstructing the party-state formula, but now with an exclusionary and backward ideology. In so doing, they have already clashed with journalists, the women's movement, nongovernmental organizations, informal merchants and evangelicals--in short, with an ever more diverse and dispersed society that expected other things from the "change" the Liberal campaign promised.

At the hub of all actions on this new stage is the still-unresolved property issue. It links everything else and explains much of what is happening. Virtually everyone has some stake in its resolution. It is vital to the hard-line anti-Sandinista nucleus of the Liberal Alliance. It is at the core of any Sandinista strategy, whether of the leadership or the base. It is indispensable for any democratic proposal in Nicaragua. And it is a sure-fire way for Alemán to expand his social base.

The hitch is that there is not just one property problem or one solution. There are numerous problems, most of them inherited from the history of the past 20 years and all of them tangled into one impenetrable mess. It is virtually impossible to get all the groups that are interested in resolving these problems to agree on which is the essential one, which thread should be pulled free from the tangle first, making the others progressively easier to unravel.

Government-FSLN Dialogue: An Open Channel to What?

On January 12, two days after the change of government, Arnoldo Alemán and Daniel Ortega, the only two national leaders with significant backing from the voting population, met as a sign of the desire of both the government and the key opposition to usher in Nicaragua's new stage with stability, governability, tolerance and a willingness to dialogue. It was a national demand, and neither side appeared to be posturing.

After this top-level encounter, the FSLN presented the government with a 9-point document for discussion, in the hope that understanding and agreement could be reached on the points. In the first meeting of the delegations for each side days later, the two heavyweights who headed them--Vice President Enrique Bolaños for the government and National Assembly representative Bayardo Arce for the FSLN--chose property as the issue to kick off the debate and seek this understanding and accord. The first agreement was that the solution to the property problem--or problems--should grow out of a shared acceptance of the rule of law. Each delegation included a team of lawyers and jurists.

Tensions began to mount in the very next meeting. The property tangle got pulled even tighter as divergent interpretations, contradictory interests, opposing styles, personal histories, campaign promises, political loyalties, pending accounts, principles, laws and specific cases all tugged in different directions. The tension was even expressed in the different names given to these meetings. While the FSLN spoke of a "dialogue" with the objective of reaching agreement, Bolaños minimized the encounters by calling them "conversations" to exchange points of view. President Alemán called them an "open channel."

National Alert: Return of Somocismo

In the third meeting, held on February 13, it was agreed to let 15 days pass before the next meeting, and to create two commissions of two lawyers each for the FSLN and the government, to review very particular cases and make concrete proposals. The idea was to ease some of the legal, political and economic tensions on the property tangle.

On February 25, a few days short of that postponed fourth meeting, President Alemán made the surprise announcement that "the property problem is already solved" because the Sandinista commanders had supposedly agreed to pay for their houses. Two days later, after calling Alemán's statement reckless and unfounded and denying that there was any agreement on anything, the FSLN decided to postpone the dialogue 15 more days. In lieu of attending the meeting originally scheduled for February 28, the FSLN issued a pronouncement succinctly denouncing the spaces that the Alemán government is intent on reopening for the Somoza family heirs. envío is reprinting the document below, given the importance of the issue at this time, the justice of the document's content, its national vision, and our view that achieving consensus opposing the return of Somocismo is not a task of the FSLN alone but is the task and even the moral obligation of all progressive forces today, a starting point for any solution that the entire nation must be able to agree on.

An Ever-Present Issue

The property problem was latent or present in all episodes of instability, some of them quite serious, that Nicaragua experienced over the nearly seven years of the Chamorro administration. It was the thread that linked one crisis to the next. Many of the problems were created by the revolution, which socially redistributed property, creating thousands of new owners, but never legally consolidated this process. Debatable criteria were used on occasion both to affect some and to benefit others. The very fact that some of those affected refer to having been "unjustly" confiscated is a tacit--and quite probably unintentional--admission that other confiscations were just. The property problem was further complicated by the "piñata" that took place in the transition period between the Sandinista and Chamorro governments, and then still further by the Chamorro administration itself, which continued justly redistributing property while simultaneously allowing others to amass wealth in a very murky fashion.

The effort to order this set of problems and provide a "definitive" solution to them came to fruition only at the end of 1995, with mediation by former US President Jimmy Carter. All of the accords reached by the majority of the social, political and economic sectors of the country in that process were shaped into a bill on property stability (now Law 209) and sent to the National Assembly.

When debate began on that bill in the Assembly, all these prior agreements about property were suddenly tied to bills to privatize the national telecommunications company, to reform the electoral law, to elect the new comptroller general and others. Things became so entangled and unclear at that time that a high-stakes move emerged on the political gameboard: suspension or indefinite postponement of the 1996 elections. The specter of that possibility haunted the conflictive electoral process right up to election day itself.

AID to the Rescue

It was to be expected that with Arnoldo Alemán's electoral victory, the Liberals, who were the most unhappy with Law 209, would pick up the property tangle again, but this time by a different thread. Alemán and the other PLC members never recognized the validity of the "solution" represented by Law 209. And it was no secret that Alemán's electoral campaign was largely financed by economic groups, among them Somocista groups in Miami, interested in another kind of solution to the property conflicts. Furthermore, one had to be pretty naive to be unaware that an Alemán victory implied a review of the conflicts over property from a very different angle than the ambiguous and ambivalent one of the Chamorro government. Chamorro had tried to please everyone a little: something for those who were confiscated, something for Sandinista leaders, something for workers and something for both army and contra veterans.

