[Congressional Record Volume 142, Number 30 (Thursday, March 7, 1996)]
[Extensions of Remarks]
[Pages E308-E310]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




CONFERENCE REPORT ON H.R. 927, CUBAN LIBERTY AND DEMOCRATIC SOLIDARITY 
                         (LIBERTAD) ACT OF 1996

                                 ______


                               speech of

                             HON. JACK REED

                            of rhode island

                    in the house of representatives

                        Wednesday, March 6, 1996

  Mr. REED. Mr. Speaker, today the House is considering legislation in 
the wake of the recent attack by the Cuban Air Force on two unarmed 
civilian aircraft. This outrageous, unprovoked act resulted in the 
tragic loss of four American lives. I, like most Americans, believe the 
United States must strongly condemn this act and work to promote a 
democratic Cuba. Unfortunately, I do not believe that H.R. 927 will 
accomplish this goal.
  This attack clearly illustrates the breakdown of the Cuban Government 
and the desperation that Fidel Castro faces in trying to hold onto 
power. The question we must answer is: how best to hasten the end of 
the Castro regime? Regrettably, the bill before us is not the answer. 
Isolation has not been successful in

[[Page E309]]

bringing down Castro. It is contrary to the policy we pursued in ending 
the cold war, and, indeed, it was not the course of action which 
resulted in the peaceful transition to democracy and market economies 
in Eastern Europe.
  H.R. 927 will also worsen conditions in Cuba and result in greater 
suffering by the Cuban people who remain hostages of Castro's 
government. By increasing the hardships of the Cuban people, we are 
running the risk of increased violence in this already volatile nation, 
as well as the potential outflow of refugees. In addition, this 
legislation would allow United States citizens to sue foreign companies 
which traffic in property confiscated in Cuba. I believe such a 
provision will swamp already overburdened U.S. courts, and I submit for 
the record an article from the Washington Post which further details 
the adverse effects of this measure.
  The Cuban Government's action which resulted in the deaths of United 
States citizens cannot be justified, and I believe it is necessary to 
put pressure on the Cuban Government to recognize this serious breach 
of international law, to pay reparations, and to punish those 
responsible for this heinous act. The President took the necessary 
initial steps in response. However, H.R. 927 is contrary to our 
ultimate foreign policy goals. By tightening the embargo, this 
legislation will only succeed in further isolating the Cuban people, 
raising tensions, and endangering a peaceful transition to democracy. I 
voted against the bill last September, I will do so again today. I urge 
my colleagues to oppose H.R. 927.

                [From the Washington Post, Mar. 3, 1996]

 The Great Cuban Embargo Scam--A Little-Known Loophole Will Allow the 
                       Richest Exiles to Cash In

                         (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 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-Burton 
     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? 
     Not 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.-Cuba 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,

[[Page E310]]

     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.

                          ____________________