Which US Company May (But Hopefully Won't) Have A “Big-League” PR Problem? Starwood/Marriott
/If (and it remains uncertain) the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury does not rescind or require modification of the license issued in 2016 to Stamford, Connecticut-based Starwood Hotels and Resorts Worldwide (a subsidiary of Bethesda, Maryland-based Marriott International), both companies may be in a potentially untenable position due to the Trump Administration’s expected efforts to discourage transactions with entities affiliated with and/or controlled by the Revolutionary Armed Forces of the Republic of Cuba (FAR). LINK: http://foresightcuba.com/grupos-empresariales-del-minfar/
For the Trump Administration, the goal may be to elicit from all of the forty-nine (49) United States companies (LINK TO LIST) with a presence in the Republic of Cuba answers to the following questions: Will they change the Republic of Cuba or will they be changed by the Republic of Cuba? Will they be agents for change or agents for the status quo?
In 2016, the Obama Administration directed the OFAC to issue a license to Starwood Hotels and Resorts Worldwide for a multi-year management agreement (the term of which has not been disclosed) with Republic of Cuba government-operated Gaviota (controlled by FAR/GAESA) which owns the Hotel Quinta Avenida (re-branded as Four Points Sheraton Havana on 27 June 2016).
In 2016, the Obama Administration directed the OFAC to issue a license to Starwood Hotels and Resorts Worldwide for a multi-year management agreement (the term of which has not been disclosed) with Republic of Cuba government-operated Gran Caribe (not controlled by FAR/GAESA) to manage the Hotel Inglaterra and transform it into a member of the Luxury Collection. The implementation of the management contract has been delayed for unannounced reasons from December 2016 to December 2017 and recently to December 2019.
In 2016, Starwood Hotels and Resorts Worldwide reported signing a Letter of Intent with Republic of Cuba government-operated Habaguanex (absorbed by FAR/GAESA in 2017) to manage a third property, the Hotel Santa Isabel. Starwood Hotels and Resorts Worldwide has provided no information about the property since 2016.
The Trump Administration is expected to position publicly (the art of persuasion) that they know the companies will “do what’s right for the Cuban people.” The “kick over the goal post” is for the companies to make unilateral non-required changes. The White House may then embrace the effectiveness of the President’s use of the “bully pulpit.”
There would then be pressure upon Starwood Hotels and Resorts Worldwide (and Marriott International) to modify or relinquish the management agreement with Gaviota.
If the company did not modify the management contract, Members of Congress and the Trump Administration could target the company as undermining United States policy and acting in a manner inconsistent with United States policy, which could be used to rescind the license from the OFAC.
All OFAC licenses are issued on the basis that they may be revised or rescinded at any time if they no longer are consistent with United States policy.
There has yet to be an announcement from Boston, Massachusetts-based General Electric (2016 revenues exceeded US$126 billion), the largest United States-based company by far (in terms of revenue) to have engaged with the Republic of Cuba. Although the company has not confirmed export of products or services, the government of the Republic of Cuba confirmed that the company is providing parts and equipment for a power plant. The Obama Administration specifically authorized the transactions as advancing benefit to the citizens of the Republic of Cuba rather than to the government of the Republic of Cuba.
Important to appreciate that policy decisions by the Trump Administration relating to the Republic of Cuba resemble a quad, or perhaps a Quadrophenia. The President remains untethered to ideology; he views issues relating to the Republic of Cuba in transactional terms and optical terms (how it looks is often more significant than what it does). The White House Staff are substantially agnostic relating to the Republic of Cuba; there are a few- and that is all that is sometimes required, for an issue of no importance to metastasize into an issue that can be reformulated into a muscular and optically-pleasing policy initiative. Members of The Cabinet view the Republic of Cuba as another among many issues requiring attention; but none believe that the Republic of Cuba is or should be a priority and no Secretary will singularly attach (in a defensive posture) themselves to issues relating to the Republic of Cuba and risk positioning for other issues of greater importance to their departments. Officials and employees within Agencies and Departments share the positions of The Cabinet, but are generally supportive of a modified laissez-fare; poke and prod and baste as required for fragmented, but forward mobility.
For Members of Congress, the issue of the Republic of Cuba is both transactional and commoditized. Although there is bipartisan support for both incremental and dynamic changes to United States statutes, no member(s) of the House of Representatives or the United States Senate will prevent “must-pass” legislation on any matter from becoming law unless issues relating to the Republic of Cuba are addressed. No one will volunteer to be a Captain Ahab.
How does The Honorable Paul Ryan, Speaker of the United States House of Representatives, have a role in the Starwood Hotels and Resorts International/Marriott presence in the Republic of Cuba?