To avoid major convulsions with the change of government and thus of perspective, the US Agency for International Development (AID) gave President Alemán a 30-page study on the property issue on December 20, two months after his election. The study was done by John Strasma, an economics professor and member of the University of Wisconsin's Land Tenure Center who has been studying this issue in Nicaragua for years. The document contains figures, evaluations, and above all recommendations that claim to show the new government how to definitively solve the "property conflicts in Nicaragua."
The figures in the study are essentially correct, and the interpretations of the conflicts seek to be as balanced as possible. To what degree is the Liberal government basing its actions on the document's recommendations? We will try to put some order in the endless array of conflicts, taking up the study's most important recommendations and contrasting them with some of what has taken place in the first 60 days of Nicaragua's new Liberal government.

A Profound Transformation

The most recent origin of the property conflicts is the 1979 revolution, a legitimate historic and political fact with legal consequences. One of the revolution's "gains" was a radical transformation of the property structure, particularly agrarian property. Changes in property continued to occur throughout the Chamorro government for several reasons: first, that administration represented a restoration of capitalism; second, the neoliberal prescriptions ordered a privatization of state holdings; and third, it was necessary to continue the agrarian reform to "buy peace" when the war financed by the Reagan government finally ended.

During the Sandinista government, nearly 1.5 million acres of rural property--32% of the country's farmland--changed hands via confiscations, expropriations, purchases or assignations. Another 12% changed hands during the Chamorro government via the privatization of state land holdings, purchases and assignations. To this must be added the de facto occupations of another 176,000 acres during those same years. In urban property, a reliable estimate is that 200,000 urban families around the country--half of all Nicaragua's urban families--were provided lots or houses during the Sandinista government.

The conflicts are more acute and the tensions and ambitions more defined when agricultural lands are at stake, since they offer the greatest potential wealth. Today only 29% of Nicaragua's exploited agricultural area has not changed hands through at least one of these transforming processes which left a large number of winners and far fewer losers. According to figures provided by former Finance Minister Emilio Pereira at the time Law 209 was being debated, 32 people benefited for every person adversely affected.

Generalized Uncertainty

Strasma's document states that 28% of Nicaragua's total population "live in uncertainty and anxiety regarding their property." This amounts to well over a million people.

Strasma situates the conflict as follows: "The most acute problem for Nicaragua's society and economy derives from the massive real estate transfers carried out or encouraged by the FSLN government between 1979 and 1990. The problem is not the redistribution per se, since history clearly indicates that agrarian reform can facilitate a country's economic and social take-off. The best known cases are the agrarian reforms of Japan, Korea and Taiwan, which helped create the economic boom in those three countries between 1949 and today. The problem in Nicaragua is the failure to formalize the redistribution: many former owners were not indemnified, they did not sign a settlement or deed in favor of the state, and their rights, registered in the Property Registry, were not cancelled."
He adds that: "Property conflicts have occurred in other countries as well, especially when a government that confiscated real estate from individuals who went to live in another country falls and they return and try to recover their confiscated goods. One country can apply the norm of automatically returning the property to the former owner and work out how to indemnify the occupant. Another country can use the opposite norm: prohibit the confiscated person from bothering the current occupant, but offer the former an indemnification. Either of the two norms functions. What does not function well is ambiguity, and regrettably that is what is happening in Nicaragua."

"Social Reforms"

There is no mention in Strasma's document of the "revolution" or the "Somocismo" that provoked it, or of the "just redistribution" of land or wealth. There is no historic context, no conceptual backdrop to situate what the document calls the "social reforms."
President Alemán and his functionaries have placed themselves within this ahistorical and ideology-free interpretive guide since taking office. They continually reiterate that they will respect "the subjects of the social reform," without giving up the reins of these "reforms" or ever mentioning the level of inequity or property concentration that existed before them, much less the responsibility that some of those who are today in power had for that injustice. They, too, never refer to the "history" of these problems. Although Nicaragua's Liberals have a backward ideology in other aspects, there is a postmodern touch to this one: since history does not exist, historic memory is unnecessary. In any case, "history" for them began in 1979.

The Poor v. the Abusers

During his election campaign, Alemán suggested that his government would apply a simple two-prong solution to the property problem: it would provide firm titles to all the poor benefited by the "social reforms" while requiring that all the non-poor who abusively took advantage of these "reforms" return their "ill-gotten" property or pay for it at its "real value."
When the government-FSLN dialogue began, the FSLN leaders said that they accepted this overall idea, but established an order for the two goals: first the government should provide the titles to the thousands of mainly poor rural and urban Nicaraguans who had become property owners due to the revolutionary changes of those years, and afterward the possible abuses would be jointly reviewed.

Strasma's document clearly recommends that the Liberal government act in that order as well, as a matter of political strategy: "We recommend that the new government quickly implement a definitive titling program for the land, lots and houses redistributed in the social reforms between 1979 and 1996. We recommend that ample publicity be given to the issuing of these definitive titles and to the process, programming and calendar that will give all the legitimate beneficiaries of the social reforms the security of being owners.

