[Congressional Record Volume 141, Number 158 (Thursday, October 12, 1995)]
[Senate]
[Pages S15106-S15113]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         RECESS UNTIL 7:30 P.M.

  Mr. DASCHLE. Mr. President, I ask unanimous consent that the Senate 
stand in recess until 7:30 this evening, and that when the Senate 
reconvenes, the time between 7:30 and 8:30 be equally divided in the 
usual form.
  There being no objection, at 6:38 p.m., the Senate recessed until 
7:29 p.m.; whereupon, the Senate reassembled when called to order by 
the Presiding Officer (Mr. Bennett).
  The PRESIDING OFFICER. The Chair, in his capacity as a Senator from 
Utah, suggests the absence of a quorum. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. PELL. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BOND. Mr. President, I rise to address the vote for cloture on 
the Dole-Helms amendment to the Sanctions Act.
  I will be voting for cloture because I wish to see this process move 
along. This bill has been pending all year, and it is time we addressed 
it and moved on. In voting for cloture, however, I want to make clear 
that I do not support this legislation. I think it is a mistake, and I 
do not believe it will achieve the intended results.
  First, this bill will impose trade sanctions on many of our closest 
allies and trading partners throughout the world. That is not going to 
help the people of Cuba in any way, but it is going to hurt American 
companies doing business around the world.
  Second, the bill creates an unprecedented right of action for legal 
claims of former property owners in Cuba. Not only will that impose a 
severe burden on our court system, it will do so without, in anyway 
helping the people who need it most--families and small property owners 
who lost their homes and businesses to the Castro regime. This new 
right of action will also put us into conflict with some companies 
headquartered in some of our closest allies who are now operating 
plants in Cuba.
  As a result of both of these problems, the United States will find 
itself under immediate attack in the World Trade Organization.
  This legislation will only add to the already overwhelming misery of 
the Cuban people. I don't want to do that, and I know none of my 
colleagues do either. Certainly, we all want to see an end to the 
Castro regime--a cold war relic whose time has passed. I believe, 
however, that Castro's days are numbered. Communism has fallen around 
the world, and it will fall in Cuba as well. We should let it fall of 
its own weight, and then be there to assist the Cuban people in 
developing and nurturing a new democratic successor. This bill will not 
achieve that goal--in fact, it will move in the other direction. I urge 
Senators to oppose it.
  Mr. PELL. I would like to speak for 2 minutes.
  The PRESIDING OFFICER. The Senator is recognized for 2 minutes.
  Mr. PELL. Thank you.
  As I have stated on previous occasions, my usual practice is to 
always vote for cloture as a matter of principle. Indeed, in my more 
than 34 years in the Senate, I have cast over 330 votes in favor of 
cloture and have only voted otherwise very rarely.
  The vote tonight is one of those rare occasions, because I feel so 
strongly about the issue at hand. I believe the best American policy in 
Cuba will be one of openness and regular relations. My several visits 
to that island over the years have only fortified my belief that the 
Communist regime there will wither under the light of expanded contact 
with the United States.
  Having in other periods of life lived under communism, I know that 
when exposed to freedom and the market economy it dies of its own 
ineptitude.
  The bill before us has just the opposite effect, and extended debate 
is warranted to make the case against it. So I shall be casting my 
vote, with some reluctance, against cloture.
  Mr. President, I ask unanimous consent that material I have here be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:


                                     U.S. Department of State,

                                                   Washington, DC.

     Legal Considerations Regarding Title III of the Libertad Bill

       The U.S. Government has long condemned as a violation of 
     international law the confiscation by the Cuban Government of 
     properties taken from U.S. nationals without compensation, 
     and has taken steps to ensure future satisfaction of those 
     claims consistent with international law. Congress recognized 
     the key role of international law in this respect. Title V of 
     the International Claims Settlement Act of 1949, as amended, 
     pursuant to which the Foreign Claims Settlement Commission 
     (FCSC) certified the claims against Cuba of 5,911 U.S. 
     nationals, accordingly applies to claims ``arising out of 
     violations of international law.''
       The State Department, however, opposes the creation of a 
     civil remedy of the type included in Title III of the ``Cuban 
     Liberty and Democratic Solidarity (LIBERTAD) Act of 1995'' 
     (the ``LIBERTAD bill'') currently under consideration by the 
     Congress. The LIBERTAD bill would be very difficult to defend 
     under international law, harm U.S. businesses exposed to 
     copy-cat legislation in other countries, create friction with 
     our allies, fail to provide an effective remedy for U.S. 
     claimants and seriously damage the interests of FCSC 
     certified claimants. It would do so by making U.S. law 
     applicable to, and U.S. courts forums in which to adjudicate 
     claims for, properties located in Cuba as to which there is 
     no United States connection other than the current 
     nationality of the owner of a claim to the property. 
     Specifically, the LIBERTAD bill would create a civil damages 
     remedy against those who, in the language of the bill, 
     ``traffic'' in property of a U.S. national. The bill defines 
     so-called ``trafficking'' as including, among other things, 
     the sale, purchase, possession, use, or ownership of property 
     the claim to which is owned by a person who is now a U.S. 
     national.
       The civil remedy created by the LIBERTAD bill would 
     represent an unprecedented extra-territorial application of 
     U.S. law that flies in the face of important U.S. interests. 
     Under international law and established state practice, there 
     are widely-accepted limits on the jurisdictional authority of 
     a state to ``prescribe,'' i.e., to make its law applicable to 
     the conduct of persons, as well as to the interests of 
     persons in things. In certain circumstances a state may apply 
     its law to extra-territorial conduct and property interests. 
     For example, a state may do so in limited circumstances when 
     the conduct has or is intended to have a ``substantial 
     effect'' within its territory. The Senate version of the bill 
     appears to imply that so-called ``trafficking'' in 
     confiscated property has a ``substantial effect'' within the 
     United States. Some have explicitly defended the LIBERTAD 
     bill on this ground.
       Asserting jurisdiction over property located in a foreign 
     country and expropriated in violation of international law 
     would not readily meet the international law requirement of 
     prescription because it is difficult to imagine how 
     subsequent ``trafficking'' in such property has a 
     ``substantial effect'' within the territory of the United 
     States. It is well established that under international law 
     ``trafficking'' in these confiscated properties cannot affect 
     Cuba's legal obligation to compensate U.S. claimants for 
     their losses. The actual effects of an illegal expropriation 
     of property are experienced at the time of the taking itself, 
     not at any subsequent point. An argument that subsequent use 
     or transfer of expropriated property may interfere with the 
     prospects for the return of the property would be hard to 
     characterize as a ``substantial effect'' under international 
     law. Under international law, the obligation with respect to 
     the property is owed by the expropriating state, which may 
     satisfy that obligation through the payment of appropriate 
     compensation in lieu of restitution.
       As a general rule, even when conduct has a ``substantial 
     effect'' in the territory of a state, international law also 
     requires a state to apply its laws to extra-territorial 
     conduct only when doing so would be reasonable in view of 
     certain customary factors. Very serious questions would arise 
     in defending the reasonableness under international law of 
     many lawsuits permitted by Title III of the LIBERTAD bill. 
     The customary factors for judging the reasonableness of 
     extra-territorial assertions of jurisdiction measure 
     primarily connections between the regulating 

