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Nicaragua Dispute over Property Rights
The dominant political issue in Nicaragua during the
early
years of the Chamorro government became the
Piñata--the
massive transfer and titling of confiscated and
expropriated
property, including homes, agricultural plots, and
businesses,
which the Sandinista government conducted during the
interim
lame-duck period between the February 1990 election and
Chamorro's inauguration in April 1990. Named after the
candystuffed papier-mâché figures that are hung for children to
strike
with sticks and break open, the Piñata created divisions
and
resentments throughout the political order. Within the
Sandinista
movement, rancor arose as the Piñata created new classes
of
"haves" and "have-nots." Within the UNO, it progressively
became
one of the more divisive issues as the executive branch of
the
Chamorro administration sought to protect the titles of
the
transfer and UNO groups within the National Assembly
sought to
invalidate them.
Law 85 and Law 86, the two Piñata laws passed by the
Sandinista-dominated National Assembly during the
transition
period, not only guaranteed the rights of squatters and
tens of
thousands of small farmers given land under the Sandinista
agrarian reform, but also allowed Sandinistas to
appropriate much
other state-owned property. Estimates of the amount of
property
transferred ranged between US$300 million and US$2
billion. The
property reportedly included thousands of "good to luxury
homes,"
including beach houses, that were titled to Sandinistas at
a
small fraction of their value. Also given away were large
stateowned properties such as cattle ranches, warehouses, and
office
buildings; state-owned businesses; and smaller items such
as
cars, taxis, trucks, machinery, office furniture, and
equipment,
including radio and television transmission towers. In
what one
Nicaraguan referred to as a private Piñata, the Central
Bank of
Nicaraguan (Banco Central de Nicaragua) transferred to
Daniel
Ortega and his close associates some US$24 million during
the
last three weeks of the Sandinista government. The result
was the
instant creation of a propertied and entrepreneurial class
of
Sandinistas and resentment from the poorer and mid-level
Sandinistas who got little or nothing.
The issue of dealing with the Piñata became a political
battlefront in 1991, when conservative members of the
National
Assembly sponsored a proposal to revoke the Piñata laws.
In June
1991, the National Assembly voted to pass the matter to
the
Economic Commission for study, a move that sparked debate
and
protest from the executive branch because deciding the
issue in a
legislative commission would preempt negotiation among
farmers,
trade unions, and businesses over the resolution of
property
issues. The move also marked the emergence of National
Assembly
president Alfredo César Aguirre, one of the primary
architects of
the reconciliation policy toward the Sandinistas, as the
leader
of the legislative challenge to the executive branch's
position.
As a result of reconciliation negotiations, President
Chamorro decreed two laws that would allow residents to
keep
homes awarded them in the Piñata if they owned no others.
They
also would have to pay market value for the houses if they
chose
to sell them or convert them to rental property. In
response to
the president's action, the next day the National Assembly
passed
an alternative plan, Law 133, by a vote of fifty-two to
thirtynine . Law 133 confirmed transfer of small homes and
agrarian
properties but required those who had received homes worth
more
than US$11,600 and farms larger than thirty-four hectares
to pay
market value for them within three months. The action by
the
National Assembly nullified the president's decrees of the
previous day. The assembly vote in favor of law 133 was
composed
of all fifty-one UNO deputies and one independent; the
thirtynine votes against it were from the entire Sandinista
delegation
in the first parliamentary session they had attended since
the
property law was introduced in June.
On September 11, 1991, President Chamorro vetoed as
unconstitutional twenty-one of thirty-two clauses in the
new
property law. On December 10, a group of nine deputies
from the
UNO and the Sandinista delegation, calling itself the
"Center
Group," (Grupo de Centro--GC) demanded a vote on the veto.
When
the vote was held four days later, several of the UNO
deputies of
that group and the delegation of thirty-nine Sandinistas
voted to
support the presidential veto, touching off accusations
that the
executive branch had bought the UNO votes.
The conflict was defined by principal players as an
important
step in the process of establishing a state of law.
National
Assembly president Alfredo César Aguirre viewed
invalidating the
property title transfer as essential for preserving
respect for
written agreements because he felt the Sandinistas had
abused the
transition period by passing laws that contravened the
transition
agreements. Minister of Presidency Antonio Lacayo
countered that
the government was bound to respect the laws transferring
title
passed by the Sandinista assembly because that assembly
had the
legal authority to pass those laws, despite its lame-duck
status.
To revoke those titles, he argued, would be to approve
ex-post-
facto laws and undermine respect for proper law passage.
More important, however, was how the land-transfer
issue
catalyzed change in both the Sandinista movement and the
UNO
coalition. The Piñata was pointed to as one of the major
causes
of the vocal demands for democratization within the
Sandinista
movement and one of the principal reasons for the
disaffection of
mid-level and lower-ranking Sandinistas who sought new
political
alternatives. The Piñata also appeared to be one of the
major
causes of the solidification of the UNO bloc in the
National
Assembly, which became a significant source of power and a
weighty counterpoint to the Chamorro government.
The threat to the Sandinistas was multifold, both
materially
and politically. Reflecting the seriousness of the
problem, when
the legislation to repeal the land transfer was
introduced,
former president Daniel Ortega warned that war could
return and
voiced what was widely interpreted as a death threat
against UNO
National Assembly deputies. Protesting the repeal bill,
Sandinista demonstrators occupied six city halls,
including the
city hall of Managua, and three radio stations. Besides
depriving
top Sandinistas of their homes and new livelihoods, the
repeal
attempt also Piñata underscored the gap between the
Sandinista
elite and the poor.
The government's inability to resolve property issues
was
also blamed for the stagnation and the subsequent
deterioration
of the nation's economy. The lack of substantial domestic
and
foreign investment was viewed as a vote of no confidence
in the
government's handling of private property tissues and its
commitment to impartial treatment of private investment.
Despite
mechanisms subsequently developed by the government to
consider
property claims on a case-by-case basis, the Piñata
remained a
volatile issue.
Data as of December 1993
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