"We recommend that the emphasis on punishing the abuses detected by the OOT be postponed until at least 1998, until a significant mass of the population in the urban area has definitive security about its property. The political cost of evicting an abuser can be very high if many people still feel insecure about their lots or houses and could be politically manipulated. Once the great majority of the conflicts are solved in favor of the legitimate occupants of the social reform and once the courts are improved, the abuses can be corrected in a more thoroughgoing manner through the courts and without manifestations of solidarity for the abusers."

Government Reverses the Order

Back in 1995, then-Finance Minister Emilio Pereira reported that the Chamorro administration had detected 2,300 cases of "abuses" committed under protection of the 1990 revolutionary laws. Since all politicians were pressuring each other for political advantages at that time, Pereira began to leak a "confidential and preliminary" list of the abusers.

In his document, Strasma notes that 9,814 cases should be reviewed (2,477 houses, 1,015 urban lots and 6,323 farms). When the crisis began in the Liberal government-FSLN dialogue, Bayardo Arce cited this same global figure, accepting the review of all these cases, requiring as a prerequisite that all cases not requiring review--more than 175,000 urban and rural properties--be legalized, with titles and registration in the Property Registry first. It quickly became clear, however, that the Liberal government wants to review absolutely everything again.

Alemán had issued barely 50 deeds in a completely non-conflictive Managua neighborhood and another 500 similarly non-controversial agrarian reform deeds in Río San Juan when the government delegation suddenly reversed Strasma's recommendations, accepted by the FSLN. At the end of the second round of the bilateral dialogue, Vice President Bolaños publicly demanded that the FSLN return to the state all properties being used by the party, not just its leaders. In other words, all confiscated properties later used for departmental and municipal delegations of the party, communal houses of organizations linked to the FSLN in the 1980s, etc.

The FSLN responded that it was not going to return anything, that the government's proposal was for a "reconfiscation," and that if the issue was to review how all properties had been acquired in Nicaragua, it would mean going all the way back to the Somoza government period and reviewing everything that had happened in the successive governments, including Chamorro's and Alemán's. Bolaños retorted that such a historic review would be "a witchhunt."
With the verbal battle engaged away from the dialogue table, Daniel Ortega declared, for example, that Alemán himself had purchased, for a song, some confiscated and untitled lands that the Sandinista government had given to agricultural cooperatives. It is also known that top civilian and military Sandinista leaders have bought land in the same tricky way. Who should return what to whom? Should some return their property and others not?
Once the government reversed the poor first, abusers next order, the dialogue to promote stability and find a solution turned into a source of instability and an increasingly tangled problem. By the beginning of March, it had finally collapsed, at least temporarily. Vice President Bolaños, who is both the government's chief negotiator and one of those whose property was confiscated, had called the Sandinistas "criminals who only know about blood and violence," and Daniel Ortega had retorted by calling Bolaños a "patricidal assassin," referring to the never-solved death of Bolaños' father by poisoning in his own home in 1963.

Meanwhile, in January, the Supreme Court decided to "intervene" the Property Registry, where theft, alterations and falsifications of deeds were rampant. The magistrates confirmed what the media had been denouncing by admitting that "an organized mafia" had been functioning in the Registry, with the help of a group of nearly a dozen lawyers. The next month the Property Registrar resigned his position, claiming that he had been pressured by the Liberals to do so. He also declared that he had warned the Chamorro government of the irregularities taking place.

A Lot Is at Stake

Beginning with the first crisis in the dialogue, the declarations of Alemán and other members of his government implicitly reiterated the reversed order: first the "abusive and piñatero" Sandinista leaders, and then everyone else. Putting off the property titling for "everyone else" is creating a new spiral of instability and uncertainty.

There are only three possible explanations for such political imprudence. Two of them have to do with Alemán's closest groups of collaborators--confiscated Somocistas, recalcitrant but non-Somocista confiscated property holders and allied investors. Either they are leaning heavily on Alemán, calling in the chips of their generous election campaign support, or they, together with Alemán, are irresponsibly acting on an excess of triumphalism and anti-Sandinista sentiments. The third possibility is simply that something else is going on that outsiders cannot see or know anything about.

In any case, what we do know from outside, or can imagine, is that big money is at stake in the dispute over who gets economic hegemony in Nicaragua. This competition opened with new rules after the Liberal victory and is the key clue for orienting oneself in the jumble of interests in which all properties in conflict are entangled, particularly those representing the biggest slice of capital. If we had an up-to-date version of "Who's Who in Business," in Nicaragua today, we could better understand the battles and skirmishes taking place in this phase of the Liberal government to see who will get the lion's share.

The Liberals Don't Recognize Laws They Don't Like

Everything indicates that in essence--and superficially, too, considering the declarations of Enrique Bolaños and others--the new government is doggedly refusing to recognize the legality of the whole process of property transformations that has taken place in Nicaragua since 1979. It is treating every confiscation as unjust and worthy of review. It claims that it will respect the property of those benefited by the agrarian reform, but that is contradictory, since much of that property came from confiscations.

