Mauricio J. Tamargo http://docs.house.gov/meetings
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Mauricio J. Tamargo http://docs.house.gov/meetings/FA/FA07/201506...150618.pdf
Attorney at Law (Licensed in FL & DC)
E-mail: mtamargo@pobletetamargo.com
Mauricio J. Tamargo
Attorney at Law
Poblete Tamargo, LLP
(former Chairman, Foreign Claims Settlement Commission
of the United States, at the Department of Justice)
Before the Subcommittee Western Hemisphere, of the House of Representatives
Committee on Foreign Affairs.
June 18, 2015
Subcommittee Hearing: The Future of Property Rights in Cuba
Thank you Mr. Chairman, Ranking Member, and members of the Subcommittee.
It is an honor to be before this great Committee, where I used to work. I have worked to
help victims of confiscations from different countries for over 26 years, including eight
years as chairman of the Foreign Claims Settlement Commission at the Department of
Justice.
It has been decades since these claims against Cuba have been given this much public
attention. The House Committee on Foreign Affairs is the committee of jurisdiction and
oversight over these certified claims of our fellow Americans against the government of
Cuba. I commend this Subcommittee for convening this hearing and hope it continues
to play an active role in the long overdue resolution and full settlement of these certified
claims. !
It is my hope that the testimony provided by all the witnesses appearing before you
today will help the Committee, the Congress, and the Administration resolve and settle
the certified claims before any further concessions are offered to the government of
Cuba.
I will summarize my remarks and ask that the full text of my testimony be placed in the
record.
WASHINGTON, DC · ALEXANDRIA, VA · CORAL GABLES, FL
www.pobletetamargo.com
1020 16th Street, N.W., Suite 700
Washington, D.C. 20036
T 202.558.9643
F 202.558.9649
www.pobletetamargo.com
MAURICIO J. TAMARGO
Attorney at Law
mtamargo@pobletetamargo.com
1020 16th Street, N.W., Suite 700
Washington, D.C. 20036
T 202.558.9643
F 202.558.9649
www.pobletetamargo.com
JASON I. POBLETE
Attorney at Law
jpoblete@pobletetamargo.com
Suite 700
Wednesday, March 10, 2010
Background on Confiscations by Cuba.
Over fifty-five years ago, the revolutionary communist government of Cuba confiscated
the real and personal property of thousands of Americans, and others, who were living
and doing business in Cuba. To this day, that chapter in U.S. history represents the
largest confiscation ever of American property, and there has been no progress in
settling these certified claims. !
These confiscations by the Cuban government had a profound impact on thousands of
American families. You can hear the pain in the claimants voices as they tell others
about how their families were forcibly removed from their homes and businesses. Their
lives were shattered; destroyed. Their grandparents and parents struggling to hold their
families together and rebuild what took them a lifetime to create. Many never recovered
economically and emotionally.
Confiscations like these, where one’s entire life is uprooted, without warning; without
compensation, scar the victims for life. I believe, they affect families the same way that
the loss of a child would. Many don't fully understand this, because they think it was just
property, but they would be wrong. It was not just property, it was their lives. They
poured everything into that business and life they knew; then everything they owned
was taken from them.
They can never forget it and they seek understanding and closure from the U.S.
government who promised them justice. Justice they have yet to receive. !
New Negotiating Opportunity Over Certified Claims
There are reports about serious talks in the making between the United States and
Cuba regarding the certified American claims. But we should remain guarded and
concerned that this will not materialize or that negotiations will not reach a settlement of
these claims. The Administration is priming the pump with a number of goodwill
gestures and gifts to Cuba in order to get the conversation started, but historically,
before these sort of favorable US actions are taken, there is, at least, an outline of an
agreement for settling certified claims.
Some will often refer to Libya as an example for the Administration’s actions on Cuba. It
is true that the US removed Libya from the State Sponsors of Terrorism list before the
U.S. - Libya claims settlement agreement was signed and paid by Libya. However,
there was at least a basic outline of an agreement before Libya came off the terrorism
list—not to mention that the Qaddafi government had already dismantled its weapons of
mass destruction programs and had met other requirements laid out in US law and UN
resolutions.
Even so, I am cautiously hopeful that these current talks will bear the long awaited fruit
of a fair and just claims settlement agreement. But no one should be under any
delusions. Just as in the case of Libya, these talks will be very difficult and could still
take a long time. !
1020 16th Street, N.W., Suite 700
Washington, D.C. 20036
T 202.558.9643
F 202.558.9649
www.pobletetamargo.com
JASON I. POBLETE
Attorney at Law
jpoblete@pobletetamargo.com
Suite 700
Wednesday, March 10, 2010
It is important to American victims that our negotiating team be well prepared for the
talks, that they make this matter a top priority, and that they are firmly committed to
making these certified claimants whole. Settlement of these claims is not only important
to the individual American claimants. There are economic and strategic reasons why
Cuba must pay these certified claims. If the world, and especially Latin America,
observes that the United States has allowed Cuba access to the US market and to
conduct normal trading relations with Americans, regardless of the $7 billion of stolen
property owned by US citizens, then Americans elsewhere around the world may suffer
even larger confiscations in the future which could dwarf the Cuba certified claims. !