[[Page S 15107]]
     state, on one hand, and the person and conduct being regulated, on the 
     other. Title III would cover acts of foreign entities and 
     non-U.S. nationals abroad involving real or immovable 
     property located in another country with no direct connection 
     to the United States other than the current nationality of 
     the person who holds an expropriation claim to that property. 
     Moreover, the actual conduct for which liability is created--
     private transactions involving the property--violates no 
     established principle of international law. Another customary 
     measure of reasonableness is the extent to which the exercise 
     of jurisdiction fits with international practice. The 
     principles behind Title III are not consistent with the 
     traditions of the international system and other states have 
     not adopted similar laws.
       International law also requires a state assessing the 
     reasonableness of an exercise of prescriptive jurisdiction to 
     balance its interest against those of other states, and 
     refrain from asserting jurisdiction when the interests of 
     other states are greater. It would be very problematic to 
     argue that U.S. interests in discouraging ``trafficking'' 
     outweigh those of the state in which the property is 
     located, be it Cuba or elsewhere, International law 
     recognizes as compelling a state's interests in regulating 
     property present within its own borders. The United States 
     guards jealously this right as an essential attribute of 
     sovereignty. In contrast, discouraging transactions 
     relating to formerly expropriated property has little 
     basis in state practice.
       That international law limits the United States' exercise 
     of extra-territorial prescriptive jurisdiction does not imply 
     that U.S. courts must condone property expropriations in 
     cases validly within the jurisdiction of the United States. 
     Our courts may refuse to give affect to an expropriation 
     where either (i) the expropriation violated international law 
     and the property is present in the United States or (ii) in 
     certain cases, the property has a legal nexus to a cause of 
     action created by a permissible exercise of prescriptive 
     jurisdiction. In fact, generally speaking, our laws prohibit 
     our courts from applying the ``Act of State'' doctrine with 
     respect to disputes about properties expropriated in 
     violation of international law. If applied the doctrine might 
     otherwise shield the conduct of the foreign state from 
     scrutiny. Indeed, in a number of important cases the 
     Department of State has actively and affirmatively supported 
     these propositions in cases before U.S. courts to the benefit 
     of U.S. claimants, including with respect to claims against 
     Cuba. The difficulty with Title III of the LIBERTAD bill 
     stems not from its willingness to disaffirm expropriations 
     that violate international law, but from its potentially 
     indefensible exercise of extra-territorial prescriptive 
     jurisdiction.
       Some supporters of the LIBERTAD bill have advanced 
     seriously flawed arguments in defending the extra-territorial 
     exercise of jurisdiction contemplated by Title III. Some have 
     defended Title III on the deeply mistaken assumption that 
     international law recognizes the wrongful nature of so-called 
     ``trafficking'' in confiscated property. No support in state 
     practice exists for this proposition, particularly with 
     regard to property either held by a party other than the 
     confiscator or not confiscated in violation of international 
     claims law (if, for example, the original owners were 
     nationals of Cuba at the time of loss.) Many of the suits 
     allowed by Title III would involve ``trafficking'' in 
     properties of this type, where an internationally wrongful 
     act would seem extremely difficult to establish.
       Regrettably, the support in international state practice 
     offered by some for viewing so-called ``trafficking'' as 
     wrongful has generally confused a state's power to assert 
     jurisdiction over conduct with the ``Act of State'' doctrine, 
     discussed previously. The unwillingness of our courts to give 
     effect to foreign state expropriations violative of 
     international law in matters over which they have valid 
     jurisdiction under international law, however, does not imply 
     that international law recognizes as wrongful any subsequent 
     entanglement with the property. Others have suggested that 
     general acceptance of domestic laws relating to conversion of 
     ill-gotten property makes ``trafficking'' wrongful under 
     international law. This argument is extremely unpersuasive as 
     many universally accepted domestic laws, including for 
     example most criminal laws, have no international law status. 
     So-called ``trafficking'' has no readily identifiable 
     international law status. International law does condemn a 
     state's confiscation of property belonging to a foreign 
     national without the payment of prompt, adequate and 
     effective compensation. In such circumstances the U.S. 
     Government has been largely successful in assuring that U.S. 
     claimants obtain appropriate compensation, precisely because 
     of the protection afforded by international law.
       Some supporters have maintained incorrectly, in addition, 
     that Title III is similar to prior extra-territorial 
     exercises of jurisdiction by the United States over torts 
     committed outside the United States. The Alien Tort Statute 
     (ATS) and the Torture Victim Protection Act of 1991 (TVPA) 
     have been cited as examples in this context. The assertion is 
     plainly false and the LIBERTAD bill differs significantly 
     from the examples cited. While the ATS and TVPA do empower 
     U.S. courts to adjudicate certain tortious acts committed 
     outside the United States, they do so only with respect to 
     acts that violate international law. The ATS covers only 
     torts ``committed in violation of the law of nations or a 
     treaty of the United States.'' Similarly, the TVPA creates 
     liability for certain conduct violating fundamental 
     international norms of human rights (i.e. torture and extra-
     judicial killing). In contrast, as explained previously, 
     supporters of the LIBERTAD bill have failed to identify any 
     basis in international law permitting the use of U.S. courts 
     for the adjudication of suits regarding extra-territorial 
     ``trafficking.''
       Title III of the LIBERTAD bill also deviates substantially 
     from accepted principles of law related to the immunity of 
     foreign sovereign states, as well as their agencies and 
     instrumentalities. Although much of the discussion of the 
     bill has focussed on suits against certain foreign 
     corporations and individuals, in its current form the Senate 
     version of the bill would allow a suit to be brought against 
     ``any person or entity, including any agency or 
     instrumentality of a foreign state in the conduct of 
     commercial activity'' that ``traffics'' in confiscated 
     property. Since ``trafficking'' is defined to include such 
     things as possessing, managing, obtaining control of, or 
     using property, it would appear at a minimum that Title III 
     authorizes suits against many Cuban or other foreign 
     governmental agencies or instrumentalities. To the extent 
     Title III provides for such suits, they would be highly 
     problematic and difficult to defend.
       The Foreign Sovereign Immunities Act (FSIA), enacted in 
     1976 after careful deliberation, is consistent with 
     international law principles of foreign sovereign immunity. 
     To the extent the LIBERTAD bill would permit suits against 
     agencies and instrumentalities of foreign governments it 
     would go far beyond current exemptions in the FSIA. The 
     LIBERTAD bill, unlike the FSIA, would not require the agency 
     or instrumentality to be ``engaged in commercial activity in 
     the United States.'' Moreover, the LIBERTAD bill contemplates 
     suits against agencies or instrumentalities of foreign states 
     for any conduct that constitutes so-called ``trafficking''; 
     as defined in the LIBERTAD bill this notion is broader than 
     owning or operating property, the FSIA standard.
       Similarly, to the extent the provisions of the LIBERTAD 
     bill permitting suits against ``entities'' is construed to 
     authorize suits against foreign governments as well, it would 
     go well beyond current exemptions in the FSIA and under 
     international law for claims involving rights in property. 
     Under the FSIA, a foreign state (as distinguished from its 
     agencies and instrumentalities) is not immune only when the 
     ``property or any property exchanged for such property is 
     present in the United States in connection with a commercial 
     activity carried on in the United States by the foreign 
     state.'' The LIBERTAD bill would appear not to impose those 
     requirements. In addition, suits against ``entities'' would 
     in these circumstances include those brought against foreign 
     governments other than Cuba that may have acquired 
     confiscated property in violation of no principle of 
     international claims law. These potential expansions of the 
     exceptions from the immunity of foreign states, as well as 
     their agencies and instrumentalities, from the jurisdiction 
     of U.S. courts and their implications for U.S. liability in 
     other countries represent matters of great concern.
       Some have suggested that even though the creation of a 
     cause of action such as that contemplated in Title III of the 
     LIBERTAD bill is not currently defensible under international 
     law, the United States should enact these provisions of the 
     bill to promote the development of new international law 
     principles in this area. Suggestions of this sort in this 
     context rest on a dubious premise of how state practice 
     contributes to international law. While the practice of 
     states represents a source of international law, state 
     practice makes law only when it is widespread, consistent and 
     followed out of a sense of legal obligation. The enactment of 
     Title III in the face of serious questions about its 
     consistency with international law, and without the support 
     of the international community, would not contribute 
     positively to international law relating to the expropriation 
     of property.
       In addition to being very difficult to defend under 
     international law, enactment of Title III would also 
     undermine a number of important U.S. interests connected to 
     these significant international law concerns. General 
     acceptance of the principles reflected in Title III would 
     harm U.S. business interests around the world. At present and 
     in general, the laws of the country in which the property 
     lies govern the rights to that property, particularly with 
     respect to real property. United States businesses investing 
     all over the world benefit from their ability to rely on 
     local law concerning ownership and control of property. Under 
     the precedent that would be set by Title III, a U.S. business 
     investing in property abroad could find itself hailed into 
     court in any other country whose nationals have an unresolved 
     claim to that property. Such a precedent could increase 
     uncertainties for U.S. companies throughout the world. 
     Perversely, Title III would hurt U.S. businesses most 
     directly in Cuba. U.S. businesses seeking to rebuild a free 
     Cuba once a transition to democracy begins will find 
     themselves easy targets of Title III suits, as U.S. 
     corporations generally are subject to the jurisdiction of our 
     courts.
       Congress should expect that the enactment of Title III of 
     the LIBERTAD bill, with its broad extra-territorial 
     application of U.S. law, significant departures from 
     established claims practice and possible contravention 

