Members Of U.S. Congress: We Were For Entrepreneurs In Cuba Before We Were Against Them. When Biden Administration Permitted Investment/Financing To Entrepreneurs, Entrepreneurs No Longer Exist
/Yes, This Is True.
Members Of The United States Congress: “We Were For Entrepreneurs In Cuba Before We Were Against Them.”
Once The Biden-Harris Administration Permitted Investment/Financing To Entrepreneurs, Entrepreneurs No Longer Exist.
Prior to 10 May 2022, members of the 117th United States Congress, including those of Cuban descent, accepted that entrepreneurs existed in the Republic of Cuba and supported the role of entrepreneurs in the Republic of Cuba: the self-employed (cuentapropista) whose resurrection was re-authorized in 1993 and micro, small and medium-size enterprises (MSMEs) along with the adoption of the Limited Liability Company (LLC) structure authorized in 2021 by the government of the Republic of Cuba. Entrepreneurs from the Republic of Cuba were invited to visit with members of the United States Congress, were invited to hearings held by committees/sub-committees of the United States Congress, and were invited to academic and commercial gatherings hosted by individuals of Cuban descent in the United States.
Individuals identifying as of Cuban descent in the 117th United States Congress- United States Senate: The Honorable Ted Cruz (R- Texas); The Honorable Marco Rubio (R- Florida); The Honorable Robert Menendez (D- New Jersey). United States House of Representatives: The Honorable Albio Sires (New Jersey; D- 8th- Retiring); The Honorable Alex Mooney (West Virginia; R-2nd); The Honorable Anthony E. González (Ohio; R- 16th- Retiring); The Honorable Mario Díaz-Balart (Florida; R-25th); The Honorable Carlos Gimenez (Florida; R- 26th); The Honorable Maria Elvira Salazar (Florida; R- 27th); The Honorable Nicole Malliotakis (New York; R- 11th).
On 11 May 2022, some of these same members of the United States Congress, along with others, not only disavowed their support for entrepreneurs in the Republic of Cuba, but they also disputed the existence of entrepreneurs in the Republic of Cuba.
To paraphrase, reminiscent of a statement from a politician: “I supported them before I was against them.” Drenching with hypocrisy.
Why the change in attitude? Because prior to 10 May 2022 the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury did neither authorize direct equity investment in nor direct financing to a company owned by a Republic of Cuba national. To remind, the license issued by the OFAC on 10 May 2022 is for an LLC created by an individual subject to United States jurisdiction to use personal funds- this is not about United States taxpayer funds as some critics have referenced. The license represents an opportunity for a personal risk. A choice.
Permitted prior to 10 May 2022 the OFAC authorized the delivery of remittances to the Republic of Cuba in the form of gifts. The primary sourcing of these gifts were individuals of Cuban descent residing in the State of Florida and State of New Jersey, the locations with the largest populations in the United States of individuals of Cuban descent.
What if the license issued by the OFAC on 10 May 2022 had been the result of an application submitted on 10 June 2021 by an individual of Cuban decent residing in the State of Florida or State of New Jersey for the purpose of delivering direct equity investment and direct financing to a friend or relative residing in the Republic of Cuba? Would this have provided the license with necessary political purity?
For at least some of the members of the United States Congress and supportive critics outside of the political arena, a lack of “Cuban-American” participation in the license application and in the resulting license is precisely their problem- and some have said so.
They adhere to a philosophy which espouses any commercial, economic, and political engagement with the current government of the Republic of Cuba is first their exclusive fiefdom and second this exclusivity naturally includes an absolute right to approve and disapprove any statutory, regulatory, and policy change by the United States government.
What also seems anathema to some members of the United States Congress is their objection to formalizing, publicizing, providing legitimacy, legality to what is happening- funds (often currency in envelopes) are delivered from the United States to the Republic of Cuba to families and friends for the purpose of supporting entrepreneurial activities.
So, the rationale is this: continue permitting what isn’t allowed is fine; officially authorizing what isn’t allowed is “surrendering to the regime.”
The Ministry of Economy and Planning (MEP) of the Republic of Cuba has reported that since the MSME/LLC structures were authorized in 2021, there are today 3,552 private MSMEs and more than 53 non-agricultural cooperatives. Fifty-five percent of the more than 3,500 were conversions from previously-authorized business structures to new structures including the use of the LLC.
