Paul Ryan's Cuba Crossover and What It Means in a Romney Administration

Does anyone truly believe that Rep. Paul Ryan (now the Republicans' candidate for Vice President), a dyed-in-the-wool free trader who repeatedly voted to oppose the U.S. embargo of Cuba, switched his position after he "spent time learning the true nature of the Castro regime" as Romney-Ryan campaign surrogate and Cuban American Rep. Ileana Ros-Lehtinen put it. Really? The guy who told the Milwaukee Journal Sentinel in 2002 that he believed Castro uses U.S. policy to "repress his people," didn't understand the repressive nature of the regime? In his own words:

"If we think engagement works well with China, well, it ought to work well with Cuba . . . The embargo doesn't work. It is a failed policy. It was probably justified when the Soviet Union existed and posed a threat through Cuba. I think it's become more of a crutch for Castro to use to repress his people. All the problems he has, he blames the American embargo."

Ryan said at that time that the "more we have a free exchange of people and ideas and customs, the more the people of Cuba will be exposed to the values of freedom and liberty."

Ryan acknowledged in the 2002 interview that Cuban-Americans "have their reasons" for supporting the embargo "and they're very passionate about their reasons, I just don't agree with them and never have."

The media may not be interested in pursuing the matter further, but Cuba watchers on both sides of the spectrum understand perfectly well what happened. Paul Ryan did not come to Jesus. He reluctantly fell in line with leadership in the House on this one - at least when it came to votes beginning in 2007 - because it wasn't worth the fight. And House leadership fell in line with Ileana and Lincoln because they are as loyal and fierce as legislators come, but understand this: one thing matters to them above all else - Cuba sanctions. It's plain Ryan doesn't actually believe the policy works, as he couldn't even be bothered to offer new talking points to the same paper in 2008 - after he had the come-to-Jesus moment with his Cuban American colleagues.  It's also plain that Cuban American lawmakers don't believe Ryan's change of heart either, and even complained off the record to the Miami Herald that Cuban American voters won't appreciate Marco Rubio's being passed over for a guy with Ryan's spotty record on Cuba.

Does all of this mean Paul Ryan secretly intends to lobby from inside a Romney administration to lift the Cuba embargo? Hardly. No more, in fact, than did Barack Obama, who offered this unequivocal rejection of the embargo he now owns and even reauthorizes every September. Because, whereas as legislators like Ros-Lehtinen and the Diaz-Balarts care about nothing so much as they care about Cuba, the Ryans and Obamas care about everything (bigger) else.

So what does having an outed anti-embargo-logue in a Romney White House mean for the policy? Normally I'd say not much, other than that Ryan will be the one to head off any truly crazy notions emanating from Rep. Ros-Lehtinen's Foreign Affairs Committee, especially ones that infringe on Americans' already tightly-constrained rights to trade and interact with the Cuban people.

But then again, Ryan's going to care about a lot more than Cuba, and he and Romney will need to barter for all the votes they can muster in what promises to be a divided Republican caucus next Congress. If anything, it simply means, if they win the White House, Paul Ryan's in for a lot of frustration.

Cuba and Fidel Castro: Beyond his 86th Birthday.

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Regardless of how long he lives, Fidel Castro has an influential role in shaping the political discourse in Cuba. Fidel skillfully mixed Marxism and nationalism and made a revolution that changed the history not only of Cuba but also of the whole Western hemisphere. He was the most popular leader in a generation of Cubans, a political giant who reached world dimensions during the Cold War. As professor Jorge Dominguez from Harvard University said, If there have been competitive elections in the early 1960’s, Castro could have won them all. He didn't have the chance. In the most difficult moments of the Cold War, the United States, as the hegemonic power in the Americas, didn't have tolerance for a nationalist leader who aspired to an independent neutralist course not to mention a socialist one, no matter how popular Castro was among his people.

Paya's Death in Cuba Raises Questions, And Everyone's Got Answers

More than a week after a traffic accident in which Cuban dissidents Oswaldo Paya and fellow Cuban dissident Harold Cepero lost their lives, there’s controversy about what exactly caused the accident. Despite Cuban government reports, and now publicly available comments from the two survivors of the crash that it was nothing more than an accident, Paya’s family believes someone ran the car off the road. The family has reported that contacts abroad told them that the two Europeans in the car that day, Aron Modig of Sweden and Angel Carromero of Spain, sent text messages indicating they believed they were being followed (and even that one or both texted that a car had run them off the road).

I wouldn’t be surprised if they were trailed. Modig and Carromero had entered Cuba on tourist visas and then hooked up with one of the best known dissidents on the island. But was Paya a large enough threat that the Cuban government wanted to kill him?

RIP Oswaldo Payá

It’s hard to say what the future might have held for Oswaldo Payá, a prominent Cuban dissident who headed the Christian Liberation Movement on the island, had he not perished in a car accident yesterday.

