When the Obama administration re-established diplomatic relations with communist Cuba in 2016, a few of his closest advisors worked hard to create clever workarounds U.S. laws that are supposed to restrict, not make it easier, to do business with human rights abusers and Cuba’s nascent but expanding oligarch class.
Cuba’s premature removal from the state sponsors of terrorism list, and the legal and regulatory sanctions relief, the Cuba market seemed prime for U.S. investment, albeit limited since an embargo, technically, remains in full force. A few American companies took advantage the Obama-era Cuba policy shift including the Marriott corporation.
I doubt the Marriott corporation entered the Cuban market without a specific license from the Treasury Department’s sanctions watchdog, the Office of Foreign Assets Control (OFAC). In fact, in its 2016 annual report to shareholders, they told shareholders:
Marriott and Starwood were both part of a powerful moment in early 2016 when the U.S. Treasury Department approved applications from the then separate companies to operate hotels in Cuba. This announcement came in conjunction with President Obama’s historic trip to Havana. With the opening of Cuba’s doors, we have the chance to build our presence in this appealing market, generate new economic opportunities and demonstrate our corporate citizenship. In 2016, a legacy-Starwood Four Points by Sheraton became the first American-branded hotel to fly its flag in Cuba2016 Marriott Annual Report
What Marriott did not share with shareholders is that they also hold a substantial certified property claim against the government of Cuba potentially worth a lot of money and, undoubtedly, could be used for leverage and market access in a future free Cuba.
I thought it was a good move by Marriott, but premature, and they were likely misled by Obama administration political advisors. These advisors were more interested in making history. Law and U.S. principles were a secondary consideration. Managing hotels with the Cuban military, or with state-owned enterprises owned by current or former Cuban military and intelligence officers is not consistent with U.S. law or policy.
3 years into the Trump Admin. and an American hotel chain – @Marriott – remains in #Cuba doing business w/the military. Could this be a change in policy? Assuming the properties were not confiscated, is managing a luxury hotel consistent with US law?https://t.co/V7CJ4R8jAa— Jason I Poblete (@JasonPoblete) December 30, 2019
According to several news reports last week, it appears the Trump administration has put an end to Marriott’s Cuba business venture with the Cuban military or Cuban state-owned enterprises. I doubt Marriott was ordered to leave Cuba by the Trump administration; they may have been informed that their specific license was about to expire and was not going to be renewed or it was revoked by OFAC.
It could be another reason; however, the reason is not as important as the outcome. American companies that are eager to do business in Cuba should do so consistent with U.S. law and policy. The same goes for European companies that have engaged in fire-sale business practices for decades, unfair labor deals, and trafficking in properties that were stolen from American citizens.
Marriott is used to working in non-democratic markets such as communist China where it owns or operates close to 400 hotels. However, unlike China, there are long-standing statutory restrictions on doing business with Cuba particularly the military and state-owned enterprises. I’d like to see a lot of American hotels in Cuba someday, hopefully soon. Before that, however, Cuba, a client state of Russia and close ally of China, needs to do more to earn America’s trust.
For example, Cuba must settle property claims with American citizens owed more than $10 billion for stolen properties and businesses it confiscated and never paid for. Cuban regime officials attacked, or helped someone attack and injure, American diplomats posted at the American embassy in Havana. When will Cuba be held to account for that? Or what about Americans unlawfully imprisoned in Cuba who are routinely denied consular service or charged with trumped-up crimes?
Cuba is a small country of about 10 million people struggling to break free from decades of hardline socialist rule. The Communist Party, the only legal political party of the gulag, lords over the people and use them as commodities in or to build a socialist paradise. It is a nightmare and the people are sick of it and starting to push back. At this juncture in Cuba’s struggle for liberty, flooding Cuba with U.S. investors and travelers will only serve to delay that process and prop up a new class of corrupt oligarchs. Remember, travel and remittances to Cuba are what oil is to Iran: survival.
This new class of Communist Party thieves – the 1% – will do as their predecessors, now mostly ancestors, and will continue to rob the Cuban people of their futures. A new generation of Cuban communist party leaders will do Russia’s and China’s bidding in the Americas and undermine U.S. national and security interests. Yet the next fifty years could be very different for the people of Cuba; and working with like-minded Americans, we can help them make it so.