Appointing Special Presidential Representative For Cuba Negotiations
Feinberg As Department Of State Special Representative For Cuba Negotiations
Biden Administration Should Negotiate Deal That Eluded Twelve Predecessors
Aren’t Two Centuries, Seven Decades And Twelve Presidencies Enough To Wait?
Two Largest Claims Account For 24%; Thirty Account For 56% Of Total
Replacing Title III Lawsuits With Government-To-Government Negotiation
Settlement Possible Without Cuba Putting Up Cash
Every Country Cuba Owes Will Benefit From A Settlement
EU Should Be Supportive As Their Companies Benefit

To create a sphere of optimism and remove a multi-decade specter of recirculating omnipresence, the Biden Administration needs to install a negotiating team who reflect gravitas as viewed by the Republic of Cuba. That means no careerist diplomats. It means politicians or business executives who the Republic of Cuba has confidence can speak directly with the President of the United States.

Senior-level officials within and surrounding the Biden Administration confirm that resolution of the 5,913 certified claims, and only the certified claims, will be a focus for the United States Department of State, United States Department of the Treasury, United States Department of Commerce, and National Security Council (NSC) at The White House.

Unfortunately, the same statements were provided by the Trump Administration (2017-2021), which did not engage with the Republic of Cuba and the Obama Administration (2009-2017) which did not effectively use the engagement it created.

The United States government retains broad discretion to negotiate a settlement on behalf of the claims certified by the United States Foreign Claims Settlement Commission (USFCSC) within the United States Department of Justice. There exists a pre-positioned constituency among the certified claimants in support of a prompt resolution.

Unknown is whether within the Biden Administration exists a confidence that direct negotiations to resolve the certified claims can develop independent of a resolution for other bilateral issues with the Republic of Cuba.

The issue of the certified claims has survived one century to the next century, seven decades, and twelve (12) presidencies: Eisenhower Administration, Kennedy Administration, Johnson Administration, Nixon Administration, Ford Administration, Carter Administration, Reagan Administration, G.H.W. Bush Administration, Clinton Administration, G.W. Bush Administration, Obama Administration, and Trump Administration. Thirteen is considered by some an unlucky number.

The Honorable Joseph Biden, President of the United States, has a varied reservoir of contacts from his service in the United States Senate (1973-2009) and Vice President of the United States (2009-2017). Suggestions for Special Presidential Representative for Cuba Negotiations reporting to the President rather to the National Security Council or United States Department of State, in alphabetical order:

Mr. G. Allen Andreas (Florida)
Chairman and Chief Executive Officer- ADM (1997-2006)

Mr. Micky Arison (Florida)
Chairman- Carnival Corporation & plc (2013-Present)

The Honorable Max Baucus (D- Montana)
United States Ambassador to China (2014-2017)
United States Senate (1978-2014)
United States House of Representatives (1975-1978)

Mr. Lloyd Blankfein (New York)
Senior Chairman- Goldman Sachs (2019-Present)
Chairman and Chief Executive Officer- Goldman Sachs (2006-2018)

The Honorable Bob Corker (R- Tennessee)
United States Senate (2007-2019)

The Honorable Christopher Christie (R- New Jersey)
Governor of New Jersey (2010-2018)

The Honorable Christopher Dodd (D- Connecticut)
Motion Picture Association of America (2011-2017)
United States Senate (1981-2011)
United States House of Representatives (1975-1981)

The Honorable Ted Kaufman (D- Delaware)
Head- Biden Transition (2020)
United States Senator (2009-2010)
Office of Senator Biden (1976-1995)

Mr. Oscar Munoz (Illinois)
Chairman and Chief Executive Officer- United Airlines (2015-2020)

Mr. Richard Parsons (New York)
President- Time Warner (1995-2002)
Chairman and Chief Executive Officer- AOL Time Warner (2002-2008)
Chairman- Citigroup (2009-2012)
Interim Chairman- Los Angeles Clippers (2014)
Interim Chairman- CBS (2018)

There is bipartisan political party support and bipartisan ideological support within the United States Congress for a robust and sustained effort to obtain a resolution to the certified claims, particularly from those who represent exporters whose commercial engagement with the Republic of Cuba remains infringed: agricultural commodities, food products, medical equipment, medical instruments, medical supplies, pharmaceuticals, healthcare products, artwork, and providers of travel-related services.

