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As U.S. and Cuba Relations Warm, Property Claims Issue Is Revived As U.S. and Cuba Relations Warm, Property Claims Issue Is Revived
(34 minutes later)
WASHINGTON — When Amy Rosoff’s parents boarded a ferry from Cuba to Key West, Fla., in April 1961, they took only the clothes they could carry and a wedding band and diamond engagement ring, smuggled in a bundle of her brother’s cloth diapers that her mother had stained brown with vanilla to deter communist soldiers from searching them.WASHINGTON — When Amy Rosoff’s parents boarded a ferry from Cuba to Key West, Fla., in April 1961, they took only the clothes they could carry and a wedding band and diamond engagement ring, smuggled in a bundle of her brother’s cloth diapers that her mother had stained brown with vanilla to deter communist soldiers from searching them.
Left behind were the deep roots and rich life her American-born grandfather had begun building in Cuba more than a half-century before, along with everything else of value that belonged to the family: a 14,000-acre farm, a shirt factory that made guayaberas, and a stately 17-room Spanish colonial home in a section of Havana then known as “Country Club,” which belonged to Ms. Rosoff’s grandmother.Left behind were the deep roots and rich life her American-born grandfather had begun building in Cuba more than a half-century before, along with everything else of value that belonged to the family: a 14,000-acre farm, a shirt factory that made guayaberas, and a stately 17-room Spanish colonial home in a section of Havana then known as “Country Club,” which belonged to Ms. Rosoff’s grandmother.
For Ms. Rosoff and the thousands of other American individuals and companies who hold financial claims against the Cuban government for property seized in the revolution — valued today at somewhere between $6 billion and $8 billion — the resumption of diplomatic ties between Washington and Havana, with embassies to reopen in both cities on Monday, represents more than a historic thaw in relations between two Cold War-era adversaries.For Ms. Rosoff and the thousands of other American individuals and companies who hold financial claims against the Cuban government for property seized in the revolution — valued today at somewhere between $6 billion and $8 billion — the resumption of diplomatic ties between Washington and Havana, with embassies to reopen in both cities on Monday, represents more than a historic thaw in relations between two Cold War-era adversaries.
It is a chance to be compensated for property long-since written off as irretrievable, and for some, an opportunity to heal old wounds still raw after decades.It is a chance to be compensated for property long-since written off as irretrievable, and for some, an opportunity to heal old wounds still raw after decades.
“They lost this very well-established, vibrant life that just got splintered and shuttered off, and for all these years nothing could be done,” said Ms. Rosoff, who is now 50 and living with her mother in Saratoga Springs, N.Y.“They lost this very well-established, vibrant life that just got splintered and shuttered off, and for all these years nothing could be done,” said Ms. Rosoff, who is now 50 and living with her mother in Saratoga Springs, N.Y.
“I look upon the opening up with Cuba as an opportunity that we haven’t had up until now to make this right, but I don’t want us to be trampled over.”“I look upon the opening up with Cuba as an opportunity that we haven’t had up until now to make this right, but I don’t want us to be trampled over.”
How claims by Ms. Rosoff’s family and thousands of others are resolved will be a test of the renewed ties between the United States and its neighbor 90 miles to the south, and may be an early indication of whether the historic opening President Obama announced last December can make progress.How claims by Ms. Rosoff’s family and thousands of others are resolved will be a test of the renewed ties between the United States and its neighbor 90 miles to the south, and may be an early indication of whether the historic opening President Obama announced last December can make progress.
United States officials have said that resolving the claims is a priority, along with discussions on human rights and law enforcement issues, including a number of American fugitives being harbored by Cuba.United States officials have said that resolving the claims is a priority, along with discussions on human rights and law enforcement issues, including a number of American fugitives being harbored by Cuba.
“Reaching agreement on resolving outstanding claims is often a lengthy process,” the State Department said in a statement Friday.“Reaching agreement on resolving outstanding claims is often a lengthy process,” the State Department said in a statement Friday.
