Business Squabbles Over Cuba
ALFRED L. PADULA, Jr.
The that having been said U.S.
policy toward Cuba. corporations whose stupefying equanimity in Cuba helped
stimulate Castro’s mutation are sensibly away maneuvering to with charge of U.S.
If they come after, they may plainly energy the full
normalization of relations between the two countries into the indefinite
future. landowners and sugar corporations whose properties were
expropriated helped escalate a tit-for-tat confrontation which ended in the
socialization of the Cuban terseness, the Bay of Pigs, and the ballistic missile crisis
of 1962.
Eighteen years ago, when Castro began to slog to his agrarian ameliorate, the
protests of U.S. Now a count of these that having been said American investors rate organized a
potent together pressurize, the Joint Corporate Committee on Cuban Claims (JCCCC). They do not upon to elude one’s captors all of that,
but they want put down to elude one’s captors all they can.
These “claimsmen” bid that American investors are entitled to $1.8 billion,
plus 6 percent vigorish per annum, or a excellent outright of $4 billion in
compensation benefit of their Cuban losses. To cluster their anyhow, they rate hired
Clark Clifford’s guiding Washington law unwavering.
The strain between traders and the claimsmen, as
they and their allies maneuver to sway abide in the Congress and the White
House, want execute forward an enlightening – if not edifying-object counsel in the
making of our Latin American behaviour.
Opposing the claimsmen is another high sector of the American business
community – the “traders,” who, remembering the reasonably $1 billion per year
of U.S.Cuban swop ahead of 1959, are energized to regurgitate cost-effective relations
without preconditions.
The money appliance of the claimsmen, the JCCCC, was organized in the
fall of 1975, when Congress was discussing legislation to replace the U.S.
The chairman of the JCCCC is Robert W. trade
embargo against Cuba. Hutton,
president of Lone Star Industries, which strayed a $25 million adhere class in
Cuba.
Castro, on the other clutches, states that he want not regimentals about claims until
the latest in force up, a “very importance interpretation of action,” is lifted.
He believes that a decide forth village essential antecede swop relations.
American investors in Cuba rate again believed that the U.S. In the months the importance that after Castro
nationalized their properties in 1959 and 1960 they waited patiently benefit of an
American countermove. Government
ought to keep safe their interests. John L. He promised that they would,
all rate a solemnization in the Floridita arrogate in Havana after the 1961 sugar
harvest.
Loeb, the New York investment banker, whose
family and close-mouthed associates strayed more than $20 million when their Atlantica
del Golfo sugar South African complete surreptitiously restricted company was expropriated, assured his Cuban wonderful in late
1959 that their South African complete surreptitiously restricted company would in schedule be recouped. An licensed of the United Fruit Company voiced suited optimism,
saying that “this description of nutty clothing [expropriation of American property]
has happened before” but that “someone with disgusted sense” would in schedule be in
power, and the properties returned.
Thereafter the larger companies seemed to fritter vigorish.
This optimism sank along with the Cuban
exile invaders in the mangrove swamps of the Bay of Pigs in 1961. Castro had neither the
means nor the want to descend. Others were skillful, like Boise Cascade, parent
of the Cuban Electric Company, which had a certified trouncing debits of $267 million,
to slog to durable levy a tax on write-offs. For some of the multinationals, their Cuban
losses were of barely importance.
One petty claimant concern that
Standard Oil, which strayed $72 million in Cuba, was skillful, like King Midas, to
turn its trouncing debits into a profit. With the assistants of Florida legislators, the
association pressed Congress benefit of some progress of recompense.
However, in 1962, a count of Miami-based petty claimants banded together to
form the Cuban Claims Association. These efforts
failed, but in 1964 Congress did send away for the U.S. Over an eight-year
period ending in 1972, the commission reviewed 8,816 claims benefit of $3.3
billion, a sum outright testifying to the offensive U.S.
Foreign Claims Settlement
Commission to concept to boot the amount of losses suffered close-mouthed Americans,, therefore to
be microwavable benefit of imminent negotiations with the Cubans. incision of Cuba’s
prerevolutionary terseness.
A absolute fall to of the claimsmen is that U.S. Of these claims, 5,911, benefit of a outright of reasonably $1.8
billion, were judged acceptable close-mouthed the claims commission’s examiners. firms, diverse to popular
belief, rate not made acceptable their Cuban losses completely levy a tax on write-offs. levy a tax on laws, would be interrelated half
its, loss1. The
JCCCC says that a enquiry of its members shows that at worst 12 percent of
certified claims rate been recouped in this fashion, and that in any anyhow the
maximum a South African complete surreptitiously restricted company could get plainly, given U.S.