The Obama Administration deemed resolution of the certified claims was a “top priority,” yet had only reported three (3) discussions (not bilaterally confirmed negotiations) with representatives of the Republic of Cuba in 2,923 days (766 days if calculated from 17 December 2014- the date upon which the United States and the Republic of Cuba announced an intention to re-establish diplomatic relations). During a 20 July 2016 background briefing by a senior official of the United States Department of State the following exchange:

REPORTER QUESTION (Miami Herald): My question has to do with the property rights issue. I wonder if you could give us any details there. And two, whether Cuba still has outstanding property rights issues with any other countries, and is there a target number we’re looking for, like settling on 20 cents on the dollar, 10 cents on the dollar, whatever?

SENIOR STATE DEPARTMENT OFFICIAL: As I mentioned, property claims is one of our top priorities. We had an initial – or first-round meeting with the Cubans on this issue last December [2015] in Havana. We will have a second round of talks here in Washington at the end of this month. We certainly have not laid out any kind of – the details which you’ve described. That will emerge from the negotiations, but we’re committed to pursuing all of the registered claims, as well as other claims that U.S. citizens have against Cuba. So it’s a process. We had a good round last December. We hope to make further progress this month in moving forward on the issue.

The Trump Administration did not disclose any direct dialogue with the Republic of Cuba relating to negotiating a settlement for the certified claims. The Trump Administration on 2 May 2019 made operational Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”). Title III authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim or non-certified claim where the owner of the certified claim or non-certified claim has not received compensation from the Republic of Cuba or from a third-party who is using (“trafficking”) the asset.

To date, thirty-two Title III lawsuits (certified claimants and non-certified claimants) have been filed in United States District Courts. Some remain before the original judge, some have been dismissed, some have been restructured, and others are at Courts of Appeals. Plaintiffs include 2nd, 9th, 31st, 38th, 73rd, 88th, 182nd, 183rd, 188th, and 3,954th largest certified claimants and other non-certified claimants. LINK To Lawsuit Filing Statistics

The Day-To-Day Guy

Mr. Kenneth Feinberg is a Washington DC-based attorney (www.feinberglawoffices.com) specializing in mediation and alternative dispute resolution, who served as Special Master for the September 11th Victim Compensation Fund and TARP Executive Compensation; Administrator of the BP Deepwater Horizon Disaster Victim Compensation Fund; retained to assist in the General Motors recall response and compensation for Volkswagen owners.

Mr. Feinberg, as United States Department Of State Special Representative (with rank of Ambassador) For Cuba Negotiations, would bring his known appreciation for deadlines to his tenure. He would coordinate the day-to-day discussions and negotiations with the Republic of Cuba. Since 2018, Mr. Feinberg has confirmed his interest in assisting with settlement negotiations.

His goal would be to conclude during the Biden Administration what the Trump Administration and Obama Administration failed to do- and what previous occupants of The White House failed to deliver on behalf of those 5,913 individuals and companies whose assets were expropriated without compensation by the Republic of Cuba, beginning with an oil refinery owned by White Plains, New York-based Texaco, Inc., now a subsidiary of San Ramon, California-based Chevron Corporation (USFCSC: CU-1331/CU-1332/CU-1333 valued at US$56,196,422.73).

How to begin? A Lunch

Mr. Feinberg’s importantly narrow mandate is to directly engage with representatives of the Republic of Cuba with the singular goal of obtaining a settlement of the 5,913 individual and company claims against the Republic of Cuba certified by the USFCSC- and only those claims.