The government does not recognize the validity of laws 85, 86 and 88, which the outgoing Sandinista government pushed through just after the 1990 elections to legalize some 70% of the farmland, lots and houses transferred since 1979 but not yet deeded. The Liberal media insist on referring to these as "piñata laws," hoping to create confusion by lumping together the abuses committed in the upheaval of the 1990 government transition period with the massive legal transfers made earlier through what the Liberals themselves are calling "social reforms."
The government is also ignoring the validity of the 1991 and 1992 accords negotiated between the Chamorro government and representatives of most of the country's major social, political and economic forces. Among the agreements are those that affected the privatization of 344 of the 351 agricultural, industrial and service business acquired by the state during the Sandinista government. The Liberals' particular displeasure with these accords is that they permitted thousands of acres of prime coffee, banana, tobacco and other agricultural lands to remain in the hands of their workers, thus ushering in a new form of associative property holding. Those businesses, which had been part of what was called the Area of People's Property (APP) in the 1980s, are now called Area of Workers' Property (APT).

The government is also ignoring everything that was definitively legalized by the dispositions of Law 209, which in synthesis validates the transformations of the 1980s and 90s, while also requiring a review of any abuses.

Touching the Untouchable Decree 3

The most surprising to some--and most expected to many others--is that the Liberals are trying to rewrite history by turning their backs on all this legislation. They are going back to 1979 to do so, even opening up to review everything that was confiscated from the Somoza family under Decree 3 and from their business partners, political collaborators and National Guard officers under Decree 38, both issued in the first days of the new revolutionary government.

The Chamorro government very discreetly returned some goods that had been confiscated under Decree 38 to their owners or paid indemnification for them. After Finance Minister Pereira began to circulate his list of alleged Sandinista piñateros, the FSLN responded by publishing a list with the names of 120 Somoza government functionaries and National Guard officers who had already been indemnified or were receiving back some of their properties. In the bilateral dialogue with the new Liberal government, Bayardo Arce announced that the compensations paid by the Chamorro government to confiscated Somocistas amounted to $640 million.

For all that, the Chamorro government did not apply either property returns or indemnifications to anyone who carried the Somoza surname; what had been confiscated from the family was untouchable. The Alemán government, however, appears to have decided to touch it.

In a certain sense, Strasma justifies overriding Decree 3 when he makes the following observation: "Victors in an armed struggle take the defeated prisoner, or kill them. In past centuries they also took all property away from their relatives, and denied them the civil rights enjoyed by the rest of the population. It is recognized today that crimes are punished, but the punishment is only applied to the criminal. Money gained through crime can be confiscated, but it does not occur to us to confiscate a house inherited by the criminal's wife from her parents, when neither the woman nor the house have anything to do with the crime. Today in Nicaragua, various FSLN leaders recognize that it was unjust to confiscate some relatives and "associates" of the deceased dictator. Although not all were guilty of his crimes, all suffered confiscation."

"Let the Somozas Come!"

If this position on whether or not to review the cases of confiscated Somoza family members appears ambiguous in the AID document, the positions of President Alemán and particularly of his vice president have been less ambiguous with each passing day. And this is not to mention the fact that a number of Somoza's children, grandchildren, former functionaries or business partners hold important and powerful posts in the new government today.

After the issue of decrees 3 and 38 came up in the government-FSLN dialogue, Alemán denied having returned anything to the Somozas, but at the same time he issued an invitation: "Let the Somozas come to Nicaragua to reclaim their properties in the courts! Let them come to demonstrate how they obtained them!"
Within 48 hours of that invitation, Alvaro Somoza and Bernabé Somoza, nephews of the last Somoza in power, came to Nicaragua after 18 years in which they did not dare return. The Sandinista media were the only ones to give ample coverage to their return and their presence in the country. The others did not because they never speak "of that." In an interview aired on the Sandinista television channel, Somoza's nephews said that they came as Nicaraguans to see how things were, to analyze investment possibilities. They did not deny that they would check out "the state" of what had been their properties.

The Claims of the Somozas

Some 40% of the agricultural lands redistributed by the revolution were confiscated under Decrees 3 and 38. But the Somozas didn't have only excellent coffee or tobacco farms. Somoza properties were everywhere and of all kinds and today are in very diverse hands. Somoza's sister is claiming over 200,000 acres of agricultural and urban land all over Nicaragua. What, if anything, will be returned to her and other members of the family and on what basis?
The dictator confiscated his private beach at Montelimar, with its famous cliff-top house, from a German family, and it was then confiscated from Somoza by the revolution, which invested heavily in it to create a tourist resort. The Chamorro government then sold it at a bargain basement price to Spanish tourism investors, quite likely with a magnificent commission for someone. Who does Montelimar belong to? What stage does one start with to unravel this thread?
The expanse of land northeast of the big traffic circle with the luminous fountain that Arnoldo Alemán built in Managua as a symbol of his administration as mayor belonged to Somoza. It was confiscated by the Sandinista government, which gave it to Cardinal Miguel Obando upon leaving office in 1990. Obando built the new Cathedral there, with generous financial support from the US owner of Domino's, the transnational pizza chain. Who does this land, now worth so much, belong to? How far back does one go to rewrite this history?
President Alemán's invitation to the Somozas elicited the following response from Daniel Ortega: "This invitation to them to come and demonstrate that they did not rob is an opportunity to return what they robbed to them." Many non-Sandinista anti-Somocistas think the same, but not all have dared say so publicly.

Was Alemán's invitation just for effect--to create confusion, or to challenge? Was it to measure the political response that can be expected from actually beginning to return properties to the Somozas? Was it the first step to get a society that ran them out accustomed to having them back? Is it a curtain behind which to hide the last-minute transactions of various economic power groups--new and old?