I think we are already seeing this happen as certain Latin American countries are
seizing the property of American corporations with impunity. It can spread further and
hurt US competitiveness. When American families and corporations who go overseas
have their property taken, or have their contracts interfered with by a foreign
government, that results in the loss of jobs and capital here in the states. Other
countries look out for their citizens and companies overseas, and the US must do the
same.
Background on Certified Claims Process
The Foreign Claims Settlement Commission of the Unites States at the Department of
Justice has been adjudicating American claims for over sixty years. The Commission
has adjudicated over 48 different claims programs against 22 different countries. !
Once the Commission has completed its work on a claims program, the Commission
certifies the claimants and the values of their claims to the State Department whose
responsibility it is to negotiate a settlement agreement with the other country. These
negotiations usually are very difficult and take a long time. The other country may seek
to challenge some aspect of the certified claims such as the valuation, or the nationality.
The other country may also have counter claims against the United States. Typically the
U.S. has something the other country wants and tradeoffs occur. That is why the
Commission is an independent agency and not under the control of any Department or
outside government official and why the Commission's decisions are not subject to
review or appeal by any agency or to any court. Additionally there is no cost to the
American taxpayer for administering the claims process because a portion of each
settlement agreement pays such costs of the Commission. !
The claims process is conducted with complete transparency, in a non-adversarial
proceeding, in which the claimant must show support for his claim. He must prove he or
she owned the property when it was seized, and prove what the value of the property
was at the time it was taken. He or she must also show proof of American citizenship at
the time the property was taken, and prove that it was taken, or interfered with, by the
Cuban government. !
1020 16th Street, N.W., Suite 700
Washington, D.C. 20036
T 202.558.9643
F 202.558.9649
www.pobletetamargo.com
JASON I. POBLETE
Attorney at Law
jpoblete@pobletetamargo.com
Suite 700
Wednesday, March 10, 2010
The transparency aspect of the Commission’s claims process is very important and I
believe the main reason this process works so well. The Commission's Decisions
states clearly how the value of each certified claim was calculated. The Commission’s
Decisions also state clearly how it uses accepted accounting practices to determine the
true value of the certified claim amounts. !
Other countries have their own commissions, which evaluate the claims of their own
citizens. Under international law, each country advocates and espouses the claims of
its own citizens against the wrongful injury, interference or takings by another country. A
claims process is used when there is no independent or reliable judiciary in the other
country for Americans to find justice or a fair hearing. !
The Foreign Claims Settlement Commission has a three-member tribunal, composed of
one full time chairman (currently vacant) who also serves as the administrator of the
Commission, and two part-time commissioners. They are each appointed by the
President for three year terms and are confirmed by the Senate. The Commission can
only adjudicate and certify American claims when it is authorized to do so. That
authorization can come from the Congress through legislation, by a treaty, or by referral
of a category of claims by the Secretary of State. !
Certified American Claims Against Cuba
We have heard different numbers as to how many certified claims there are. There are
in fact 5,913 certified claims against the government of Cuba. Of those, 5,911 were
adjudicated by the Commission in the first Cuba Claims Program during the 1960s and
the 1970s and two more were added in the Second Cuba Claims Program in 2006. !
There are several types of certified claims against Cuba. Most are for confiscation of
personal property, such as bank accounts, stock shares, bonds and debts. Some claims
are for the confiscation of real property or land, some are personal injuries, and a
number of them are for wrongful death claims. !
When the claims were originally certified by the Commission they were valued at $1.8
billion dollars. Today, they are valued at around $7 to $8 billion due to the 6% simple
interest called for under international law and certified by the Commission. Only around
300 claims are corporate but they represent roughly 80% of the total value, and the rest
are individuals or families representing roughly 20% of the total value. Another
interesting statistic is that the top 124 claims represent 90% of the total value, or $1.6
out of the total $1.8 billion.
No other American claims program has been left pending and unpaid for this long, 55
years. I don’t count the Soviet / Russian claims program because it was partially
settled. As an aside, I urge the Committee take action on those Soviet, (now Russia),
certified claims as well. !
1020 16th Street, N.W., Suite 700
Washington, D.C. 20036
T 202.558.9643
F 202.558.9649
www.pobletetamargo.com
JASON I. POBLETE
Attorney at Law
jpoblete@pobletetamargo.com
Suite 700
Wednesday, March 10, 2010
Settlement Proposals and Discussion
There have been suggestions of a settlement agreement with Cuba that would use
restitution of the old confiscated property or substitution of comparable property to settle
the certified claims. We have also heard over the years certain Cuban government
officials warn the Cuban people that the Americans are coming for your houses.
The media also seem to like the optics of this and keeps asking the same type of
questions about restoring the land to old owners and have asked my opinions on the
“property problem between the US and Cuba”. My answer to all these comments and
arguments is that there is no property problem, because there is no property. Under
international law the American property is gone. The Cuban government confiscated it.
But the same international law section states that, what remains is the debt that Cuba
must pay. The U.S. has a right, under international law, to fair compensation for its
citizens. !