First, the Special Presidential Representative For Cuba Negotiations and Mr. Feinberg would convene a series of intimate briefings with representatives of the thirty-largest certified claimants and their respective legal counsels. As two (2) certified claimants represent 24% of the total value of the certified claims and thirty (30) certified claimants represent 56% of the total value of the certified claims, briefings with each of the primary stakeholders would not be an unreasonable effort to undertake within a thirty (30) day period.

Second, would be a lunch invitation from the Special Presidential Representative For Cuba Negotiations and Mr. Feinberg to the Ambassador of the Republic of Cuba to the United States. The purpose of the lunch would be to establish a personal rapport and create a reasonable and measurable timeline towards resolving the issue of the certified claims; thirty (30) days to create a timeline should be adequate.

Third, would be a visit by the Special Presidential Representative For Cuba Negotiations and Mr. Feinberg to the Republic of Cuba within thirty (30) days of completion of the timeline.

Important that the negotiations have a timeline- a beginning and an end. Six (6) months is more than adequate.

Imperative there be no intermediaries between the governments; no third-parties arranging meetings or serving as couriers for messages. Not a triangle. A straight line of communication. No meetings in third countries.

Structure Of A Resolution

A certified claims settlement should be based upon the payment of 100% of the value of each certified claim. Even with a full settlement based upon principal and interest, the annual rate of inflation has substantially diminished the value of each certified claim.

Opportunities for settlement include, but are not limited to, 100% compensation, debt-for-equity swaps, and substitution investments (one structure for another; one piece of land for another, etc.).

Portions of monies owed could be transformed into tradable equity positions which a certified claimant could use or could redirect or could market to a third-party.

In combination with or separately from compensation formats, the Republic of Cuba could provide transferable values to the certified claimants including:

Income Tax Holidays
Import duty exemptions
Reduced energy rates
Property tax credits
Earned income tax credits
Issuance of commercial paper

Resolution is the means to the goal in whatever form such resolutions may take for the largest United States corporate claimants (e.g., debt-for-equity swaps for new direct foreign investment opportunities, or property restitution combined with re-investment in once-owned properties, or the sale of development rights to third parties, United States-based or non-United States-based). The goal is closure.

Importance For Diaz-Canel Administration

H.E. Miguel Diaz-Canel, President of the Republic of Cuba, would need seriously consider the Biden Administration certified claims negotiating effort and should promptly dedicate members of his team to the negotiations.

Resolving the issue of the certified claims would cement the Biden Administration and the Diaz-Canel Administration firmly into legacy territory.

Resolving the issue of the certified claims is the foundation for more than six decades of United States laws, regulations, and policies.

A re-normalized United States-Republic of Cuba bilateral commercial, economic, and political relationship would benefit the 11.3 million citizens of the 800-mile archipelago and the approximately two million individuals of Cuban descent residing in the United States, primarily in the State of Florida and State of New Jersey.

For the Diaz-Canel Administration, resolving the issue of the certified claims would materially benefit the governments and the private sectors within those countries who have supported the Republic of Cuba- and in far too many instances, found their loans, rescheduling of loans, commercial credits, government-to-government assistance, and private sector investments habitually subject to multi-year and sometimes multi-decade disappointment. Success in the Republic of Cuba has always strained to obtain enough oxygen to provide for consistent and positive performance.

Not institutionally sustainable, nor fair for the Republic of Cuba to not to resolve the one issue with the United States that most negatively impacts those to whom it owes much: European Union (EU)-member countries, Brazil, China, Iran, Japan, Mexico, Russia, Turkey, Venezuela, and Vietnam, among others.

Absent the issue of the certified claims, the United States could remove the onerous, and for the commercial partners of the Republic of Cuba, extraterritorial financial sanctions infrastructure managed by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury, Bureau of Industry and Security (BIS) of the United States Department of Commerce, and Office of Legal Advisor (OLA) of the United States Department of State.