The Sword of Evictions Begins to Swing

President Alemán has insisted again and again that in a democracy--including Nicaragua's squalid democracy--the four branches of state "are independent." And basing himself on this supposed independence, he lets it be understood that decisions about the properties confiscated from the Somozas will be not his but those of the sovereign judicial branch.

The "independence" of the branches also appears in his interpretation of the wave of evictions or eviction notices ordered by judges all over the country today. A law approved by the National Assembly in 1996 prohibits any further evictions until such time as a definitive solution to the property conflicts is reached. The outgoing Assembly extended it, but since the Supreme Court, on January 7, annulled all legislation passed by that Assembly in the last two months of its session, the law halting evictions was annulled too.

With nothing to stop them, the evictions, begun even in the few days remaining between the annulment and President Alemán's inauguration on January 10, have now multiplied by the dozens. They are particularly increasing in the rural zones, where they are less visible and the media rarely go. They are ordered by local judges, but behind these judges are old and new economic power groups of various political stripes. They are acting under cover of the tremendous confusion triggered by the new government's gestures, declarations and decisions.

In areas where there have been no evictions yet, the possibility that there will be hangs like a sword over many cooperatives and peasants without titles. While numerous nongovernmental organizations say that this uncertainty is affecting peasant participation in their rural community development projects, Alemán continues to insist that "the genuine cooperatives" and "the poor" have nothing to fear.

But they do fear. And they also die. The first blood of this new crisis was spilled on February 26, when a big landowner, accompanied by a judge, visited lands that were formerly his in El Jicaral, León. In an incident that is still confusing, the former owner killed one of the peasants from the cooperative that now cultivates the land and claims ownership of it.

The National Federation of Cooperatives (FENACOOP) warned in a communiqué issued the next day that it "will head the more than a thousand cooperatives existing in the country that are affiliated to this Federation, and together we are going to defend our legitimate right to property. If the former landowners want to play rough, we'll do it, but we will not let one more of ours die in vain."

"Normal and Honest" Trials?

On this issue of evictions, the government is following the suggestion in Strasma's document to the letter: "We recommend eliminating the sources of new insecurities. The police should repress any new property invasion, eliminating from the reigning culture the idea of seeking access to land through force or trickery. The National Assembly should stop prohibiting evictions of lessees who do not pay the rent or of the losers in normal and honest trials between individuals."
The new government has closed the circle. The executive branch assures the poor benefited with properties that they can relax, that it will give them titles. The judicial branch resolves new or old disputes over properties of the poor (in normal and honest trials?) by ordering their eviction. The executive branch then declares that the branches are independent and that the judicial labor cannot be interfered with. The legislative branch, controlled by the Liberals and independent legislators who have already been bought, does not agree to legislate another postponement of evictions until after the poor receive their final deeds. The poor live in fear of being evicted. The executive assures them that they have nothing to fear, that it will give them titles...

The Greedy Want the APT Too

The hard-line nucleus of the Liberal government and the entire publicity apparatus surrounding Arnoldo Alemán are determined to reduce the "property problem" in propaganda terms to the message that "Sandinista leaders must either give back or pay the real price for the mansions that they robbed and are living in." It is as if the Liberals are seeking reaffirmation of their authority or clinching proof of the "end" of Sandinismo in the symbol of this payment or return of properties.

However serious the irregular acquisition of homes by some Sandinista leaders is in ethical or political terms, the "mansion" issue is the least important of all the property conflicts to either Nicaragua's economic reactivation or its political stability. As everyone knows, and as Sandinista leaders have repeated daily since the dialogue with the government began, the most important problem is in the rural area. To be more exact, it must be sought in the avarice awakened in the former owners of confiscated agricultural and agroindustrial properties now formally part of the Area of Workers' Property. New economic power groups, not excluding those of Sandinista leaders, share that greed. According to FSLN sources, nearly 12,000 workers are now owners of associative businesses in coffee, tobacco, cooking oil, rice, livestock and bananas.

On January 15, the Movement for the Defense of Property, billed as a "broad social movement," was created in Managua, with people from all over the country representing the different sectors of productive property ownership resulting from the transformations of the past decade and a half: the worker-owners of the APT, small individual producers, cooperative members, veterans of the Nicaraguan Resistance, the Army and the old Ministry of the Interior, and those with war disabilities. All told, they represented about 300,000 families, who now control roughly 60% of the national agricultural production, while the traditional business sector only produces 40%.

Many of the businesses in the APT have been successful, but others have not. Not all are authentically self-managed, and not all have genuine worker ownership. In some it is only a facade, while others run the business and get the profits. This incipient process is promising, but was launched in Nicaragua at the same time that the neoliberal adjustment was. All these properties have been affected by the economic policies, particularly the credit policy, implemented by the Chamorro government. They all have debts; none of them has had the support they would have received had there been a realistic economic reactivation plan for the agriculture and livestock.

What has further tangled this part of the property knot is that all the APT businesses were born of the massive privatization of valuable state companies headed up by CORNAP, the holding company created by the Chamorro government for that purpose. The privatization process lacked the most minimum legal framework and hence any transparency. The just, the less just and downright sinners all benefited from it.