[[Page S 15108]]
     of international law, will create serious disputes with our closest 
     allies, many of whom have already voiced their objections. 
     The United States must expect the friction created by Title 
     III to hurt efforts to obtain support in pressing for change 
     in Cuba. Moreover, once the transition to democracy does 
     begin, Title III will greatly hamper economic reforms and 
     slow economic recovery as it will cloud further title to 
     confiscated property.
       Perhaps most importantly, Title III of the LIBERTAD bill 
     would not benefit U.S. claimants. The private right of action 
     created by Title III, furthermore, would likely prove 
     ineffective to U.S. claimants. Past experience suggests that 
     countries objecting to the extra-territorial application of 
     U.S. law reflected in Title III, most likely some of our 
     closest allies and trading partners, could be expected to 
     take legal steps under their own laws to block adjudication 
     or enforcement of civil suits instituted against their 
     nationals. Moreover, many foreign entities subject to suit 
     would deem U.S. jurisdiction illegitimate and fail to appear 
     in our courts. Title III would in those circumstances merely 
     produce unenforceable default judgements. In addition, some 
     commentators have estimated potential law suits to number in 
     the hundreds of thousands, so the LIBERTAD bill would also 
     clog our courts and result in enormous administrative costs 
     to the United States. As the lawsuits created under Title III 
     might not result in any increase in or acceleration of 
     compensation for U.S. claimants, these costs would be 
     unjustifiable.
       In so far as it departs from widely accepted international 
     claims law, Title III of the LIBERTAD bill undermines widely-
     established principles vital to the United States' ability to 
     assure that foreign governments fulfill their international 
     obligations for economic injury to U.S. nationals. In doing 
     so, Title III hurts all U.S. citizens with claims against 
     another government. With respect to claims against Cuba 
     specifically, the cause of action contemplated in Title III 
     of the LIBERTAD bill will hamper the ability of the U.S. 
     Government to obtain meaningful compensation for certified 
     claimants. Consistent with our longstanding and successful 
     claims practice, at an appropriate time when a transition to 
     democracy begins in Cuba, the United States will seek to 
     conclude a claims settlement agreement with the Cuban 
     government covering certified claimants, or possibly create 
     some other mechanism to assure satisfaction of their claims. 
     If Title III is enacted into law and U.S. claimants have an 
     opportunity, at least on paper, to receive compensation for 
     claimed properties from third party ``traffickers,'' the 
     Cuban Government may simply refuse to address the claims on 
     the grounds that the claimants must pursue alternative 
     remedies in U.S. courts. Yet, as indicated previously the 
     prospects for broad recoveries in this manner are very poor.
       Even if Cuba accepts its international law responsibilities 
     with respect to U.S. claims, the United States can expect 
     that a large quantity of private suits would profoundly 
     complicate claim-related negotiations, as well as subsequent 
     claims payment procedures. Cuba might easily demand that the 
     United States demonstrate that each person holding an 
     interest in any of the nearly 6,000 certified claims, and 
     possibly the tens of thousands of uncertified claims, has not 
     already received compensation via a lawsuit or private 
     settlement. As the United States will not have records of 
     private suits, let alone non-public out of court settlements, 
     doing so would be extremely difficult. In addition, dealing 
     with unpaid judgments in this context would likely prove 
     particularly difficult.
       Finally, the Castro regime has already used, and if enacted 
     into law would continue to use, the civil cause of action 
     contemplated by Title III of the LIBERTAD bill to play on the 
     fears of ordinary citizens that their homes or work places 
     would be seized by Cuban-Americans if the regime falls. The 
     United States must make it clear to the Cuban people that 
     U.S. policy toward Cuban property claims reflects established 
     international law and practice, and that the future 
     transition and democratic governments of the Cuban people 
     will decide how best to resolve outstanding property claims 
     consistent with international law.
                                                                    ____

                                             Executive Office     
                                                 of the President,


                              Office of Management and Budget,

                               Washington, DC, September 20, 1995.

                   Statement of Administration Policy

       (This statement has been coordinated by OMB with the 
     concerned agencies.)


 h.r. 927--cuban liberty and democratic solidarity act--(burton (r) in 
                           and 43 cosponsors)

       The Administration supports the central objective of H.R. 
     927, i.e., to promote a peaceful transition to democracy in 
     Cuba. However, H.R. 927 contains a number of seriously 
     objectionable provisions that would not advance U.S. 
     interests in Cuba and would damage other U.S. interests. 
     Therefore, the President's senior advisers would recommend 
     that H.R. 927 be vetoed unless the following provisions are 
     deleted or amended:
       The bill would encroach upon the President's exclusive 
     authority under the Constitution to conduct foreign affairs, 
     or otherwise unduly limit the President's flexibility, by 
     purporting to require the President or the Executive branch 
     to pursue certain courses of action regarding Cuba. Mandatory 
     provisions should be replaced with precatory language in the 
     following sections: 102(b); 104(a); 110(b); 112, 201; 202(e); 
     203(c)(1); and 203(c)(3).
       The exemption in section 102(d) from civil penalty 
     authority for activities related to research, education and 
     certain other purposes, and the burdensome requirement for an 
     agency hearing for civil penalties in other cases, greatly 
     limits the effectiveness of civil penalties as a tool for 
     improving embargo enforcement. Section 102(d) should be 
     amended to address this shortcoming.
       Section 103 should be amended to make the prohibition of 
     certain financing transactions subject to the discretion of 
     the President.
       Section 104(a) should be amended to urge U.S. opposition to 
     Cuban membership or participation in International Financial 
     Institutions (IFIs) only until a transition government is in 
     power to enable the IFIs to support a rapid transition to 
     democracy in Cuba. Section 104(b), which would require 
     withholding U.S. payments to IFIs, could place the U.S. in 
     violation of international commitments and undermine their 
     effective functioning. This section should be deleted.
       Sections 106 and 110(b), which would deny foreign 
     assistance to countries, if they, or in the case of section 
     110(b), private entities in these countries, provide 
     certain support to Cuba, should be deleted. Section 106 
     would undermine important U.S. support for reform in 
     Russia. Section 110(b) is cast so broadly as to have a 
     profoundly adverse affect on a wide range of U.S. 
     Government activities.
       Section 202(b)(2)(iii), which would bar transactions 
     related to family travel and remittances from relatives of 
     Cubans in the United States until a transition government is 
     in power, is too inflexible and should be deleted.
       Sections 205 and 206 would establish overly-rigid 
     requirements for transition and democratic governments in 
     Cuba that could leave the United States on the sidelines, 
     unable to support clearly positive developments in Cuba when 
     such support might be essential. The criteria should be 
     ``factors to be considered'' rather than requirements.
       By failing to provide stand-alone authority for assistance 
     to a transition or democratic government in Cuba, Title II 
     signals a lack of U.S. resolve to support a transition to 
     democracy in Cuba.
       Title III, which create a private cause of action for U.S. 
     nationals to sue foreigners who invest in property located 
     entirely outside the United States, should be deleted. 
     Applying U.S. law extra-territorially in this fashion would 
     create friction with our allies, be difficult to defend under 
     international law, and would create a precedent that would 
     increase litigation risks for U.S. companies abroad. It would 
     also diminish the prospects of settlement of the claims of 
     the nearly 6,000 U.S. nationals whose claims have been 
     certified by the Foreign Claims Settlement Commission. 
     Because U.S. as well as foreign persons may be sued under 
     section 302, this provision could create a major legal 
     barrier to the participation of U.S. businesses in the 
     rebuilding of Cuba once a transition begins.
       Title IV, which would require the Federal Government to 
     exclude from the United States any person who has 
     confiscated, or ``traffics'' in, property to which a U.S. 
     citizen has a claim, should be deleted. It would apply not 
     only to Cuba, but world-wide, and would apply to foreign 
     nationals who are not themselves responsible for any illegal 
     expropriation of property, and thus would create friction 
     with our allies. It would require the State Department to 
     make difficult and burdensome determinations about property 
     claims and investment in property abroad which are outside 
     the Department's traditional area of expertise.


