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AKIN GUMP WASHINGTON
No, 7488
P, 2/3
JOINT CORPORATE COMMITTEE ON CUBAN CLAIMS
do LOl'lll STU ll'IPUsnIES, INC,
October 10, 1995
300 FlllSI' STAMFOIW PLACE.
STAMr<lPJ), CT Oo9U
(203) 969...8600
Dear Senator:
I recently wrote to urge you to oppose Title III of lcgi.slation, the • Cuban Liberty
and Democratic Solidarity Act," that purports to protect the property rights of U.S.
nationals against the confiscatory ta.kin~ by the Castro regime. At that rime, Senator
Helms was planning to attach this legislation as an amendment to the then-pending
Foreign Operations Appropriations Bill. It is my understanding that this legislation now
may be brought to the Senate floor as a free-standing bill as early as Wednesday of this
week. I am writing once again to urge you to oppose this lc:gislation insofar as it contains
Title III in its present form because it pases the most serious threat to the property rights
of U.S. certified claimants since the Castro regime's unlawful expropriations more than
three decades ago.
In the rush to pass this legislation and thereby demonstrate our firm resolve against
Fidel Castro, the far-reaching domestic consequences of this legislation have received far
too little attention. In my letter of September 20th, I wrote of the irrcpax-able harm
certified claimants would suffer if Title III of this legislation is passed. For the first time
ever and contrary to international law, this lcgi.slation would permit a specified national
origin group, Cuban-Americans, who were not U.S. citizens at the time their property
was confiso.ted, to file Tide Ill la',1/Suits against the Government of Cuba for the property
losses they suffered as Cuban nationals. Indeed, this legislation even permits Cuban exiles
abroad to file lawsuits in U.S. federal courts if they establish a corporation in the United
States for the purpose of pursuing any claim they may have against Cuba. The creation of
a new right to sue is never an inconsequential matter yet the careful scrutiny such a
provision deserves has been disturbingly lacking to date:.
We can reasonably expect plaintiffs' attorneys to exploit this newly created lawsuit
right to the fullest extent possible, creating a ride of litigation that will all but sweep away
the value of the claims currently held by U.S. certified claimants. Each time one of those
lawsuits is reduced to a final judgment against Cuba, the injury to U.S. certified claimants
increases. Ultimately, the: cumulative weight of those judgments will extinguish any
possibility the o:rtificd claimants ever h.i.d of being, compensated. A virtually bankrupt
Cuba cannot be expected to compensate the U.S. cenified claimants, who hold claims
valued today at nearly $6 billion, when it is also facing the prospect of satisfying
potentially tens of billion.s of dollars in federal court judgments held by Cuban-Americans,
have been valued as high as $94 billion.
whose
cl.urns
David W, W&ll1,1Z, ChN(fTU.11
James A, PO<lo'ffl, Scae'luy and lit:duft:l
National Council of the Churches of Christ in the USA
[/-,~
URGENT ATTENTION: FOREIGN POLICY AIDE
September 19, 1995
Office of the
General Secretary
Dear Representative:
I write on behalf of the National Council of Churches of Christ in the USA (NCC)
to urge your opposition to the Cuban Liberty and Democratic Solidarity bill,
H.R. 927, which is scheduled to be considered on the House floor this week.
We believe strongly that contrary to its stated objectives, the bill is likely to provoke
a negative response that will harm efforts to achieve peaceful social, economic, and
political change in Cuba.
The National Council of Churches and many of its member denominations have
maintained a decades-long relationship of pastoral accompaniment with the
Protestant churches of Cuba. Through Church World Service (CWS) -- our relief,
refugee, and development program -- the NCC has assisted for more than thirty
years in the resettlement in the U.S. of Cuban asylum seekers and refugees. Over
the past four years CWS has carried out regular shipments of humanitarian
assistance that is administered through the Cuban Ecumenical Council for use in
nursing homes and childrens' hospitals.
On numerous occasions the NCC has called on the U.S. and Cuban governments to
engage in dialogue aimed at resolving the long-standing conflict between our
countries. In particular, we have urged measures that would foster greater
communication and understanding between people in the U.S. and Cuba, which we
view as key to achieving a more normal relationship.
Our deep concerns about the Cuban Liberty and Democratic Solidarity Act include
the following:
1.
-- ....
By incorporatin2: in U.S. policy recognition of property claims of Cubans
who became U.S. citizens subsequent to the expropriation of their property,
and by subjecting to sanctions anyone who "traffics" in such property, the
bill is likely to strengthen hard-liners within the Cuban government and fuel
renewed anti-U.S. sentiment among: the Cuban population. This provision is
likely be interpreted within Cuba as a move to return to the economic and
social situation that existed there prior to the 1959 revolution. There is little
or no support for such a move within Cuba, even among the most vehement
critics of the current regime.
1
The bill specifies conditions for the expansion of U.S. assistance that are
likely to undermine diplomatic efforts to achieve a peaceful resolution of the
conflict between the U.S. and Cuba. By linking broader U.S. assistance to
Cuba to a highly specific set of conditions, the bill reduces significantly the
diplomatic tools available to the Administration. At ·the same time, the bill
fails to broaden humanitarian or exchange programs that foster stronger
people-to-people relationships.
3.
The bill reinforces regulations promulgated in August 1994 that restrict travel
and shipment of goods to family members. These new restrictions have led
to serious delays in efforts to secure licenses for travel to Cuba. The ability
to travel to Cuba on short notice is particularly important to the pastoral
accompaniment of the Protestant churches during this difficult period of
transition. [Oscar: other problems resulting from the new regulations?]
The NCC believes that a new approach to U.S. - Cuban relations is long overdue.
The Cuban Liberty and Democratic Solidary Act represents a further deepening of
an anachronistic policy in serious need of change. I strongly urge you to oppose
H.R. 927 and to support efforts to bring about more normal relations between
the U.S. and Cuba.
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Sincerely,
1
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Joan Brown Campbell
General Secretary
National Council of Churches
of Christ in the U.S.A.
A 202
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\9,1,Q W!l:;(IN Ul1\U.lV"R0
l!U!TC 205
September 20, 1995
A."-'•_INl•l'ON. VIRGINIA 22201
Sc,1otor W. Cohen
United States Senate
Washmgton, ll c. 20515
Re: "Th<' Cuha Liberty uod Demof..·t~tit Solithtrity J\C't"
l)ear SenMor:
My client t\mstftr, ~long with thuusrutds of other lJ S dti7cn hohk, s 01· claims
certified against Cuba in the J960's by the Foreign Claims Sclllc111c11t Commission, will
suffer deva.<Tating cw11u1nic injury it' T11I• 111 of Scnuto, I Ielm's bill (forn1crly S :i8 l) is
passed "' u11 omendment to the Vorcign Opcrntions t\ppropriaiions \!ill It i, Co, this
n.:asou lhol 1 am writing.
I1 is absolutely false th•t Tille Ill hos been revised in w•ys thn! make ii no lonGt,.
violative of both internationul low and the tights anrl interests of U.S. citizens holdinf;
claims cer1ifierl against Cuba pu~uant to the J964 Cuh• Claims Act. As you know, ·1 irle.
JI! allows l•wsuits 10 be brought in the fe.deral cnu1t,; against (;ub, •nd private indivi<lual,
dthcr livins in or doing business in thl!t couuuy with rc,;pecl 10 properties 1ake11 frun\
1heir owners for rhe most µw I thiny-fove years •so. I>a mag cs ure 1ecovc1 nulc against Cuba
and others fu, llcble the current valu• ofrho,c proµc, tics. <.:ontrn,y to intcrnRlional law,
it mnkes no dillcrence un<ler Tille Ill whctlier • litig•nt w~s a ll S ci1i,cn nt the ti111c the
property in C\Jba was taken. lnd.:cd Title lll is specifically <lc.,igncd lu ~ivo:: subsequemly
naturalizod Cuban Amcric1ms slt\luto,y lawsuit righrs against Cuba or u lyp¢ 1hat we a.._ a
nation have. never hcforc given anyone else - even 1hn~c who w..:11.! U.S. chl1.en\ in th!..·
time of their foreign propeny lo$ses.
Tille Ill oi'Senator lielm's tt111c11d111cnt will produce the following con,cqucnccs if
cn•e-ted in it.& pre<ent form;
* Our federal courts will be deluged in Cubu-, clotcd litigation. On t\ugu$t 28,
1995 the Naflar,a/ law Jounml (attached) reported that )00,000 • 430,000 lawsuits a,.e to
be expected from Cuban Anwrlcans if Title Ill is enacted. According 10 judicial Impact
analyi;\~ •t the Admioistn1tive Ollkc of the U S. Courl, c•ch of these suits will average
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$4,500 m costs, whether they go to trial or 1101. 1'hercforc ihc adm111is11utive costs lo 1hr
courts xlone of Title m wLJI reaclr m•arly $2 billion
* Jf we. onacl Title Ill tho~·c ),')] l cl.iimunts C"t:rtiflt;d under 1he 1?(:i'1 Cui:lI\11
Claims Acl will see lltcir rrospetls of rec.ovelin,K compensatk>u from .an in1pov<'.nshcd
Cub~ dilute<l to vinually nothing ln a scu of Cuban l\m<.:ric:m cfoirns (To put this m~l!<"r
iulO oontext, t.hc Departmeut of State has c~limared (..\1bo11 AmenU'l.n µwpcny cli\illl:i r11
nearly $9.\ billion). 11 is critical tlrat it be understood that a cluim ccrtilicd hy 11\c Forcig.11
Claims Settlement Commission co11stitutes a prnperry intercsi I lt' Cong,cs..< C11.1c1s Tillo
lJl with the foreseeable effoct of <lc_,troyi11g the v»Jue of the $6 billion (accord111g 10 S1x1c.