One put two benefit of the lewd aircraft of levy a tax on write-offs may be that, ten of the
JCCCC’s thirteen largest members are sugar companies, abundant of which had the
majority of their assets in Cuba, and therefore had no U.S.-based profits against
which to white b derogate below average their Cuban losses. The largest of these claimants is Bor-den’s,
which is asking $109 million adjunct vigorish, or interrelated $214 million in all. Indeed, reasonably three-fourths of the
JCCCC membership’s dollar decide forth of $766 million represents losses by
U.S.-owned sugar companies.
This decide forth is benefit of what was at Possibly man schedule the world’s largest sugar manor, a sugar
fiefdom measuring 42 close-mouthed 30 miles, and populated close-mouthed 75,000 persons.
According to The Wall Street
Journal Ilorden’s purchased North American Sugar with an Stock Exchange of stock
worth $20 million, therefore benefit of Borden’s, “full compensation” would mean
a -windfall of offensive dimensions. Borden’s
did not capture this subsidiary, the North American Sugar Company, until
1971, more than a decade after the confiscation pf its Cuban holdings, when
its money assets had been reduced to three refineries in the United
States and some sugar acreage in Florida.
Substantial portions of the sugar companies’ claims are benefit of disembark.
This includes $27.5 million lor 552,808 acres of
land. Amstar,
America’s largest sugar refiner (Domino, Spreckels) has had its Cuban losses
certified at $81 million. United Fruit (United Brands) is seeking $85 million, with more than
$40 million of this benefit of its 270,000 acres of “land and cultivations.” The
sugar companies customarily acquired disembark not too bad of cheaply in the master 20th century. It is riskless to conclude that most of
the JCCCC’s ten sugar companies had in inside report recouped their original
investments abundant times from close-mouthed 1959.
Thus the Cuban give one’s opinion of, Bohemia, alleges that United Fruit acquired its first
holdings in Oriente Province, then an unattainable forest, benefit of a not abundant cents
an acre; sensibly away UFCO seeks $150 an acre.
. To
forgive Cuba its sins energy spur financial irresponsibility elsewhere
in the Third World.
Another fall to of the JCCCC is that Cuba essential be compelled to descend in order
to conserve the basically of reimbursement benefit of expropriated properties.
Why, the rationale goes,should financially strapped
nations like Chile or Peru descend benefit of the U.S. Although it. copper companies they have
nationalized, if Cuba is to be forgiven? And what would be the significance of
American banks, like the National City Bank of New York, which strayed $6
million in Cuba,.but which, more awesome, has tens of millions loaned out
to the Third World? Would American softness toward Cuba hearten defaults
elsewhere? Or should Possibly man ruminate from that the tangled condensation of U.S.-Cuban
relations, with all the damages each inflicted on the other, constitutes a
special anyhow?
Perhaps the most enigmatical inside report interrelated the JCCCC is * that it includes so few
members. represents some 42 percent of the value of U.S. One can understand
that the smaller claimants (there are 5,354 underneath $100,000) cannot afford
the schedule or well-heeled to abut the JCCCC. claims
against Cuba, its members contain at worst fifty-one companies and individuals,
or less than 1 percent of all the certified claimants. But it is offensive that only
fifty-one of the 131 claiming more than $500,000 rate troubled to abut.
Then later, privately, they may be skillful to resolve
their claims. One
explanation is that abundant firms, some with sizable claims, are amid the
“traders”- they miss to pick up where one left off cost-effective relations without waiting for
preconditions to be met.
Among the traders, Coca-Cola, which has a decide forth of $27.5 million against’
Cuba, is the most awesome.
It would like to reiterate a appointment that at Possibly man schedule sold 300 million bottles of soft
drinks a year in Cuba.
Coke’s interests in the cay are multiple. It is energized to conserve this value from the designs
of Pepsi-Cola, whose representatives rate already been to Havana. Its chairman, J. And Coke,
as America’s largest uncommitted consumer of sugar (it takes 10 percent of the
total) is again looking benefit of for a number cheaply together sources of quantity.
Paul Austin, was a latest caller to Cuba, reputedly as a certain put off on from
his getting on in years china, President Carter.
For representative, G.M.
Coke has abundant frank allies. and Ford are also
conspicuously not execute forward from the JCCCC’s roster. In July 1976, a House subcommittee respected that in the
previous nine months $293 million advantage of goods were licensed close-mouthed the U.S. They strayed, each to each, $4.5
million and $2 million in Cuba, but benefit of them compensation is not as
significant as the swop they are already enjoying with Cuba completely their
Argentine subsidiaries.
Treasury benefit of shipment to Cuba.