Cuba is a sovereign nation and as such it controls its own land and who owns it. As to
the possibility of a settlement agreement, which may include some land as repayment
or restitution, that really is up to Cuba, not the United States. But I would caution that
any such settlement, if offered by Cuba, is very difficult to pull off and would require a
high degree of confidence between both countries. !
Settlement agreements that involve a property restitution option have been successful
in the past, but in special circumstances. In a few settlement agreements to which the
U.S. was a party, such as the agreement with the German Democratic Republic and the
current Albania Program, an opt-out provision allowed claimants to go into the foreign
country’s court process for restitution of their land. !
But one key element, which would be needed, is a property court or property
commission in the foreign country with a reasonable guarantee of due process
protection and an independent judiciary, something that does not remotely exist in Cuba
today
Other suggested settlement approaches would break up the certified claims into
separate categories, to be handled differently in the settlement negotiations process,
such as by big value versus smaller value claims, or commercial land claims versus
residential land claims, or land claims verses personal property claims, thinking these
may speed up the negotiations or make it easier to reach a settlement.
Equal treatment of all the certified claims is the simplest, less complicated, approach
and is the quickest and most likely way to succeed !
Any effort along the lines of creating different categories of claims are much more likely
to result in divisions amongst the claimants, pulling in different directions and
significantly reducing the likelihood of a settlement of these certified claims. It is also
1020 16th Street, N.W., Suite 700
Washington, D.C. 20036
T 202.558.9643
F 202.558.9649
www.pobletetamargo.com
JASON I. POBLETE
Attorney at Law
jpoblete@pobletetamargo.com
Suite 700
Wednesday, March 10, 2010
completely unnecessary as the government of Cuba is capable, if it wants to, come up
with the $7 to $8 billion it needs to pay all the certified claims.
I have over the years heard a number of investment speculators in these claims and
some financial experts opine that the US and the certified claimants must be prepared
to receive pennies on the dollar for their claims. They are plain wrong.
Sometimes these same experts have tried to illegally purchase or transfer the certified
claims from the claimants, without the proper license from the Office of Foreign Assets
Control at the Treasury Department. That sort of behavior is not helpful to this claims
settlement process. In fact, I recall from my years at the Commission that we always
had to be very careful never to say anything publicly that could put the State
Department negotiating team at a disadvantage when the day should come to negotiate
the settlement agreement. !
Not only do I believe that the US should settle for nothing less than the full price with
100% of the interest but I call on the Administration and the Congress to hold fast and
not remove key elements of the embargo or the sanctions that remain unless the
claimants receive full and fair payment for the settlement of their certified claims.
I also hear that Cuba is poor and cannot afford to pay these claims amounts. Cuba
keeps crying poverty, saying it has no money. That is just not true. Cuba has ample
funds. It is not for lack of money that Cuba has been a high risk for investors and
creditors for so many years. It is just that Cuba’s leadership have other plans for their
revenue. Fidel Castro is rumored to have a net worth of over $900 million, probably the
same amount for Raul Castro, and the rest of Cuba’s generals and leadership class
also are all rumored to be quite rich. !
Accurate or reliable information as to the Cuban economy and their budget revenues is
hard to come by but there is enough empirical data available that leads me to conclude
that Cuba has the financial resources to pay the full price of these claims or it could
easily finance the settlement. According to the World Bank, Cuba’s GDP is more than
$69 billion. We also know that Cuba receives over $2 billion annually from the US alone,
in the form of remittances and commodities and gifts and trade. Plus maybe the same
from amount Venezuela. We hope shortly to have access to the recently announced
Paris Club - Cuba agreement in principle, which would likely shed more light on Cuba’s
assets and revenues in much more detail. !
The present value of the certified claims, $7, to $8, billion, in todays global economy, is
really not that hard to finance. Private investment and financial sectors could, and
probably would, extend Cuba those funds if they saw that Cuba’s economy would be
free of the U.S. embargo. I agree with those finance experts in that
Cuba’s economy would expand dramatically if it were able to restore a normal trading
relationship with the United States, and Cuba’s government allowed it. So realistically
financing the settling of certified claim would not be a problem for Cuba.
1020 16th Street, N.W., Suite 700
Washington, D.C. 20036
T 202.558.9643
F 202.558.9649
www.pobletetamargo.com
JASON I. POBLETE
Attorney at Law
jpoblete@pobletetamargo.com
Suite 700
Wednesday, March 10, 2010
Recommendations To The Congress, The Administration, & Certified Claimants.
First, and foremost, of these is to urge the Congress not to lift the credit, finance and
banking restrictions and sanctions (still in effect) on trade with Cuba. Congress must not
pass any legislation further easing the embargo unless these certified claims are paid
and settled. We should remember our American certified claimants. I repeat, Congress
must not lift the current embargo on Cuba unless these certified claims are paid in full. !
I have zero confidence in any promise made by the government of Cuba to pay these
claims at some future time after the embargo is lifted. That’s not the way settlement
agreements are made. That is not the way the Vietnam Settlement Agreement was
made. And please keep in mind that comparing past claims programs to the Cuba
program is just not a reasonable or fair comparison. The world has changed quite a bit
since some of the Cold War-era programs were concluded.
We only get one shot at this. We only have one thing Cuba wants. It is access to the
US market and the lifting of the embargo. If the Congress gives that away without
getting these claims paid, then Congress will have failed to protect and defend these
American families and companies. !