Depanrncm figures) in claims hel<l hy America11 ciri1.ens. it shn11ld cxpccl 10 indem11ily
those citi,ens someday, under the Fifih Amendment's "takings da11se", to the f\111 amou111
of thoir e.:onomic injury. If Title Ill is made law, the Americun taxpayc, will quic,,
pwhably somo<l•y dt.mnnd a,, explanation us to how on c•rth he or she has b,·cn fvreod to
step iulo the shoes of tho CuUttn government an(1 comµcnsare U.S. <.:ompanies tmd
innividu•ls for their property losses in Cuha over tltl, ty-fivt. yeai s a~o
* Ir we violate imc1natio11al law ttnd long-standing U.S. odherence to 1ha1 law ~Y
enacting Title 11) and conferring ret10ll<'tive rights opon 11011-U S. nationals ,i lime of
foreign property lossos, hislory !dis us that we will 11u/ h• pcrn11itcd to stop wilh t'ub•n
Americuns The equul prolccliou prnvi~ions of the (.'onstilution will 1ivl IOl<'.tll\e li111itint
the conferral uf ~uch nn import Ant bcuc.fir as II fedl'1 al richt of nclion on only one or ou1
mt\ny m1.tional· origin groups v.-hu:-:c members hH.ve suflCrc<l p11.c:t forelgu prnpt•ny lo!'i:-:cs II'.
iliS will su1cly happen, R former South Viclnamcsc army offac<.:r who is now~ U.S. citizt1.n
:<oes in order to gain the s.tme right accorded Cuban Ame, icans to recover d,11nagcs fol'
property expropriations he sutlerc<l. who. if Title JJl is c11aned. is prepared tu s;y he
should 1101 have such n right? On wh•t principled basis would such a right be de11icd him if
given by Congress to Cuban A.tucrkans'/ Wir.t about Chinese 1\11,crir"ns. Hungarin11
Americans, Iranian Amcric~ns.. Gieck Alllericttn~, Prilestiniiln 1\mCJic<111~. Ruxxian
A.tncricans, Polish Amoricai1,? Arc we HOing to claim surprise wlrcn the courts ttJI us tllHI
the equul protection of laws r~uirell\c,>1 of the Gons1 itution rna11dntes !hM each of these
national-orig.in groups u..'Ceivo the :i:11me rigltl vf Hction ~gaiusc th('.ir fo11m:r governments
that we aro proµusins to give Cuban American, by vinue of1'itlc lit'/ How many soch
suits might wo then expect from these oilier nation~l-u,igin group", •nd at what cost to
hoth the nulional treasury and our relations with tho mnuy countries that will eud up being
sued in our federal courts? It must also be kc'jlt in mind that U.S. companies lhxr have
inve.ted in various couotric, ,where our naturnli,od citizc11, have proµerty eloiin, (e g.
1
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Sham:hai P(IW(', ('q, v. th,ilNt scat~.( 4 Cl. Ct 2:l.,, ( 19::0) q/fd. 1111i,11. 7<,s 2c1 :i;Q Wed.Cir. l~M),
<,·r/. d,ni,d 474 U.S. 909 (1985),
p. ;j.)
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Vietnam) will be held liable for ~o-c:~llc<l ·1raffit.:.king'' i11 lhus~ dni1111.:U rnop1.:1 w.:} if ·1 illc
111 is enacted and cxluKkU !,;Om1lituliu11ully to olhcr national-origin f;_roUp$. _
* The m\lhitude of lawsuits thl-11 will b¢ iile<I pursu"nt 10 Ti1 le 111 witl ,w!"r 11mt", hr.
convcrteil to fim1.l judgments a~ains1 Cuba, and as such will C<lnstilu1c
&
running srn t.•
l"ohlcrn for the United States. Ti~e Ill lawsuits are cxphcitly made nondlsmissiblc. The
foci of hundreds of thousands of Cuban /\merie<>n judgment creditors againSl Cuba will
m*c il impossible for us to normalize relations wilh a fr1e11dly eove1 n111e:rt1 11\ 1ht11
oountry. Aircn,ft and ships would be seiztd, Cuhan a<.<cr< in rhc tJ.S. h•nkinl( system
would be allM.he<l, good, producc<l in Cubu would uc c,cculcd upon when they u11 ivc in
U.S. µcits - .tl in pursuit of rooovery of billions of dollars in fodcrnl ooun ow.ids. Th,·
population of Cuba (the majority ofwhoni were nor even oom when rhe propente, ofrhe
Cuban American judgment creditor:-. were t'1ken) will Ix.: imlculu1c<l Cu, <lccu<lcs lo come
to the judb'll\ents entered lll:!•inst thci, count, y uu our fcdc, al court dockets. Ilow is such a
st•tc ufaffisirs conducive to a 1cco11cilintio11 between Cubans on the island 011d the Cuhan
COIIUUuJULy of the United Stares?
The alternative to L11c pcnnnncm cstm11ge,nent Title Ill lowsui!S w;11 produc,'
between Cuba and the United S1a1c.s would ol' courie be tc,r • ll s rresidc.nt t~ dismiss.
the judgments cnlcrcd u..'(ttinsl Cubu. Nolwillislu111.li11~ \he µ1ohibiliou tiHuinsl such
executive branch action contained in Title l!l, it is probable that 1hc courts will uhimatcly
uphold lhe dismissals as • keitimate exercise of the. pre.,irlential pmogarive 10 ronrl11r.1
foreign aft'airs.' What then?
The c.re<>tion of a cause of ac.11on by Congre~s 1s obviously not a trivial matter.
JJundreds of 1housands of Cuban Americans will quite propt.rly avail 1hcmsclvcs or the
right of •ctinn to he given them hy l'itlc Ill 'I hcsc cases will pmcccd incxorahly 10 tin•I
judgments. (There are reolly no defenses available to Cubo under Title Ill. ll is u slliet
liibility statuLe). As tiMI tederal court judgment6 tht.y will carry the lllith and crool! of the
United SLu.tc::1 !(<JVCJ11mcnt, with 1t.ll lhc rights 11.n<l. n..,ncdic3 of c.xccuticm ~<...1" our in n11r
laws. Wha1 will be the e-011seque11ce of the president e,,.tlnguisluns thc1c: juJ;:111c11t, tt11d
their oonoomiumt rights of execution?
Agllin, as in 1he case of' certified c.1ain1ants, • f<.deral court judgment is a prope11y
intcrc,L protected by the Constitution. lfthat interest i, extinguished hy prr.sirle.n1i~I order.
the Fif\h Amendment "takin&s douse:" wit Ii its duty of full compe11satio11 will he triggerr<I
If Title III is enacted it should be wi1h full knowledge lhM Cong, e» muy someday he
asked by the public to explain how The Amori(M peopk came ultinwcly to be liohle fo,
tons of billions of dollars of d•miges in recompeJ1se to o. s• oup ur 11011-U.S. ruttionals at
4
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the time they lost properties in Cuen' lo u pefiod of heightened conocm for potcn11xl
J.(Ovcnum.:11\~l lio.bllity under tho 1ftkint~ ('.11\use of 1he l1ifi.h /\mendmcm, Title. ill should hl'
~pproached with the greatest CHutio11 urn! ~cco fo1 t.l1c liability lim~ bomb thM ll is.
* A troubling aspect oCTitlc Ill i:-i its co111emp1uous disregard ofinterna1ionJl tnv
/\s ~ nation we and our citizens benefir from inrtm<1tiom1\ lxw i11 a 111y1 iH.d of' li11111s, Mu.:h
as oven~s inve~tment and intclkclual p1oµcrly µ1ulc!.!lio11 1 th~ snfoty (,f O\u diplomal'ti.00 roVt..1t..-ignly over our marine resources. MMy other (..."Xan,pll!s of th<' bcnclils 10 11h'':
United States of on intemMioMI n1le of law could he given. How can v,c in future
rlemand compliance with i11tcrnutiu11ul luw liy other nations if we bl°t prepared to violate
~,nt very lnw by enacting Title Ill? The proponents of this lre,i<IMion havr nr.vr.r
satisfactorily answered thbt fundamental question.
To conclude, ~ain proponents of Title ll1 from outside th~. s~nat•, h•ve. enga~<·d
in a campaign to minirniu its signilk~ncc. lloiled down, th~.ir m~ssage i, th.i • vo,. fo,
Title UI is en inconsequenti~I thing For example, they will xay that a lillg•m cunnm "'
will not. sue \.uha it~ett: hut ralhc1 any t1.cliorn1 111c limilci.l tu "thi1<l µuny 11uili!..:kc1s'' in
coufiscutw p1 ope.ties, Let there be nu mistake on tlli• point. Tit lo Ill is •n unprecedented
fO(k,ral cour1 ('.l"lm#: r,rosr-'m ag.3in1:1 1he. nation of C'uha. Section :\02 of Title 111 is plain
und unntnl>i.~uous in its me.111ing. ll is the inesc;"tpable consequences of 1Mt mc..,i,i11g th<1t
the Senate must ~ddress.