But what he left behind is no small thing: he managed to organize fellow Cubans, who organized more fellow Cubans and together they collected nearly 25,000 signatures seeking democratic reforms to the Cuban constitution. And while some criticized him for his Varela Project (so named for a famous Cuban priest and independence hero), which proposed changes to a constitution that critics refuse to legitimize, the movement he led is the only reformist one that I’m aware of to spread across the island and reach thousands of Cubans. Payá, who shunned U.S. aid insisted that Cuba’s transition would be undertaken by Cubans, not foreign governments. It was Paya’s Varela Project that reached the ears of an entire nation, thanks to President Carter’s nationally live-televised 2002 speech – in Spanish, no less – at the University of Havana.

Oswaldo Payá was a man dedicated to his faith and to his hopes for a more just and democratic society. Simply put, he made an impact in a way few other Cuban dissident activists have, and his passing leaves a void that won't be easily filled.

OFAC Cuba Enforcement Strikes Again - And This Time, It Would have Been Legal?

Another day, another big-ticket Cuba embargo enforcement notice from OFAC, the Treasury Department’s Office of Foreign Assets Control. Or so it seems these days more than ever.

Several years ago, just how much time and money OFAC was spending on Cuba embargo enforcement, especially in comparison with its other responsibilities, caused quite a stir.  Back in 2004, Senate Finance Committee investigators (I was one of them) discovered that OFAC, an office of roughly 100 investigative personnel charged with sanctions programs enforcement and tracking terrorist funding networks, had dedicated 21 of those personnel or FTEs (fulltime equivalents) to Cuba sanctions, which all too often amounted to tracking down cigar aficionados buying Cuban cigars on the internet or fining the 74-year-old grandmother who went on a bike tour that she thought was legit but wasn’t. 

The numbers were shocking because that same office dedicated only two FTEs to tracking the funding networks of Osama bin Laden.  Numerous members of Congress on both sides of the aisle were outraged by what they saw as a gross misallocation of precious and mission critical resources.  The Committee continued asking questions, until finally OFAC just refused to tell.  Its staff, we were told, are all cross-trained and shifted so much that it was impossible to report and quantify what percent of resources were dedicated to various missions. 

In today’s fiscal climate then, perhaps it’s wise that OFAC seems to make every effort to catch the big fish too.  Those multi-million dollar fines and not so much taxpayer dollars, it could be argued, help pay for all the personnel enforcing the Cuba embargo.

The latest OFAC catch is the Vancouver, Washington malt company Great Western.  According to OFAC, Great Western made the mistake of “perform[ing] various back-office functions for the sales by a foreign affiliate of non-U.S. origin barley malt to Cuba.”  Though OFAC originally anticipated a nearly $6 million fine, the company ended up settling its case and paying just $1.3 million. Why?  It seems OFAC considered a number of mitigating factors in the case, including the fact that, “if the subject goods had been shipped from the United States, they would have been eligible for an OFAC license.”

Yes, apparently it’s possible to violate the embargo, even in relation to one of the very few exemptions to the embargo.

Who Would Be Better for Cuba: Romney or Obama?

Few nations feel the fallout of a U.S election more than the island of Cuba, just ninety miles away, where millions have never known life without a U.S. bloqueo hanging over their heads. 

During the height of the Cold War, bringing down the Castro government, which was closely allied to the Soviet Bloc, was a matter of national security. But after the Berlin Wall fell, Cuba no longer mattered.  As long as Cuba wasn’t exporting revolution, serving as a hub for narco-traffickers, or gushing U.S.-bound rafter refugees, it no longer mattered whether U.S. policy objectives and tactics were realistic, effective or even in the national interest. 

From President Reagan to President Obama and the various Republican contenders who sought to replace him (including presumptive Republican nominee, Mitt Romney),  Cuba is a pit stop on the Florida campaign trail, and little else.  How else to explain Mitt Romney’s unfortunate “Patria o muerte, venceremos!” gaffe before a disgusted crowd of Cuban Americans during a 2007 campaign stop, when some careless campaign staffer must have thought it’d be great to throw in a  beloved Cuban expression to win fans in electoral-vote rich South Florida, but instead just fanned the flames of insult to injury by arming Romney with that famous Fidel Castro sign-off.  And of course, in the crucial election years of 2004 and 2006, President George W. Bush empaneled lofty commissions to plan every last detail of a Cuban transition to market democracy, and then update the plan, none of which has come to pass.  And though President Obama promised a “new beginning” with Cuba early in his presidency, it’s amounted to not too much more than a new beginning with potential swing Cuban American voters keen on visiting their families in Cuba whenever they like.   It was Barack Obama in 2004, by the way, who said in no uncertain terms that it was time for the U.S. to lift its embargo of Cuba.