                         pay-as-you-go scoring

       H.R. 927 would affect receipts; therefore, it is subject to 
     the pay-as-you-go requirement of the Omnibus Budget 
     Reconciliation Act (OBRA) of 1990. OMB's preliminary scoring 
     estimate is that receipts would be insignificant. Final 
     scoring of this proposal may deviate from this estimate.
                                                                    ____



                                        The Secretary of State

                               Washington, DC, September 20, 1995.
     Hon. Newt Gingrich,
     Speaker, House of Representatives.
       Dear Mr. Speaker: I am deeply concerned about H.R. 927, the 
     Cuban Liberty and Democratic Solidarity Act, which the House 
     is scheduled to consider this week. The Department of State 
     believes that in its current form this legislation would 
     damage prospects for a peaceful transition in Cuba and 
     jeopardize a number of key U.S. interests around the world. 
     For these reasons, I would recommend that the President veto 
     the bill if passed by the Congress in its current form.
       As you know, we share with the sponsors of the bill the 
     goal of promoting a peaceful transition to democracy in Cuba. 
     We have pursued that goal by maintaining a tough, 
     comprehensive economic embargo against the Cuban government 
     while reaching out to the Cuban people through licensing 
     private humanitarian aid and improved telecommunications. 
     This policy, guided by the Cuban Democracy Act, has helped to 
     force the limited but positive economic changes that are 
     taking place in Cuba.
       We believe that H.R. 927 would actual damage prospects for 
     a peaceful transition. We have consistently objected to the 
     overly rigid list of more than a dozen ``requirements'' for 
     determining when a transition or a democratic government is 
     in power. These inflexible standards for responding to what 

[[Page S 15109]]
     may be a rapidly evolving situation could leave the United States on 
     the sidelines during a transition. Moreover, by failing to 
     provide clear authority to assist even a transition or 
     democratic government that meets the bill's certification 
     requirements, the legislation fails to signal to the Cuban 
     people that the United States is prepared to assist them once 
     the inevitable transition to democracy in Cuba begins.
       In addition to damaging prospects for a rapid, peaceful 
     transition to democracy, H.R. 927 would jeopardize other key 
     U.S. interests around the globe. For example, it would 
     interfere with U.S. assistance to Russia and other nations of 
     the former Soviet Union. Other provisions would condition 
     assistance to any country if it -- or even a private entity 
     in its territory -- participates in the completion of a 
     nuclear power plant in Cuba. This kind of rigid conditioning 
     of assistance can have far-reaching consequences and may 
     interfere with our ability to advance the national interest.
       While we are firmly committed to seeking the resolution of 
     U.S. property claims by a future Cuban government, the right 
     created by the bill to sue in U.S. courts persons who buy or 
     invest in expropriated U.S. properties in Cuba, 
     (``traffickers'') is a misguided attempt to address this 
     problem. Encumbering property in Cuba with litigation in U.S. 
     courts is likely to impede our own efforts to negotiate a 
     successful resolution of U.S.-citizen claims against Cuba and 
     could hamper economic reform efforts by a transitional 
     government in Cuba. U.S. citizens and corporations with 
     certified claims have publicly opposed these provisions. In 
     addition, these provisions would create tensions in our 
     relations with our allies who do not agree with the premises 
     underlying such a cause of action. This stance would be hard 
     to defend under international law. Furthermore, we know that 
     this provision is already being used by the Castro regime to 
     play on the fears of ordinary citizens that their homes and 
     work places would be seized by Cuban-Americans if the regime 
     were to fall.
       Title III will also ultimately prove harmful to U.S. 
     business. First, it sets a precedent that, if followed by 
     other countries, would increase litigation risks for U.S. 
     companies abroad. Second, it will create a barrier to 
     participation by U.S. businesses in the Cuban market once the 
     transition to democracy begins. Because the lawsuits 
     contemplated by the bill may be brought against the United 
     States as well as foreign companies and are not terminated 
     until the rigid requirements for a democratic Cuban 
     government are satisfied, the bill erects an enormous legal 
     hurdle to participation by U.S. business in the rebuilding of 
     a free and independent Cuba.
       Finally, the provisions of the bill that would deny visas 
     to ``traffickers'' in expropriated property, which are global 
     in scope and not limited to Cuba, will create enormous 
     frictions with our allies and be both burdensome and 
     difficult to administer.
       In sum, the Department of State believes that while the 
     goals of H.R. 927 are laudable, its specific provisions are 
     objectionable and in some cases contrary to broader U.S. 
     interests, even to the goal of establishing democracy and a 
     free market in the country with active U.S. involvement. 
     Given these considerations, the Department of State can not 
     support the bill and, if it were presented to the President, 
     would urge a veto.
           Sincerely,
     Warren Christopher.
                                                                    ____

                                         Joint Corporate Committee


                                              on Cuban Claims,

                                   Stamford, CT, October 10, 1995.
       Dear Senator: I recently wrote to urge you to oppose Title 
     III of legislation, the ``Cuban Liberty and Democratic 
     Solidarity Act,'' that purports to protect the property 
     rights of U.S. nationals against the confiscatory takings by 
     the Castro regime. At that time, Senator Helms was planning 
     to attach this legislation as an amendment to the then-
     pending Foreign Operations Appropriations Bill. It is my 
     understanding that this legislation now may be brought to the 
     Senate floor as a free-standing bill as early as Wednesday of 
     this week. I am writing once again to urge you to oppose this 
     legislation insofar as it contains Title III in its present 
     form because it poses the most serious threat to the property 
     rights of U.S. certified claimants since the Castro regime's 
     unlawful expropriations more than three decades ago.
       In the rush to pass this legislation and thereby 
     demonstrate our firm resolve against Fidel Castro, the far-
     reaching domestic consequences of this legislation have 
     received far too little attention. In my letter of September 
     20th, I wrote of the irreparable harm certified claimants 
     would suffer if Title III of this legislation is passed. For 
     the first time ever and contrary to international law, this 
     legislation would permit a specified national origin group, 
     Cuban-Americans, who were not U.S. citizens at the time their 
     property was confiscated, to file Title III lawsuits against 
     the Government of Cuba for the property losses they suffered 
     as Cuban nationals. Indeed, this legislation even permits 
     Cuban exiles abroad to file lawsuits in U.S. federal courts 
     if they establish a corporation in the United States for the 
     purpose of pursuing any claim they may have against Cuba. The 
     creation of a new right to sue is never an inconsequential 
     matter yet the careful scrutiny such a provision deserves has 
     been disturbingly lacking to date.
       We can reasonably expect plaintiffs' attorneys to exploit 
     this newly created lawsuit right to the fullest extent 
     possible, creating a tide of litigation that will all but 
     sweep away the value of the claims currently held by U.S. 
     certified claimants. Each time one of those lawsuits is 
     reduced to a final judgment against Cuba, the injury to U.S. 
     certified claimants increases. Ultimately, the cumulative 
     weight of those judgments will extinguish any possibility the 
     certified claimants ever had of being compensated. A 
     virtually bankrupt Cuba cannot be expected to compensate the 
     U.S. certified claimants, who hold claims valued today at 
     nearly $6 billion, when it is also facing the prospect of 
     satisfying potentially tens of billions of dollars in federal 
     court judgments held by Cuban-Americans, whose claims have 
     been valued as high as $94 billion.
       Our already overburdened federal courts will have to deal 
     with the daunting task of adjudicating some 300,000 to 
     430,000 lawsuits, according to one estimate that has never 
     been refuted. (And that does not even take into account the 
     number of additional claims that we can anticipate will be 
     brought on equal protection grounds by Vietnamese-Americans, 
     Polish-Americans, Chinese-Americans and other national origin 
     groups.) Indeed, a litigation explosion appears to be exactly 
     what the bill's sponsors intend: They hope to enlist an army 
     of lawyers to launch a barrage of federal court lawsuits 
     against Cuba in order to hopelessly entangle the island in 
     lawsuits. In so doing, title to property in Cuba will be 
     clouded for years to come, thus ensuring that every effort at 
     privatization or market-oriented economic reform will be 
     doomed to failure. In a classic case of overkill, however, 
     this endless litigation will not only encumber the current 
     regime, but will impose an onerous burden on a future 
     democratic government that will make normalization of 
     relations with the United States virtually impossible.
       Faced with this prospect, the president, as an exercise of 
     executive prerogative in the conduct of foreign affairs, may 
     elect to dismiss those federal court judgments pending 
     against a friendly government in Cuba. However, dismissing 
     those lawsuits may not turn out to be such a simple matter 
     because the U.S. Government may very well find itself liable 
     for tens of billions of dollars in property takings claims to 
     this large class of citizens who were non-U.S. nationals at 
     the time they lost properties in Cuba. In short, if Title III 
     is enacted, we will be left either with the prospect of 
     protracted litigation against Cuba, which will indefinitely 
     delay normalization of relations with a post-Castro Cuban 
     government, or enormous liability to possibly hundreds of 
     thousands of Cuban-Americans should those federal court 
     judgments be dismissed as an incident of normalization.
       Amazingly, the Senate is poised to vote on this legislation 
     without the benefit of the Judiciary Committee's views on 
     these and other critical issues that fall within its purview. 
     The Judiciary Committee has held no hearings on Title III, 
     has not reviewed it, nor has it, or the Foreign Relations 
     Committee for that mater, issued any reports on it. It is 
     astonishing that we may be so casually headed toward putting 
     our government, and ultimately U.S. taxpayers, on the line 
     for tens of billions of dollars worth of Cuban-American 
     claims in a foreign land. The only conclusion that can be 
     drawn is that this legislation is being rushed to a vote 
     before these serious issues can be thoroughly considered by 
     the Senate through its normal procedures. Given the profound 
     domestic implications of this legislation beyond the obvious 
     and immediate injury to U.S. certified claimants, I urge you 
     to oppose Title III of this legislation if for no other 
     reason than to ensure that these concerns receive the careful 
     deliberation they warrant.
           Sincerely,
                                                 David W. Wallace,
     Chairman.
                                                                    ____