“Now that we have reached an agreement on the re-establishment of diplomatic relations, we believe that a discussion of property claims should follow shortly,” the statement added.“Now that we have reached an agreement on the re-establishment of diplomatic relations, we believe that a discussion of property claims should follow shortly,” the statement added.
But resolving them is a complicated and politically tangled process, made more difficult by the more than 50 years that have passed since Fidel Castro came to power and began confiscating land and businesses in the name of the revolution, including from many Americans.But resolving them is a complicated and politically tangled process, made more difficult by the more than 50 years that have passed since Fidel Castro came to power and began confiscating land and businesses in the name of the revolution, including from many Americans.
In the years that followed, many filed claims with the United States government through the Foreign Claims Settlement Commission, an independent agency at the Department of Justice. The commission received nearly 9,000 such applications — the vast majority from large corporations like Coca-Cola, Colgate-Palmolive, and the ITT Corporation — and in 1971 certified almost 6,000 of them as valid, which at the time totaled $1.9 billion. The value today, with interest, is estimated as high as $8 billion.In the years that followed, many filed claims with the United States government through the Foreign Claims Settlement Commission, an independent agency at the Department of Justice. The commission received nearly 9,000 such applications — the vast majority from large corporations like Coca-Cola, Colgate-Palmolive, and the ITT Corporation — and in 1971 certified almost 6,000 of them as valid, which at the time totaled $1.9 billion. The value today, with interest, is estimated as high as $8 billion.
About $230 million of the original $1.9 billion in claims is owed to families like Ms. Rosoff’s, according to Richard Feinberg, a fellow at the Brookings Institution and professor at the University of California San Diego who is writing a paper about the unresolved claims. About $230 million of the original $1.9 billion in claims is owed to families like Ms. Rosoff’s, according to Richard Feinberg, a fellow at the Brookings Institution and professor at the University of California, San Diego, who is writing a paper about the unresolved claims.
“Both governments are just in the early stages of thinking about what their opening positions might be and how they want to bargain this,” Mr. Feinberg said in an interview.“Both governments are just in the early stages of thinking about what their opening positions might be and how they want to bargain this,” Mr. Feinberg said in an interview.
Figuring it out, he said, would be a crucial move for the Cuban government if it wants to attract foreign investors and rescue its crippled economy, and a political necessity for Mr. Obama if he hopes to build support for his goal of persuading Congress to lift the trade embargo that persists despite the policy change he announced last year. Figuring it out, he said, will be a crucial move for the Cuban government if it wants to attract foreign investors and rescue its crippled economy, and a political necessity for Mr. Obama if he hopes to build support for his goal of persuading Congress to lift the trade embargo that persists despite the policy change he announced last year.
“In order for Cuba to become truly market-friendly, to have a favorable business climate for international investment, the outstanding claims issue has to be resolved,” Mr. Feinberg said. “What’s going to keep this relationship moving forward is, constituencies have to be created in both countries who are gaining from the normalization process.”“In order for Cuba to become truly market-friendly, to have a favorable business climate for international investment, the outstanding claims issue has to be resolved,” Mr. Feinberg said. “What’s going to keep this relationship moving forward is, constituencies have to be created in both countries who are gaining from the normalization process.”
Over decades of hostility between the two nations, the claims were woven ever more tightly into United States law. In 1996, after Cuba shot down two planes flown by members of the Cuban exile group Brothers to the Rescue, Congress consolidated trade embargo legislation in the Helms-Burton law, which included language that said the “satisfactory resolution” of property claims should be an “essential condition” for restoring full economic and diplomatic ties.Over decades of hostility between the two nations, the claims were woven ever more tightly into United States law. In 1996, after Cuba shot down two planes flown by members of the Cuban exile group Brothers to the Rescue, Congress consolidated trade embargo legislation in the Helms-Burton law, which included language that said the “satisfactory resolution” of property claims should be an “essential condition” for restoring full economic and diplomatic ties.