The Murky Privatization Process

When the dialogue foundered, the FSLN mentioned the possibility of turning to the Court of International Arbitration in Paris, but Alemán, proclaiming his admiration for Sandino's exemplary nationalism, rejected any such international interference. He had his own idea on how to shake the dialogue out of its shock: he would do it by administering another shock. He released a compromising video clip from 1993 showing a CORNAP official receiving a bribe of over $30,000 during the privatization of the state sugar refineries.

Hardly anyone could figure out quite why the President showed this precise "proof" instead of some other one, and more to the point, what he wanted to "prove" with it. Everyone in Nicaragua knows that this is just one brick of the great muddy building of privatization. Those in the new Liberal government who are starting to look through the documentation--or, to be more precise, the lack of documentation--backing up the process directed by Chamorro's technocrats are surprised by just how much mud there is. "There wasn't just one piñata here, but over 300 piñatas," said one. "It's incredible!"
No Nicaraguan who is the slightest bit aware of what is going on in this country is oblivious to the fact that the privatization "piñata" wove together the interests of the highest Chamorro government officials, those of some Sandinista leaders and also those of the traditional large national capitalists who supported Violeta Chamorro through her administration, and then supported Arnoldo Alemán's rise to power, although they are now finding themselves in serious contradiction with him.

Referring to those involved in the CORNAP piñata, Alemán swore that he would send to prison "not only chicken thieves but also white-collar criminals, those who wear suits and carry briefcases." But so many briefcase carriers are compromised that the question is: which ones will go to jail and which ones will enjoy impunity at the head of specific economic power groups?

The Privatization of The Sugar Refineries

Alemán said he would begin with those who were compromised in the privatization of the sugar refineries. The President has his eye on three refineries, whose murky privatization he said he would revoke for being illegal. One of those refineries is the Victoria de Julio, also known as "Timal" (for Tipitapa-Malacatoya), which the government of Cuba gave to the FSLN government in 1985, when the four years of construction had finished. Cuba's investment amounted to some $80 million (including construction, installation, equipment and technical training). This refinery is now the property of "the workers" and the FSLN leaders who are behind them. Capitalists allied to Alemán seem very interested in appropriating this and the other two refineries in which 25% was privatized to their workers. Will Timal be returned to the state? Will the Liberal party-state-business then transfer it into other hands?
According to Rosendo Díaz, the new CORNAP president, "taking away" something is nothing other than embargoing it for debts, since the majority of the APT businesses owe the state the equivalent of some $40 million in debt accumulated over the years in which they have not paid the agreed-upon quotas to legalize their ownership. Díaz announced that he would soon embargo these privatized state properties that are in arrears. Sandinista leaders say that any embargo, as well as any eviction, must be suspended until a definitive solution is found to this labyrinth of problems. The workers of the enterprises themselves argue that without a property title--the Chamorro government never issued them any--they cannot get credit and therefore cannot cancel old debts. CORNAP responds with the argument that many of these lands have posted huge profits with the export of coffee or tobacco and still have not canceled their debts. Another closed circle. Where does one begin to open it, and with what key?

Compensation to The Confiscated

There are massive numbers of deeds still to sort out, contradictory interpretations of the legal validity of the confiscations, ambitions and aspirations to get started with economic projects, and hand in hand with it all the issue of indemnification.

Strasma's document devotes a lot of attention to the compensation of those who have been unjustly confiscated. According to the AID study, 15,969 claims were filed with the National Commission of Confiscation Review created by the Chamorro government as of 1996. Of these, 45% were claims for rural properties and 32% were for urban properties. The rest are lesser claims for vehicles, stocks, cattle, machinery and the like. A total of 157 claims (exactly 1% of the total) were filed for companies.

According to Emilio Pereira, who went from being Chamorro's finance minister to being the Liberal government's luxury economic adviser, "you had to have guts" to solve the property problem after the 1990 change of government, and he counted himself in that group.

In some cases, guts were accompanied by traps, set by the same Pereira. One such case was the Solka laboratories, confiscated from the Solórzano family for its ties to Somocismo. The Chamorro government--that is to say, the finance minister himself--compensated this family for five times the real value of the bankrupt business that the Solórzanos abandoned when they left Nicaragua. Today, the workers of that pharmaceutical company, who pulled it out of bankruptcy and received stock as a result of the concertación agreements, defend it as their own. But they are facing the following challenge, which complicates things more: one of the confiscated and already generously compensated members of the Solórzano family is a minister in the new Liberal government. Can there be "normal and honest" trials in this and so many other cases in conflict?

Confiscated Piñateros

Strasma praises the effort the Chamorro government made to create some order in the problem, to study the claims and begin to indemnify some of those who were confiscated. But he criticizes the fact that the Chamorro government's "solutions" have been merely administrative ones that the claimant is under no obligation to accept.