Current statutes and regulations in the Republic of Cuba do not specifically authorize MSME “members” who are not permanent residents in the Republic of Cuba. Current statutes and regulations do authorize an MSME to have connectivity with non-Republic of Cuba-based companies. Until there is a specific statutory and regulatory change, direct equity investment into an MSME may need be processed through the same evaluation mechanism as is direct equity investment into an entity affiliated with the government of the Republic of Cuba.
As to questions about the mechanism for an equity investor in a MSME receiving profit distributions and for a financing source receiving interest and principle payments, that is solely a decision of the investor, financier, and MSME based upon statutes and regulations. There is a risk, the acceptable level of which is for the investor and financing source to determine.
Which leaves entrepreneurs residing in the Republic of Cuba where? First, they have vanished from the lexicon. When they were recipients only of gifts from family and friends, they were defined as an army forward deployed against the government of the Republic of Cuba. Their goal was to wrestle control of their lives from the grip of the government of the Republic of Cuba. They were on the front lines, in the fox holes. They were applauded for swimming against the tide.
Their restaurants (paladares), Airbnb-registered properties (casas particulares), Internet applications, fashion designers, beauty salons, vehicle repair shops, artist studios were, among thousands of other operational categories prior to 10 May 2022, beacons of hope and engines for prosperity.
But that all changed on 11 May 2022. Now these same individuals- and their employees, were nothing. Well, not quite nothing. They were now complicate with the government of the Republic of Cuba- in part responsible for the status quo rather than a catalyst for change. All of them existed solely because they had friends and family connected with the government of the Republic of Cuba, Communist Party of the Republic of Cuba, or Revolutionary Armed Forces of the Republic of Cuba. They were now actors in a play first appearing on 1 January 1959 and since running twenty-four hours a day, seven days a week, for 23,012 consecutive performances.
So, what to make of this support for support until the support becomes available for anyone and becomes transparent for all to see?
Critics of authorizing direct equity investment in and direct financing to a privately-owned business in the Republic of Cuba are co-conspirators with the government of the Republic of Cuba to limit the role of the re-emerging private sector in the Republic of Cuba.
One cannot legitimately promote their support for entrepreneurs in the Republic of Cuba and then provide no means to do so. Does support for entrepreneurs in the Republic of Cuba mean letting them rot? Is this the tough-love strategy?
The re-emerging private sector will not receive the oxygen (equity investment and financing) it requires to transition from being a child needing support (gifting) of a parent to being an adult determining his/her destiny through the support of a national and international equity and financing constituency.
Would critics prefer those individuals in the Republic of Cuba who were entrepreneurs prior to 10 May 2022 seek their equity investment and financing from a Republic of Cuba government-operated financial institution? Seek their equity investment and financing from a financial institution located outside of the United States? Or, purchase an airline ticket, travel to the United States, and remain there?
Critics of the decision by the Biden-Harris Administration (2021- ) to direct the OFAC to energize opportunities for engagement with the re-emerging private sector in the Republic of Cuba should be applauding rather than excoriating the initiative to seek the license and then the issuance of the license.
For the United States government, the decision of choice was and remains clear: Be an enabler, a guide, a savior to the re-emerging private sector in the Republic of Cuba or by absence be a co-conspirator with the government of the Republic of Cuba.
To paraphrase, reminiscent of a statement from a politician: “You didn’t build that… because you can’t build what does not exist and because you do not exist.”
Soon there will be an individual of Cuban descent who creates a company in the Republic of Cuba, builds it, installs a management team, and then uses that experience and profits to visit the United States and replicate his/her success in the United States. That’s the type of competition everyone should embrace. That’s the type of entrepreneurship everyone should embrace. Critics don’t need use the term entrepreneur; they can use the word risk-taker.
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LINKS To Related Posts
Response To A Washington Times Editorial From Those Criticized And On Behalf Of Those Criticized. May 26, 2022
Replying To A Wall Street Journal Editorial From Those Who Were Attacked And On Behalf Of Those Who Were Attacked. May 22, 2022
Biden-Harris Administration Approves First Equity Investment Since 1960 In A Private Cuban Company May 10, 2022