The negotiation is likely to be contentious. Cuba, too, has claims against the United States that the government is likely to raise in any discussion about compensating Americans. Officials there have long argued that the embargo has inflicted deep economic losses on Cuba; in 2013, they put the accumulated value at $157 billion.The negotiation is likely to be contentious. Cuba, too, has claims against the United States that the government is likely to raise in any discussion about compensating Americans. Officials there have long argued that the embargo has inflicted deep economic losses on Cuba; in 2013, they put the accumulated value at $157 billion.
They may also demand restitution for injuries and deaths resulting from purported American acts of terrorism against Cuba, something the United States has done successfully in lawsuits against countries including Iran and Libya, Mr. Feinberg said. And Cubans are likely to demand an accounting of the Cuban assets frozen in American banks after the revolution. They may also demand restitution for injuries and deaths resulting from alleged American acts of terrorism against Cuba, something the United States has done successfully in lawsuits against countries including Iran and Libya, Mr. Feinberg said. And Cubans are likely to demand an accounting of the Cuban assets frozen in American banks after the revolution.
According to a 2014 Treasury Department report, $270 million worth of Cuban assets are frozen in United States bank accounts.According to a 2014 Treasury Department report, $270 million worth of Cuban assets are frozen in United States bank accounts.
“It’s going to be a mess that may not get resolved for many, many years,” said Roy C. Smith, a finance professor at N.Y.U.’s Stern School of Business who has also studied the claims.“It’s going to be a mess that may not get resolved for many, many years,” said Roy C. Smith, a finance professor at N.Y.U.’s Stern School of Business who has also studied the claims.
For families who are awaiting a resolution, the coming negotiation is personal.For families who are awaiting a resolution, the coming negotiation is personal.
One day in 1961, as rumors swirled that land was being confiscated, Ms. Rosoff’s parents, Roy and Lois Schechter, drove out to their farm in Pinar del Rio to pay their employees and were greeted at the gate by armed Fidelistas, who sent them away at rifle-point.One day in 1961, as rumors swirled that land was being confiscated, Ms. Rosoff’s parents, Roy and Lois Schechter, drove out to their farm in Pinar del Rio to pay their employees and were greeted at the gate by armed Fidelistas, who sent them away at rifle-point.
Work at the family’s shirt factory had already ground to a virtual halt because of strict import restrictions imposed by Mr. Castro. And her grandmother, Jeannette Schechter, who had left to vacation in the United States, could not return, leaving her house abandoned with all of the family’s possessions inside.Work at the family’s shirt factory had already ground to a virtual halt because of strict import restrictions imposed by Mr. Castro. And her grandmother, Jeannette Schechter, who had left to vacation in the United States, could not return, leaving her house abandoned with all of the family’s possessions inside.
Also left behind in Cuba was the United Hebrew Congregation founded by Morris Schechter, Ms. Rosoff’s grandfather, in 1906.Also left behind in Cuba was the United Hebrew Congregation founded by Morris Schechter, Ms. Rosoff’s grandfather, in 1906.
When a cousin of Ms. Rosoff’s went to Cuba a few years ago, she said, he found the Chinese ambassador living in the Schechter house. Her family’s claims were $2.2 million, according to the claims settlement commission, worth about $4.5 million today.When a cousin of Ms. Rosoff’s went to Cuba a few years ago, she said, he found the Chinese ambassador living in the Schechter house. Her family’s claims were $2.2 million, according to the claims settlement commission, worth about $4.5 million today.
Ms. Rosoff, born and raised in New York in a house where English, Spanish and Yiddish mingled, inherited her parents’ bitterness about what they lost.Ms. Rosoff, born and raised in New York in a house where English, Spanish and Yiddish mingled, inherited her parents’ bitterness about what they lost.
But when Mr. Obama announced that he was ready to move toward normalizing relations, she felt hope for renewed ties between her country and the one she has only heard about, and for a resolution.But when Mr. Obama announced that he was ready to move toward normalizing relations, she felt hope for renewed ties between her country and the one she has only heard about, and for a resolution.
“Before, there was no conversation,” she said. “At least now, there’s a conversation.”“Before, there was no conversation,” she said. “At least now, there’s a conversation.”