(On the flopped ‘new beginning’ some will point to Cuba’s imprisonment of an American USAID subcontractor, Alan Gross, for more than two years as the end of the new beginning. And while I think the Cuban government could and should show clemency toward Gross - and now a critic on the other side will say the U.S. could and should show clemency toward the Cuban Five - one cannot ignore the reality that the Obama administration’s continuation and stubborn defense of USAID democracy programs beefed up under the Bush administration that snuck Americans onto the island without host country consent to break that country’s laws, whatever we might think of them, might have played a role, a big one, in all of this.)

Obama’s approach, precisely because it seeks to cater to a more moderate segment of Florida’s electoral pool, is less strident and more reasonable than that of his predecessor, who was instead maximizing the hard-line faithful.  And yet, more reasonable doesn’t necessarily mean Cuba matters more to the current occupant of the White House any more than it did to the last.  President Bush was willing to separate families, while President Obama seems oblivious to the historic changes in Cuba underway today, both because real events and impacts on the island aren’t the point.  Domestic political advantage is. 

Perhaps that is why this pointed commentary from the internationally acclaimed Cuban blogger Yoani Sanchez, reflecting on Obama’s pragmatism and reminding us that while Cuba may not matter to the U.S., U.S. elections always matter in Cuba, may not cause a much-needed course correction in a Romney or Obama White House come 2013.

Roundup: Raul Castro in China, Food Duty Returns, and Cuban BIS Bank Deposits Plummet

Raul Castro, who rarely travels abroad, is in China and Vietnam this week. In China, he's been welcomed by President Hu Jintao and Prime Minister Wen Jiabao. He'll also be meeting with the vice-president and vice-premier, next in line for the top Chinese posts, signalling that this is a long-haul relationship. 

This is Castro’s first visit to China since becoming president. One Chinese scholar predicted that the leaders would sign agreements that will help speed up Cuban economic reforms: "Reforms need investment. Since Cuba faces difficulty in drawing investment from the West, closer China-Cuba economic ties constitute strong support for its reforms and development," he said. The two countries have signed 8 accords, including no-interest loan funds from China to Cuba. 

While the visit has so far clearly been a friendly one, it’s not clear there’s a whole lot more in the way of Chinese investment.  Perhaps more important is the opportunity for Raul Castro to observe the development there (compared with his two other visits over the last twenty years, before he became president of Cuba) and consider how and which similar policies to adapt in Cuba. Omar Everleny of the University of Havana’s Center for the Study of the Cuban economy encourages taking a look at and lessons from the significant investments undertaken by Hong Kong Chinese in mainland China, as Cuba has a large diaspora that is more and more willing – and welcome – to come home.

Can the BRICS Sink or Save Cuba?

Just as I was about to overlook news of the first visit to Cuba by an Indian Foreign Minister in nearly 25 years,  during which it was agreed to “open new horizons” in the bilateral economic relationship, the following headline caught my eye: “Will the BRICS rescue Iran?”  It’s an interesting commentary that reflects on Iran’s economic relationships over the last several decades and concludes not only will the BRICS not save Iran, but actually, one by one they seem to be abandoning ship.

If that is the case - that the tightened sanctions on Iran will eventually convince Iran to strike a real deal with the negotiating parties (who at the present moment are having a tough go of it), owing to the overwhelming nature of the economic sanctions, might we surmise that more pressure applied to Cuba could break that government’s will as well? 

I'm not so sure, as there are several key differences to consider.  Foremost is of course the fact that Iran sanctions are increasingly multi-lateral, led by the U.S., while Cuba sanctions are essentially unilateral – America is the holdout, not the leader.  I can’t think of another country that actually has active economic sanctions in place against Cuba. 

Rivera Takes Florida Law Targeting Cuba, Odebrecht to Washington

It's hard to imagine the U.S. embargo of Cuba could possibly get any tighter at this point, right?  Wrong.

First, a quick review of the fifty year-old entanglement of laws, regulations and presidential proclamations all designed to bring down the fifty three year-old Castro regime in Cuba starts with the 1917 Trading with the Enemy Act  - an ironic bill as Cuba was our friend in 1917, but Cuba is now the only country in the world to which the Act still applies.  It also includes several major sanctions upgrades designed to punish Cuba in the wake of the Eastern Bloc collapse two decades ago and create conditions on the island that would lead to regime change there, also to block U.S. companies, including their subsidiaries, from doing business with Cuba, to penalize anyone foreigners that 'traffick' in expropriated Cuban properties, and to dissuade foreign companies from doing business there at all (including, for example, by prohibiting any vessel docking in Cuba from docking in the United States for 180 days).   Such sanctions and more can be found in the 1992 Cuban Democracy Act, the 1996 Helms-Burton Act (known more for its sponsors than for its aspirational title) and the 2000 Trade Sanctions Reform and Export Enhancement Act, which though it legalized heavily regulated cash in advance food and medicine sales to the island, it itched into stone, or public law, the United States' only remaining travel ban, against Cuba (such bans were previously a matter of presidential policy). 