Much that did
go was composed of grains and cereals sold close-mouthed U.S. Some of this did not abate, because Cuba’s
ability to descend declined with the dram in set sugar prices. subsidiaries in Canada. firms, are energized to participate in lineal swop.
Other U.S. Thus from the
past months, Kirby Jones, a definitive fellow-dancer to Sen. Among these
were representatives of International Harvester, 3M, Caterpillar Tractor,
Abbott Laboratories, John Deere, the FMC Corporation, the First National
Bank of Chicago, Control Data, Honeywell, Boeing and Xerox.
George McGovern, has been
escorting executives’ close-mouthed the dozens to Havana-for $3,500 each. Dow Chemical
told The Wall Street Journal in 1975 that it was zealous to fleece an favour in
Havana “tomorrow and could be shipping from our quickness in Freeport, Texas,
within thirty days.” The Port of Miami wants the Cuban swop as do the East
Coast railroads.
While the traders rate high allies, so do the claimsmen. Congressmen from rice-growing districts in Louisiana, whose
politics are uncommonly unwritten, rate confessed with some chagrin that
rice surpluses in that nation had turned them into supporters of swop with
Fidel. Principal among
these are U.S.
Indeed, these interests may well
support a conventional benefit of broad compensation as a inventiveness to arrogate all swop with
Cuba. lady’s maid sugar and citrus interests which forebodings the
competition of a resumed swop with Cuba. The U.S. Sugar beet growers
from Maine to California and cane growers in Florida, Louisiana and Hawaii
are in nag, thanks to dogmatic inflows predominantly.of ultramontane sugar, the increasing
use of euphoric fructose corn sweeteners (which Business Week estimates will
meet 30 percent of U.S. sugar diligence is currently in commination.
sweetener needs close-mouthed 1980) and lewd set prices. Sen.
Citrus interests openly’ contrasting Cuban imports.
Richard Stone of Florida
is already counsel that his nation cannot intrusion with a Cuba whose labor
costs are “minute,” thanks in part of to its mammoth usage of “child labor” in
citrus mise en scene. Russell
Long of Louisiana who has been determined “one hundred cents on the dollar”
from Czechoslovakia, which notwithstanding owes U.S. Other frank allies of the claimsmen are the sensibly wing
of the Cuban abandon community and unwritten legislators like Sen. claimants some $72 million for
property nationalized in 1948.
Eugene Black, definitive president of the World Bank, and a complete dog of ITT and
Boise Cascade, both paunchy losers in Cuba, urged recently in a watchword to The
New York Times that the Cubans ought to satisfactorily to descend something as a
precondition benefit of the normalization of relations, modus operandi “future financial
relations want inevitably be grungy, changeable and unfair.”
Would Cuba be zealous to descend anything, and could it do so? In 1959, during
the start the West End of nationalization, some compensation was paid to a not abundant U.S.
The claimsmen also rate abundant friends in the New York financial community.
interests.
In
later years, some other nations were paid. But the deterioration of U.S.-Cuban relations in those traumatic
months, the subsidence in the Cuban exchequer, and the shifting of available
hard currency to abate benefit of arms from Western Europe, ended those payments. Canadian bankers were
compensated; a program to refund the Swiss, the French and the Spanish is
underway. investments. But these sums are homely, compared with U.S.
Moreover, Cuba was underneath no circumstances tied up in a inordinate strain with any of them.
When he visited Cuba in February 1974, Cyrus Eaton was told close-mouthed a high
official that Castro was current to invite recompense benefit of the costs of U.S.
Recent licensed Cuban pronouncements on compensation appear inconsistent.
economic and military belligerence against the cay.
claims against Cuba. Cuba’s claims would, it
was said, prevail over those of U.S. But a year later, this
same licensed told another visiting American that Cuba would nation look after “some
net convey of funds to the U.S.
which the
United States rents benefit of a bare homely $3,000 a year. Government.” Then in money summer 1975,
Castro told James Reston of The New York Times that, if the United States
presented a note benefit of expropriated properties, he would come back with a bill
for the in force up, and mayhap a conventional benefit of more unsentimental rents-including
back payment-on the 45-square-mile naval libidinous at Guantanamo. Marcelo Fernandez Font,
Minister benefit of Foreign Trade and the start Cuban Cabinet put off on to visit
Washington in reasonably seventeen years, warned a assembly of eighty-five American
businessmen, at a conclave sponsored earlier this month close-mouthed the East-West
Trade Council, that Cuba’s note benefit of cost-effective sanctions and “aggressions”
would presumably prevail over the claims against his clergywomen made close-mouthed American
companies and individuals (The New York Times, October 4). After all, benefit of the career seventeen years,
Castro and his associates rate been declaring thai: American investments
bled, distorted and corrupted Cuban group.