Such a failure by the U.S. government will also condemn other American companies
and families around the world to suffer the same fate because the same thing will
happen to them. Solving the Cuba program correctly will send a message to the world
that the United States stands by property rights, no matter how long it takes. This is
more than just a Cuba problem.
Second I urge the Congress to enact legislation to grant limited authority to the Foreign
Claims Settlement Commission to update the certified claims as to who is the current
holder in interest of each certified claim. As I have already explained, claims programs
are not designed to go unpaid for 55 years. Multiple generations of individual and
corporate claimants have come and gone and the information needs to be updated to
expedite the resolution of the certified claims. Not only is it good governmental
housekeeping but it sends a message to Cuba. This legislation should also do the same
for the Soviet claims program.
During my tenure as Chairman, the Commission took it upon itself to research and
update, as best we could, the claimant contact information the Commission has on
record for each claimant. Technically, the Commission’s authority over the claims ended
by statute in 1972, when it certified the claims to the State Department. Lacking
authority to demand proof, the Commission really does not know if it has the correct
person listed as the claimant. !
When the Treasury Department tries to distribute the settlement funds paid by Cuba, it
will have a very difficult time documenting and ascertaining the true owner of each
1020 16th Street, N.W., Suite 700
Washington, D.C. 20036
T 202.558.9643
F 202.558.9649
www.pobletetamargo.com
JASON I. POBLETE
Attorney at Law
jpoblete@pobletetamargo.com
Suite 700
Wednesday, March 10, 2010
claim. The U.S. can put this time, during the negotiations, to good use by updating our
government records so we will be better prepared for the day of settlement and
distribution of payments.
Reauthorizing a Cuba program for this necessary purpose would also send a signal and
message to the Cuban government that the US is seriously standing behind its certified
claimants and insiste that the Cuban government pay its bills. !
The Commission is perfectly suited to administer this review and revision of all the
certified Cuba claimants. It has the claim files and the staff and expertise to conduct
such a program, and I believe it could do so with its current staff, thereby it would not
add any cost to the U.S budget. !
Thirdly, this recommendation is to Congress but first I need to provide
some background of the problem. !
As I have already stated, I believe these talks are extremely difficult. I am not only
concerned that the Cuban government will continue with its intransigence, but also that
with the US government’s level of commitment in forcing the Cuban government to pay
the certified claims. I am hopeful that the debts will be settled, but you never know, we
have been waiting 55 years we may get more of the same status quo. !
Lets face it, the embargo, such as it is, is full of holes. Even with the current credit and
banking restrictions, there is a great deal of trade and commerce going on between
Cuba and the United States. The current Cuban embargo is the only hope of forcing
Cuba to pay the certified claims. What about the promise made to the certified
claimants? The travel and commerce of the U.S. with Cuba is using stolen American
property. That has been taking place for many years under Republican and Democratic
administrations.
We know that stolen American property is trespassed upon because at least one
runway expansion at Jose Marti Airport is on land which is the subject of a certified
claim. It is most likely true of other Cuban airports as well, and every major port in Cuba,
including the Port of Mariel is subject of a certified claim. All make use of land which is
the subject of multiple American certified claims, and the list is much longer than this.
How can the US government license or allow travel and trade which trespasses on the
property stolen from American citizens? Certain large special interests in the US show
no hesitation on doing business with Cuba, even if it means using the property stolen
from their fellow American citizens. !
I urge the Congress to seriously consider enacting a trespass penalty of 10% on all
trade, commerce, remittances, toll calls, gifts, fly over fees, port duty, - everything. This
trespass penalty would be paid by all those conducting business, buying or selling
goods, or giving anything, which pays any revenue or fee to the Cuban government or
agents of the Cuban government. The proceeds collected from the trespass penalty
1020 16th Street, N.W., Suite 700
Washington, D.C. 20036
T 202.558.9643
F 202.558.9649
www.pobletetamargo.com
JASON I. POBLETE
Attorney at Law
jpoblete@pobletetamargo.com
Suite 700
Wednesday, March 10, 2010
would go into a fund which would pay all certified claimants equally their full amount
including interest. !
This trespass penalty would not release Cuba of its debt to the US, but now the debt
would be owed to the U.S. government and not the certified claimants. The U.S.
government should also consider adding additional penalties on the government of
Cuba for every month or year that it fails to make, as required by current U.S. law,
progress on the claims issue.
If the settlement negotiations are successful and these claims are paid by Cuba, then
there will be no need for this unilateral action by Congress. But if the settlement
negotiations fail in paying the certified claims, then it is time to end the suffering of the
certified claimants. Justice demands that a trespass penalty be paid by all Americans
doing any business with Cuba.
Those traveling and trading should consider this trespass penalty as the cost of
trafficking in someone else’s stolen property. I suggest this trespass penalty be enacted
into law should we fail to achieve a settlement agreement, by a certain date, which
would pay the American certified claims and while continuing the current embargo. The
present ongoing and never-ending waiting by the certified claimants is unacceptable
and intolerable. It is the responsibility of the US Congress to bring an end to this
embarrassing 55 year wait by our fellow Americans. We would be happy to assist the
Congress in drafting the trespass penalty legislation.