Yo1m; . . incl'.rcly,
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Robetl L. Muse
' See. P.!'.P.!lf!1' ,<, Mi.}f:lf!_'!...fl.!~ ~\.lf>tfl, ut 6!1:S: "TJuJU~h ,\i,; OOIK."IUl.lc lluit the rrcsidcnl lt:1s ,culed
petitioner's claims again~ rran, we dn Mt ~ur~ lh1'1 the scttlemcn1 l1ns t.er!l11u:tled j)l.1itiu11e1 's possible
lelk.ing u!uim uguiJM uguJ.nsC the Unii¢d ~·uucs." (Emphas.is added). Jus1icc Powell, C<'lncurriur. in (l:"111 tu"1
diaentinA tn r,,r1, Md lh\« to~ '"The OovQrnnxmt must p3y Ju,1 LXH11pcu~~(t\l11 when ii JUrthcrs the
111:tlion's !orciJjn policy goals by u.<inll il~ 'b:tr~lnini: chi~' claims Jawfullr held by u u;lul!wly few
1lC('$()nS anJ sOOjt,..t lu the juri~1cUu11 ol' our e.:>urt,," Id. at 6?1.
,.. • d I
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......
JOINT CORPORA TE COMMITTEE ON CUBAN CLAIMS
do LON"E
srA.R c-;DCSTIUES, l}:C
September 20, 1995
300 FIJ!.ST ST A MFORD PUCE
STAMFOW, Cf 06912
(l03) 969,8600
Dear Scnacor:
The Joint Corporate Committee on Cuban Claims represents more than thin:v U.S.
corporations with certified claims against the Government of Cuba stemming from the
Castro regime's unlawful confiscation of U.S. property without just compensation. Our
member corporations hold more than one-half of the $1.6 billion in outstanding certified
corporate claims. On behalf of the Joint Corporate Committee, I am writing to urge you
to oppose Title III of legislation Sen. Helms will offer as an amendment to the Foreign
Operations Appropriations Bill because it poses the: most serious threat to the: property
rights of the certified claimants since the Castro regime's confiscations more than thirty
years ago.
The centerpiece of rhe Helms legislation is Title III, which creates a right of action
_
that for the first time will allow U.S. citizens -- regardless of whether they were U.S.
citizens at the time their property was confiscated in Cuba -- to file lawsuits in U.S. courts
against persons or entities that '' traffic' in that property, including the Government of
Cuba. In effect, this provision creates within the federal court system a separate Cuban
claims program available to Cuban-Americans who were nor U.S. nationals as of the date
of their injury. This unprecedented conferral of retroactive rights upon naturalized
citizens is not only contrary to international law, but raises serious implications with
respect to the Cuban Government's ability to satisfy the certified claims.
Allowing Cuban-Americans to make potentially tens if not hundreds of thousands
of claims against Cuba in our federal courts may prevent the U .S certified claimants from
ever receiving the compensation due them under international legal standards. After all,
Cuba hardly has the means to compensate simultaneously both the certified claimants and
hundreds of thousands of Cuban-Americans, who collectivdy hold claims valued as high
as $94 billion, according to a State Department e.5timatc. In· addition, this avalanche of
lawsuits undoubtedly will cloud ntle to property in Cuba for years, thereby lessening the
prospects for rcstitutionary approaches in satisfaction of some of the certified claims.
Apart from the inJury to the interests of U.S. certified claimants, we can reasonably
anticipate that this legislation, by opening our courts to such an expansive new class of
daimants, will unleash a veritable explosion of litigation that will place an enormous if not
overwhelming burden on our courts. Moreover, the legislation even would allow Cuban
exiles abroad ro avail themselves of this lawsuit right simply by forming a corporation in
the United States, transferring any claim they may have against Cuba into thar U.S.
corporate entity, and bringing suit in U.S. federal courts. In addition, other similarly
situated U.S. nationals of various ethnic origins who have suffered property losses under
similar circumstances can be expected to pursue this lawsuit right on equal protection
. : : \I
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September 20, 1995
Page 2
grounds. While it is difficult co predict with any precision the number of lawsuits that
will be filed under this legislation, it is not unreasonable to conclude that they will
number in the hundreds of thousands.
Finally, we must consider the impact of this lawsuit right on the ability of a postCastro Cuban government to successfully implement market-oriented reforms. There can
be little doubt that the multitude of unresolved legal proceedings engendered by this
legislation will all but preclude such reform, which must be the foundation of a free and
prosperous Cuba. Even should the President, as an incident of normalizing relations with
a democratic Cuban government, ultimately extinguish these claims, if history is a guide,
our government could assume tremendous liability to this newly created class of claimants.
In light of the pernicious implications of this legislation for the legal rights of
certified claimants, an already overburdened court system, the claims settlement proce.ss
and the orderly disposition of claims, and the post-Castro investment environment, we
urge you to oppose the Helms amendment insofur as 1t contains Title III in its present
form.
Sincerely,
David W. Wallace, Chainnan
',,_ '\
.. ·~·-<,.
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STATEMENT OF DAVID W. WALLACE, CHAIRMAN
JOINT CORPORATE COMMfITEE ON CUBAN CLAIMS
ON S. 381,
THE CUBAN LIBERTY AND DEMOCRATIC SOLIDARITY ACT OF 1995
SUBMITTED TO
THE SUBCOMMITTEE ON WESTERN HEMISPHERE
AND PEACE CORPS AFFAIRS
THE COMMITIEE ON FOREIGN RELAT[ONS
UNITED STATES SENATE
JUNE U,, 199S
Mr. Chairman ;\,lld Members of the Subcommittee, I appreciate the opportunity to·
submit this statement expressing the views of rhc Joint C<!rpor:itc 0.)mrnittcc on Cuban
Claims with rcspecr to .S. 381, the 'Cub.tn Liberty and D{'mocratic SoHdarity
(LIBERT AD) Act of 1995."
The: Joint Corp<>rate Committee on Cuban Cl.um.1 1 of which I serve :lS Chaim1ai1,
represents m<>rc than thirty U.S. corporations with ccrrificd daims againn th<:
Government of Cuba stemming from the ~tro regime's unlawful confisc.:ation of U.S.
-.property witho1,1t just compensation. Our member ,orporQtions hold more 1hAn one-half
of the -St .6 billion in ouutanding certified corporate cla.inu. Since its formation in 1975,
thC' C.ommittcc has vigorously supported the proposition th~t bs;fs.ir.i: our governmc:11t
taka any steps to resume normal tt.1dc :ind diplomatic rcl11tions with Cuba, the:
-Go\·enuru:nt of Cuba must provide 11.dcqu:itc compensation for the U.S. propcrtic:s it
unlawfully sciud.
·
Although I w submitting this statement in my capacity ~ Chainnan of the Joint
0.>rporate C<.>mmittcc I. would Wee tO note pucnthctk,lly that I alJo serve as Chaimun
and Ch0cf-€x«actvc-Bi1fic:er of Lone Star Industries, Inc. Lone Star is a ~rtificd daim
holder whose cement plant at Ma.rid wu ~izcd by the Cub:tn Government in 1960.
Lone Star'$ claim i., valued at $24. 9 million plus 6% lntcrc1t since the date of sci~urc.
On lx:half of ou~ ('...ommittee, I W4llt to commtnd the ~ignifo;anl contribution you
have made to the debate on U.S .•Cuba policy by foL"tning ~ne~d attention on the
Cutro regime's unlawful expropriation of U.S. property •• m i..~~ue that all too oft~n gets
lost in the debate over the wi$dom of the.embargo policy. fu:<:1>gnizing the importil.llt
rvle th4t tr4dc and investment by U.S. businesses will have in Cuba 1s·economic
rccon$tru~ion and its eventual rctutn to the intcrn:ation;J m0101unitv, cvid~n,e of
concrete StCpi by the Government of Cuba tow:1tds the satisfactory rewlution of th,
proixrty dwns ~sut must be ~ csscntidl condition for the resumption of cconomk· 3nd
diplomatic tica between our n3tions.
I mini. it is irnporuu1L lo recall the essential =on /or which the U.S. government
first imposed a partial trade embargo against Cuba in 1960, followed by the suspension of
o.iplomatic relations in 1961 and the unposition of 11. tottl trade embargo in l 96:2. Th~
actions were t:ikcn in direct response to the Castro regime's expropriation of properties
held by American citii(ns and companies without payment of prompt, adequate and
cfkcth·e compensation as required under U.S. md imcm:uionu law. Th~ illeeiil
confucation of private assets wu the largctt uncompemated taking of American property
in the history of our country, affecting scores of Individual compa.n.itS am.! invcsLon In
Cuba.n ~ntl'.Triscs.
Th= citiz.:11.$ and comprnic~ wh0,$C property was confu=ed ha.ve a. leg,il right
1'¢(0gniud in long-established international law to receive adequate compensation or the
return of their property, Indeed, Cuba's Constitution of 1940 and even t.hc dCCCCC6
issued by the Cut.ro regime since it ~e to power in 1959 recognized the principle of
~ompensation for confiscated properties, PUt$Uant to Titlc V of the lntcmationaJ Claims
~cment A(.t. 1 the cl~ of U.S. citizens and corpor~tions &&aillSt the Cuban
govcnunent have been adjudicated and cenified by the Foreign Clainu ~ttkment
Comnumon of the United States. Yet to this day, th~ ccrtlficd clairru remain
uruawf1ed.
