There he was, Senator Bob Menendez, Democrat of New Jersey, holding forth from the well of the Senate making his Alamo stand against some very innocuous provisions to allow Cuban-American family members travel to Cuba and for American agricultural producers to carry out the business they already do with Cuba more efficiently during a time of economic recession.
Most analysts I speak with say this was a picture of a man trying to put his finger in a dike, knowing it was about to burst. Senator Menendez is, you see, the highest ranking Cuban American in Congress and, with the Diaz-Balart brothers and Rep. Lehtinen in the minority, the last hope for defending the embargo against Cuba in the 111th Congress.
Now, however, the dike has burst. At a time when the nation is reeling from the worst recession in years, our failed embargo on Cuba is keeping American farmers and businesses from significant orders. After the devastation of the 2008 hurricanes, the Cuban government is providing 75% of the food for its 11 million people. Most of that has to be imported from countries much further away than 90 miles. China just received the order for a new fleet of Cuban Buses--not Detroit. One third of Cuba's housing stock is still gravely damaged or destroyed because the island cannot get the building materials to rebuild. Yet American suppliers would be happy to fill those orders.
Today that objective reality was made political reality by 15 Senators who signed onto a letter organized by Max Baucus, an ag state Senator from Montana. Addressed to Treasury Secretary Tim Geithner, the Senators urged Tim Geithner not to stray from the letter of the law as passed by Congress in the Omnibus legislation, in effect telling Geithner that whatever deal Menendez thought he had with Treasury, it shall not stand.
This is important. The 2008 presidential election showed that the Cuban American community in South Florida no longer has a lock on Florida's electoral vote, liberating the president from having to continue a policy of isolation that makes no sense for America. This letter, and its strong showing of support in the Senate, reveals that the Congressional control that pro-embargo members had is crumbling around them.
Menendez had already angered the Administration by holding up the appointment of Science Advisor John Holdren over perceived slights on Cuba policy. That Menendez, a member of the Senate Democratic Leadership, caused such tumult and likely embarrassment for the Obama administration and for Senate Majority Leader Reid on a must-pass piece of legislation was too much, and now Senator Baucus has added some parliamentary dynamite.
The new reality is that there is no political obstacle to a decisive shift on U.S. Cuba policy. Not in Florida and not on Capitol Hill. Now the question is about political will in the White House.
I have reprinted the letter and signatories below.
March 16, 2009
Secretary Timothy F. Geithner
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
Dear Secretary Geithner,
We are concerned by a March 11 Office of Foreign Assets Control (OFAC) notice outlining its planned implementation of provisions passed in the Omnibus Appropriations Act of 2009. The intent of those provisions was to facilitate already legal agricultural trade with Cuba.
The Trade Sanctions Reform and Export Enhancement Act (TSRA) of 2000 authorized agricultural exports to Cuba by payment of cash in advance or third-country bank letters of credit. For several years, until early 2005, such cash-based sales were taking place and working well. After goods shipped from U.S. ports, the Cuban buyers initiated payments, routing them through third-country banks, as required by the law. There were no reported instances in which a Cuban buyer took possession of U.S. goods prior to completing payment to the U.S. seller, a fact acknowledged by the Treasury Department during the confirmation hearing of Deputy Secretary Kimmitt in July 2005.
Despite this fact, OFAC issued a rule in February 2005 that defined “payment of cash in advance” as payment prior to shipment of goods. The change in definition has brought all cash-based sales to a halt, rendering the cash in advance provision useless and undermining Congress’s intent to facilitate agriculture sales to Cuba. Your March 5, 2009 letter stated that OFAC will continue to use this definition. This is contrary to the intention of the provisions included in the Omnibus legislation to halt this use.
We are troubled to see OFAC continue this practice. Its March 11 notice mistakenly suggests that the “ordinary commercial meaning” of “cash in advance” requires payment prior to shipment of goods. Such an interpretation is legally inaccurate. The American Law Division of the Congressional Research Service has studied this issue in depth and concluded that, “[I]t would appear difficult to find legal support for OFAC’s interpretation that ‘payment of cash in advance’ requires payment be received prior to shipment. As a review of four traditional methods of payment indicates, it appears customary within the international trade and finance community to place the emphasis on the legal transfer of control, rather than on the date of shipment…OFAC’s interpretation appears to limit the available payment options to those that are considered risky, undesirable, and underutilized….”
In your Questions for the Record during consideration of your nomination earlier this year, you committed to “… taking great care to follow congressional intent and working closely with members of Congress to ensure that OFAC’s activities with regard to Cuba are achieving its important objectives without unnecessary hurdles or unreasonable administrative delays.” We urge you to stand by that pledge.
We look forward to working closely with you on this matter.
Sincerely,
Senator Max Baucus Senator Richard Lugar
Senator Jeff Bingaman Senator Mike Enzi
Senator Tom Harkin Senator Pat Roberts
Senator Blanche Lincoln Senator Mike Crapo
Senator Jon Tester Senator Kit Bond
Senator Patty Murray Senator Mark Pryor
Senator Mary Landrieu Senator Maria Cantwell
Senator Tim Johnson