The Fourth and final recommendation is more of a call to action to all those American
families and companies who are holding certified claims against Cuba. I urge you to get
engaged in this discussion and write to your congressman, your senators, the
President, and the State Department, and keep writing and calling them.
American certified claimants need to demand that their claims be settled and if they are
not going to be settled then they should be paid by the trespass penalty. This is no
longer the time to sit on the sidelines. Let your voices be heard.
I urge the Congress and the Administration to forcefully advocate for Americans, defend
their rights, and finally settle these certified claims.
Thank you.
Attorney at Law (Licensed in FL & DC)
E-mail: mtamargo@pobletetamargo.com
Mauricio J. Tamargo
Attorney at Law
Poblete Tamargo, LLP
(former Chairman, Foreign Claims Settlement Commission
of the United States, at the Department of Justice)
Before the Subcommittee Western Hemisphere, of the House of Representatives
Committee on Foreign Affairs.
June 18, 2015
Subcommittee Hearing: The Future of Property Rights in Cuba
Thank you Mr. Chairman, Ranking Member, and members of the Subcommittee.
It is an honor to be before this great Committee, where I used to work. I have worked to
help victims of confiscations from different countries for over 26 years, including eight
years as chairman of the Foreign Claims Settlement Commission at the Department of
Justice.
It has been decades since these claims against Cuba have been given this much public
attention. The House Committee on Foreign Affairs is the committee of jurisdiction and
oversight over these certified claims of our fellow Americans against the government of
Cuba. I commend this Subcommittee for convening this hearing and hope it continues
to play an active role in the long overdue resolution and full settlement of these certified
claims. !
It is my hope that the testimony provided by all the witnesses appearing before you
today will help the Committee, the Congress, and the Administration resolve and settle
the certified claims before any further concessions are offered to the government of
Cuba.
I will summarize my remarks and ask that the full text of my testimony be placed in the
record.
WASHINGTON, DC · ALEXANDRIA, VA · CORAL GABLES, FL
www.pobletetamargo.com
1020 16th Street, N.W., Suite 700
Washington, D.C. 20036
T 202.558.9643
F 202.558.9649
www.pobletetamargo.com
MAURICIO J. TAMARGO
Attorney at Law
mtamargo@pobletetamargo.com
1020 16th Street, N.W., Suite 700
Washington, D.C. 20036
T 202.558.9643
F 202.558.9649
www.pobletetamargo.com
JASON I. POBLETE
Attorney at Law
jpoblete@pobletetamargo.com
Suite 700
Wednesday, March 10, 2010
Background on Confiscations by Cuba.
Over fifty-five years ago, the revolutionary communist government of Cuba confiscated
the real and personal property of thousands of Americans, and others, who were living
and doing business in Cuba. To this day, that chapter in U.S. history represents the
largest confiscation ever of American property, and there has been no progress in
settling these certified claims. !
These confiscations by the Cuban government had a profound impact on thousands of
American families. You can hear the pain in the claimants voices as they tell others
about how their families were forcibly removed from their homes and businesses. Their
lives were shattered; destroyed. Their grandparents and parents struggling to hold their
families together and rebuild what took them a lifetime to create. Many never recovered
economically and emotionally.
Confiscations like these, where one’s entire life is uprooted, without warning; without
compensation, scar the victims for life. I believe, they affect families the same way that
the loss of a child would. Many don't fully understand this, because they think it was just
property, but they would be wrong. It was not just property, it was their lives. They
poured everything into that business and life they knew; then everything they owned
was taken from them.
They can never forget it and they seek understanding and closure from the U.S.
government who promised them justice. Justice they have yet to receive. !
New Negotiating Opportunity Over Certified Claims
There are reports about serious talks in the making between the United States and
Cuba regarding the certified American claims. But we should remain guarded and
concerned that this will not materialize or that negotiations will not reach a settlement of
these claims. The Administration is priming the pump with a number of goodwill
gestures and gifts to Cuba in order to get the conversation started, but historically,
before these sort of favorable US actions are taken, there is, at least, an outline of an
agreement for settling certified claims.
Some will often refer to Libya as an example for the Administration’s actions on Cuba. It
is true that the US removed Libya from the State Sponsors of Terrorism list before the
U.S. - Libya claims settlement agreement was signed and paid by Libya. However,
there was at least a basic outline of an agreement before Libya came off the terrorism
list—not to mention that the Qaddafi government had already dismantled its weapons of
mass destruction programs and had met other requirements laid out in US law and UN
resolutions.
Even so, I am cautiously hopeful that these current talks will bear the long awaited fruit
of a fair and just claims settlement agreement. But no one should be under any
delusions. Just as in the case of Libya, these talks will be very difficult and could still
take a long time. !
