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Cuba Regime Must Be Giddy

The Obama Administration continues to flaunt U.S. law on several fronts. Meanwhile Members of Congress in both the House and the Senate, refuse to do anything to stop him and his advisors. Healthcare, the Iran nuclear deal, the environment, and much more. A recently leaked DHS memorandum, if authenticated, shows that administration lawyers were seeking way to break the law and violate a federal court injunction that suspended administrative amnesty for illegal aliens.

Federal regulatory overreach is the sine qua non of the Obama administration’s approach to governance. If they can’t do it legally, they’ll figure out any way to get their way. Most of the time they do so right in the open, as if challenging anyone who dares cross them to do something about it. For doing so, many conservatives have paid a high price via regulatory abuse by administration IRS, FEC, or EPA officials, to name a few.

The administration has also enlisted the support of special interests in town. It has legions of facilitators — Republicans and Democrats on K Street — that are raking in the money at your expense. When Senator Ted Cruz (R-Tex.) warns about the long-term consequences of the Washington Cartel, he is talking about these shenanigan. Cruz is also highlighting a much more serious issue, the ongoing erosion of the rule of law. The gaming of your regulatory system, notwithstanding legal barriers in place to stop it, is destroying the country. It is exactly this sort of behavior that gives us lawyers a bad reputation, deservedly so.

Abuse of federal regulations also happens in the foreign affairs arena. It is tougher to track because the executive has a great deal of leeway to carry out the foreign policy of the United States. However, like all of the powers granted to the President by the Constitution, it has limits. The Congress can, and routinely does, rein in the executive via the power of the purse and other legislative controls granted to it by the Constitution.

This separation of powers struggle has been, and always will be, a mainstay of our government. It is on full display in the media, almost daily, about Middle East matters. Of course it is never contextualized that way but that tug-of-war is at play behind the scenes on many foreign policy challenges such as the Iran nuclear deal (or license to build nuclear weapons) or, closer to home, accommodation of Communist Cuba.

Just yesterday, Sprint CEO Marcelo Claure announced he inked a deal to improve telecommunications services in Cuba. It will be interesting to learn more about this deal and how it is consistent with the statutory prohibition against investing in Cuba’s telecommunication infrastructure. I’m certain Sprint’s lawyers did all of this by the book, with the administration’s support and license or authorizations in tow.

Legal Practice Tip: all persons subject to U.S. law must have some kind of U.S. government authorization to engage in transactions with Cuba that involve properties subject to a U.S. certified claim …

However, as Senator Marco Rubio (R-Fla.) and Senator Dan Coats (R-Ind.) asked Treasury Secretary Lew in January of this year (embedded), asking Lew to cite the legal authority for allowing U.S. telecommunications company to engage in transactions with Cuba that result in investing in Cuba’s telecom infrastructure.

The reality is that it will take a great deal of creative, and specious legal maneuvering, to get around this express ban:

Nothing in this subsection shall be construed to authorize the investment by any United States person in the domestic telecommunications network within Cuba. For purposes of this paragraph, an “investment” in the domestic telecommunications network within Cuba includes the contribution (including by donation) of funds or anything of value to or for, and the making of loans to or for, such network; 22 U.S.C. § 6004

If the Cuban regime wants to buy American equipment and services to improve telecommunications systems within the island, they can do so if the President certifies to the Congress that a transition government is in place in Cuba. There is no transition government in place in Cuba, far from it. One thing is to sell mobile devices and phone cards to the Cuban people, clearly allowed under U.S. law. It is quite another to help the Cuban regime improve the island’s telecommunications infrastructure.

What will the White House lawyers say to all this? They will argue a non-existing codification of the President’s regulatory power to, in essence, amend the law and regulations as he sees fit. The Congress did no such thing in 1996 when it codified the regulations in the LIBERTAD Act; it codified the restrictions in existence in the regulations. That is it. The lawyers believe, erroneously, that the Trading with the Enemy Act gives them authority to do this. They would be wrong. Meanwhile, Members of Congress are sitting on their hands so they either agree with it or are too distracted to do anything about it.

The Cuba regime must be smiling broadly at their good fortune. For not only are they securing much-needed political and economic lifeline from the Washington Cartel, but they are pitting American versus American in future legal and political battles, shifting attention from where it should be, on them. Then again, when administration officials flaunt the rule of law for the sake of legacy building and political gamesmanship, I expect no less from shrewd Cuba Communist Party  leaders.

Who would not take free money or assistance without conditions that come with an assurance of no negative consequences? 

If the Obama administration wants to pursue a more robust policy of assisting the Cuban people, have at it. Do the country a favor and do so within the confines of the law. 

Have a problem with existing law? Stop wasting people’s time or adding legal and compliance uncertainty in an already challenging market for persons subject to US law. Be adults. Do what any rational person in this town should in a case like this, go to Congress and work for an amendment of the law. I can guarantee you, as someone who has interacted with congressional offices on both sides of this issue, they have done no such thing this year.

1.14.2015 Rubio-Coats Lttr to Sec. Lew Re. Cuba Sanctions Enforcement

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