                                           National Council of the


                                Churches of Christ in the USA,

                                               September 19, 1995.
       Dear Representative: I write on behalf of the National 
     Council of Churches of Christ in the USA (NCC) to urge your 
     opposition to the Cuban Liberty and Democratic Solidarity 
     bill, H.R. 927, which is scheduled to be considered on the 
     House floor this week. We believe strongly that contrary to 
     its stated objectives, the bill is likely to provoke a 
     negative response that will harm efforts to achieve peaceful 
     social, economic, and political change in Cuba.
       The National Council of Churches and many of its member 
     denominations have maintained a decades-long relationship of 
     pastoral accompaniment with the Protestant churches of Cuba. 
     Through Church World Service (CWS)--our relief, refugee, and 
     development program--the NCC has assisted for more than 
     thirty years in the resettlement in the U.S. of Cuban asylum 
     seekers and refugees. Over the past four years CWS has 
     carried out regular shipments of humanitarian assistance that 
     is administered through the Cuban Ecumenical Council for use 
     in nursing homes and childrens' hospitals.
       On numerous occasions the NCC has called on the U.S. and 
     Cuban governments to engage in dialogue aimed at resolving 
     the long-standing conflict between our countries. In 
     particular, we have urged measures that would foster greater 
     communication and understanding between people in the U.S. 
     and 

[[Page S 15110]]
     Cuba, which we view as key to achieving a more normal relationship.
       Our deep concerns about the Cuban Liberty and Democratic 
     Solidarity Act include the following:
       1. By incorporating in U.S. policy recognition of property 
     claims of Cubans who became U.S. citizens subsequent to the 
     expropriation of their property, and by subjecting to 
     sanctions anyone who ``traffics'' in such property, the bill 
     is likely to strengthen hard-liners within the Cuban 
     government and fuel renewed anti-U.S. sentiment among the 
     Cuban population. This provision is likely to be interpreted 
     within Cuba as a move to return to the economic and social 
     situation that existed there prior to the 1959 revolution. 
     There is little or no support for such a move within Cuba, 
     even among the most vehement critics of the current regime.
       2. The bill specifies conditions for the expansion of U.S. 
     assistance that are likely to undermine diplomatic efforts to 
     achieve a peaceful resolution of the conflict between the 
     U.S. and Cuba. By linking broader U.S. assistance to Cuba to 
     a highly specific set of conditions, the bill reduces 
     significantly the diplomatic tools available to the 
     Administration. At the same time, the bill fails to broaden 
     humanitarian or exchange programs that foster stronger 
     people-to-people relationships.
       3. The bill reinforces regulations promulgated in August 
     1994 that restrict travel and shipment of goods to family 
     members. These new restrictions have led to serious delays in 
     efforts to secure licenses for travel to Cuba. The ability to 
     travel to Cuba on short notice is particularly important to 
     the pastoral accompaniment of the Protestant churches during 
     this difficult period of transition. [Oscar: other problems 
     resulting from the new regulations?]
       The NCC believes that a new approach to U.S.-Cuban 
     relations is long overdue. The Cuban Liberty and Democratic 
     Solidarity Act represents a further deepening of an 
     anachronistic policy in serious need of change. I strongly 
     urge you to oppose H.R. 927 and to support efforts to bring 
     about more normal relations between the U.S. and Cuba.
           Sincerely,
                                              Joan Brown Campbell,
     General Secretary.
                                                                    ____



                                             Mansfield & Muse,

                               Washington, DC, September 20, 1995.
     Senator W. Cohen,
      United States Senate, Washington, DC.
     Re ``The Cuba Liberty and Democratic Solidarity Act''
       Dear Senator: My client Amstar, along with thousands of 
     other U.S. citizen holders of claims certified against Cuba 
     in the 1960's by the Foreign Claims Settlement Commission, 
     will suffer devastating economic injury if Title III of 
     Senator Helm's bill (formerly S. 381) is passed as an 
     amendment to the Foreign Operations Appropriations Bill. It 
     is for this reason that I am writing.
       It is absolutely false that Title III has been revised in 
     ways that make it no longer violative of both international 
     law and the rights and interests of U.S. citizens holding 
     claims certified against Cuba pursuant to the 1964 Cuba 
     Claims Act. As you know, Title III allows lawsuits to be 
     brought in the federal courts against Cuba and private 
     individuals either living in or doing business in that 
     country with respect to properties taken from their owners 
     for the most part thirty-five years ago. Damages are 
     recoverable against Cuba and others foreseeable the current 
     value of those properties. Contrary to international law, it 
     makes no difference under Title III whether a litigant was a 
     U.S. citizen at the time the property in Cuba was taken. 
     Indeed Title III is specifically designed to give 
     subsequently naturalized Cuban Americans statutory lawsuit 
     rights against Cuba of a type that we as a nation have never 
     been before given anyone else--even those who were U.S. 
     citizens at the time of their foreign property losses.
       Title III of Senator Helm's amendment will produce the 
     following consequences if enacted in its present form:
       Our federal courts will be deluged in Cuba-related 
     litigation. On August 28, 1995 the National Law Journal 
     (attached) reported that 300,000-430,000 lawsuits are to be 
     expected from Cuban Americans if Title III is enacted. 
     According to judicial impact analysts at the Administrative 
     Office of the U.S. Courts each of these suits will average 
     $4,500 in costs, whether they go to trial or not. Therefore 
     the administrative costs to the courts alone of Title III 
     will reach nearly $2 billion.
       If we enact Title III those 5,911 claimants certified under 
     the 1964 Cuban Claims Act will see their prospects of 
     recovering compensation from an impoverished Cuba diluted to 
     virtually nothing in a sea of Cuban American claims (To put 
     this matter into context, the Department of State has 
     estimated Cuban American property claims at nearly $95 
     billion). It is critical that it be understood that a claim 
     certified by the Foreign Claims Settlement Commission 
     constitutes a property interest. If Congress enacts Title III 
     with the foreseeable effect of destroying the value of the $6 
     billion (according to State Department figures) in claims 
     held by American citizens, it should expect to indemnify 
     those citizens someday, under the Fifth Amendment's ``takings 
     clause'', to the full amount of their economic injury. If 
     Title III is made law, the American taxpayer will quite 
     probably someday demand an explanation as to how on earth he 
     or she has been forced to step into the shoes of the Cuban 
     government and compensate U.S. companies and individuals for 
     their property losses in Cuba over thirty-five years ago.
       If we violate international law and long-standing U.S. 
     adherence to that law by enacting Title III and conferring 
     retroactive rights upon non-U.S. nationals at time of foreign 
     property losses, history tells us that we will not be 
     permitted to stop with Cuban Americans. The equal protection 
     provisions of the Constitution will not tolerate limiting the 
     conferral of such an important benefit as a federal right of 
     action on only one of our many national origin groups whose 
     members have suffered past foreign property losses if, as 
     will surely happen, a former South Vietnamese army officer 
     who is now a U.S. citizen sues in order to gain the same 
     right accorded Cuban Americans to recover damages for 
     property expropriations he suffered, who, if Title III is 
     enacted is prepared to say he should not have such a night? 
     On what principled basis would such a night be denied him if 
     given by Congress to Cuban Americans? What about Chinese 
     Americans, Hungarian Americans, Iranian Americans, Greek 
     Americans, Palestinian Americans, Russian Americans, Polish 
     Americans? Are we going to claim surprise when the courts 
     tell us that the equal protection of laws requirement of the 
     Constitution mandates that each of these national-origin 
     groups receive the same right of action against their former 
     governments that we are proposing to give Cuban Americans by 
     virtue of Title III? How many such suits might we then expect 
     from these others national-origin groups and at what cost to 
     both the national treasury and our relations with the many 
     countries that will end up being sued in our federal courts? 
     It must also be kept in mind that U.S. companies that have 
     invested in various countries where our naturalized citizens 
     have property claims (e.g. Vietnam) will be held liable for 
     so-called ``trafficking'' in those claimed properties if 
     Title III is enacted and extended constitutionally to 
     other national-origin groups.
       The multitude of lawsuits that will be filed pursuant to 
     Title III will over time be converted to final judgments 
     against Cuba, and as such will constitute a running sore 
     problem for the United States. Title III lawsuits are 
     explicitly made nondismissible. The fact of hundreds of 
     thousands of Cuban American judgment creditors against Cuba 
     will make it impossible for us to normalize relations with a 
     friendly government in that country. Aircraft and ships would 
     be seized. Cuban assets in the U.S. banking system would be 
     attached, goods produced in Cuba would be executed upon when 
     they arrive in U.S. ports--all in pursuit of recovery of 
     billions of dollars in federal court awards. The population 
     of Cuba (the majority of whom were not even born when the 
     properties of the Cuban American judgment creditors were 
     taken) will be indentured for decades to come to the 
     judgments entered against their country on our federal court 
     dockets. How is such a state of affairs conducive to a 
     reconciliation between Cubans on the island and the Cuban 
     community of the United States?
       The alternative to the permanent estrangement Title III 
     lawsuits will produce between Cuba and the United States 
     would of course be for a U.S. president to dismiss the 
     judgments entered against Cuba. Notwithstanding the 
     prohibition against such executive branch action contained in 
     Title III, it is probable that the courts will ultimately 
     uphold the dismissals as a legitimate exercise of the 
     presidential prerogative to conduct foreign affairs.\2\ What 
     then?
     \2\ See, Dames & Moore v. Regan, 453 U.S. 654 (1981).
---------------------------------------------------------------------------
       The creation of a cause of action by Congress is obviously 
     not a trivial matter. Hundreds of thousands of Cuban 
     Americans will quite properly avail themselves of the right 
     of action to be given them by Title III. These cases will 
     proceed inexorably to final judgments. (There are really no 
     defenses available to Cuba under Title III. It is a strict 
     liability statute). As final federal court judgments they 
     will carry the faith and credit of the United States 
     government, with all the rights and remedies of execution set 
     out in our laws. What will be the consequence of the 
     president extinguishing these judgments and their concomitant 
     rights of execution?
       Again, as in the case of certified claimants, a federal 
     court judgment is a property interest protected by the 
     Constitution. If that interest is extinguished by 
     presidential order, the Fifth Amendment ``takings clause'' 
     with its duty of full compensation will be triggered. If 
     Title III is enacted it should be with full knowledge that 
     Congress may someday be asked by the public to explain how 
     the American people came ultimately to be liable for tens of 
     billions of dollars of damages in recompense to a group of 
     non-U.S. nationals at the time they lost properties in 
     Cuba.\3\ In a period of heightened concern for potential 
     governmental liability under the takings clause of the Fifth 
     Amendment, 