It is our ~ition th1.t Liftin& the ~mbe.r~ prior to tt.!olution of the cl.aim$ issue
.would be unwise as ll. natter of policy and damaging to our settlement negotiations
posture. F!nt, lt would set a bad p=dent by aign,Jing • wi111ngnc.,s on the part of our
nation to tolerate Cuba's failure to abide by prectpts of international law. Other foreign
nations, oonsequcntly, may draw the conclusion that unlawful seizure& of prop«ty an
~ without con~qt1ence, thereby leading to future unlawful confiscations of Ameria.o.
propcnics without compensation, Second, lifting the embargo would remove the best
leVCUSC we have in compelling th, Cuban go~.nmcm to aodteu the dalms of U.S.
nationals ind would place our negotiators at a terrible ~adVll.lltagc in s ~ just
compcmuion and r«titutk1n. We depend on our government to protect the rights of lts
ciclzeru when they are hmne<I by the unlawful actions of a foreign agent. The Joint
CorpoCAtc Committee greatly appreciates the stcadfut suppon our State I>cpartmcnt has
provlclccl over the yean on the <:llim.l i.mle. However, we recoswz.c tha.t the powefl\11
tool of unctions will be crucial to tbc: Dcpan:rncnt's ability ultimately to cffca: a jun
r~lutlon of thus i4,1ue, ..
Apart from the need to redress the lcgiwmtc grievan~ of tJ .S. claimants, we also
ihould not overlook the wntribution th<:IH: dtizeru end eompani«G made to the economy
of pre-revolutionary Cuba, helping to make it one of the top ranking Latin Amcrian
«nin~e4 in terms of living sundan:l.s and economic growth. Many ot these comptnlu
tnd individuals look forward to returning to Cuba to work with iu people to help rebuild
th¢ nation and invest i.n its future. & was the cue in pr~-n;volutionary Cuba, the ability
of the Cuban govcmmcnt to attnct roreign investment on~ ~ will bt. kq to the
$UCCCS$ of any national policy of economic rcvitaliution.
2
However, unless and until potential investors can Ix ass\11'.ed of their right to own
property free from the threat of confiscation without cornpeI:1Sation 1 m.:my U.S. companies
~imply will not be willing to u.ke the ruk of doing btUi.ness with Cuba. It is only by rurly
and reasonably addrt$sing the clwns issue that the Cuban government can demonstrate to
the satisfaction of the business conununity its recognition uf and reipcct lot property
righc,.
\Ve 11re plea.;ed that S, 381 do« not waver from the core principle, firmly
embodied in U.S. law, which requires the tdcquatc resolution of the ccnificd d.aimJ
before trade and diplomatic relations berwccn the U.S. and C\lbw goY¢l'nffl¢nU
nonnalizcd.. However, we uc ,oncern«l with provisions of Section 207 of the revised bill
that condition the resumption of U.S. &Mistancc to Cuba on the adoption of step& leading
to th<: sati3faction of cl<Um$ of both the certified claimants ami Cuban-Amcrica.n citizens
who were not U.S. nationals at the time their property wu confiscated. Notwithstanding
the modifying provisions wh11;h a,w,<.l priority to the aettlcment of the ccrt;iflcd c:Wnu
and give the President authority to resume aid upon a showing that the Cuban
-&>vanment has taken ~uffidcnt 6tcps to satisfy the certi.fied clairn.1 1 th.15 dramatl~
cxpmsion of the. d~imtrtt pool, as a practical matter, would ncccssuily impinge upon the
=
property interests of the certified claimants.
Even though the cWmants who were not U.S. ru.tioniw at the time of the
property loss would not enjoy the espousal rights that the certified daima.nts enjoy, the
=~it.ion of a. second tier of claimants by the U.S. Government at a minimum would
nc«-iwily oolor, and likely make: more complicated, my settlement negotlatloD$ with
Cuba (O the dctcimcut of the ~ed cla.imanu.
-.
-
Moreover, the fuct: that the legislation gives prioricy for the ~tkmcnt o f ~
P1"91?erty claims is of little ,oruequenc:e within the context of such t vastly expanded p001
of cluman.u thtt seemingly dc6.ta a rroinpt, adequate and cffcctive settlement of c:lalms.
In addition, on,e th~ ~oond tier o dairn,nt, is rc~ud, It would be exctedlngly
difficult politically for the President to ~ e his wa.ivtt authority, F!.o.ally, thl.! dramatic
expwioi, of the clununt pool would serve es a aignificant dlsinccntlve fur 1. p<>Jt-Cuuu
Cubm Govemrt\et\t to enter into mctnlngful settlement negotlttlons with the United
States given the sheer enormity of the: outaundi.ng d&iml and the pnctlQl imp»1ibillty of
nua/ylng ill th~ d&ima.
- · ln abort, while we are aymptthctlc; to the po.itlon of those individuw and entWc,
who were not U.S. nationals tt the tbuc their property was seiud, wt bellevc that U.S.
Government rcwgnitlon Lncl r¢ptC$Cntation of tlw group of clairoaou - even f'al.l.ing short
of c.,pou.,,J of their cl~ with ci post-~tro govemm.ent in Ci1ba - would hann the
intcresu of the al.ready ccni.ficd clt.ltnanu. We believe thtt the rc«>gnltion of a second tier
of claimffl.U will deby and compllcacc: the scttlcment of c;mified dW'.1$, and may
undc.nnine the prospects for serious settlement negotucions with ~ Cuban Govtrnmcnt.
It is our view, based on wc:ll-cstabfuhc<l pcindpl~ of international law, th•t
individua.15 and entities who were Cuban nationals at the time their property wa.s
confiscated. must seek resolution of their clairos in Cuban couru under Cuban 1.a.w under a
fun.ir( Cublltl Government whereby the re.spcctivc pmpcrty rights of former and current
Cuban nationals may be fairly determined. In taking that po,!ition, we categorically rej<xt
a.ny nvtivn that ~ u~Luc.ili·.Ged Ainccica.n ha.s uiy lcncr degree of right than 11. na.tivc.bom
American. That objectionable and irrelevant notion serves only to cloud the real issue
here, and that is simply the question of what rights are pettincnt to o. non•nttion:11 ilS of
the date of injury. Simply put, international law does not confer rcuoact.ivc rights upon
nuuralizcd citizen$.
Many of the same objections noted above also apply to Section 802 of the revi$Cd.
bill, which Gilowt U.S. nationals, including hundrcw ot thousands ot naturalized CubanAmericans, to file suit in U.S. couns against p¢t'$ons or entities that traffic In ~ropri,.tcd
pro~y. We believe thl.s Untr.$trictcd provision also will ad\-CCWy affect the righu of
IXCtificd cwmants. By effectively movin15 claim& settlement out of the venue of the
Foreign Claims Settlement Commission and into the federal judiciary, this provision cw
be c~cctcd to i.nvitc hundreds of thousands of commercial and tt.Sidcntla.l property
lawauiu. Apart from the enormous, if not overwhelming, burden th~ lawsuit& will place
on OW' COIi«$, this prov4ion ralJes serious implications with respect to tbe Cuban
Govenunent'~ ability to ~ttisfy cx:rtificd Clam'!$,
first, allowing Cuba. to become liable by way of federal COW't J1.1<3gimnu for
monctuy tUmJ.ges on a r1on-di.smlssible bui$ ncceffirily will reduce whatever moneta.ry
mcms Cuba might have to satisfy the ~ d clalnu. Second, this expected multipliclty
of l,wsuiu undo11bte<ily wiU cloud title to property l.n. Cuba for yem, thereby kucning
the prospccu for l'(Stitutionuy approaches in satisfaction of some of these cWms.
Mot(()vct, under this provision, the Ptt.Sldent would have no power to dlsml$$ th* suJu
u an.incident of nomullzlng relations with a dctnoaatktlly ckcted government in Cuba
once they are ronuncnced. C.Onsequently, the foreign investment that will be crucial to
Cuba'G $ucceuful implcment:1tlon or muket-orierttC4 reforms will be ill but prcclud.ed by
these unreaolved !¢gal proceedings.
In ronct\lsion, we want to QOJMl.Cttd you tor your efforts in ralsi.ng the profile of
the .P1'9PC1t>' ch•bm =ue and· focusing attention on the importtn.cc of tc!Olvlng these
-cliI.riu to the full restoration o! democrAcy and free enterprise in Cuba. We a l s o ~
and apprcdatc the efforts you have made to modify this legislation in. response to the
concerns cxpl'($$((1 by the ccrtlftcd claimant community; however, we hope tht.t you will
further consi~ our continuing concerns n:g21"(ling the implication, of this lcgi$lttion. for
the legal righu of certified cla.lmants, an tlrcady overburdened ooutt ,ystw, the~
settlement pro~s ~nd thr. or<lr.rly d~position
environment.
nr dmru,
artd th<'! J'O't-Cutro invertment
'~"
','
1:1 1n95
J, i j
I
\ : 23PM
AKIN GUMP WASHINGTON
No, 7488
P, 2/3
JOINT CORPORATE COMMITTEE ON CUBAN CLAIMS
do LOl'lll STU ll'IPUsnIES, INC,
October 10, 1995
300 FlllSI' STAMFOIW PLACE.
STAMr<lPJ), CT Oo9U
(203) 969...8600
Dear Senator:
I recently wrote to urge you to oppose Title III of lcgi.slation, the • Cuban Liberty
and Democratic Solidarity Act," that purports to protect the property rights of U.S.
nationals against the confiscatory ta.kin~ by the Castro regime. At that rime, Senator
Helms was planning to attach this legislation as an amendment to the then-pending
Foreign Operations Appropriations Bill. It is my understanding that this legislation now
may be brought to the Senate floor as a free-standing bill as early as Wednesday of this
week. I am writing once again to urge you to oppose this lc:gislation insofar as it contains
Title III in its present form because it pases the most serious threat to the property rights
of U.S. certified claimants since the Castro regime's unlawful expropriations more than
three decades ago.