"In 1996," he comments, "many claimants neither accepted nor rejected the indemnification that they were offered. They completed the documentation, took the offer of indemnification contemplated in the law in effect and then decided to do nothing until the October 1996 elections, with the hope of perhaps obtaining more from the next government based on political friendships or some miracle from a generous foreign donor who would give more money for their lost properties."
The document is also critical of the claimants: "Dealing with a proprietor is difficult in expropriation cases, and more difficult in a case like Nicaragua. Each claimant wants "more" and thinks that if the government can be generous with him/her, it will not be noticed within the total amount, which is so large.... Regrettably, one also has to be careful of the 'opportunists' who are looking for their own 'piñata' in the negotiation. Between 1993 and 1996 cases were seen of confiscated owners who had sold their properties to the FSLN government and collected money. Nonetheless, taking advantage of the Sandinista disorder, they wanted to collect again. Cattle ranchers also showed up who were claiming payment for thousands of heads of confiscated cattle, when they had never declared income tax on cattle activities."
In search of the longed-for definitive solution, Strasma recommends activating the titling process to the maximum for the new owners and expanding the indemnification options for the greatest number of those confiscated. But where is the money to come from?
During his election campaign, Alemán spoke insistently of a plan to "buy peace," one component of which was to ask the international community for some $500 million to indemnify those whose confiscated properties could not be returned to them. Strasma is strongly critical of this plan:
"It has been said that, if the industrialized countries gave millions of dollars to pay for wars, why won't they give us any to achieve peace? But times have totally changed since the end of the Cold War. As one US congressperson expressed it: 'I cannot ask a middle-class taxpayer to finance the indemnification of a rich person who was confiscated, who lost more property than my taxpayer has ever had in his life.' There have been many agrarian reforms in the world and some urban reforms with foreign support. But to date we have never seen foreign financing to pay the former owners."

The Sale of TELCOR

During the Chamorro government, the pending indemnifications were going to be paid with the earnings from the sale of 40% of the stocks of the national telecommunications company, Nicaragua's only really profitable state business. Because the privatization of TELCOR was tightly bound into the property tangle, it was at the center of the political and institutional crisis for months. In the end, after the Chamorro government's most costly publicity campaign and a public bid, the sale was postponed several times until the elections finally put it off until March 1997.

TELCOR won't be sold then either. The AID document advises analyzing the proposals very closely, and so does the dynamic of globalized capital. An accord signed in Geneva on February 15 by 69 countries representing 95% of the world's telephone traffic will unleash a new competition among the telecommunications corporations as of January 1, 1998. This caused the delay in the sale, and perhaps forced the government to be satisfied with a very low price in the bids. In the framework of the Geneva agreement, which Nicaragua did not sign, what interest and what hurry will the giant transnational corporations have to buy into the little Nicaraguan market?
Who does seem to be interested in ending up with TELCOR--in "payment" for his significant contribution to Alemán's election campaign--is Cuban-born US millionaire Jorge Mas Canosa, who came to Managua on March 7, apparently to explore the terrain. An associate of the most conservative members of the US power apparatus, Mas Canosa already owns the Mas-Tec telecommunications company, which is a strategic participant in Spanish telecommunications.

Another knot that is difficult to untie is that of the claims by confiscated "US citizens." Some 95% of the claimants who are taking refuge under that umbrella are originally Nicaraguans--and a large group of them are associates of Somoza--who took US nationality when they escaped into exile.

Will the US Decertify Nicaragua?

Nicaragua could be "decertified" by the United States in July 1997 for not having returned the properties of this group of confiscated owners or indemnifying them. Senator Jesse Helms has been pushing this decertification process for years. Unless it is overridden by the President, failure to get certified means that the US government would not only cut off its already shrinking economic cooperation with the Nicaraguan government, but would also urge the international lending agencies to do the same.

Clinton government sources report that the Chamorro government satisfactorily resolved the claims of 1,400 of these US citizens, but 1,030 more cases are pending. On February 21, US Undersecretary of State John Hamilton visited Nicaragua to officially present the US government's claim to the new Liberal government. Days later, two members of the National Assembly board (a Liberal and a Conservative) traveled to Miami to meet with Congressman Dan Burton (infamous for the Helms-Burton Law) in search of flexibility on this issue. Meanwhile, President Alemán has avoided comment.

For Economic Democracy

The property mess is enormous, and with so many flanks, it covers everything: the national conflicts we see and those we don't, those whose origin is in the search for social justice and those of a more murky origin. Those linked to Somoza, to the Sandinistas, to Chamorro, even to Alemán, plus "the rest" are all bound together by the multiple threads of the property tangle.

The solution cannot be merely a legal one, and much less can this legality be turned over to the judicial apparatus, which is so slow, so fragile and so vulnerable to blackmail and bribery.

The solution has to be more holistic. It requires a minimum of ethics on all sides; it requires a national vision; it requires that all involved give up something; and it requires that in the name of peace, everyone cross over from the cold side of "legal justice" into the more humane framework of "social justice." As the most traditional social doctrine of the Catholic Church wisely says, "a social mortgage weighs" over all property, whether ill-gotten or fairly obtained.

The solution cannot be only the product of a dialogue between confiscated and confiscating leaders. Both of those sectors are today defending interests that make it harder to reach a solution that will really favor production and benefit the immense majority of the poor, so absent, so politically unrepresented at the dialogue table.

Having many properties in the hands of many owners must be defended. Equity in the distribution of property and ever more equitable participation in the production of wealth and the enjoyment of the profits of that production must be defended. This isn't socialism; it's democracy. And only with economic democracy can there be political democracy. And only with economic democracy can electoral democracy have any value.

The solution will largely depend on the organizational capacity of the poor to defend the properties that the revolution put in their hands. It need not be a violent defense, but it does have to be an organized defense, a shared, intelligent, creative defense. One of its first and most important objectives is to prevent capital with a Somocista origin from sinking its hooks back into Nicaragua.

