Obama Gives U.S. Property Claimants the Shaft

Sunday, July 17, 2016
From McClatchy News:

Have U.S. property claims in Cuba been forgotten in normalization rush?

When Javier Garcia-Bengochea opened his morning newspaper in 1996, the last thing he expected to see was a mention of his family’s former property.

But, near the bottom of a Wall Street Journal article on foreign business investment in Cuba, there it was. An Italian shipping line with which the U.S. did business would be developing the Santiago shipping port La Maritima Parreño as a new destination for its cruise ships.

The port and its warehouses were once part of a privately held corporation headed by Garcia-Bengochea’s cousin, Albert J. Parreño, who’d become an American citizen in 1943. If the family had sold, given away or even abandoned the property, its development might not have been shocking news.

However, the Cuban government had confiscated the Santiago land from the family in 1960, and the family had never been paid for its stake in the company, as international law requires.

“Every American venture in Cuba involves stolen property,” said Garcia-Bengochea, a neurosurgeon who lives in Jacksonville, Florida. “It’s one of the most disgraceful things I’ve ever seen.”

Garcia-Bengochea is one of almost 6,000 U.S. citizens who hold interest in certified property claims against the Cuban government. His cousin’s is No. 1231, according the U.S. Foreign Claims Settlement Commission. Cubans who became American citizens after their property was expropriated by the Castro regime are not eligible to take part in the U.S. claims process.

With diplomatic relations restored, some travel restrictions lifted and legislation in the pipeline that would lift even more constraints on trade, Garcia-Bengochea and his fellow claimants are growing increasingly concerned that their claims – valued today at $6 billion to $8 billion – may remain unsettled forever.

“They are really running out of time to do this,” said Mauricio Tamargo, former chairman of the Foreign Claims Settlement Commission. “I understand some gestures of opening the process to begin discussions, but we’ve gone well beyond what we should be doing.”

More than half a century has passed since Fidel Castro’s rise to power and his subsequent confiscation of property in the name of the revolution. Since then, the Foreign Claims Settlement Commission, an independent agency within the Department of Justice, has evaluated 8,821 claims by American parties and validated 5,913 of them with certifications.

Most of the claims are held by corporations. Others were filed by individuals, such as Garcia-Bengochea’s cousin, who were American nationals at the time of the confiscation. Though the property was originally valued at $1.9 billion, interest brings that estimate as high as $8 billion.

Under international law, the U.S. government is supposed to negotiate a settlement for the claims with the Cuban government. But as the process of normalization has surged – last week, the Obama administration proposed authorizing eight airlines to fly nonstop to Havana – there’s been no public progress on settling the claims, and claimants’ advocates are feeling frustrated.

“I am quite distressed at the level of commerce that is occurring between the two countries,” Tamargo said. “Stop giving these trade concessions; start forcing them to make an offer and settle these claims.”

“It’s disgraceful,” Garcia-Bengochea said. “This process has found a way to not follow the law.”

Since Garcia-Bengochea saw that Wall Street Journal story in 1996, multiple international corporations have continued doing business on his family’s former property, including Carnival Cruise Line, the China Harbour Engineering Co. and Fred Olsen Cruise Lines, Garcia-Bengochea said. The property includes the Santiago port and its accompanying warehouses.

Garcia-Bengochea inherited the claim from his cousin Parreño, a New York attorney and American citizen at the time of the property’s confiscation. Originally valued at $547,365, the claim’s 6 percent annual interest rate means its value today is almost $8 million.