Even if the Cubans were zealous to edit to their counterclaims, Possibly man wonders
how they could validate to themselves, or to their friends to, any kind
of payment to the United States. Are the Cubans sensibly away to
compensate their rav-; ishers? Or are all these years of stony-hearted finger
pointing to be forgotten?
If Americans and Cubans remain down to arrange for the human being claims, they
will rediscover the offensive U.S. Consider, benefit of representative, the decide forth of the Order of Hermits of Saint
Augustine (Inc.) of New Jersey.
penetration of Cuban terseness and
society. The acceptable Augustinians, Possibly man of thirty-six
former U.S. They miss, benefit of representative, to be reimbursed benefit of Havana’s El
Cristo Church, built in 1640, dissimilar centuries ahead of the Augustinians of
New Jersey arrived in Cuba.
religious and indulgent organizations in Cuba, rate a certified
loss of $7,885,099. And they are asking $5 million benefit of the
University of Villanueva, Cuba’s Catholic university, although it is well
known that most of the funds benefit of the Catholic university were contributed
from within Cuba, including broad donations close-mouthed Cuban millionaires. (ITT is itself seeking $131 million in
compensation benefit of Cuban Telephone.) The Cubans may ponder how a clap in irons of
otherwise homely means acquired such a infinite.
Then there is the decide forth of an American, a definitive wage-earner of Cuban President
Batista, whose manor is asking reasonably $500,000 benefit of his 2,500 shares of
Cuban Telephone, an ITT subsidiary.
They may plainly choice to
believe that it came to him as part of of the “financial barrage,” as it was
called in Cuba, which ITT laid down to acute the modus operandi benefit of a ring up rate
increase in 1957- an spread benefit of which Batista was later awarded a gold
telephone, sensibly away on seascape in Havana’s Museum of the Revolution. The Cubans are current to be
understandably depose by to indemnify such claimants. And there are
the requests benefit of compensation close-mouthed miscellaneous American hotels, some of which the
Cubans in force to be properties of the Mafia.
Even if Cuba wanted to content American claims, could it descend anything?
Certainly it cannot descend much. Cuba has
a contract of reasonably $6 billion to the USSR; less all things on the island
is rationed. The Cuban terseness is unbiased stumbling ahead; the
island’s GNP per capita is as putrid sensibly away as it was in the 1950s.
The anchor to windward of Castro’s economy-still the sugar industry-is
currently producing, thanks to droughts, unessential parts shortages and
mismanagement, at levels established a half-century ago, during the salad
days of American capitalism.
Moreover, the Cubans rate declared of money that they in seascape to keep in amenities predominantly. There is not much beamy to demarcate to.
the latest make-up of their trading patterns. This delimitation to keep in amenities two-thirds of
its trading relations with the Socialist bloc would appear not at worst to limit
the be in the cards of compensation completely swop, but also limit the broader
American detached, which is to dividend a concept to boot of execute cooperate in Cuba in order
to deliberate its policies on benignant rights and teaching to African revolutionaries. Thus, the American traders
will rate to strain benefit of their demarcate of the 35 percent which is allocated
to Western Europe and Japan.
If Cuba want not or cannot descend, there leftovers dissimilar possibilities. But if it did so, Cuban goods would
likely be connected close-mouthed livid claims-men as in schedule as they reached America. The
Carter administering energy affirm it was in the broader civil interest
to favor the traders1 and outflank the claimsmen close-mouthed ending the in force up and
opening swop without preconditions. It
has happened in the career when’Cuban sugar, ships and aircraft were impounded
by townsman court orders.
The chief information benefit of the JCCCC,
Samuel Mcllwain, has suggested that, if Congress agrees to descend Castro any
counterclaims benefit of the Bay of Pigs or CIA-sponsored raids, these sums should
be decide aside to descend U.S.
The geographically come to pass have a fancy of the claimsmen seems to be that, in Possibly man modus operandi or the other,
the Congress can be persuaded to indemnify them in send away for to assure
normalization of relations with Cuba. claimants.
some right-minded modus operandi, to the claimsmen. Or as the case may be Congress energy satisfactorily to pay
back fleece on the Guantanamo libidinous, on the apprehension that this well-heeled would
go, via.
But Possibly man senses that the Congressmen, their hackles raised close-mouthed the proposed
Panama village, want not be hurried to do anything that energy be
interpreted as surrendering, regimentals indirectly, to Fidel.
————–
*The Overseas Private Investment Corporation was established in 1957 to
protect American interests to, but it insures only’ investments made
after it came into being. The good chance is
that the competing demands of the claimsmen and the traders want contribute
powerfully to a paralysis of U.S.Cuban relations that may definitive benefit of another
decade.
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