In the rush to pass this legislation and thereby demonstrate our firm resolve against
Fidel Castro, the far-reaching domestic consequences of this legislation have received far
too little attention. In my letter of September 20th, I wrote of the irrcpax-able harm
certified claimants would suffer if Title III of this legislation is passed. For the first time
ever and contrary to international law, this lcgi.slation would permit a specified national
origin group, Cuban-Americans, who were not U.S. citizens at the time their property
was confiso.ted, to file Tide Ill la',1/Suits against the Government of Cuba for the property
losses they suffered as Cuban nationals. Indeed, this legislation even permits Cuban exiles
abroad to file lawsuits in U.S. federal courts if they establish a corporation in the United
States for the purpose of pursuing any claim they may have against Cuba. The creation of
a new right to sue is never an inconsequential matter yet the careful scrutiny such a
provision deserves has been disturbingly lacking to date:.
We can reasonably expect plaintiffs' attorneys to exploit this newly created lawsuit
right to the fullest extent possible, creating a ride of litigation that will all but sweep away
the value of the claims currently held by U.S. certified claimants. Each time one of those
lawsuits is reduced to a final judgment against Cuba, the injury to U.S. certified claimants
increases. Ultimately, the: cumulative weight of those judgments will extinguish any
possibility the o:rtificd claimants ever h.i.d of being, compensated. A virtually bankrupt
Cuba cannot be expected to compensate the U.S. cenified claimants, who hold claims
valued today at nearly $6 billion, when it is also facing the prospect of satisfying
potentially tens of billion.s of dollars in federal court judgments held by Cuban-Americans,
have been valued as high as $94 billion.
whose
cl.urns
David W, W&ll1,1Z, ChN(fTU.11
James A, PO<lo'ffl, Scae'luy and lit:duft:l
National Council of the Churches of Christ in the USA
[/-,~
URGENT ATTENTION: FOREIGN POLICY AIDE
September 19, 1995
Office of the
General Secretary
Dear Representative:
I write on behalf of the National Council of Churches of Christ in the USA (NCC)
to urge your opposition to the Cuban Liberty and Democratic Solidarity bill,
H.R. 927, which is scheduled to be considered on the House floor this week.
We believe strongly that contrary to its stated objectives, the bill is likely to provoke
a negative response that will harm efforts to achieve peaceful social, economic, and
political change in Cuba.
The National Council of Churches and many of its member denominations have
maintained a decades-long relationship of pastoral accompaniment with the
Protestant churches of Cuba. Through Church World Service (CWS) -- our relief,
refugee, and development program -- the NCC has assisted for more than thirty
years in the resettlement in the U.S. of Cuban asylum seekers and refugees. Over
the past four years CWS has carried out regular shipments of humanitarian
assistance that is administered through the Cuban Ecumenical Council for use in
nursing homes and childrens' hospitals.
On numerous occasions the NCC has called on the U.S. and Cuban governments to
engage in dialogue aimed at resolving the long-standing conflict between our
countries. In particular, we have urged measures that would foster greater
communication and understanding between people in the U.S. and Cuba, which we
view as key to achieving a more normal relationship.
Our deep concerns about the Cuban Liberty and Democratic Solidarity Act include
the following:
1.
-- ....
By incorporatin2: in U.S. policy recognition of property claims of Cubans
who became U.S. citizens subsequent to the expropriation of their property,
and by subjecting to sanctions anyone who "traffics" in such property, the
bill is likely to strengthen hard-liners within the Cuban government and fuel
renewed anti-U.S. sentiment among: the Cuban population. This provision is
likely be interpreted within Cuba as a move to return to the economic and
social situation that existed there prior to the 1959 revolution. There is little
or no support for such a move within Cuba, even among the most vehement
critics of the current regime.
1
The bill specifies conditions for the expansion of U.S. assistance that are
likely to undermine diplomatic efforts to achieve a peaceful resolution of the
conflict between the U.S. and Cuba. By linking broader U.S. assistance to
Cuba to a highly specific set of conditions, the bill reduces significantly the
diplomatic tools available to the Administration. At ·the same time, the bill
fails to broaden humanitarian or exchange programs that foster stronger
people-to-people relationships.
3.
The bill reinforces regulations promulgated in August 1994 that restrict travel
and shipment of goods to family members. These new restrictions have led
to serious delays in efforts to secure licenses for travel to Cuba. The ability
to travel to Cuba on short notice is particularly important to the pastoral
accompaniment of the Protestant churches during this difficult period of
transition. [Oscar: other problems resulting from the new regulations?]
The NCC believes that a new approach to U.S. - Cuban relations is long overdue.
The Cuban Liberty and Democratic Solidary Act represents a further deepening of
an anachronistic policy in serious need of change. I strongly urge you to oppose
H.R. 927 and to support efforts to bring about more normal relations between
the U.S. and Cuba.
/ !3-~
~
Sincerely,
1
;v
Joan Brown Campbell
General Secretary
National Council of Churches
of Christ in the U.S.A.
A 202
296 9133
Mansfield
&
Muse
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Of"f"IC(.
LAW L)I fLCC!:;
MANSFIELD & MUSE
:llUU M ~"fRCCT,
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\9,1,Q W!l:;(IN Ul1\U.lV"R0
l!U!TC 205
September 20, 1995
A."-'•_INl•l'ON. VIRGINIA 22201
Sc,1otor W. Cohen
United States Senate
Washmgton, ll c. 20515
Re: "Th<' Cuha Liberty uod Demof..·t~tit Solithtrity J\C't"
l)ear SenMor:
My client t\mstftr, ~long with thuusrutds of other lJ S dti7cn hohk, s 01· claims
certified against Cuba in the J960's by the Foreign Claims Sclllc111c11t Commission, will
suffer deva.<Tating cw11u1nic injury it' T11I• 111 of Scnuto, I Ielm's bill (forn1crly S :i8 l) is
passed "' u11 omendment to the Vorcign Opcrntions t\ppropriaiions \!ill It i, Co, this
n.:asou lhol 1 am writing.
I1 is absolutely false th•t Tille Ill hos been revised in w•ys thn! make ii no lonGt,.
violative of both internationul low and the tights anrl interests of U.S. citizens holdinf;
claims cer1ifierl against Cuba pu~uant to the J964 Cuh• Claims Act. As you know, ·1 irle.
JI! allows l•wsuits 10 be brought in the fe.deral cnu1t,; against (;ub, •nd private indivi<lual,
dthcr livins in or doing business in thl!t couuuy with rc,;pecl 10 properties 1ake11 frun\
1heir owners for rhe most µw I thiny-fove years •so. I>a mag cs ure 1ecovc1 nulc against Cuba
and others fu, llcble the current valu• ofrho,c proµc, tics. <.:ontrn,y to intcrnRlional law,
it mnkes no dillcrence un<ler Tille Ill whctlier • litig•nt w~s a ll S ci1i,cn nt the ti111c the
property in C\Jba was taken. lnd.:cd Title lll is specifically <lc.,igncd lu ~ivo:: subsequemly
naturalizod Cuban Amcric1ms slt\luto,y lawsuit righrs against Cuba or u lyp¢ 1hat we a.._ a
nation have. never hcforc given anyone else - even 1hn~c who w..:11.! U.S. chl1.en\ in th!..·
time of their foreign propeny lo$ses.
Tille Ill oi'Senator lielm's tt111c11d111cnt will produce the following con,cqucnccs if
cn•e-ted in it.& pre<ent form;
* Our federal courts will be deluged in Cubu-, clotcd litigation. On t\ugu$t 28,
1995 the Naflar,a/ law Jounml (attached) reported that )00,000 • 430,000 lawsuits a,.e to
be expected from Cuban Anwrlcans if Title Ill is enacted. According 10 judicial Impact
analyi;\~ •t the Admioistn1tive Ollkc of the U S. Courl, c•ch of these suits will average
P.02
2i:
2U2
29b
9133
Mansiiela
,
Muse
2
$4,500 m costs, whether they go to trial or 1101. 1'hercforc ihc adm111is11utive costs lo 1hr
courts xlone of Title m wLJI reaclr m•arly $2 billion
* Jf we. onacl Title Ill tho~·c ),')] l cl.iimunts C"t:rtiflt;d under 1he 1?(:i'1 Cui:lI\11
Claims Acl will see lltcir rrospetls of rec.ovelin,K compensatk>u from .an in1pov<'.nshcd
Cub~ dilute<l to vinually nothing ln a scu of Cuban l\m<.:ric:m cfoirns (To put this m~l!<"r
iulO oontext, t.hc Departmeut of State has c~limared (..\1bo11 AmenU'l.n µwpcny cli\illl:i r11
nearly $9.\ billion). 11 is critical tlrat it be understood that a cluim ccrtilicd hy 11\c Forcig.11
Claims Settlement Commission co11stitutes a prnperry intercsi I lt' Cong,cs..< C11.1c1s Tillo
lJl with the foreseeable effoct of <lc_,troyi11g the v»Jue of the $6 billion (accord111g 10 S1x1c.