1020 16th Street, N.W., Suite 700
Washington, D.C. 20036
T 202.558.9643
F 202.558.9649
www.pobletetamargo.com
JASON I. POBLETE
Attorney at Law
jpoblete@pobletetamargo.com
Suite 700
Wednesday, March 10, 2010
It is important to American victims that our negotiating team be well prepared for the
talks, that they make this matter a top priority, and that they are firmly committed to
making these certified claimants whole. Settlement of these claims is not only important
to the individual American claimants. There are economic and strategic reasons why
Cuba must pay these certified claims. If the world, and especially Latin America,
observes that the United States has allowed Cuba access to the US market and to
conduct normal trading relations with Americans, regardless of the $7 billion of stolen
property owned by US citizens, then Americans elsewhere around the world may suffer
even larger confiscations in the future which could dwarf the Cuba certified claims. !
I think we are already seeing this happen as certain Latin American countries are
seizing the property of American corporations with impunity. It can spread further and
hurt US competitiveness. When American families and corporations who go overseas
have their property taken, or have their contracts interfered with by a foreign
government, that results in the loss of jobs and capital here in the states. Other
countries look out for their citizens and companies overseas, and the US must do the
same.
Background on Certified Claims Process
The Foreign Claims Settlement Commission of the Unites States at the Department of
Justice has been adjudicating American claims for over sixty years. The Commission
has adjudicated over 48 different claims programs against 22 different countries. !
Once the Commission has completed its work on a claims program, the Commission
certifies the claimants and the values of their claims to the State Department whose
responsibility it is to negotiate a settlement agreement with the other country. These
negotiations usually are very difficult and take a long time. The other country may seek
to challenge some aspect of the certified claims such as the valuation, or the nationality.
The other country may also have counter claims against the United States. Typically the
U.S. has something the other country wants and tradeoffs occur. That is why the
Commission is an independent agency and not under the control of any Department or
outside government official and why the Commission's decisions are not subject to
review or appeal by any agency or to any court. Additionally there is no cost to the
American taxpayer for administering the claims process because a portion of each
settlement agreement pays such costs of the Commission. !
The claims process is conducted with complete transparency, in a non-adversarial
proceeding, in which the claimant must show support for his claim. He must prove he or
she owned the property when it was seized, and prove what the value of the property
was at the time it was taken. He or she must also show proof of American citizenship at
the time the property was taken, and prove that it was taken, or interfered with, by the
Cuban government. !
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Wednesday, March 10, 2010
The transparency aspect of the Commission’s claims process is very important and I
believe the main reason this process works so well. The Commission's Decisions
states clearly how the value of each certified claim was calculated. The Commission’s
Decisions also state clearly how it uses accepted accounting practices to determine the
true value of the certified claim amounts. !
Other countries have their own commissions, which evaluate the claims of their own
citizens. Under international law, each country advocates and espouses the claims of
its own citizens against the wrongful injury, interference or takings by another country. A
claims process is used when there is no independent or reliable judiciary in the other
country for Americans to find justice or a fair hearing. !
The Foreign Claims Settlement Commission has a three-member tribunal, composed of
one full time chairman (currently vacant) who also serves as the administrator of the
Commission, and two part-time commissioners. They are each appointed by the
President for three year terms and are confirmed by the Senate. The Commission can
only adjudicate and certify American claims when it is authorized to do so. That
authorization can come from the Congress through legislation, by a treaty, or by referral
of a category of claims by the Secretary of State. !
Certified American Claims Against Cuba
We have heard different numbers as to how many certified claims there are. There are
in fact 5,913 certified claims against the government of Cuba. Of those, 5,911 were
adjudicated by the Commission in the first Cuba Claims Program during the 1960s and
the 1970s and two more were added in the Second Cuba Claims Program in 2006. !
There are several types of certified claims against Cuba. Most are for confiscation of
personal property, such as bank accounts, stock shares, bonds and debts. Some claims
are for the confiscation of real property or land, some are personal injuries, and a
number of them are for wrongful death claims. !
When the claims were originally certified by the Commission they were valued at $1.8
billion dollars. Today, they are valued at around $7 to $8 billion due to the 6% simple
interest called for under international law and certified by the Commission. Only around
300 claims are corporate but they represent roughly 80% of the total value, and the rest
are individuals or families representing roughly 20% of the total value. Another
interesting statistic is that the top 124 claims represent 90% of the total value, or $1.6
out of the total $1.8 billion.
No other American claims program has been left pending and unpaid for this long, 55
years. I don’t count the Soviet / Russian claims program because it was partially
settled. As an aside, I urge the Committee take action on those Soviet, (now Russia),
certified claims as well. !
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Suite 700
Wednesday, March 10, 2010
Settlement Proposals and Discussion
There have been suggestions of a settlement agreement with Cuba that would use
restitution of the old confiscated property or substitution of comparable property to settle
the certified claims. We have also heard over the years certain Cuban government
officials warn the Cuban people that the Americans are coming for your houses.
The media also seem to like the optics of this and keeps asking the same type of
questions about restoring the land to old owners and have asked my opinions on the
“property problem between the US and Cuba”. My answer to all these comments and
arguments is that there is no property problem, because there is no property. Under
international law the American property is gone. The Cuban government confiscated it.
But the same international law section states that, what remains is the debt that Cuba
must pay. The U.S. has a right, under international law, to fair compensation for its
citizens. !
Cuba is a sovereign nation and as such it controls its own land and who owns it. As to
the possibility of a settlement agreement, which may include some land as repayment
or restitution, that really is up to Cuba, not the United States. But I would caution that
any such settlement, if offered by Cuba, is very difficult to pull off and would require a
high degree of confidence between both countries. !