At this moment defense of private property, led by those who were so deprived of property historically and saw things change, could be an extraordinary occasion to consolidate our still incipient social movements.


This document on the property issue, signed by the FSLN National Directorate, was read publicly on February 28, 1997, and published in Barricada, March 4, 1997.

It is publicly known that prominent members of the Somoza family are hoping that their many goods affected by the state through Decree 3 of July 20, 1979, will be restituted with the coming to power of the Liberal government. In 1995, when Lilliam Somoza, her husband and children turned to the OAS Human Rights Commission to recover their properties, alleging supposed violations of their human rights, the Nicaraguan government of President Violeta Barrios de Chamorro rejected those claims and refused to recognize any rights of this family. In addition to defending the legal validity of the laws transferring all of the dictator's properties to the state, the Chamorro government referred to Somocismo as "...the exemplary tyranny of abuses, assassinations, genocide and robbery."
In recent days, however, the highest representatives of the new Alemán government have recognized the Somozas' rights in statements and have encouraged them to demand the return of all their goods. This has given rise to the provocative and challenging presence of various members of that family in the country.

As in 1979, the Sandinista Front considers the Somoza family to have no legal, moral or economic basis whatsoever to reclaim goods that they usurped over the forty-odd years of their ignominious regime. Decrees 3 and 38, issued together with the framework of the Fundamental Statute of July 20, 1979, established the political, institutional and legal basis, the genesis of the 1987 Constitution and by extension of the 1990 and 1996 elections. To deny the validity of these laws affecting the Somoza family is also to deny everything that the four governments from 1979 to the present have done.

Restitution on behalf of the state of the goods the Somoza dynasty had usurped was a morally necessary public action that the Nicaraguan people demanded and supported. It was not an attempt to affect the daily means of a family's livelihood, but rather to recover 2.7 million acres of land and close to a hundred enterprises, including banks, insurance companies, air and shipping lines, fishing, mining and lumber companies, construction companies, sugar refineries, agroindustries in tobacco, rice, coffee, meat, etc. An inheritance equivalent to 40% of the country's Gross Domestic Product built over 40 years of abuse and violence.

No Right to Compensation

For the same reasons, there is no room for considering any right to compensation since these are illegally obtained properties. Furthermore, according to verifiable registries, the Somoza family mortgaged all of its properties in private and public financial institutions, obtaining $200 million through the Central Bank which was taken out of the country between 1977 and May 1979.

In fact, the government should be demanding that the Somoza family restore this capital to the nation, as it became one of the most onerous components of the foreign debt after 1979. Given the government's complacency and its willingness
to favor the Somozas' property claims, we must recall that they are the ones who installed a dictatorial regime that suppressed democracy and public liberties, subjected state institutions to subservience, corruption and nepotism and responded to the citizenry's just protests with murder, torture and finally genocide.

Given this situation, the OAS declared in the XVII Conference of Ministers in June 1979 that the solution to the Nicaraguan case should be inspired by "the immediate and definitive replacement of the Somocista regime."
The FSLN considers the disappearance of Somocismo and the more just distribution of agrarian and urban properties to be the indispensable basis of the stability the nation requires to develop democracy and equitable economic growth. Therefore, encouraging the return of Somocismo or failing to recognize the democratized property system with social content built by the last two governments is irresponsible and leads to the reinstallation of the basis of injustice, polarization and inequality that led several generations of Nicaraguans into war.

The FSLN and the People Do Not Accept Property Returns

The FSLN and, we are sure, the great majority of the people, will not under any circumstance accept the return of property to the Somoza family or the attempts to make room for the return of a regime condemned by history and the international community. In 1996 the Nicaraguan people voted with their hopes pinned to solutions for unemployment, economic growth, peace and the search for opportunities for a better future. It was not a vote for the return to Somocismo or for the reconcentration of property in the hands of a few. To the FSLN, this is the dividing line between instability and governability in the long term.

End the Demagogy

We demand that the government cease the dangerous demagogy of protecting one family, or turning to the registries and other legalistic formalities to cover its determination to evict the 270,000 families benefited by social transformations. The land tenure changes were fair and necessary and they continue to be so. The law should serve to protect these changes, not as a ruse to reverse them. Somocismo used the protection of law to legitimize illegally gained wealth.

The FSLN considers the legitimate and true owners to be those people with titles protected by law, but also by justice. The obligation of any responsible government in Nicaragua in any case is to correct the formal defects, incongruities and legal obstacles to benefiting thousands of agricultural producers and citizens with full access to the agrarian and urban properties assigned them by the legally constituted authorities.

Government Officials As Claimants

Some of those who have demanded the unconditional return of goods affected by Decree 3 or the Agrarian and Urban Reform Laws currently hold important government posts. Those officials have launched an offensive to affect workers, peasants and other citizens, trying to evict them from their productive units, farm plots and lots or houses. These actions must stop immediately.

In condemning and rejecting these attempts to return properties that bode a return to the Somocista past, the FSLN calls on all families benefited by the state to resist any attempt to evict them from their properties that is backed by twisted and biased interpretations of the law.

Social peace and political stability come first. All FSLN militants and political structures, and Sandinismo as a whole, should take the lead in the people's struggle to defend their property against Somocismo.

No to Somocismo! Free Land or Death! National Directorate of the Sandinista National Liberation Front

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