Depanrncm figures) in claims hel<l hy America11 ciri1.ens. it shn11ld cxpccl 10 indem11ily
those citi,ens someday, under the Fifih Amendment's "takings da11se", to the f\111 amou111
of thoir e.:onomic injury. If Title Ill is made law, the Americun taxpayc, will quic,,
pwhably somo<l•y dt.mnnd a,, explanation us to how on c•rth he or she has b,·cn fvreod to
step iulo the shoes of tho CuUttn government an(1 comµcnsare U.S. <.:ompanies tmd
innividu•ls for their property losses in Cuha over tltl, ty-fivt. yeai s a~o
* Ir we violate imc1natio11al law ttnd long-standing U.S. odherence to 1ha1 law ~Y
enacting Title 11) and conferring ret10ll<'tive rights opon 11011-U S. nationals ,i lime of
foreign property lossos, hislory !dis us that we will 11u/ h• pcrn11itcd to stop wilh t'ub•n
Americuns The equul prolccliou prnvi~ions of the (.'onstilution will 1ivl IOl<'.tll\e li111itint
the conferral uf ~uch nn import Ant bcuc.fir as II fedl'1 al richt of nclion on only one or ou1
mt\ny m1.tional· origin groups v.-hu:-:c members hH.ve suflCrc<l p11.c:t forelgu prnpt•ny lo!'i:-:cs II'.
iliS will su1cly happen, R former South Viclnamcsc army offac<.:r who is now~ U.S. citizt1.n
:<oes in order to gain the s.tme right accorded Cuban Ame, icans to recover d,11nagcs fol'
property expropriations he sutlerc<l. who. if Title JJl is c11aned. is prepared tu s;y he
should 1101 have such n right? On wh•t principled basis would such a right be de11icd him if
given by Congress to Cuban A.tucrkans'/ Wir.t about Chinese 1\11,crir"ns. Hungarin11
Americans, Iranian Amcric~ns.. Gieck Alllericttn~, Prilestiniiln 1\mCJic<111~. Ruxxian
A.tncricans, Polish Amoricai1,? Arc we HOing to claim surprise wlrcn the courts ttJI us tllHI
the equul protection of laws r~uirell\c,>1 of the Gons1 itution rna11dntes !hM each of these
national-orig.in groups u..'Ceivo the :i:11me rigltl vf Hction ~gaiusc th('.ir fo11m:r governments
that we aro proµusins to give Cuban American, by vinue of1'itlc lit'/ How many soch
suits might wo then expect from these oilier nation~l-u,igin group", •nd at what cost to
hoth the nulional treasury and our relations with tho mnuy countries that will eud up being
sued in our federal courts? It must also be kc'jlt in mind that U.S. companies lhxr have
inve.ted in various couotric, ,where our naturnli,od citizc11, have proµerty eloiin, (e g.
1
~
Sham:hai P(IW(', ('q, v. th,ilNt scat~.( 4 Cl. Ct 2:l.,, ( 19::0) q/fd. 1111i,11. 7<,s 2c1 :i;Q Wed.Cir. l~M),
<,·r/. d,ni,d 474 U.S. 909 (1985),
p. ;j.)
,.. • (l
Vietnam) will be held liable for ~o-c:~llc<l ·1raffit.:.king'' i11 lhus~ dni1111.:U rnop1.:1 w.:} if ·1 illc
111 is enacted and cxluKkU !,;Om1lituliu11ully to olhcr national-origin f;_roUp$. _
* The m\lhitude of lawsuits thl-11 will b¢ iile<I pursu"nt 10 Ti1 le 111 witl ,w!"r 11mt", hr.
convcrteil to fim1.l judgments a~ains1 Cuba, and as such will C<lnstilu1c
&
running srn t.•
l"ohlcrn for the United States. Ti~e Ill lawsuits are cxphcitly made nondlsmissiblc. The
foci of hundreds of thousands of Cuban /\merie<>n judgment creditors againSl Cuba will
m*c il impossible for us to normalize relations wilh a fr1e11dly eove1 n111e:rt1 11\ 1ht11
oountry. Aircn,ft and ships would be seiztd, Cuhan a<.<cr< in rhc tJ.S. h•nkinl( system
would be allM.he<l, good, producc<l in Cubu would uc c,cculcd upon when they u11 ivc in
U.S. µcits - .tl in pursuit of rooovery of billions of dollars in fodcrnl ooun ow.ids. Th,·
population of Cuba (the majority ofwhoni were nor even oom when rhe propente, ofrhe
Cuban American judgment creditor:-. were t'1ken) will Ix.: imlculu1c<l Cu, <lccu<lcs lo come
to the judb'll\ents entered lll:!•inst thci, count, y uu our fcdc, al court dockets. Ilow is such a
st•tc ufaffisirs conducive to a 1cco11cilintio11 between Cubans on the island 011d the Cuhan
COIIUUuJULy of the United Stares?
The alternative to L11c pcnnnncm cstm11ge,nent Title Ill lowsui!S w;11 produc,'
between Cuba and the United S1a1c.s would ol' courie be tc,r • ll s rresidc.nt t~ dismiss.
the judgments cnlcrcd u..'(ttinsl Cubu. Nolwillislu111.li11~ \he µ1ohibiliou tiHuinsl such
executive branch action contained in Title l!l, it is probable that 1hc courts will uhimatcly
uphold lhe dismissals as • keitimate exercise of the. pre.,irlential pmogarive 10 ronrl11r.1
foreign aft'airs.' What then?
The c.re<>tion of a cause of ac.11on by Congre~s 1s obviously not a trivial matter.
JJundreds of 1housands of Cuban Americans will quite propt.rly avail 1hcmsclvcs or the
right of •ctinn to he given them hy l'itlc Ill 'I hcsc cases will pmcccd incxorahly 10 tin•I
judgments. (There are reolly no defenses available to Cubo under Title Ill. ll is u slliet
liibility statuLe). As tiMI tederal court judgment6 tht.y will carry the lllith and crool! of the
United SLu.tc::1 !(<JVCJ11mcnt, with 1t.ll lhc rights 11.n<l. n..,ncdic3 of c.xccuticm ~<...1" our in n11r
laws. Wha1 will be the e-011seque11ce of the president e,,.tlnguisluns thc1c: juJ;:111c11t, tt11d
their oonoomiumt rights of execution?
Agllin, as in 1he case of' certified c.1ain1ants, • f<.deral court judgment is a prope11y
intcrc,L protected by the Constitution. lfthat interest i, extinguished hy prr.sirle.n1i~I order.
the Fif\h Amendment "takin&s douse:" wit Ii its duty of full compe11satio11 will he triggerr<I
If Title III is enacted it should be wi1h full knowledge lhM Cong, e» muy someday he
asked by the public to explain how The Amori(M peopk came ultinwcly to be liohle fo,
tons of billions of dollars of d•miges in recompeJ1se to o. s• oup ur 11011-U.S. ruttionals at
4
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4
the time they lost properties in Cuen' lo u pefiod of heightened conocm for potcn11xl
J.(Ovcnum.:11\~l lio.bllity under tho 1ftkint~ ('.11\use of 1he l1ifi.h /\mendmcm, Title. ill should hl'
~pproached with the greatest CHutio11 urn! ~cco fo1 t.l1c liability lim~ bomb thM ll is.
* A troubling aspect oCTitlc Ill i:-i its co111emp1uous disregard ofinterna1ionJl tnv
/\s ~ nation we and our citizens benefir from inrtm<1tiom1\ lxw i11 a 111y1 iH.d of' li11111s, Mu.:h
as oven~s inve~tment and intclkclual p1oµcrly µ1ulc!.!lio11 1 th~ snfoty (,f O\u diplomal'ti.00 roVt..1t..-ignly over our marine resources. MMy other (..."Xan,pll!s of th<' bcnclils 10 11h'':
United States of on intemMioMI n1le of law could he given. How can v,c in future
rlemand compliance with i11tcrnutiu11ul luw liy other nations if we bl°t prepared to violate
~,nt very lnw by enacting Title Ill? The proponents of this lre,i<IMion havr nr.vr.r
satisfactorily answered thbt fundamental question.
To conclude, ~ain proponents of Title ll1 from outside th~. s~nat•, h•ve. enga~<·d
in a campaign to minirniu its signilk~ncc. lloiled down, th~.ir m~ssage i, th.i • vo,. fo,
Title UI is en inconsequenti~I thing For example, they will xay that a lillg•m cunnm "'
will not. sue \.uha it~ett: hut ralhc1 any t1.cliorn1 111c limilci.l tu "thi1<l µuny 11uili!..:kc1s'' in
coufiscutw p1 ope.ties, Let there be nu mistake on tlli• point. Tit lo Ill is •n unprecedented
fO(k,ral cour1 ('.l"lm#: r,rosr-'m ag.3in1:1 1he. nation of C'uha. Section :\02 of Title 111 is plain
und unntnl>i.~uous in its me.111ing. ll is the inesc;"tpable consequences of 1Mt mc..,i,i11g th<1t
the Senate must ~ddress.
