Breaking Sanctions with Cuba?
By: Denise Simon | FoundersCode.com
Cuba is a state sponsor of terrorism, that is until the White House decided it was no longer.
Cuba supports Iran’s nuclear ambitions and opposed IAEA rebukes of secret Iranian enrichment sites. The two countries have banking agreements (Islamic Republic News Agency),economic cooperation and lines of credit ( FNA), and three-way energy-focused treaties with Bolivia (CSMonitor). Cuba and Iran hold regular ‘Joint Economic Commission’ meetings; the latest, in November 2009, further expanded bilateral trade and economic ties.
The LIBERTAD Act, known as the Helms-Burton law as stated in the text, Fidel and Raul Castro cannot be part of the governing structure. Cuba has supported and provided safe haven to members of the Basque Fatherland and Liberty (ETA) and the Revolutionary Armed Forces of Colombia (FARC). Both are U.S.-designated Foreign Terrorist Organizations (FTOs). The Obama administration would therefore need to remove ETA and FARC from the FTO list, before removing Cuba from the state-sponsors-of-terrorism list.
The State Department terrorism report also makes references beyond ETA and FARC — most significantly that Cuba harbors several fugitives of U.S. justice. Terrorists, murderers, and other violent criminals are being protected, well fed, and supported by the Communist regime. Among these is a woman convicted of first-degree murder, Joanne Chesimard. Also known as Assata Shakur, she is on the FBI’s Most Wanted Terrorists list for executing a New Jersey State Police trooper. With the help of the Black Liberation Army, she broke out of prison and found refuge in Cuba. According to the FBI, Chesimard “continues to profess her radical anti-U.S. government ideology.” Read more here from NRO.
Anyone remember Cuba sending arms to North Korea that was captured by Panama? The United Nations even declared that Cuba broke the Arms Resolution.
Russia may build a large international airport in Cuba with investors from the United Arab Emirates, Russian Industry and Trade Minister Denis Manturov said in an interview with a newspaper in Abu Dhabi.
Manturov told newspaper The National that Russia is in discussions with Abu Dhabi’s Mubadala investment company to invest in building a hub in Cuba for flights to Latin America. Russia is ready to invest $200 million in the project. More here.
Cuba is a problem and history matters.
Dates and actions going forward.
Related reading: Cuba and China link up to develop 18-hole golf course
Related reading: The Cuban Military is the Largest Conglomerate, run by the Castro Brothers
For a complete list and timeline of sanctions against Cuba, go here. Most of the sanction activity occurred in 2016 due to the Obama White House normalizing relations with the country, the Castro brothers and appeasing Russia. It must also be noted that Cuba has been propping up Venezuela for many years.
October 10, 2003: In response to a crackdown on human rights by the Castro regime, President George W. Bush announced a measure to tighten sanctions on the country, including increased border inspections of travelers and shipments between the two countries.
May 2009: The Obama administration lifted restrictions on Cuban-Americans traveling and sending money to Cuba, also allowing U.S.-based telecommunications firms to seek business on the island. More here.
Why is any of this important? Who is who and breaking sanctions perhaps via the United Arab Emirates and shadow companies?
Some key names and positions:
Larry Glick, EVP, Strategic Development
Jason Greenblatt, Chief Legal Officer
Ron Lieberman, VP, Special Projects
Edward Russo, Lawyer and Director of Florida-Cuba Environmental Coalition, Inc.
Melissa Nathan, Spokesperson
Antonio Zamora, Managing Member at Cuba Portal, LLC, Investment Promoter and here
Bloomberg: Cuba has only one 18-hole golf course: the government-run Varadero Golf Club, about two hours east of Havana. Built on the 1930s estate of chemicals magnate Irénée du Pont, it was refurbished in the 1990s when the government turned to tourism to bolster its economy after the fall of the Soviet Union. Du Pont’s former residence, Xanadú Mansion, serves as the clubhouse. On the third floor, a wood-and-marble bar offers sweeping views of the Florida Straits.
The course, expanded by Canadian architect Les Furber, is largely flat and littered with palm trees, and the greens fee runs $70. One reviewer described it as “inoffensive golf at its finest.” Yet lining up a putt on the 8th or 18th holes, both of which are right on the azure water, even a duffer can’t miss Cuba’s potential. With fertile soil, plentiful green coastline, and topography that spans plains, rolling hills, and rugged mountains, the island is a golf course architect’s Shangri-La.
