US embassy cable - 05PORTAUPRINCE1667

UNCLAS SECTION 01 OF 05 PORT AU PRINCE 001667 
 
SIPDIS 
 
WHA/CAR 
WHA/EPSC 
INR/IAA (BEN-YEHUDA) 
TREASURY FOR ALLEL RODRIGUEZ, GERGORY BERGER, WILLIAM 
BALDRIDGE, LARRY MCDONALD 
USDOC FOR 4322/ITA/MAN/WH/OLAC (SMITH, S.) 
EB/IFD/OIA/JPROSELI 
L/CID/JNICOL 
 
E.O. 12958: N/A 
TAGS: CASC, EFIN, EINV, KIDE, HA, OPIC, POGV 
SUBJECT: HAITI: 2005 REPORT ON INVESTMENT DISPUTES AND 
EXPROPRIATION CLAIMS 
 
REF: STATE 70014 
 
The Embassy is aware of ten (10) investment disputes against 
private citizens and expropriation claims against the 
Government of Haiti by U.S. citizens.  In addition to these 
cases, the Embassy has provided assistance to a number of 
other U.S. citizens that have investment disputes with 
private persons or entities in Haiti.  In all cases, 
especially those involving occupation of land by squatters, 
satisfactory resolution has been hindered by problems in 
Haiti's legal system and compounded by the political crisis 
of 2004, which resulted in the formation of the Interim 
Government of Haiti (IGOH).  The IGOH, supported by the 
international community, has worked to establish a credible, 
effective judiciary and police force.  However, progress has 
been minimal, especially with respect to civil/commercial 
cases.  Many claimants opt to settle their disputes out of 
court rather than rely on the justice system, which has 
traditionally been marred by incompetence, corruption, and a 
lack of resources. 
 
1. (A)  Claimant A 
 
(B)  1973 
 
(C)  According to information provided by Claimant A (a U.S. 
citizen who has not signed a Privacy Act Waiver), in 1970 
Claimant signed a 99 year agreement with the GOH to establish 
a privately financed, privately administered free enterprise 
zone on the Haitian island of Tortuga.  Under the agreement, 
the GOH would halve the profits of the zone but full 
management authority would rest with the Free Port Authority, 
under the control of Claimant A. 
 
Prospective investors would obtain all necessary permits and 
other administrative needs from the Free Port Authority, not 
the GOH.  The contract waived the jurisdiction of Haitian 
courts over the project.  Under pressure from the GOH, the 
agreement was renegotiated in 1972 but remained substantively 
the same.  By 1973, Claimant A claims to have invested 
approximately $2.5 million in the project. 
 
Claimant A reports that in February 1973 the GOH effectively 
seized Claimant's investment and nullified the contract, 
asserting the jurisdiction of Haitian courts despite the 
provisions in the contract.  Claimant A asserts that the GOH 
legitimized the contract nullification through illegitimate 
proceedings in the Haitian courts.  Claimant A further 
alleges that attempts to resolve the claim were frustrated by 
many short-lived and illegitimate governments in Haiti. 
 
The U.S. Embassy has intervened on several occasions with the 
GOH on Claimant A's behalf, urging that the case be resolved 
promptly and equitably.  In March 1997, the U.S. Ambassador 
wrote President Preval, asking him to meet with Claimant A's 
attorney to discuss a plan for an out-of-court settlement. 
In December 1997, Claimant A met with representatives of 
President Preval in an effort to revitalize discussions 
regarding the future of the project.  The U.S. Embassy 
further called the matter to the attention of President 
Preval in an invitation to meet with Claimant A. The GOH 
agreed to send a delegation, including the State Secretary 
for Tourism and two members of the President's personal 
staff, to Texas to meet with Claimant A in June 1998. 
 