Yo1m; . . incl'.rcly,
;-1~1.
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.
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Robetl L. Muse
' See. P.!'.P.!lf!1' ,<, Mi.}f:lf!_'!...fl.!~ ~\.lf>tfl, ut 6!1:S: "TJuJU~h ,\i,; OOIK."IUl.lc lluit the rrcsidcnl lt:1s ,culed
petitioner's claims again~ rran, we dn Mt ~ur~ lh1'1 the scttlemcn1 l1ns t.er!l11u:tled j)l.1itiu11e1 's possible
lelk.ing u!uim uguiJM uguJ.nsC the Unii¢d ~·uucs." (Emphas.is added). Jus1icc Powell, C<'lncurriur. in (l:"111 tu"1
diaentinA tn r,,r1, Md lh\« to~ '"The OovQrnnxmt must p3y Ju,1 LXH11pcu~~(t\l11 when ii JUrthcrs the
111:tlion's !orciJjn policy goals by u.<inll il~ 'b:tr~lnini: chi~' claims Jawfullr held by u u;lul!wly few
1lC('$()nS anJ sOOjt,..t lu the juri~1cUu11 ol' our e.:>urt,," Id. at 6?1.
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......
JOINT CORPORA TE COMMITTEE ON CUBAN CLAIMS
do LON"E
srA.R c-;DCSTIUES, l}:C
September 20, 1995
300 FIJ!.ST ST A MFORD PUCE
STAMFOW, Cf 06912
(l03) 969,8600
Dear Scnacor:
The Joint Corporate Committee on Cuban Claims represents more than thin:v U.S.
corporations with certified claims against the Government of Cuba stemming from the
Castro regime's unlawful confiscation of U.S. property without just compensation. Our
member corporations hold more than one-half of the $1.6 billion in outstanding certified
corporate claims. On behalf of the Joint Corporate Committee, I am writing to urge you
to oppose Title III of legislation Sen. Helms will offer as an amendment to the Foreign
Operations Appropriations Bill because it poses the: most serious threat to the: property
rights of the certified claimants since the Castro regime's confiscations more than thirty
years ago.
The centerpiece of rhe Helms legislation is Title III, which creates a right of action
_
that for the first time will allow U.S. citizens -- regardless of whether they were U.S.
citizens at the time their property was confiscated in Cuba -- to file lawsuits in U.S. courts
against persons or entities that '' traffic' in that property, including the Government of
Cuba. In effect, this provision creates within the federal court system a separate Cuban
claims program available to Cuban-Americans who were nor U.S. nationals as of the date
of their injury. This unprecedented conferral of retroactive rights upon naturalized
citizens is not only contrary to international law, but raises serious implications with
respect to the Cuban Government's ability to satisfy the certified claims.
Allowing Cuban-Americans to make potentially tens if not hundreds of thousands
of claims against Cuba in our federal courts may prevent the U .S certified claimants from
ever receiving the compensation due them under international legal standards. After all,
Cuba hardly has the means to compensate simultaneously both the certified claimants and
hundreds of thousands of Cuban-Americans, who collectivdy hold claims valued as high
as $94 billion, according to a State Department e.5timatc. In· addition, this avalanche of
lawsuits undoubtedly will cloud ntle to property in Cuba for years, thereby lessening the
prospects for rcstitutionary approaches in satisfaction of some of the certified claims.
Apart from the inJury to the interests of U.S. certified claimants, we can reasonably
anticipate that this legislation, by opening our courts to such an expansive new class of
daimants, will unleash a veritable explosion of litigation that will place an enormous if not
overwhelming burden on our courts. Moreover, the legislation even would allow Cuban
exiles abroad ro avail themselves of this lawsuit right simply by forming a corporation in
the United States, transferring any claim they may have against Cuba into thar U.S.
corporate entity, and bringing suit in U.S. federal courts. In addition, other similarly
situated U.S. nationals of various ethnic origins who have suffered property losses under
similar circumstances can be expected to pursue this lawsuit right on equal protection
. : : \I
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...' ..
September 20, 1995
Page 2
grounds. While it is difficult co predict with any precision the number of lawsuits that
will be filed under this legislation, it is not unreasonable to conclude that they will
number in the hundreds of thousands.
Finally, we must consider the impact of this lawsuit right on the ability of a postCastro Cuban government to successfully implement market-oriented reforms. There can
be little doubt that the multitude of unresolved legal proceedings engendered by this
legislation will all but preclude such reform, which must be the foundation of a free and
prosperous Cuba. Even should the President, as an incident of normalizing relations with
a democratic Cuban government, ultimately extinguish these claims, if history is a guide,
our government could assume tremendous liability to this newly created class of claimants.
In light of the pernicious implications of this legislation for the legal rights of
certified claimants, an already overburdened court system, the claims settlement proce.ss
and the orderly disposition of claims, and the post-Castro investment environment, we
urge you to oppose the Helms amendment insofur as 1t contains Title III in its present
form.
Sincerely,
David W. Wallace, Chainnan
',,_ '\
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tJ
STATEMENT OF DAVID W. WALLACE, CHAIRMAN
JOINT CORPORATE COMMfITEE ON CUBAN CLAIMS
ON S. 381,
THE CUBAN LIBERTY AND DEMOCRATIC SOLIDARITY ACT OF 1995
SUBMITTED TO
THE SUBCOMMITTEE ON WESTERN HEMISPHERE
AND PEACE CORPS AFFAIRS
THE COMMITIEE ON FOREIGN RELAT[ONS
UNITED STATES SENATE
JUNE U,, 199S
Mr. Chairman ;\,lld Members of the Subcommittee, I appreciate the opportunity to·
submit this statement expressing the views of rhc Joint C<!rpor:itc 0.)mrnittcc on Cuban
Claims with rcspecr to .S. 381, the 'Cub.tn Liberty and D{'mocratic SoHdarity
(LIBERT AD) Act of 1995."
The: Joint Corp<>rate Committee on Cuban Cl.um.1 1 of which I serve :lS Chaim1ai1,
represents m<>rc than thirty U.S. corporations with ccrrificd daims againn th<:
Government of Cuba stemming from the ~tro regime's unlawful confisc.:ation of U.S.
-.property witho1,1t just compensation. Our member ,orporQtions hold more 1hAn one-half
of the -St .6 billion in ouutanding certified corporate cla.inu. Since its formation in 1975,
thC' C.ommittcc has vigorously supported the proposition th~t bs;fs.ir.i: our governmc:11t
taka any steps to resume normal tt.1dc :ind diplomatic rcl11tions with Cuba, the:
-Go\·enuru:nt of Cuba must provide 11.dcqu:itc compensation for the U.S. propcrtic:s it
unlawfully sciud.
·
Although I w submitting this statement in my capacity ~ Chainnan of the Joint
0.>rporate C<.>mmittcc I. would Wee tO note pucnthctk,lly that I alJo serve as Chaimun
and Ch0cf-€x«actvc-Bi1fic:er of Lone Star Industries, Inc. Lone Star is a ~rtificd daim
holder whose cement plant at Ma.rid wu ~izcd by the Cub:tn Government in 1960.
Lone Star'$ claim i., valued at $24. 9 million plus 6% lntcrc1t since the date of sci~urc.
On lx:half of ou~ ('...ommittee, I W4llt to commtnd the ~ignifo;anl contribution you
have made to the debate on U.S .•Cuba policy by foL"tning ~ne~d attention on the
Cutro regime's unlawful expropriation of U.S. property •• m i..~~ue that all too oft~n gets
lost in the debate over the wi$dom of the.embargo policy. fu:<:1>gnizing the importil.llt
rvle th4t tr4dc and investment by U.S. businesses will have in Cuba 1s·economic
rccon$tru~ion and its eventual rctutn to the intcrn:ation;J m0101unitv, cvid~n,e of
concrete StCpi by the Government of Cuba tow:1tds the satisfactory rewlution of th,
proixrty dwns ~sut must be ~ csscntidl condition for the resumption of cconomk· 3nd
diplomatic tica between our n3tions.
I mini. it is irnporuu1L lo recall the essential =on /or which the U.S. government
first imposed a partial trade embargo against Cuba in 1960, followed by the suspension of
o.iplomatic relations in 1961 and the unposition of 11. tottl trade embargo in l 96:2. Th~
actions were t:ikcn in direct response to the Castro regime's expropriation of properties
held by American citii(ns and companies without payment of prompt, adequate and
cfkcth·e compensation as required under U.S. md imcm:uionu law. Th~ illeeiil
confucation of private assets wu the largctt uncompemated taking of American property
in the history of our country, affecting scores of Individual compa.n.itS am.! invcsLon In
Cuba.n ~ntl'.Triscs.