There's more.  So much more that this 44-page report focused on the legal and regulatory framework of the embargo doesn't even cover it all.  Like, efforts that began under the Bush administration and have increased under the Obama administration to prevent Cuba from using or exchanging U.S. dollars in foreign banks (even when those dollars come from American relatives licensed to send them). 

Though there are hundreds of thousands of Cuban Americans who now no longer support the embargo or consider themselves exiles (as evidenced by their frequent trips home to the island), it only takes a couple of well-placed and dedicated lawmakers to buck the trend, and yes, it is possible, further tighten the five decade-old embargo.

One such legislator, Rep. David Rivera, is particularly interesting because he has spent so very much time on Cuba since arriving to the U.S. Congress in 2011.  Since arriving to Congress in January 2011, Rivera has introduced 9 bills, 5 of which focus on Cuba (even if they don't all contain the word 'Cuba').  The various bills focus on the two biggest threats to the ongoing US-Cuba Cold War, the ongoing normalization of Cuban Americans immigrants' dealings with Cuba (excluding, of course, those largely 'historico' generation Cuban Americans who think of themselves as exiles), and deep water oil exploration in Cuba.  But Rep. Rivera is now championing yet another Cuba-related initiative - what I'll call his Odebrecht Amendment, added to the Defense Appropriations Act of 2013 passed out of a House Committee last month - and that could have a far greater impact on U.S. foreign and trade policy beyond U.S.-Cuban relations if it catches on.

Hopes Dim on Cuban Oil, Foreign Investment, Havana Club Rum Rights

It’s not been a banner week – or month – for Cuba on the trade, investment and economic front.

After its second attempt in 10 years to find commercial quantities of oil in Cuban deep water in the Gulf of Mexico – its latest well came up dry – Spain’s Repsol is “almost certain” it won’t try again.  Repsol has the option to drill again later this year before the Italian-owned Scarabeo rig – which, due to the U.S. embargo, had to be specially built with no more than 10% of American parts for exploration in Cuba - moves on to Brazil.  Next up are two  Malaysian and Russian firms, whose explorations this summer could be crucial to Cuba’s near-to-mid-term hopes of accessing undersea reserves it estimates to be as high as 20 billion barrels (the U.S. estimates it to have around 5 billion). 

As Jorge Pinon, a former oil executive and an expert on Cuba’s oil prospects, points out, once the only rig in the world that can drill in Cuban waters without violating the U.S. embargo moves on, it could be years before it’s available and another player is willing to invest millions in the gamble – especially when larger reserves beckon elsewhere around the world.  The prospect of an energy-independent Cuba was intriguing from a geopolitical standpoint, and surely a blow to Cuba’s hopes of digging out of its continuing economic troubles.   Just as some wondered if success in the Gulf could derail the economic reforms underway out of necessity, it might soon be time to ask if failure could spur on the painfully slow pace of the reforms.

The pace seems even slower for foreign investments on the island of late.  Cuban officials have cracked down on foreign investors and their domestic partners found to be involved in corruption – two British executives have recently landed in jail.  Other partners such as Unilever and a group of Israeli investors in Cuban citrus are on their way out following unsuccessful contract renewal negotiations.   It’s mystifying to watch Cuban officials working harder to chase off investors than to bring them in when, as one western diplomat put it, such concessions are “inevitable”.  With plans to drastically cut government payrolls (that the small domestic private sector can’t quickly or totally absorb), Cuba’s main benefactor and trading partner, Venezuela’s Hugo Chavez’s health (and hold on power) uncertain, and big bills to pay with not enough hard currency earnings to pay them, it’s hard to understand what’s going on.  And that is exactly the sort of climate that will scare off investors for the time being.

And in perhaps the most bitter news for Cuba, the U.S. Supreme Court has rejected a petition over the U.S. trademark rights to the Havana Club rum name.  Given that the U.S. accounts for 40% of the worldwide rum market, CubaExport and its French distributor partner Pernod Ricard, which distribute Cuba’s flagship rum to more than 80 other countries around the world but not in the U.S. yet, had hoped the U.S. Patent and Trademark Office (USPTO) would hold their seat in the U.S. market until the embargo is eventually lifted.  That’s  because CubaExport had registered the U.S. rights to the name in 1976 (after the prior owner, who’s rum distillery was expropriated by the Cuban government, failed to renew the U.S. trademark rights in 1973), and renewed its rights every ten years thereafter in order to keep its rights current.