On an afternoon late last year, the golfers teeing off included a group of U.S. executives from the Trump Organization, who have the enviable job of flying around the world to identify golf-related opportunities. The company operates 18 courses in four countries, including Scotland and the United Arab Emirates. It would like to add Cuba. Asked on CNN in March if he’d be interested in opening a hotel there, Donald Trump said yes: “I would, I would—at the right time, when we’re allowed to do it. Right now, we’re not.” On July 26 he told Miami’s CBS affiliate, WFOR-TV, that “Cuba would be a good opportunity [but] I think the timing is not right.”
That, however, hasn’t stopped some of his closest aides from traveling to Cuba for years and scouting potential sites and investments. The U.S. trade embargo, first established in 1962, prohibits U.S. citizens from traveling to the island. But over the years, the U.S. has carved out allowances for family visits, journalism, and other social causes. Most commercial activity is still forbidden, though, with a few exceptions, such as selling medical supplies or food. Golf isn’t on that list.
Trump Organization executives and advisers traveled to Havana in late 2012 or early 2013, according to two people familiar with the discussions that took place in Cuba and who spoke on condition of anonymity. Among the company’s more important visitors to Cuba have been Larry Glick, Trump’s executive vice president for strategic development, who oversees golf, and Edward Russo, Trump’s environmental consultant for golf. On later trips, they were joined by Jason Greenblatt, the Trump Organization’s chief legal officer, and Ron Lieberman, another Trump golf executive. Glick, Greenblatt, and Lieberman didn’t respond to requests for interviews. Melissa Nathan, a spokeswoman for the Trump Organization, declined to answer a list of detailed questions.
In a series of telephone interviews, Russo confirmed he’s traveled to Cuba about a dozen times since 2011. Although he’s spearheading the company’s Cuban golf efforts, according to three people familiar with his role, Russo says these trips haven’t been on behalf of the Trump Organization. He says he’s taken at least one with Glick to go bird-watching and “check out some habitats”—activities that could conceivably qualify for exemptions to the travel ban.
Despite saying his trips with Trump executives were unrelated to the Trump Organization, Russo referred questions about those trips to Eric Trump, the 32-year-old son of the Republican presidential nominee and the company’s executive vice president for development and acquisitions, including golf. “In the last 12 months, many major competitors have sought opportunities in Cuba,” Trump said in an e-mailed statement. “While we are not sure whether Cuba represents an opportunity for us, it is important for us to understand the dynamics of the markets that our competitors are exploring.”
So which was it: a little birding? Keeping an eye on the competition? Maybe neither. According to Antonio Zamora, a well-known Cuban-American lawyer, who says he’s advised the Trump Organization on Cuba for about a decade, he and Russo visited a prospective golf site east of Havana in an area called Bello Monte several years ago.
Based in Miami, Zamora took part in the 1961 Bay of Pigs invasion but is now an outspoken critic of the U.S. sanctions. “An embargo that has been in place by a world power like the United States for 50 years and has not accomplished anything substantial is a disgrace,” Zamora writes in his 2013 book, What I Learned About Cuba By Going To Cuba. “This is not what great powers do.” He advises U.S. investors throughout Latin America. He’s circulated conceptual drawings of a Trump tower in Havana beside refurbished versions of the Hotel Neptuno-Triton, a dilapidated pair of 1970s buildings in the city’s business district, according to a person who saw them. (Zamora denies this.)
Zamora does say that he discussed with the Trump Organization the possibility of teaming up with a foreign company to give Trump a minority position in a venture. He says the deal failed to materialize. Zamora dismisses any legal concerns about this, saying he’s been to Cuba dozens of times for conferences, and that the U.S. Department of the Treasury doesn’t bother with these kinds of trips. “It’s a nonissue,” he says.
Farhad Alavi, managing partner of Akrivis Law Group in Washington and an adviser to companies on U.S. sanctions, says that, before 2015, exploring most potential deals in Cuba was “not even in the realm of what Treasury might have licensed.” He adds that “prior to 2015, a fact-finding trip by a U.S. person for a business activity, like building a golf course or hotel, was prohibited. It’s not under one of the categories of permissible travel to Cuba.”
In January 2015, the Treasury Department broadened an exception for “professional research.” That’s viewed by attorneys to encompass all sorts of potential investment activity—short of signing deals. To finalize an investment in Cuba requires a specific license from Treasury’s Office of Foreign Assets Control (OFAC). Starwood Hotels & Resorts and Marriott each announced in March they’d received authorization. (A Treasury spokeswoman says it is agency policy not to confirm or deny whether specific licenses have been issued.) Russo says the Trump Organization hasn’t secured one.