Settlement agreements that involve a property restitution option have been successful
in the past, but in special circumstances. In a few settlement agreements to which the
U.S. was a party, such as the agreement with the German Democratic Republic and the
current Albania Program, an opt-out provision allowed claimants to go into the foreign
country’s court process for restitution of their land. !
But one key element, which would be needed, is a property court or property
commission in the foreign country with a reasonable guarantee of due process
protection and an independent judiciary, something that does not remotely exist in Cuba
today
Other suggested settlement approaches would break up the certified claims into
separate categories, to be handled differently in the settlement negotiations process,
such as by big value versus smaller value claims, or commercial land claims versus
residential land claims, or land claims verses personal property claims, thinking these
may speed up the negotiations or make it easier to reach a settlement.
Equal treatment of all the certified claims is the simplest, less complicated, approach
and is the quickest and most likely way to succeed !
Any effort along the lines of creating different categories of claims are much more likely
to result in divisions amongst the claimants, pulling in different directions and
significantly reducing the likelihood of a settlement of these certified claims. It is also
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jpoblete@pobletetamargo.com
Suite 700
Wednesday, March 10, 2010
completely unnecessary as the government of Cuba is capable, if it wants to, come up
with the $7 to $8 billion it needs to pay all the certified claims.
I have over the years heard a number of investment speculators in these claims and
some financial experts opine that the US and the certified claimants must be prepared
to receive pennies on the dollar for their claims. They are plain wrong.
Sometimes these same experts have tried to illegally purchase or transfer the certified
claims from the claimants, without the proper license from the Office of Foreign Assets
Control at the Treasury Department. That sort of behavior is not helpful to this claims
settlement process. In fact, I recall from my years at the Commission that we always
had to be very careful never to say anything publicly that could put the State
Department negotiating team at a disadvantage when the day should come to negotiate
the settlement agreement. !
Not only do I believe that the US should settle for nothing less than the full price with
100% of the interest but I call on the Administration and the Congress to hold fast and
not remove key elements of the embargo or the sanctions that remain unless the
claimants receive full and fair payment for the settlement of their certified claims.
I also hear that Cuba is poor and cannot afford to pay these claims amounts. Cuba
keeps crying poverty, saying it has no money. That is just not true. Cuba has ample
funds. It is not for lack of money that Cuba has been a high risk for investors and
creditors for so many years. It is just that Cuba’s leadership have other plans for their
revenue. Fidel Castro is rumored to have a net worth of over $900 million, probably the
same amount for Raul Castro, and the rest of Cuba’s generals and leadership class
also are all rumored to be quite rich. !
Accurate or reliable information as to the Cuban economy and their budget revenues is
hard to come by but there is enough empirical data available that leads me to conclude
that Cuba has the financial resources to pay the full price of these claims or it could
easily finance the settlement. According to the World Bank, Cuba’s GDP is more than
$69 billion. We also know that Cuba receives over $2 billion annually from the US alone,
in the form of remittances and commodities and gifts and trade. Plus maybe the same
from amount Venezuela. We hope shortly to have access to the recently announced
Paris Club - Cuba agreement in principle, which would likely shed more light on Cuba’s
assets and revenues in much more detail. !
The present value of the certified claims, $7, to $8, billion, in todays global economy, is
really not that hard to finance. Private investment and financial sectors could, and
probably would, extend Cuba those funds if they saw that Cuba’s economy would be
free of the U.S. embargo. I agree with those finance experts in that
Cuba’s economy would expand dramatically if it were able to restore a normal trading
relationship with the United States, and Cuba’s government allowed it. So realistically
financing the settling of certified claim would not be a problem for Cuba.
1020 16th Street, N.W., Suite 700
Washington, D.C. 20036
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www.pobletetamargo.com
JASON I. POBLETE
Attorney at Law
jpoblete@pobletetamargo.com
Suite 700
Wednesday, March 10, 2010
Recommendations To The Congress, The Administration, & Certified Claimants.
First, and foremost, of these is to urge the Congress not to lift the credit, finance and
banking restrictions and sanctions (still in effect) on trade with Cuba. Congress must not
pass any legislation further easing the embargo unless these certified claims are paid
and settled. We should remember our American certified claimants. I repeat, Congress
must not lift the current embargo on Cuba unless these certified claims are paid in full. !
I have zero confidence in any promise made by the government of Cuba to pay these
claims at some future time after the embargo is lifted. That’s not the way settlement
agreements are made. That is not the way the Vietnam Settlement Agreement was
made. And please keep in mind that comparing past claims programs to the Cuba
program is just not a reasonable or fair comparison. The world has changed quite a bit
since some of the Cold War-era programs were concluded.
We only get one shot at this. We only have one thing Cuba wants. It is access to the
US market and the lifting of the embargo. If the Congress gives that away without
getting these claims paid, then Congress will have failed to protect and defend these
American families and companies. !
Such a failure by the U.S. government will also condemn other American companies
and families around the world to suffer the same fate because the same thing will
happen to them. Solving the Cuba program correctly will send a message to the world
that the United States stands by property rights, no matter how long it takes. This is
more than just a Cuba problem.