Most recently, in June 2002, Claimant again contacted the 
Embassy for assistance in re-opening negotiations with the 
Government of Haiti.  The Embassy contacted Martine Deverson, 
then Minister of Tourism, regarding the status of Claimant 
A's request for negotiations.  She informed the Embassy that 
the Haitian court had indeed revoked the claimant's 
concession.  She assured the Embassy that the Ministry of 
Justice was prepared to reconsider any proof Claimant A has 
of justification for a decision to the contrary, including 
original supporting documents or a new proposal for review. 
In 2005, the Embassy attempted, but was unable, to contact 
Claimant A. 
 
 
2. (A)  Claimant B 
 
(B)  1996 
 
(C)  Property belonging to Claimant B's family (U.S. 
citizens, who have not signed Privacy Act Waivers) in the 
Delmas area of Port-au Prince, was invaded by persons who 
cleared the land and began constructing homes on it.  The 
squatters acted with overt encouragement from the Deputy 
Mayor of Delmas, who made public statements to the effect 
that the Municipality was expropriating the land.  Claimant 
B's family secured court orders affirming their clear title 
to the land and sought GOH enforcement of the orders.  In 
1998, the Ambassador sought the intervention of the 
Ministries of the Interior and Justice, wrote the Mayor of 
Delmas regarding the matter, and raised the matter with 
President Preval.  Pursuant to court order, the Haitian 
National Police cleared the land of squatters on two 
occasions, but the matter is not yet resolved.  In 2005, 
Claimant B told the Embassy that the last change in the case 
occurred in 2002, when Claimant B attempted to retake 
possession of the disputed property, but was shot at and 
chased away by the squatters. 
 
 
3. (A)  Claimant C 
 
(B)  1996 
 
(C)  Claimant C is an American-held company (that has not 
signed a Privacy Act Waiver) with a copper mining concession 
in the Artibonite region of Haiti, near the northern city of 
Gonaives. Since 1985, the U.S. company has invested USD 9 
million in the operation.  In 1996, local Haitian government 
authorities challenged Claimant C's right to the concession, 
and the property was seized and held from September 1996 
until the spring of 1998.  The company successfully defended 
its claim in district court of Gonaives and again in appeals 
court in Gonaives when the government appealed the ruling in 
favor of the company. 
 
Claimant C regained control of the disputed mining property 
subsequent to the appeals court decision.  The case was 
appealed by the government to the Supreme Court, which ruled 
in favor of Claimant C in 1998.  The Embassy considers the 
case closed. 
 
 
4. (A)  Claimant D 
 
(B)  1983 
 
(C)  Claimant D (a U.S. citizen who has not signed a Privacy 
Act Waiver) alleges that land purchased by his company in 
Grand Godet in the south of Haiti in 1972 was illegally 
confiscated by the GOH in 1983.  Jean Marie Chanoine, a 
member of Jean Claude Duvalier's cabinet, allegedly gave the 
order to confiscate the property.  The Administration General 
des Contributions occupied the land and then sold it to 
Chanoine.  Claimant D's attorney obtained a favorable court 
judgment in 1990, but Claimant D has not been able to retake 
possession of the property.  Claimant D is currently seeking 
additional judicial intervention.  The Embassy has repeatedly 
raised the issue with GOH officials, most recently in a 
letter to President Preval in 1998.  However, since then, the 
claimant has not sought further assistance, and the Embassy 
has attempted, but been unable, to contact Claimant D. 
 
 
5. (A)  Claimant E 
 
(B)  1988 
 
(C)  Claimant E's (a U.S. Citizen who has not signed a 
Privacy Act Waiver) father purchased property in 1978, which 
was originally part of the estate of former President Paul 
Magloire.  After Magloire left office in 1957, the land was 
nationalized by executive order.  The Magloire family 
disputes the original seizure and purchase of the land and 
filed suit against both Claimant E and the GOH to reclaim the 
land.  Haiti's Supreme Court ruled for the Magloires and 
ordered the eviction of Claimant E.  The court subsequently 
ordered a stay of the eviction.  The matter now rests in the 
political realm; Claimant E is seeking to have the GOH 
reconfirm the original sale.  The U.S. Ambassador called this 
matter to the attention of President Preval in a January 1998 
letter.  As of 2005, this case has not been settled and 
Claimant E is still attempting to have the original sale 
recognized.  However, Claimant E is living on the property 
purchased in the sale. 
 