Th= citiz.:11.$ and comprnic~ wh0,$C property was confu=ed ha.ve a. leg,il right
1'¢(0gniud in long-established international law to receive adequate compensation or the
return of their property, Indeed, Cuba's Constitution of 1940 and even t.hc dCCCCC6
issued by the Cut.ro regime since it ~e to power in 1959 recognized the principle of
~ompensation for confiscated properties, PUt$Uant to Titlc V of the lntcmationaJ Claims
~cment A(.t. 1 the cl~ of U.S. citizens and corpor~tions &&aillSt the Cuban
govcnunent have been adjudicated and cenified by the Foreign Clainu ~ttkment
Comnumon of the United States. Yet to this day, th~ ccrtlficd clairru remain
uruawf1ed.
It is our ~ition th1.t Liftin& the ~mbe.r~ prior to tt.!olution of the cl.aim$ issue
.would be unwise as ll. natter of policy and damaging to our settlement negotiations
posture. F!nt, lt would set a bad p=dent by aign,Jing • wi111ngnc.,s on the part of our
nation to tolerate Cuba's failure to abide by prectpts of international law. Other foreign
nations, oonsequcntly, may draw the conclusion that unlawful seizure& of prop«ty an
~ without con~qt1ence, thereby leading to future unlawful confiscations of Ameria.o.
propcnics without compensation, Second, lifting the embargo would remove the best
leVCUSC we have in compelling th, Cuban go~.nmcm to aodteu the dalms of U.S.
nationals ind would place our negotiators at a terrible ~adVll.lltagc in s ~ just
compcmuion and r«titutk1n. We depend on our government to protect the rights of lts
ciclzeru when they are hmne<I by the unlawful actions of a foreign agent. The Joint
CorpoCAtc Committee greatly appreciates the stcadfut suppon our State I>cpartmcnt has
provlclccl over the yean on the <:llim.l i.mle. However, we recoswz.c tha.t the powefl\11
tool of unctions will be crucial to tbc: Dcpan:rncnt's ability ultimately to cffca: a jun
r~lutlon of thus i4,1ue, ..
Apart from the need to redress the lcgiwmtc grievan~ of tJ .S. claimants, we also
ihould not overlook the wntribution th<:IH: dtizeru end eompani«G made to the economy
of pre-revolutionary Cuba, helping to make it one of the top ranking Latin Amcrian
«nin~e4 in terms of living sundan:l.s and economic growth. Many ot these comptnlu
tnd individuals look forward to returning to Cuba to work with iu people to help rebuild
th¢ nation and invest i.n its future. & was the cue in pr~-n;volutionary Cuba, the ability
of the Cuban govcmmcnt to attnct roreign investment on~ ~ will bt. kq to the
$UCCCS$ of any national policy of economic rcvitaliution.
2
However, unless and until potential investors can Ix ass\11'.ed of their right to own
property free from the threat of confiscation without cornpeI:1Sation 1 m.:my U.S. companies
~imply will not be willing to u.ke the ruk of doing btUi.ness with Cuba. It is only by rurly
and reasonably addrt$sing the clwns issue that the Cuban government can demonstrate to
the satisfaction of the business conununity its recognition uf and reipcct lot property
righc,.
\Ve 11re plea.;ed that S, 381 do« not waver from the core principle, firmly
embodied in U.S. law, which requires the tdcquatc resolution of the ccnificd d.aimJ
before trade and diplomatic relations berwccn the U.S. and C\lbw goY¢l'nffl¢nU
nonnalizcd.. However, we uc ,oncern«l with provisions of Section 207 of the revised bill
that condition the resumption of U.S. &Mistancc to Cuba on the adoption of step& leading
to th<: sati3faction of cl<Um$ of both the certified claimants ami Cuban-Amcrica.n citizens
who were not U.S. nationals at the time their property wu confiscated. Notwithstanding
the modifying provisions wh11;h a,w,<.l priority to the aettlcment of the ccrt;iflcd c:Wnu
and give the President authority to resume aid upon a showing that the Cuban
-&>vanment has taken ~uffidcnt 6tcps to satisfy the certi.fied clairn.1 1 th.15 dramatl~
cxpmsion of the. d~imtrtt pool, as a practical matter, would ncccssuily impinge upon the
=
property interests of the certified claimants.
Even though the cWmants who were not U.S. ru.tioniw at the time of the
property loss would not enjoy the espousal rights that the certified daima.nts enjoy, the
=~it.ion of a. second tier of claimants by the U.S. Government at a minimum would
nc«-iwily oolor, and likely make: more complicated, my settlement negotlatloD$ with
Cuba (O the dctcimcut of the ~ed cla.imanu.
-.
-
Moreover, the fuct: that the legislation gives prioricy for the ~tkmcnt o f ~
P1"91?erty claims is of little ,oruequenc:e within the context of such t vastly expanded p001
of cluman.u thtt seemingly dc6.ta a rroinpt, adequate and cffcctive settlement of c:lalms.
In addition, on,e th~ ~oond tier o dairn,nt, is rc~ud, It would be exctedlngly
difficult politically for the President to ~ e his wa.ivtt authority, F!.o.ally, thl.! dramatic
expwioi, of the clununt pool would serve es a aignificant dlsinccntlve fur 1. p<>Jt-Cuuu
Cubm Govemrt\et\t to enter into mctnlngful settlement negotlttlons with the United
States given the sheer enormity of the: outaundi.ng d&iml and the pnctlQl imp»1ibillty of
nua/ylng ill th~ d&ima.
- · ln abort, while we are aymptthctlc; to the po.itlon of those individuw and entWc,
who were not U.S. nationals tt the tbuc their property was seiud, wt bellevc that U.S.
Government rcwgnitlon Lncl r¢ptC$Cntation of tlw group of clairoaou - even f'al.l.ing short
of c.,pou.,,J of their cl~ with ci post-~tro govemm.ent in Ci1ba - would hann the
intcresu of the al.ready ccni.ficd clt.ltnanu. We believe thtt the rc«>gnltion of a second tier
of claimffl.U will deby and compllcacc: the scttlcment of c;mified dW'.1$, and may
undc.nnine the prospects for serious settlement negotucions with ~ Cuban Govtrnmcnt.
It is our view, based on wc:ll-cstabfuhc<l pcindpl~ of international law, th•t
individua.15 and entities who were Cuban nationals at the time their property wa.s
confiscated. must seek resolution of their clairos in Cuban couru under Cuban 1.a.w under a
fun.ir( Cublltl Government whereby the re.spcctivc pmpcrty rights of former and current
Cuban nationals may be fairly determined. In taking that po,!ition, we categorically rej<xt
a.ny nvtivn that ~ u~Luc.ili·.Ged Ainccica.n ha.s uiy lcncr degree of right than 11. na.tivc.bom
American. That objectionable and irrelevant notion serves only to cloud the real issue
here, and that is simply the question of what rights are pettincnt to o. non•nttion:11 ilS of
the date of injury. Simply put, international law does not confer rcuoact.ivc rights upon
nuuralizcd citizen$.
Many of the same objections noted above also apply to Section 802 of the revi$Cd.
bill, which Gilowt U.S. nationals, including hundrcw ot thousands ot naturalized CubanAmericans, to file suit in U.S. couns against p¢t'$ons or entities that traffic In ~ropri,.tcd
pro~y. We believe thl.s Untr.$trictcd provision also will ad\-CCWy affect the righu of
IXCtificd cwmants. By effectively movin15 claim& settlement out of the venue of the
Foreign Claims Settlement Commission and into the federal judiciary, this provision cw
be c~cctcd to i.nvitc hundreds of thousands of commercial and tt.Sidcntla.l property
lawauiu. Apart from the enormous, if not overwhelming, burden th~ lawsuit& will place
on OW' COIi«$, this prov4ion ralJes serious implications with respect to tbe Cuban
Govenunent'~ ability to ~ttisfy cx:rtificd Clam'!$,
first, allowing Cuba. to become liable by way of federal COW't J1.1<3gimnu for
monctuy tUmJ.ges on a r1on-di.smlssible bui$ ncceffirily will reduce whatever moneta.ry
mcms Cuba might have to satisfy the ~ d clalnu. Second, this expected multipliclty
of l,wsuiu undo11bte<ily wiU cloud title to property l.n. Cuba for yem, thereby kucning
the prospccu for l'(Stitutionuy approaches in satisfaction of some of these cWms.
Mot(()vct, under this provision, the Ptt.Sldent would have no power to dlsml$$ th* suJu
u an.incident of nomullzlng relations with a dctnoaatktlly ckcted government in Cuba
once they are ronuncnced. C.Onsequently, the foreign investment that will be crucial to
Cuba'G $ucceuful implcment:1tlon or muket-orierttC4 reforms will be ill but prcclud.ed by
these unreaolved !¢gal proceedings.
In ronct\lsion, we want to QOJMl.Cttd you tor your efforts in ralsi.ng the profile of
the .P1'9PC1t>' ch•bm =ue and· focusing attention on the importtn.cc of tc!Olvlng these
-cliI.riu to the full restoration o! democrAcy and free enterprise in Cuba. We a l s o ~
and apprcdatc the efforts you have made to modify this legislation in. response to the
concerns cxpl'($$((1 by the ccrtlftcd claimant community; however, we hope tht.t you will
further consi~ our continuing concerns n:g21"(ling the implication, of this lcgi$lttion. for
the legal righu of certified cla.lmants, an tlrcady overburdened ooutt ,ystw, the~
settlement pro~s ~nd thr. or<lr.rly d~position
environment.
nr dmru,
artd th<'! J'O't-Cutro invertment