[Congressional Record Volume 142, Number 28 (Tuesday, March 5, 1996)]
[Extensions of Remarks]
[Pages E271-E272]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      CUBAN EMBARGO NOT THE ANSWER

                                 ______


                           HON. DOUG BEREUTER

                              of nebraska

                    in the house of representatives

                         Tuesday, March 5, 1996

  Mr. BEREUTER. Mr. Speaker, Cuba's shootdown of two civilian aircraft, 
resulting in the loss of four American lives just over a week ago, was 
a reprehensible and cowardly act. Certainly, a swift and decisive 
response from the U.S. Government is entirely warranted. Whether the 
Clinton administration has chosen the appropriate response is far less 
certain.
  This Member would call to the attention of his colleagues an 
editorial in the March 3, 1996 edition of the Washington Post, entitled 
``The Great Cuban Embargo Scam''. A key intent behind the embargo 
legislation is to discourage foreign investment in Cuba by allowing 
Cuban-Americans to sue in U.S. Federal courts those foreign companies 
doing business on land once owned by these exiles. Author Louis F. 
Desloge argues that, conversely, companies are unlikely to abandon 
viable operations in Cuba because of lawsuits, and would be more than 
willing to settle out of court.
  Mr. Speaker, this Member would ask that Mr. Desloge's editorial from 
the Washington Post be placed in today's record and urges that his 
colleagues read it.

               [From the Washington Post, March 3, 1996]

                      The Great Cuban Embargo Scam

                         (By Louis F. Desloge)

       Virtually everyone agrees that President Clinton should 
     retaliate forcefully against Cuba's tragic and murderous 
     downing of two civilian aircraft last weekend. But the least 
     effective and most counterproductive punishment is Clinton's 
     acquiescence to the Helms-Burton bill to tighten the U.S. 
     embargo of Cuba. This legislation, which the White House 
     endorsed last week, albeit with reservations, will only play 
     into Castro's hands

[[Page E272]]

