Rather than cutting off new investments in Fidel Castro's Cuba, the sanctions passed by Congress open a backdoor for wealthy exiles to pour money into the island's economy for the first time in more than three decades, according to critics.
"This is just going to backfire," predicts Louis Desloge, vice president of the U.S.-Cuba Foundation, who argues the law - which Clinton has promised to sign - will give veto power over any new investments in Cuba to a small group of wealthy Cuban exiles.The measure permits Cuban exiles for the first time to file civil suits in U.S. federal courts against any foreign firm doing business in Cuba to recover their properties - worth an estimated $100 billion - that Castro confiscated between 1959 and 1964.
Only those who lost properties worth more than $50,000 when they were seized are entitled to sue, and the legislation says the civil suits can be settled out of court, "without the necessity of obtaining any license or permission from any agency of the United States."
That not only allows Americans a back-door way of overriding the present embargo against doing business in Castro's Cuba, but it encourages companies doing business in Cuba to reach an out-of-court settlement with the wealthy exiles whose properties they are using - or plan to use.
"The effect is going to be opposite to its purposes here," said Desloge, noting the Cuban sanctions bill was intended to choke off all investments in Cuba.
The measure might actually encourage investments because foreign investors will seek to strike advance settlements with the exiles so they can be ensured their investments won't be seized if Castro is unseated.
Rep. Joe Moakley, D-Mass., agreed, and predicted even the most ardent of Castro's opponents are going to regret speeding the new Cuban sanctions bill through Congress in the wake of last month's shootdown of two Cuban-American rescue planes.
"I know the authors have the best of intentions, but I firmly believe that by passing this bill we are making a big mistake," Moakley said.
Rep. Dan Burton, R-Ind., sponsor of the legislation, said the threat of civil suits puts new teeth in sanctions against Castro, since it will dry up any new investment in Cuba. "This bill will force him from power. I really do believe that," Burton said.
But Rep. Neil Abercrombie, D-Hawaii, said that the legislation is so broad that even America's Mafia families will be lining up in American courts to sue for the recovery of properties that Mafia don Meyer Lansky once operated in Havana.
Abercrombie said the legislation actually lifts the embargo against Cuba "for a select few, and perversely creates an incentive for increased economic development in Cuba."
Lawyers handling claims of American businesses whose properties were seized after Castro's 1959 revolution bitterly protested that they are being left out in the cold.
Washington attorney Robert Muse, who represents the claims to two sugar mills Castro seized from the American Amstar Corp., said the legislation dilutes legitimate claims to recover seized properties in Cuba already approved by international courts.
"This is anarchy. It blatantly violates international law," Muse said.
He said that it is only a matter of time before the federal courts rule that other exiled groups like the Vietnamese, Palestinians or Eastern Europeans have an equal Constitutional right as the Cuban exiles to file suits to recover their seized properties.
"This is unprecedented," Muse said, protesting that Congress is using the federal courts to implement foreign policy.
Not only will this flood the courts, he warned, but foreign countries are certain to retaliate.
Canada, he said, could just as easily permit its citizens to sue to recover properties Americans seized in the Revolutionary War.