 
6. (A)  Claimant F 
 
(B)  1996 
 
(C)  Claimant F (a U.S. citizen who has not signed a privacy 
act waiver) owns a building in the Delmas section of Port au 
Prince that has been used as a GOH public secondary school 
for the past four years.  Despite a court judgment against 
the mayor of Delmas in 1996 and a promise from the Ministry 
of Education to vacate the property, classes in the building 
continued.  The Embassy wrote to the Ministry of Education in 
May 1999 to ask that the school vacate the property at the 
end of the current term.  According to Claimant F,s lawyer, 
who the Embassy contacted in 2005, Claimant F and the GOH 
reached an agreement and the GOH has signed a contract to 
rent Claimant F,s property thereby settling the dispute. 
The Embassy considers this case closed. 
 
 
7. (A)  Claimant G 
 
(B)  2000 
 
(C)  Claimant G, a U.S. company operated in Haiti by two U.S. 
citizens (who have not signed Privacy Act Waivers), is 
involved in court cases pending in both Texas and Haitian 
courts against another Texas-based U.S. company, over 
ownership of Claimant G's assets.  In February 2000, the GOH 
imposed a large fine on Claimant G for customs violations and 
temporarily shut down Claimant G's operations.  Claimant G 
protested this move as an expropriation.  Claimant G and the 
GOH settled on a fine and payment schedule shortly 
thereafter, and Claimant G's business reopened. 
 
When Claimant G ceased making the agreed upon payments in 
June 2000, the GOH moved to take all proceeds from sales at 
the company, effectively taking control of the company's 
operations.  Embassy officers met frequently with GOH 
officials to urge them to give Claimant G all due 
consideration under Haitian and international law, and to 
ensure the safety of the U.S. citizens affiliated with 
Claimant G.  However, due to the ongoing U.S. and Haitian 
court cases, the USG has not taken a position on the merits 
of either Claimant G or the other U.S. company's claims. 
 
On October 6 2004, Claimant G was found guilty of violating 
the Foreign Corrupt Practices Act by authorizing the payment 
of over USD 500,000 to Haitian customs officials in 1998 and 
1999 to avoid more than USD 1.5 million in customs duties. 
According to Claimant G,s lawyer, who the Embassy contacted 
in 2005, Claimant G,s conviction in the United States 
effectively ended the Claimant G,s dispute in Haiti.  The 
Embassy considers the case closed. 
 
 
8. (A)  Claimant H 
 
(B)  2002 
 
(C)  In 1956, Claimant H's (a U.S. citizen who has not signed 
a Privacy Act Waiver) father began to build an experimental 
farm and ecological reserve on land he bought from several 
smallholders in Kenskoff, west of Port-au-Prince.  On 
approximately 30 acres, the reserve protects plant species 
indigenous to Haiti, Central and South America, Asia and 
Africa.  After his death in 1992, his daughter, Claimant H, 
continued to use the Farm for ecological and agricultural 
education. 
 
Between 1998 and 2002, Claimant H's family experienced 
increasing difficulties with neighbors including theft and 
poaching, and police protection has been inadequate.  A 
well-organized, well-funded group with alleged ties to 
several government officials built a large road through 
Claimant H's property and prepared to build buildings, all 
without approval from Claimant H.  The group also advertised 
pieces of the land for sale to the public. 
 