[[Page S 15111]]

     Title III should be approached with the greatest caution and 
     seen for the liability time bomb it is.
     \3\ See, Dames & Moore v. Regan, supra, at 688: ``Though we 
     conclude that the President has settled petitioner's claims 
     against Iran, we do not suggest that the settlement has 
     terminated petitioner's possible taking claim against the 
     United States.'' (Emphasis added). Justice Powell, concurring 
     in part and dissenting in part, had this to say: ``The 
     Government must pay just compensation when it furthers the 
     nation's foreign policy goals by using as `bargaining chips' 
     claims lawfully held by a relatively few persons and subject 
     to the jurisdiction of our courts.'' Id. at 691.
---------------------------------------------------------------------------
       A troubling aspect of Title III is its contemptuous 
     disregard of international law. As a nation we and our 
     citizens benefit from international law in a myriad of forms, 
     such as overseas investment and intellectual property 
     protection, the safety of our diplomats and sovereignty over 
     our marine resources. Many other examples of the benefits to 
     the United States of an international rule of law could be 
     given. How can we in the future demand compliance with 
     international law by other nations if we are prepared to 
     violate that very law by enacting Title III? The proponents 
     of this legislation have never satisfactorily answered that 
     fundamental question.
       To conclude, certain proponents of Title III from outside 
     the Senate have engaged in a campaign to minimize its 
     significance. Boiled down, their message is that a vote for 
     Title III is an inconsequential thing. For example, they will 
     say that a litigant cannot or will not sue Cuba itself, but 
     rather any actions are limited to ``third party traffickers'' 
     in confiscated properties. Let there be no mistake on this 
     point. Title III is an unprecedented federal court claims 
     program against the nation of Cuba. Section 302 of Title III 
     is plain and unambiguous in its meaning. It is the 
     inescapable consequences of that meaning that the Senate must 
     address.
                                         Joint Corporate Committee


                                              on Cuban Claims,

                                               September 20, 1995.
       Dear Senator: The Joint Corporate Committee on Cuban Claims 
     represents more than thirty U.S. corporations with certified 
     claims against the Government of Cuba stemming from the 
     Castro regime's unlawful confiscation of U.S. property 
     without just compensation. Our member corporations hold more 
     than one-half of the $1.6 billion in outstanding certified 
     corporate claims. On behalf of the Joint Corporate Committee, 
     I am writing to urge you to oppose Title III of legislation 
     Sen. Helms will offer as an amendment to the Foreign 
     Operations Appropriations Bill because it poses the most 
     serious threat to the property rights of the certified 
     claimants since the Castro regime's confiscations more than 
     thirty years ago.
       The centerpiece of the Helms legislation is Title III, 
     which creates a right of action that for the first time will 
     allow U.S. citizens--regardless of whether they were U.S. 
     citizens at the time their property was confiscated in Cuba--
     to file lawsuits in U.S. courts against persons or entities 
     that ``traffic'' in that property, including the Government 
     of Cuba. In effect, this provision creates within the federal 
     court system a separate Cuban claims program available to 
     Cuban-Americans who were not U.S. nationals as of the date of 
     their injury. This unprecedented conferral of retroactive 
     rights upon naturalized citizens is not only contrary to 
     international law, but raises serious implications with 
     respect to the Cuban Government's ability to satisfy the 
     certified claims.
       Allowing Cuban-Americans to make potentially tens if not 
     hundreds of thousands of claims against Cuba in our federal 
     courts may prevent the U.S. certified claimants from ever 
     receiving the compensation due them under international legal 
     standards. After all, Cuba hardly has the means to compensate 
     simultaneously both the certified claimants and hundreds of 
     thousands of Cuban-Americans, who collectively hold claims 
     valued as high as $94 billion, according to a State 
     Department estimate. In addition, this avalanche of lawsuits 
     undoubtedly will cloud title to property in Cuba for years, 
     thereby lessening the prospects for restitutionary approaches 
     in satisfaction of some of the certified claims.
       Apart from the injury to the interests of U.S. certified 
     claimants, we can reasonably anticipate that this 
     legislation, by opening our courts to such an expansive new 
     class of claimants, will unleash a veritable explosion of 
     litigation that will place an enormous if not overwhelming 
     burden on our courts. Moreover, the legislation even would 
     allow Cuban exiles abroad to avail themselves of this lawsuit 
     right simply by forming a corporation in the United States, 
     transferring any claim they may have against Cuba into that 
     U.S. corporate entity, and bringing suit in U.S. federal 
     courts. In addition, other similarly situated U.S. nationals 
     of various ethnic origins who have suffered property losses 
     under similar circumstances can be expected to pursue this 
     lawsuit right on equal protection grounds. While it is 
     difficult to predict with any precision the number of 
     lawsuits that will be filed under this legislation, it is not 
     unreasonable to conclude that they will number in the 
     hundreds of thousands.
       Finally, we must consider the impact of this lawsuit right 
     on the ability of a post-Castro Cuban government to 
     successfully implement market-oriented reforms. There can be 
     little doubt that the multitude of unresolved legal 
     proceedings engendered by this legislation will all but 
     preclude such reform, which must be the foundation of a free 
     and prosperous Cuba. Even should the President, as an 
     incident of normalizing relations with a democratic Cuban 
     government, ultimately extinguish these claims, if history is 
     a guide, our government could assume tremendous liability to 
     this newly created class of claimants.
       In light of the pernicious implications of this legislation 
     for the legal rights of certified claimants, an already 
     overburdened court system, the claims settlement process and 
     the orderly disposition of claims, and the post-Castro 
     investment environment, we urge you to oppose the Helms 
     amendment insofar as it contains Title III in its present 
     form.
           Sincerely,
                                                 David W. Wallace,
     Chairman.
                                                                    ____