     by creating an expansive loophole for property claimants, 
     especially wealthy Cuban Americans, to circumvent the 
     embargo.
       Jesse Helms and Dan Burton, conservatives whom I admire, 
     are no doubt sincere in their motivation to subvert Castro's 
     rule by applying economic pressure on his regime. However, 
     they may very well achieve just the opposite of what they 
     seek by buttressing, not undermining, Castro's support at 
     home and weakening, not strengthening, the embargo's 
     prohibition on trade with Cuba.
       The Helms-Burton bill is a slick stratagem. Its stated 
     purpose is to tighten the embargo by allowing Cuban Americans 
     to have the unprecedented right to sue, in U.S. federal 
     courts, foreign companies doing business on land once 
     owned by these exiles. The idea is to discourage foreign 
     business investment in Cuba, thus undermining the island's 
     financial recovery which, the bill's supporters naively 
     hope, will result in a collapse of the Castro regime. The 
     bill's practical consequences are a different story.
       A little-noticed provision in the Helms-Burton measure will 
     enable a small group of Cuban Americans to profit from the 
     economic activity occurring in Cuba.
       To understand this provision, one must first know who 
     helped write it. As the Baltimore Sun reported last May, the 
     bill was drafted with the advice of Nick Gutierrez, an 
     attorney who represents the National Association of Sugar 
     Mill Owners of Cuba and the Cuban Association for the Tobacco 
     Industry. Gutierrez acknowledges his involvement, as does 
     Ignacio Sanchez, an attorney whose firm represents the 
     Bacardi rum company. Sanchez told the Sun that he worked on 
     the bill in his capacity as a member of the American Bar 
     Association's Cuban Property Rights Task Force and not as a 
     representative of the rum company.
       It is not hard to surmise what these former sugar, tobacco 
     and rum interests will do if and when the law takes effect: 
     sue their competitors who are now doing business in Cuba.
       Gutierrez told the Miami Herald last fall as saying that he 
     (and his clients) are eyeing a Kentucky subsidiary of 
     British-American Tobacco (B.A.T.) that produces Lucky Strike 
     cigarettes. B.A.T. has a Cuban joint venture with the 
     Brazilian firm Souza Cruz to produce tobacco on land 
     confiscated from his clients, Gutierrez claims.
       Bacardi would be able to sue Pernod Ricard, the French 
     spirits distributor, currently marketing Havana Club rum 
     worldwide. Bacardi claims that Pernod Ricard's rum is being 
     produced in the old Bacardi distillery in the city of 
     Santiago de Cuba.
       Here is how this vexatious scheme will work if Helms-Barton 
     becomes law. The former landowner of a tobacco farm files a 
     suit in federal court against British-American Tobacco and 
     seeks damages. If both sides want to avoid prolonged 
     litigation they can reach an out-of-court settlement whereby 
     the former tobacco grower can now share in the profits of the 
     ongoing B.A.T.-Brazilian joint venture in Cuba. Likewise, 
     Bacardi could reach a settlement to get a share of Pernod 
     Ricard's profits from sales of Havana Club internationally.
       These agreements do not need the blessing of the U.S. 
     government. This is the million dollar loophole in Helms-
     Burton. The bill states: ``an action [lawsuit] . . . may be 
     brought and may be settled, and a judgment rendered in such 
     action may be enforced, without the necessity of obtaining 
     any license or permission from any agency of the United 
     States.''
       What will be the practical result? Foreign companies like 
     Pernod Ricard and British-American Tobacco are unlikely to 
     abandon viable operations in Cuba because of a lawsuit. More 
     likely, these foreign businessmen will agree, reluctantly, to 
     pay off Cuban exiles suing under Helms-Burton. Given the 
     choice of forfeiting millions of dollars invested in Cuba or 
     their financial interests in the United States, the practical 
     business solution might be to give the exiles a cut of the 
     action. Far better to have 90 percent of something than 100 
     percent of nothing, these businessmen will reason. Allowing 
     Cuban Americans a share of their profits will just be 
     factored in as another cost of doing business.
       Indeed, Helms-Burton gives the Cuban exile community a 
     strong financial stake in Castro's Cuba. If the foreign 
     businesses simply withdrew in the face of Helms-Burton, the 
     exiled tobacco, sugar and rum interests would get nothing. 
     But if British-American Tobacco or Pernod Ricard or any other 
     foreign firm now doing business with the Castro regime offers 
     an out-of-court settlement to Cuban American exiles, who is 
     going to turn them down? Given the option, at least some 
     people are going to choose personal enrichment over the 
     principle of not doing business with Fidel. After all, Fidel 
     has been in power for 37 years, and the exiles are not 
     getting any younger.
       The Clinton White House is not unaware of the scam at the 
     heart of the bill. Before the shooting down of the plane, the 
     president had objected to the provisions allowing U.S. 
     nationals to sue companies doing business in Cuba. During 
     last week's conference with Congress, the president's men 
     surrendered and asked for a face-saving compromise: a 
     provision giving the president the right to block such deals 
     later on if they do not advance the cause of democracy in 
     Cuba. But how likely is Clinton to block Cuban Americans in 
     Florida, a key election state, from suing Castro's foreign 
     collaborators later in the final months of an election year? 
     Now very.
       The bottom line is that Clinton, in the name of getting 
     tough with Castro, has endorsed a bill that allows the 
     embargo to be evaded and protects Cuban Americans who want to 
     legally cut deals to exploit their former properties in Cuba 
     while the rest of the American business community must watch 
     from the sidelines.
       In fact, the legislation could encourage a massive influx 
     of new foreign investment in Cuba. Armed with the 
     extortionist powers conferred by the legislation, former 
     property holders could shop around the world for prospective 
     investors in Cuba and offer them a full release on their 
     property claim in exchange for a ``sweetheart'' lawsuit 
     settlement entitling them to a piece of the economic action. 
     Thus, the embargo is legally bypassed and everyone laughs all 
     the way to the bank.
       Actually, not everyone would benefit. The Clinton-endorsed 
     version of Helms-Burton only exempts the wealthiest cabal of 
     Cuba's former elites from the embargo's restraints. The bill 
     will only allow those whose former property is worth a 
     minimum value of $50,000 (sans interest) to file suits. And 
     you had to be very rich to have owned anything of that value 
     in Cuba in 1959. If you were a Cuban butcher, baker or 
     candlestick maker, too bad. This bill is not for you.
       What could be more useful to Castro in his efforts to shore 
     up his standing with the Cuban people? The spectacle of the 
     U.S. Congress kowtowing to these Batista-era plantation 
     owners and distillers provides Fidel his most effective 
     propaganda weapon since the Bay of Pigs debacle. Castro 
     surely knows that the overwhelming majority of the Cuban 
     people--60 percent of whom were born after 1959--would deeply 
     resent what can be characterized, not unfairly, as an attempt 
     to confiscate their properties and revert control over Cuba's 
     economy to people who symbolize the corrupt rule of the 
     1950s. Rather than undermining Castro's rule, this bill would 
     drive the people into his camp.
       Where is the logic in denying the vast majority of the 
     American people the right to become economically engaged in 
     Cuba if it is extended to only a select, wealthy few? Is the 
     concept of ``equal protection under the law'' served if non-
     Cuban Americans are now relegated to the status of second-
     class citizens? Or is the real intent of this bill to allow 
     rich Cuban exiles the opportunity to get a jump start and 
     thereby head off the ``gringo'' business invasion certain to 
     follow the demise of the embargo and the inevitable passing 
     of Castro.
       Let us put an end to this special interest subterfuge. 
     Whatever obligation the United States had to my fellow Cuban 
     Americans has been more than fulfilled by providing us safe 
     haven and the opportunity to prosper and flourish in a free 
     society. Providing us, once again, another special exemption 
     which makes a mockery of the American Constitution, laws and 
     courts, not to mention making a farce of U.S.-Cuban policy, 
     is an insult to both the American and Cuban people.
       If we are going to lift the embargo for a few wealthy 
     exiles then, fine, let us lift it for all Americans. To be 
     fair and consistent, why not liberate the entire American 
     community to bring the full weight if its influence to bear 
     upon Cuban people? Implementing an aggressive engagement 
     policy to transmit our values to the Cuban people and to 
     accelerate the burgeoning process of reform occurring on the 
     island has a far better chance of ending Castro's rule than 
     the machinations of Helms-Burton.

     

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