Claimant H obtained a court order to stop construction while 
the land ownership issue was settled, but the order was not 
enforced and construction continued.  The claimant and 
Claimant H's family say that their lives were threatened and 
they were denied access to their property.  Embassy officers 
met with various Haitian officials and Ministers to request a 
response to Claimant H's complaints and enforcement of the 
court order.  Claimant H also appealed to members of the 
international community in Port-au-Prince, including NGO and 
international organization workers, to frequent the site and 
show an interest.  Finally, Embassy officers approached the 
owner of the property neighboring the claimant's, and through 
whose property the access road had been cut (with the 
property owner's consent), and noted to the neighbor that he 
could be held liable on racketeering charges if he abetted 
the activities of the group seeking to seize claimant's land. 
 The neighbor agreed to close access to the group, and 
construction activities ceased. 
 
In 2005, Claimant H,s lawyer informed the Embassy that the 
courts ruled in the claimant's favor.  However, the paperwork 
to execute the decision has not yet been executed.  Claimant 
H's lawyer expects that the dispute may continue until the 
results are part of the public record. 
 
 
9. (A)  Claimant I 
 
(B)  2004 
 
(C)  Claimant I (a U.S. corporation that has not signed a 
Privacy Act Waiver) operates a cellular network in Haiti. 
Claimant J's contract dispute with the Interim Government of 
Haiti (IGOH) about its proposed upgrade to GSM technology 
began in mid-2004.  Claimant J started negotiations with the 
IGOH from the position that their contact would require only 
a small amendment to accommodate an upgrade to GSM.  The 
IGOH, on the other hand, argued that Claimant I would need to 
negotiate a new contract. 
 
Throughout the dispute, the Embassy has advocated on behalf 
of Claimant I, arguing that the government should take a 
technology-neutral position.  The Embassy has also encouraged 
both sides to negotiate in good faith and settle the matter 
as quickly as possible.  On behalf of Claimant I, the 
Ambassador brought the Embassy,s technology neutrality 
position to the attention of the Prime Minister, and the 
Economic Counselor discussed Claimant I,s situation with the 
Minister of Transportation and Public Works on several 
occasions.  Both the IGOH and Claimant I say they are close 
to signing a renegotiated contract, which is a compromise 
between their original positions.  The Embassy will continue 
to monitor the negotiations, and push for a speedy and 
equitable resolution. 
 
 
10. (A)  Claimant J 
 
(B)  2004 
 
(C)  Claimant J (a U.S. Citizen who has not signed a Privacy 
Act Waiver) asserts that in 2000, the SONAPI industrial park 
took possession of his machinery, worth approximately USD 6.5 
million, because of rental debt variously described as USD 
35,000 or 100,000.  After the departure of President Aristide 
in February 2004, Claimant J attempted to get his equipment 
back, however he was told that it had been destroyed in the 
rioting that took place around the time of Aristide,s 
departure.  Claimant J says he knows this assertion is false. 
 He claims that in October 2002, SONAPI sold his equipment to 
well connected businessmen and gave the profits to members of 
the Aristide government. 
 
Since December 2004, Claimant J has asked for indemnification 
by the IGOH.  His case was recently transferred from SONAPI 
to the Minister of Finance for a final decision.  The Embassy 
has not taken a position on the details of the case, but has 
pushed the Ministry to provide Claimant J with a timely 
response.  The Ambassador wrote a letter supporting the 
timely adjudication of Claimant J,s case and the Economic 
Counselor met with the Minister of Finance several times to 
discuss Claimant J's case.  In June 2005, the Interim 
Government of Haiti (IGOH) and Claimant J entered into 
negotiations to settle the dispute.  The Embassy will 
continue to monitor Claimant J,s case. 
 
 
 
Claimant Names 
 
Claimant A: Greg Peterson, Dupont Caribbean Development 
Claimant B: Roy Benjamin Family 
Claimant C: First City Development Corporation of Haiti S.A. 
Claimant D: Tomar Industries of Haiti 
Claimant E: Monnin Family 
Claimant F: Jules Moliere 
Claimant G: Rice Corporation of Haiti 
Claimant H: Jane Wynne and Family 
Claimant I: Comcel 
Claimant J: Antoine Medard, A&M Industries 
FOLEY