 Statement of David W. Wallace, Chairman, Joint Corporate Committee on 
Cuban Claims on S. 381, the Cuban Liberty and Democratic Solidarity Act 
                                of 1995

 (Submitted to the Subcommittee on Western Hemisphere and Peace Corps 
Affairs, the Committee on Foreign Relations, United States Senate, June 
                               14, 1995)

       Mr. Chairman and Members of the Subcommittee, I appreciate 
     the opportunity to submit this statement expressing the views 
     of the Joint Corporate Committee on Cuban Claims with respect 
     to S. 381, the ``Cuban Liberty and Democratic Solidarity 
     (LIBERTAD) Act of 1995.''
       The Joint Corporate Committee on Cuban Claims, of which I 
     serve as Chairman, represents more than thirty U.S. 
     corporations with certified claims against the Government of 
     Cuba stemming from the Castro regime's unlawful confiscation 
     of U.S. property without just compensation. Our member 
     corporations hold more than one-half of the $1.6 billion in 
     outstanding certified corporate claims. Since its formation 
     in 1975, the Committee has vigorously supported the 
     proposition that before our government takes any steps to 
     resume normal trade and diplomatic relations with Cuba, the 
     Government of Cuba must provide adequate compensation for the 
     U.S. properties it unlawfully seized.
       Although I am submitting this statement in my capacity as 
     Chairman of the Joint Corporate Committee, I would like to 
     note parenthetically that I also serve as Chairman and Chief 
     Executive Officer of Lone Star Industries, Inc. Lone Star is 
     a certified claim holder whose cement plant at Mariel was 
     seized by the Cuban Government in 1960. Lone Star's claim is 
     valued at $24.9 million plus 6 percent interest since the 
     date of seizure.
       On behalf of our Committee, I want to commend the 
     significant contribution you have made to the debate on U.S.-
     Cuba policy by focusing renewed attention on the Castro 
     regime's unlawful expropriation of U.S. property--an issue 
     that all too often gets lost in the debate over the wisdom of 
     the embargo policy. Recognizing the important role that trade 
     and investment by U.S. businesses will have in Cuba's 
     economic reconstruction and its eventual return to the 
     international community, evidence of concrete steps by the 
     Government of Cuba towards the satisfactory resolution of the 
     property claims issue must be an essential condition for the 
     resumption of economic and diplomatic ties between our 
     nations.
       I think it is important to recall the essential reason for 
     which the U.S. government first imposed a partial trade 
     embargo against Cuba in 1960, followed by the suspension of 
     diplomatic relations in 1961 and the imposition of a total 
     trade embargo in 1962. These actions were taken in direct 
     response to the Castro regime's expropriation of properties 
     held by American citizens and companies without payment of 
     prompt, adequate and effective compensation as required under 
     U.S. and international law. This illegal confiscation of 
     private assets was the largest uncompensated taking of 
     American property in the history of our country, affecting 
     scores of individual companies and investors in Cuban 
     enterprises.
       These citizens and companies whose property was confiscated 
     have a legal right recognized in long-established 
     international law to receive adequate compensation or the 
     return of their property. Indeed, Cuba's Constitution of 1940 
     and even the decrees issued by the Castro regime since it 
     came to power in 1959 recognized the principle of 
     compensation for confiscated properties. Pursuant to Title V 
     of the International Claims Settlement Act, the claims of 
     U.S. citizens and corporations against the Cuban government 
     have been adjudicated and certified by the Foreign Claims 
     Settlement Commission of the United States. Yet to this day, 
     these certified claims remain unsatisfied.
       It is our position that lifting the embargo prior to 
     resolution of the claims issue would be unwise as a matter of 
     policy and damaging to our settlement negotiations posture. 
     First, it would set a bad precedent by signaling a 
     willingness on the part of our nation to tolerate Cuba's 
     failure to abide by precepts of international law. Other 
     foreign nations, consequently, may draw the conclusion that 
     unlawful seizures of property can occur without consequence, 
     thereby leading to future unlawful confiscations of American 
     properties without compensation. Second, lifting the embargo 
     would remove the best leverage we have in compelling the 
     Cuban government to address the claims of U.S. nationals and 
     would place our negotiators at a terrible disadvantage in 
     seeking just compensation and restitution. We depend on our 
     government to protect the rights of its citizens when they 
     are harmed by the unlawful actions of a foreign agent. The 
     Joint Corporate Committee greatly appreciates the steadfast 
     support our State Department has provided over the years on 
     the claims issue. However, we recognize that the powerful 
     tool of sanctions will be crucial to the Department's ability 
     ultimately to effect a just resolution of this issue.

[[Page S 15112]]

       Apart from the need to redress the legitimate grievances of 
     U.S. claimants, we also should not overlook the contribution 
     these citizens and companies made to the economy of pre-
     revolutionary Cuba, helping to make it one of the top ranking 
     Latin American countries in terms of living standards and 
     economic growth. Many of these companies and individuals look 
     forward to returning to Cuba to work with its people to help 
     rebuild the nation and invest in its future. As was the case 
     in pre-revolutionary Cuba, the ability of the Cuban 
     government to attract foreign investment once again will be 
     key to the success of any national policy of economic 
     revitalization.
       However, unless and until potential investors can be 
     assured of their right to own property free from the threat 
     of confiscation without compensation, many U.S. companies 
     simply will not be willing to take the risk of doing business 
     with Cuba. It is only by fairly and reasonably addressing the 
     claims issue that the Cuban Government can demonstrate to the 
     satisfaction of the business community its recognition of and 
     respect for property rights.
       We are pleased that S. 381 does not waver from the core 
     principle, firmly embodied in U.S. law, which requires the 
     adequate resolution of the certified claims before trade and 
     diplomatic relations between the U.S. and Cuban governments 
     are normalized. However, we are concerned with provisions of 
     Section 207 of the revised bill that condition the resumption 
     of U.S. assistance to Cuba on the adoption of steps leading 
     to the satisfaction of claims of both the certified claimants 
     and Cuban-American citizens who were not U.S. nationals at 
     the time their property was confiscated. Notwithstanding the 
     modifying provisions which accord priority to the settlement 
     of the certified claims and give the President authority to 
     resume aid upon a showing that the Cuban Government has taken 
     sufficient steps to satisfy the certified claims, this 
     dramatic expansion of the claimant pool, as a practical 
     matter, would necessarily impinge upon the property interests 
     of the certified claimants.
       Even though the claimants who were not U.S. nationals at 
     the time of the property loss would not enjoy the espousal 
     rights that the certified claimants enjoy, the recognition of 
     a second tier of claimants by the U.S. Government at a 
     minimum would necessarily color, and likely make more 
     complicated, any settlement negotiations with Cuba to the 
     detriment of the certified claimants.
       Moreover, the fact that the legislation gives priority for 
     the settlement of certified property claims is of little 
     consequence within the context of such a vastly expanded pool 
     of claimants that seemingly defies a prompt, adequate and 
     effective settlement of claims. In addition, once this second 
     tier of claimants is recognized, it would be exceedingly 
     difficult politically for the President to exercise his 
     waiver authority. Finally, this dramatic expansion of the 
     claimant pool would serve as a significant disincentive for a 
     post-Castro Cuban Government to enter into meaningful 
     settlement negotiations with the United States given the 
     sheer enormity of the outstanding claims and the practical 
     impossibility of satisfying all those claims.
       In short, while we are sympathetic to the position of those 
     individuals and entities who were not U.S. nationals at the 
     time their property was seized, we believe that U.S. 
     Government recognition and representation of this group of 
     claimants--even falling short of espousal of their claims 
     with a post-Castro Government in Cuba--would harm the 
     interests of the already certified claimants. We believe that 
     the recognition of a second tier of claimants will delay and 
     complicate the settlement of certified claims, and may 
     undermine the prospects for serious settlement negotiations 
     with the Cuban Government.
       It is our view, based on well-established principles of 
     international law, that individuals and entities who were 
     Cuban nationals at the time their property was confiscated 
     must seek resolution of their claims in Cuban courts under 
     Cuban law under a future Cuban Government whereby the 
     respective property rights of former and current Cuban 
     nationals may be fairly determined. In taking that position, 
     we categorically reject any notion that a naturalized 
     American has any lesser degree of right than a native-born 
     American. That objectionable and irrelevant notion serves 
     only to cloud the real issue here, and that is simply the 
     question of what rights are pertinent to a non-national as of 
     the date of injury. Simply put, international law does not 
     confer retroactive rights upon naturalized citizens.
       Many of the same objections noted above also apply to 
     Section 302 of the revised bill, which allows U.S. nationals, 
     including hundreds of thousands of naturalized Cuban-
     Americans, to file suit in U.S. courts against persons or 
     entities that traffic in expropriated property. We believe 
     this unrestricted provision also will adversely affect the 
     rights of certified claimants. By effectively moving claims 
     settlement out of the venue of the Foreign Claims Settlement 
     Commission and into the federal judiciary, this provision can 
     be expected to invite hundreds of thousands of commercial and 
     residential property lawsuits. Apart from the enormous, if 
     not overwhelming, burden these lawsuits will place on our 
     courts, this provision raises serious implications with 
     respect to the Cuban Government's ability to satisfy 
     certified claims.
       First, allowing Cuba to become liable by way of federal 
     court judgments for monetary damages on a non-dismissible 
     basis necessarily will reduce whatever monetary means Cuba 
     might have to satisfy the certified claims. Second, this 
     expected multiplicity of lawsuits undoubtedly will cloud 
     title to property in Cuba for years, thereby lessening the 
     prospects for restitutionary approaches in satisfaction of 
     some of these claims. Moreover, under this provision, the 
     President would have no power to dismiss these suits as an 
     incident of normalizing relations with a democratically 
     elected government in Cuba once they are commenced. 
     Consequently, the foreign investment that will be crucial to 
     Cuba's successful implementation of market-oriented reforms 
     will be all but precluded by these unresolved legal 
     proceedings.
       In conclusion, we want to commend you for your efforts in 
     raising the profile of the property claims issue and focusing 
     attention on the importance of resolving these claims to the 
     full restoration of democracy and free enterprise in Cuba. We 
     also recognize and appreciate the effort you have made to 
     modify this legislation in response to the concerns expressed 
     by the certified claimant community; however, we hope that 
     you will further consider our continuing concerns regarding 
     the implications of this legislation for the legal rights of 
     certified claimants, an already overburdened court system, 
     the claims settlement process and the orderly disposition of 
     claims, and the post-Castro investment environment.