The OFAC, BIS, and OLA-administered sanctions against the Republic of Cuba inflict collateral damage to countries who directly engage with the Republic of Cuba and to countries which may tangentially engage with the Republic of Cuba. All parties would be jubilant if the Diaz-Canel Administration would negotiate a settlement which resulted in an elimination of the sanctions.

No government should build a long-term strategy of victimization when there exist means to remove a problem. Both the United States and the Republic of Cuba have been guilty of such strategies with respect to their bilateral relationship. The history may not be fair; the process for resolution may feel unjust. Governments need weigh the cost of maintaining political pride against the impact upon their citizens (their shareholders) of not resolving an action taken by the government.

The Republic of Cuba should not need to continue to define success by how much others will provide to it for the maintenance of commercial, economic, and political systems which are neither self-sufficient nor sustainable. The Republic of Cuba must not be perceived as an exhibit in a museum; and as a symbol of what only functions if others continue to fund it and fuel it.

Resolution of the certified claims will not, on their own, transform the commercial, economic, and political infrastructure of the Republic of Cuba. However, it will remove a highly-visible pillar of resistance used to forestall provision of choice, of opportunities to its citizenry.

There is in the United States and within other countries an increasing lack of empathy for the Republic of Cuba.

There is a shift of accountability from all that is unsound in the Republic of Cuba is the fault of the United States to its primarily the fault of the Republic of Cuba. A shift from the United States should repair it to the Republic of Cuba should repair it. This dynamic may not be fair, but it is a reality. And successful negotiations are about reality rather than wishful thinking.

For the bilateral relationship with the Republic of Cuba to re-normalize, there must be a resolution of the certified claims; there are no reasons the Biden Administration and Diaz-Canel Administration cannot make it happen. It is important for each government to exceed expectations.

The Certified Claims

There are 8,821 claims of which 5,913 awards valued at US$1,902,202,284.95 were certified by the United States Foreign Claims Settlement Commission (USFCSC) and have not been resolved for nearing sixty years (some assets were officially confiscated in the 1960’s, some in the 1970’s and some in the 1990’s). The USFCSC permitted simple interest (not compound interest) of 6% per annum (approximately US$114,132,137.10); with the approximate current value of the 5,913 certified claims US$8.8 billion.

The first asset (along with 382 enterprises the same day) to be expropriated by the Republic of Cuba was an oil refinery on 6 August 1960 owned by White Plains, New York-based Texaco, Inc., now a subsidiary of San Ramon, California-based Chevron Corporation (USFCSC: CU-1331/CU-1332/CU-1333 valued at US$56,196,422.73).

From the certified claim filed by Texaco: “The Cuban corporation was intervened on June 29, 1960, pursuant to Resolution 188 of June 28, 1960, under Law 635 of 1959. Resolution 188 was promulgated by the Government of Cuba when the Cuban corporation assertedly refused to refine certain crude oil as assertedly provided under a 1938 law pertaining to combustible materials. Subsequently, this Cuban firm was listed as nationalized in Resolution 19 of August 6, 1960, pursuant to Cuban Law 851. The Commission finds, however, that the Cuban corporation was effectively intervened within the meaning of Title V of the Act by the Government of Cuba on June 29, 1960.”

The largest certified claim (Cuban Electric Company) valued at US$267,568,413.62 is controlled by Boca Raton, Florida-based Office Depot, Inc. The second-largest certified claim (International Telephone and Telegraph Co, ITT as Trustee, Starwood Hotels & Resorts Worldwide, Inc.) valued at US$181,808,794.14 is controlled by Bethesda, Maryland-based Marriott International; the certified claim also includes land adjacent to the Jose Marti International Airport in Havana, Republic of Cuba. The third-largest certified claim valued at US$97,373,414.72 is controlled by New York, New York-based North American Sugar Industries, Inc. The smallest certified claim is by Sara W. Fishman in the amount of US$1.00 with reference to the Cuban-Venezuelan Oil Voting Trust.