“Professional research” makes it easier for companies to explore business opportunities in Cuba, but it may not put the Trump Organization in the clear. Golf could be seen as promoting tourism, which remains illegal for U.S. companies. (President Barack Obama can’t change that—the tourism ban cannot be repealed without an act of Congress.) “If the Treasury Department believed that a new golf course in Cuba were intended to attract tourists from outside Cuba, then U.S. persons who meet in Cuba to develop the golf course could be charged with promoting tourism in Cuba,” says Richard Matheny, chair of the national security and foreign trade regulation practice group at Goodwin Procter in Washington. “This is unlawful under the current sanctions.”
“You can’t help but say, ‘Wow, here’s a hotel that could be renovated’
Golf’s history in Cuba is tinged with the absurd. In the 1950s the country staged tournaments that weren’t on the official PGA Tour but still attracted top players. In 1958 famed mobster Meyer Lansky—who’d been deported from the U.S. a decade earlier and was running a number of successful casinos in Cuba—set out to build the greatest hotel Havana had ever seen and further showcase the sport. With backing from Frank Sinatra, his Monte Carlo de La Habana was to feature a casino, a helicopter landing pad, and several glorious courses.
Lansky’s timing was spectacularly bad. A few weeks after construction started, Fidel Castro began his final rebel offensive against Cuba’s president, General Fulgencio Batista. On New Year’s Eve, Batista fled to the Dominican Republic. Castro rolled into Havana a few days later, and Lansky soon halted work. Castro declared golf “a game of the idle rich and exploiters of the people” and plowed over almost all the island’s courses. Even so, a series of early 1960s photographs shows Castro and his fellow revolutionary Che Guevara hamming it up with golf clubs. Castro was a baseball player, but Che took up golf as a young man and was rumored to have a 4 handicap. Last year a Cuban composer and an American librettist staged an opera in Havana based in part on those photos.
These days, Cuban officials actively promote golf development. A 200-page brochure published by the government late last year, Portfolio of Opportunities for Foreign Investment, features three hoped-for golf developments around the island, including two under contract with British and Chinese developers. The government also reportedly has a deal with Spanish airline Air Europa to develop a hotel and golf course at Playa El Salado, about 25 miles west of Havana. The Trump Organization has a particular interest in that development, according to a source familiar with the matter.
Although it’s not clear if Donald Trump is aware of his aides’ activities in Cuba—he didn’t return phone calls for this article—he’s demonstrated a familiarity with the rules for investing there. In his March interview with CNN, he said he wouldn’t enter Cuba “on the basis that you get a 49 percent interest, because right now you get a 49 percent interest.” The exchange was an apparent reference to Cuban law limiting foreign investors’ stakes in Cuban operations to less than 50 percent. Trump didn’t mention the more onerous U.S. regulations limiting investment in Cuba. He said he likely favored Obama’s efforts to normalize relations with Cuba, “but I’d want much better deals than what we’re making.”
Encouraged by the White House’s loosening of regulations, plenty of other U.S. companies, including Airbnb, Google, PayPal, and Western Union, are gradually entering Cuba, but they must still carefully navigate the embargo. In late June, Starwood began managing a refurbished hotel in Havana’s main business district, the first U.S.-managed hotel in Cuba in 60 years. At a June event in Manhattan, a Starwood executive repeatedly referred to the “business travelers” who would be attracted by the property, apparently mindful of the perils of promoting tourism.
The repercussions of breaking the embargo are real. Violators are still being penalized, even for ventures only remotely connected to Cuba. In February, the Treasury Department alleged that two Cayman Islands subsidiaries of the energy-services company Halliburton had been involved in oil drilling off the shore of Angola, as part of a consortium in which the Cuban government held a 5 percent stake. Halliburton agreed to pay the U.S. $304,706 to settle the matter.
For the Trump Organization, there’s a further concern: the potential conflicts of interest posed by Trump’s far-flung business empire should he be elected president. In addition to his operations in the U.S., Trump operates in Azerbaijan, Brazil, Georgia, Israel, Turkey, and several other countries. Federal conflict-of-interest laws do little to prevent presidents from continuing to exert influence over their businesses—even as they exercise powers that could broadly benefit those interests.
“Make sure that whatever you do is absolutely legal in every way, and at some point, when it’s legal, I’d be interested in it”
Russo, 70, lives in Key West, Fla. He first encountered the Trump Organization in 2002. The former chairman of the town planning board in Bedminster, N.J., Russo helped Trump get authorization for his golf course there. Though he has no formal environmental training, he appears before local regulators around the country seeking approval for Trump projects.
On the phone, he’s friendly, a talker, but the first to admit his memory’s not the best. “I don’t remember last night,” he says. He was unsure how many times he and Glick, Trump’s golf chief, had traveled to Cuba. He says he took Glick on at least one trip to Cuba for some bird-watching.
