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Starwood Files a Complaint with the U.S. Justice Department for
 $63 million Worth of Land it Claims the Cuban Government
 Seized in 2003
By Frances Robles, The Miami Herald
Knight Ridder/Tribune Business News

Aug. 25, 2005 - Four decades after Fidel Castro's government had apparently seized all foreign-owned properties in Cuba, it now turns out that a U.S. telephone company retained some 400 acres of land in and around Havana until just two years ago.

News of the surprising landholdings came after Starwood Hotels and Resorts Worldwide -- owners of the Sheraton hotel chain -- filed a complaint last week with the U.S. Justice Department for $63 million worth of land it said the Cuban government seized in 2003 from a Starwood subsidiary.

"The land belongs to us. They can't take it," said Ignacio Sanchez, a Washington lawyer who represents Starwood. "The Cuban government basically said to go pound sand."

The claim startled Cuba experts and some U.S. government officials, who were unaware that any American company still owned land in Cuba. Castro nationalized virtually all foreign-owned properties in 1960, from land to sugar mills to factories.

Starwood's land was owned by Radio Corporacion Cubana (RCC), a company established in Cuba in 1922 as a subsidiary of the International Telephone and Telegraph Corp. In 1998, Starwood acquired ITT's ownership of RCC.

RCC used the land for a transmitting station, buildings and equipment needed for international telephone service until 1992, when Hurricane Andrew knocked out the Florida side of the phone service. The property remained largely unused until 2003, when both the land and RCC were seized.

The Cuban government probably didn't seize the land in the 1960s because it wanted the telephone service to continue, according to people close to the case. But why the Cubans didn't seize the properties after the phone service stopped in 1992 remains a mystery, they added.

By the time Castro's government got around to seizing the land -- citing "hostile laws and policies of the U.S. government" -- the U.S. commission that fielded complaints from U.S. citizens who had lost property in the 1960s had long closed its books.

The commission, which was created in 1967 and shut down in 1972, certified some 6,000 claims totaling $1.8 billion. With a 6 percent interest, that now stands as a $6 billion tab. Among the biggest claimants were North American Sugar and United Fruit Sugar Co.

"This is a policy of looking out for citizens when facing a government that is taking properties," said Mauricio J. Tamargo, chairman of the Foreign Claims Settlement Commission. "There will be a day when the U.S. and Cuba normalize relations and for that to occur, there has to be a settlement, and that has to be paid."

To address Starwood's recent seizure, the commission has reopened, paving the way for a claim by the hotel chain and any other U.S. citizen or company whose properties have been taken.

"Cuba was not to be reasoned with," Sanchez said, 'so the company availed itself of its rights and went to the federal government, saying, 'Here's another confiscation after 40 some-odd years.' "

Experts in Cuba property issues said reopening the claims commission for the benefit of one company is unprecedented. The move was welcomed by attorneys and claimants, even if few recent claims are likely.

The rules for filing a claim against Cuba are strict. The applicant must be a U.S. citizen or company at the time the property is taken. And it must have been seized after May 1967.

Attorney Robert Muse, an expert in Cuba trade issues, said applicants could include, for example, Cubans who arrived during the Mariel boat lift, became U.S. citizens, and then had family property seized after the death of a loved one.

"It is extraordinary that a program would be created for a single company," Muse said. "They are potentially creating a very large Cuban-American program here. Did they know that when they created a special program for one company?"


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Copyright (c) 2005, The Miami Herald

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