The two (2) largest certified claims total US$449,377,207.76, representing 24% of the total value of the certified claims. Thirty (30) certified claimants hold 56% of the total value of the certified claims. This concentration of value creates an efficient pathway towards a settlement.

Certified claimants with current or recent activity within the Republic of Cuba include: New York, New York-based Colgate-Palmolive, Moline, Illinois-based Deere & Company, Atlanta, Georgia-based Delta Air Lines, Boston, Massachusetts-based General Electric, Bethesda, Maryland-based Marriott International, Chicago, Illinois-based University of Chicago, Denver, Colorado-based Western Union and New Haven, Connecticut-based Yale University, among others.

The ITT Corporation Agreement

In July 1997, then-New York City, New York-based ITT Corporation and then-Amsterdam, the Netherlands-based STET International Netherlands N.V. signed an agreement whereby STET International Netherlands N.V. would pay approximately US$25 million to ITT Corporation for a ten-year right (after which the agreement could be renewed and was renewed) to use assets (telephone facilities and telephone equipment) within the Republic of Cuba upon which ITT Corporation has a certified claim valued at approximately US$130.8 million. ETECSA, which is now wholly-owned by the Republic of Cuba, was a joint venture controlled by the Ministry of Information and Communications of the Republic of Cuba within which Amsterdam, the Netherlands-based Telecom Italia International N.V. (formerly Stet International Netherlands N.V.), a subsidiary of Rome, Italy-based Telecom Italia S.p.A. was a shareholder. Telecom Italia S.p.A., was at one time a subsidiary of Ivrea, Italy-based Olivetti S.p.A. The second-largest certified claim (International Telephone and Telegraph Co, ITT as Trustee, Starwood Hotels & Resorts Worldwide, Inc.) valued at US$181,808,794.14 is controlled by Bethesda, Maryland-based Marriott International.

The Trump Administration on 2 May 2019 made operational Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”).

Title III authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim or non-certified claim where the owner of the certified claim or non-certified claim has not received compensation from the Republic of Cuba or from a third-party who is using (“trafficking”) the asset. Title III lawsuit statistics:

32 Lawsuits Filed (11 Certified Claimants & 21 Non-Certified Claimants)
4 Of The Dismissed Lawsuits At Court Of Appeals
US$191,493.00+ Court Filing Fees (not including attorney court appearance fees)
72+ Law Firms
206+ Attorneys
10,600+ Filed Court Documents
US$5+ Million Law Firm Billable Hours (estimated 85% by defendants)
14 Countries Impacted
115 Plaintiffs (some in multiple cases)
4 Class Action Requests
60 Defendants (including corporate parent, subsidiaries; some sued in multiple lawsuits)
24 United States Defendants (not including subsidiaries)
6 Republic of Cuba Initial Defendants (three remaining)
27 Non-United States Defendants
8 European Union-Based Defendants
5 Companies Notified As Potential Defendants

Posts About Certified Claims & Trump Administration & Obama Administration

31 August 2018

https://www.cubatrade.org/blog/2018/8/29/ouktsdg4gyrblq7zudchikvdd6abdo?rq=certified%20claims

14 June 2018

https://www.cubatrade.org/blog/2018/6/14/trump-administration-may-be-focusing-upon-certified-claims-unlike-obama-administration?rq=certified%20claims

17 July 2017

https://www.cubatrade.org/blog/2017/7/11/memo-from-nsc-to-potus-this-week-for-title-iii-suspension-capitulate-incapacitate-or-negotiate?rq=certified%20claims

29 May 2017

https://www.cubatrade.org/blog/2017/5/29/0t6ts1bv3by20ot3mi9bydvdqv3e86?rq=certified%20claims

1 January 2017

https://www.cubatrade.org/blog/2017/1/12/h2uudthnn6be8hfgxifqsrdo4aqpb0?rq=certified%20claims

1 December 2016