Second I urge the Congress to enact legislation to grant limited authority to the Foreign
Claims Settlement Commission to update the certified claims as to who is the current
holder in interest of each certified claim. As I have already explained, claims programs
are not designed to go unpaid for 55 years. Multiple generations of individual and
corporate claimants have come and gone and the information needs to be updated to
expedite the resolution of the certified claims. Not only is it good governmental
housekeeping but it sends a message to Cuba. This legislation should also do the same
for the Soviet claims program.
During my tenure as Chairman, the Commission took it upon itself to research and
update, as best we could, the claimant contact information the Commission has on
record for each claimant. Technically, the Commission’s authority over the claims ended
by statute in 1972, when it certified the claims to the State Department. Lacking
authority to demand proof, the Commission really does not know if it has the correct
person listed as the claimant. !
When the Treasury Department tries to distribute the settlement funds paid by Cuba, it
will have a very difficult time documenting and ascertaining the true owner of each
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JASON I. POBLETE
Attorney at Law
jpoblete@pobletetamargo.com
Suite 700
Wednesday, March 10, 2010
claim. The U.S. can put this time, during the negotiations, to good use by updating our
government records so we will be better prepared for the day of settlement and
distribution of payments.
Reauthorizing a Cuba program for this necessary purpose would also send a signal and
message to the Cuban government that the US is seriously standing behind its certified
claimants and insiste that the Cuban government pay its bills. !
The Commission is perfectly suited to administer this review and revision of all the
certified Cuba claimants. It has the claim files and the staff and expertise to conduct
such a program, and I believe it could do so with its current staff, thereby it would not
add any cost to the U.S budget. !
Thirdly, this recommendation is to Congress but first I need to provide
some background of the problem. !
As I have already stated, I believe these talks are extremely difficult. I am not only
concerned that the Cuban government will continue with its intransigence, but also that
with the US government’s level of commitment in forcing the Cuban government to pay
the certified claims. I am hopeful that the debts will be settled, but you never know, we
have been waiting 55 years we may get more of the same status quo. !
Lets face it, the embargo, such as it is, is full of holes. Even with the current credit and
banking restrictions, there is a great deal of trade and commerce going on between
Cuba and the United States. The current Cuban embargo is the only hope of forcing
Cuba to pay the certified claims. What about the promise made to the certified
claimants? The travel and commerce of the U.S. with Cuba is using stolen American
property. That has been taking place for many years under Republican and Democratic
administrations.
We know that stolen American property is trespassed upon because at least one
runway expansion at Jose Marti Airport is on land which is the subject of a certified
claim. It is most likely true of other Cuban airports as well, and every major port in Cuba,
including the Port of Mariel is subject of a certified claim. All make use of land which is
the subject of multiple American certified claims, and the list is much longer than this.
How can the US government license or allow travel and trade which trespasses on the
property stolen from American citizens? Certain large special interests in the US show
no hesitation on doing business with Cuba, even if it means using the property stolen
from their fellow American citizens. !
I urge the Congress to seriously consider enacting a trespass penalty of 10% on all
trade, commerce, remittances, toll calls, gifts, fly over fees, port duty, - everything. This
trespass penalty would be paid by all those conducting business, buying or selling
goods, or giving anything, which pays any revenue or fee to the Cuban government or
agents of the Cuban government. The proceeds collected from the trespass penalty
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JASON I. POBLETE
Attorney at Law
jpoblete@pobletetamargo.com
Suite 700
Wednesday, March 10, 2010
would go into a fund which would pay all certified claimants equally their full amount
including interest. !
This trespass penalty would not release Cuba of its debt to the US, but now the debt
would be owed to the U.S. government and not the certified claimants. The U.S.
government should also consider adding additional penalties on the government of
Cuba for every month or year that it fails to make, as required by current U.S. law,
progress on the claims issue.
If the settlement negotiations are successful and these claims are paid by Cuba, then
there will be no need for this unilateral action by Congress. But if the settlement
negotiations fail in paying the certified claims, then it is time to end the suffering of the
certified claimants. Justice demands that a trespass penalty be paid by all Americans
doing any business with Cuba.
Those traveling and trading should consider this trespass penalty as the cost of
trafficking in someone else’s stolen property. I suggest this trespass penalty be enacted
into law should we fail to achieve a settlement agreement, by a certain date, which
would pay the American certified claims and while continuing the current embargo. The
present ongoing and never-ending waiting by the certified claimants is unacceptable
and intolerable. It is the responsibility of the US Congress to bring an end to this
embarrassing 55 year wait by our fellow Americans. We would be happy to assist the
Congress in drafting the trespass penalty legislation.
The Fourth and final recommendation is more of a call to action to all those American
families and companies who are holding certified claims against Cuba. I urge you to get
engaged in this discussion and write to your congressman, your senators, the
President, and the State Department, and keep writing and calling them.
American certified claimants need to demand that their claims be settled and if they are
not going to be settled then they should be paid by the trespass penalty. This is no
longer the time to sit on the sidelines. Let your voices be heard.
I urge the Congress and the Administration to forcefully advocate for Americans, defend
their rights, and finally settle these certified claims.
Thank you.
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