“He was into it. And that’s the thing. I’m going to Cuba, I’m bringing people to Cuba. And I know people from Trump, I know people outside of Trump. So if somebody from Trump wanted to come with me, I don’t think that means they were representing anything having to do with the Trump Organization. They just enjoyed the environment, like you or I would.” Russo says that on his travels in Cuba, “you can’t help but say, ‘Wow, here’s a hotel that could be renovated,’ or, ‘This is a particular spot that would be perfect for this or perfect for that,’ and I would only hope that someday that the Trump Organization or other investors could develop something nice over there.”
Asked if he’s discussed Cuban opportunities with Donald Trump, Russo says: “I don’t remember exactly what our conversations were. But you would have to realize that talking to Donald Trump is, you know, it’s a very complicated experience.” He added later that Trump admonished him on Cuba to “make sure that whatever you do is absolutely legal in every way, and at some point, when it’s legal, I’d be interested in it.”
Glick, 49, is close to the Trump family and has worked for Trump for nine years. He recently traveled with Eric Trump, checking the status of the company’s developments in Bali, Dubai, Manila, and Aberdeen, Scotland, according to pictures posted by the two men on their Twitter accounts. He sits on the board of Eric’s foundation. Although he has no formal campaign role, he’s a fierce advocate for Trump’s White House run, excoriating Hillary Clinton on social media almost daily. He accompanied both adult Trump sons at the Republican National Convention during TV interviews. One person recalled a conversation with Glick after he returned from Cuba during which he described the company’s ambitions for golf on the island. Glick didn’t respond to requests for comment.
For his part, Russo gets that even now, pursuing golf in Cuba is problematic. “I would interpret golf as tourism, and therefore it can’t be done at this time,” he says. He maintains his dozen or so trips have all been environmental—and for birding—with only the most casual inquiries into golf-related properties. “Given the nature of the regulations and OFAC’s licensing trends, I would be quite surprised if it authorized multiple trips to Cuba for nonspecialist, nonexpert, random bird-watching,” says Alavi, the U.S. sanctions adviser.
In February 2013, Zamora, the Cuban-American lawyer, set up a nonprofit in Miami called the Florida-Cuba Environmental Coalition. Its directors include Russo and several advisers for investors in Cuba, including some who have consulted for the Trump Organization. Certain “environmental” projects qualified as one of the reasons U.S. citizens could travel to Cuba legally in 2013. When he’s asked about the nonprofit, Russo’s memory falters again. “I don’t think I’ve ever been to a meeting. I didn’t even know my name was on that group,” he says.
Another board member of the coalition, Dominic Soave, is a Havana-based business consultant from Canada who’s made introductions for Trump executives in Cuba, according to two people familiar with the matter. He’s also circulated a set of drawings of Havana with a Trump tower. “I really haven’t been advising anyone,” says Soave. He, Zamora, and two other directors say their nonprofit has taught sustainable fishing techniques to Cuban fishermen. The group has also promoted the Ernest Hemingway International Billfishing Tournament in Cuba, helping Americans get licenses to take part.
A second nonprofit, the American-Cuban Golf Association, was set up last year by Russo’s wife, Jennifer Hulse, and lists a residence in Key West as its address. The group lists her and her husband as directors. The organization’s third director is David Schutzenhofer, who runs the Trump National Golf Club in Bedminster. Schutzenhofer did not return calls prior to publication.
Asked about the golf nonprofit, Russo first seems confused: “What is that supposed to do?” he asks. “Am I listed on that also?” He eventually explains that the group was intended to provide cross-cultural golf instruction: Cubans teaching golf to Americans and vice versa. “You should know that the organization was my idea and had nothing to do with the Trump Organization,” Hulse wrote in an e-mail. “One of my passions in life is golf, and I would like to find a way to bridge the distance between our countries through love of the game.”
A couple of Hulse’s cultural exchanges may have taken place toward the end of last year. Photographs and a video posted to Hulse’s Facebook page in December show her husband and Greenblatt, the Trump chief legal officer, at the Floridita restaurant in Old Havana, a favorite of Hemingway’s. Another set of pictures, posted a month earlier, shows Russo, Glick, Lieberman, and Soave listening to a live performance of Hotel California in the lobby of the Parque Central hotel in Old Havana.
Still another series finds the men playing at the Varadero course. One shot shows Russo teeing off, with Glick and Lieberman waiting their turn. Below the pictures of the Trump executives golfing, one Facebook friend asked: “How is the golf course?”
Hulse replied: “Not spectacular but it’s the only one in Cuba right now. Plans to build many more in the near future.”