  Mr. PELL. I yield the floor.
  Mr. DODD addressed the Chair.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Mr. President, let me first of all commend my dear friend 
and distinguished colleague from Rhode Island. As all of my colleagues 
are aware, our friend from Rhode Island has announced he will not be 
seeking reelection almost a year from now. He has been a wonderful U.S. 
Senator over these many years representing his State and always keeping 
in mind the national interest.
  He has had a longstanding view on cloture, and it has to be a very 
unique set of circumstances that would cause someone with more than 30 
years of having maintained a very strong philosophical position--much 
to the chagrin, I might point out, of his colleagues from time to time 
who have wanted his vote or not wanted his vote on a particular 
matter--to take this position. So, I respect immensely his decision.
  Mr. President, we are going to vote in a couple minutes on this 
matter. We have had a good opportunity to talk about it over the last 
day or so. I just want to reiterate, if I could, the underlying concern 
I have about this bill and why I think that cloture should not be 
invoked.
  True of all matters that we consider in this body, but particularly 
when it comes to matters affecting the international relations of this 
Nation, the first test ought to be whether or not what we are going to 
do is in the best interests of our country; and, secondly, whether or 
not it is going to help or hinder, depending upon the purpose of the 
legislation, the country involved.
  Before we even get to the second question, the first question must be 
answered positively. And my concern about this bill that is before us 
is that, in the first instance, it is not in the self-interest of this 
country to adopt this bill for the reason that it creates unprecedented 
new opportunities for a group of people that we have never provided 
access to the U.S. courts to on claims matters involving the 
expropriation of property where there has been a lack of compensation.
  As my colleagues no doubt are aware, under U.S. claims court rules 
for the last four decades, more than four decades, in order to sue in a 
U.S. claims court, you must have been a U.S. citizen that was doing 
business or had property in the country where there is an expropriation 
of property at the time. As has been pointed out in the case of Cuba, 
there were some 6,000 individuals or corporations that held that status 
in 1959 when the expropriations took place across the board.
  What we are doing with this bill, and why I ask my colleagues to read 
it, look at it, is for the first time in more than four decades we are 
now saying, in addition to that group, anyone who was a national of 
Cuba but who subsequently became a U.S. citizen, or even went to some 
other country, can now file in the U.S. claims court for compensation 
under the expropriation actions.
  That is unprecedented. There are some 37 other countries in the world 


[[Page S 15113]]
that have matters of expropriation of properties pending. Were we to 
apply the same standard we are going to apply, or could apply with this 
legislation, it would open up in the case of Americans of Polish 
ancestry, Vietnamese, Chinese, German--the countries, 37 in number--
then one could only begin to imagine the kind of overwhelming amount of 
work that would fall on our United States courts.
  It is estimated that each claims action costs some $4,500 to process. 
Just with the passage of this legislation, we will expand the workload 
of that court from 6,000 cases, legitimate cases of expropriation, to 
some 430,000 cases. That is what we have been told is the estimate of 
the claims. Who is going to pay for that, and what happens to the 
claimants who have a consistent legitimate right? Yet, that is what we 
are doing with this bill.
  So regardless of how one feels about the government in Cuba, how 
angry they may be, I just beseech my colleagues to read title III of 
this bill and then ask themselves whether or not this is something we 
ought to be doing to ourselves.
  This is an unfunded mandate, in effect, for the claims that come 
before the court. There is another reason, in my view, why it should be 
rejected. We never voted on it in committee, never had a single vote. 
The bill is brought to the floor by the chairman of the Foreign 
Relations Committee who chairs the committee which has jurisdiction.
  I hope we do not invoke cloture and that the bill be sent back for 
further work so it comes back with the kind of provisions in title III 
that are not, I think, so threatening and dangerous to the country.
  Mr. President, I heard the gavel come down. Is there a time 
limitation?
  The PRESIDING OFFICER. The time has been divided and the time on the 
Democratic side has expired.
  Mr. DODD. I ask unanimous consent that my colleague be able to 
respond.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN. Mr. President, I was only going to ask a question of the 
Senator from Connecticut. I am not on the relevant committee. My 
understanding was this was not subject to a committee markup, and this 
legislation came to the floor without a markup; is that correct?
  Mr. DODD. That is correct. Again, I can understand someone who was in 
the minority trying to pull that, but if you are in the majority and 
the chair of the committee and bring a bill out that you did not have a 
markup on in your own committee, I do not understand the precedent for 
that, it seems to me.
  We had hearings on this issue, in fairness to the chairman of the 
committee. There are hearings we had about the situation in Cuba, but 
no markup of this legislation at all.
  Mr. DORGAN. This is not an unimportant issue, I agree with the 
Senator. Since I am not involved in this committee's actions, it seems 
to me that the approach that would best serve the search for the right 
policy would be an approach where you have a committee process, where 
they mark up the bill, debate the bill during markup, write the best 
bill and then bring it to the floor. This appears not to be the regular 
order to get the legislation to the floor. I appreciate the Senator's 
response.
  Mr. DODD. Just for the benefit of my colleagues, I point out, as I 
mentioned earlier, this expands the definition of who is a U.S. 
claimant to include ``any Cuban national presently a United States 
citizen regardless of citizenship at the time of the expropriation, as 
well as any person who incorporates himself or herself as a business 
entity under U.S. law prior to this bill becoming law.''
  That is, you do not have to be a U.S. citizen today, you can be a 
foreign national, but if you incorporate yourself as any person, then 
you can bring an action in U.S. claims court. That is unprecedented, as 
far as the law has stood for the past 4 decades.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DOLE. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Order of Procedure

  Mr. DOLE. Mr. President, there will be a vote momentarily. That will 
be the last vote of the day. It could be the last vote of the week, 
depending on whether or not we get to appoint conferees to S. 652, the 
telecommunications bill, tomorrow. I understand there may be an 
instruction on the other side. If there is an instruction, that could 
require a vote tomorrow. And we hope to appoint conferees to welfare 
reform, H.R. 4. The President has asked about expediting that. Others 
have asked about expediting that. We are prepared to appoint conferees. 
We hope we can do that tomorrow.
  As to Monday, I hope to have an announcement tomorrow whether or not 
we will be in session at all on Monday, and if we are in session, what 
we will be about, because as I understand, there is going to be a 
massive traffic jam on Monday. They tell me thousands of buses are 
going to be in town, so it might not be possible to get to the Capitol, 
or, if you get here, it might not be possible to get anywhere else.
  I will try to accommodate my colleagues and make that announcement as 
early as I can tomorrow.

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