Sugar tycoon Alfonso Fanjul now open to investing in Cuba under ‘right circumstances’
- Submitted by: lena campos
- Business and Economy
- 02 / 05 / 2014
In exile in the United States, he built an even larger sugar empire, amassing one of North America’s great fortunes and befriending members of Congress and presidents who benefited from his largesse. The sting of his family’s forced departure from Cuba led him to become one of the principal funders of the U.S. anti-Castro movement.
Now, contrary to what almost anyone could have imagined, the 76-year-old Fanjul has begun to reassess old grievances and tentatively eye Cuba as a place for him and other U.S. businessmen to expand their enterprises. Quietly, without fanfare, Fanjul has started visiting the island of his birth and having conversations with top Cuban officials.
“If there is some way the family flag could be taken back to Cuba, then I am happy to do that,” Fanjul said in a rare interview, publicly discussing his recent visits to the island for the first time.
Fanjul’s about-face is a startling development for the exile network that has held a grip on the politics of U.S.-Cuba relations for decades and has played an outsize role in presidential campaigns. His trips place him at the vanguard of a group of ultra-wealthy U.S. investors with roots on the island whose economic interests and political clout are pushing the two countries toward a thaw in their half-century standoff.
Fanjul, in the interview, said repeatedly that his primary motivation in visiting Cuba has been a desire to “reunite the Cuban family,” referring broadly to the Cuban diaspora and those who remain on the island. Business considerations could be explored only if there are political and diplomatic advances, he said.
“The [Fanjul] family was in Cuba for 150 years, and, yes, at the end of the day, I’d like to see our family back in Cuba, where we started. .?.?. But it has to be under the right circumstances,” said Fanjul, who is best known by his nickname, “Alfy.” “One day we hope that the United States and Cuba would find a way so the whole Cuban community could be able to live and work together.”
Fanjul, who lives in Palm Beach, Fla., and whose family holdings include Domino Sugar and refineries across the United States, Latin America and Europe, has managed to maintain a remarkably low profile for a politically connected tycoon. His access to the highest levels of power was evident during the Monica Lewinsky scandal of the 1990s, when the special prosecutor’s report noted that President Bill Clinton received a call from Fanjul during a private Oval Office moment with the intern.
Last week, the Fanjul family’s influence over policymakers was on display when the U.S. House passed a farm bill that would cut subsidies to many agricultural products while leaving unscathed the controversial, taxpayer-backed program that protects sugar profits.
Fanjul visited Cuba in April 2012 and again in February 2013 as part of a delegation licensed through the Brookings Institution, the Washington think tank that has produced recent papers criticizing U.S. policy and calling on the Obama administration to further loosen sanctions. In Havana, he lingered with tears in his eyes at his family’s colonial-era manse, now a museum, with its elegant columns, lush inner courtyard, sparkling chandeliers and grand staircase.
He was so taken by the nostalgia and excitement of returning to the familiar streets of his youth, a travel companion recalled, that Fanjul enthusiastically chatted up random people of all ages as he walked around. He also met with Cuba’s foreign minister and toured state-run farms and a sugar mill with Cuban agricultural officials.
Unlike most other Cuban Americans who travel to the island, Fanjul has direct access to some of America’s most important policymakers. After returning from his first trip, Fanjul met with his good friend, then-Secretary of State Hillary Rodham Clinton, to express his changing views on Cuba. In November, Fanjul once again discussed his evolving mind-set with Clinton and her husband at a Clinton Foundation fundraiser in the Miami home of Cuban American businessman Paul Cejas, a former U.S. ambassador to Belgium.
Many embargo supporters say U.S. policy should change only when certain conditions are met, such as regime change or political reforms. Fanjul, however, said he prefers not to answer the question of whether he would require the fall of the Castro government or an end to communism before doing business in Cuba — saying that he respects existing U.S. law.
“Right now there’s no way for us to consider investing in Cuba. How can you work a deal if you’re not legally allowed to do it?” he said.
“Now, would we consider an investment at some later date?” continued Fanjul, a permanent U.S. resident who maintains Spanish citizenship. “If there’s an arrangement within Cuba and the United States, and legally it can be done and there’s a proper framework set up and in place, then we will look at that possibility. We have an open mind.”
He said the Cuban government — which has business deals with companies from countries such as Canada and Spain — would have to change its economic structure to make it easier and safer for outside companies to make money.
“Cuba has to presumably satisfy the requirements that investors need, which are primarily a return on investment and security of the investment, so they feel comfortable with what they’re doing,” he said. “I personally would look at that in the same framework as any investor would.”
The logistical, political and legal complexities involved in any potential expansion of U.S.-based businesses onto Cuban soil are staggering. Fanjul’s willingness to hold meetings with the Castro government puts him on a potential collision course with Senate Foreign Relations Committee Chairman Robert Menendez (D-N.J.), a Cuban American whose campaigns have been supported by Fanjul but who is an unwavering advocate for the embargo and has the power to thwart any attempts to lift it.
Trickier still would be the impact on presidential politics, with Florida’s Cuban American electorate still a significant factor in the battle for that state’s crucial electoral college votes.
Already, there have been signs that younger Cuban Americans, particularly those born in the United States, are moving away from the hard-line views of their parents and grandparents. Now, as Fanjul’s recent gestures show, even some of the most entrenched exiles are evolving, and politicians accustomed to embracing the Cuba trade embargo in their pursuit of Florida’s large Cuban American electorate will have to calibrate the risks and rewards of evolving along with them.
Hillary Clinton, the putative Democratic front-runner for president in 2016, spoke out in favor of the Obama administration’s actions relaxing restrictions on family travel and cash flow to the island. Yet she, like many politicians in both parties, has repeatedly expressed support for continued sanctions. She is close with several key players, besides Fanjul, who have stated an openness to more engagement with Cuba.
Fanjul, a longtime supporter of Bill Clinton’s campaigns and causes, would probably be a major donor, as well as a close adviser on Cuba-related matters, to Hillary Clinton should she run in 2016. Virginia Gov. Terry McAuliffe (D), a longtime Clinton confidant, traveled to Cuba for a trade mission in recent years and held discussions with high-ranking government officials there. And Cejas, whom Bill Clinton appointed as ambassador to Belgium, has expressed doubts about the U.S. trade embargo against Cuba.
“I can tell you one thing that became very clear to me: The embargo is really an embargo against America ourselves. Because Americans cannot do business with Cuba, where there are incredible opportunities for growth,” said Cejas, who traveled to Cuba with Fanjul.
The issue could prove thornier for Republicans, such as Sen. Marco Rubio (R-Fla.), a Cuban American widely seen as a possible 2016 presidential candidate. A staunch supporter of sanctions who blasted President Obama’s loosening of some restrictions as an “enrichment of a Cuban regime that routinely violates the basic human rights and dignity of its people,” Rubio has cited the Fanjul family as a crucial source of campaign funds and political connections.
The family recently hosted another possible GOP presidential candidate, New Jersey Gov. Chris Christie, who headlined a Republican Governors Association reception last month at the Palm Beach home of Fanjul’s nephew, Jose “Pepe” Fanjul Jr., just as a scandal was erupting around Christie.
The Fanjuls’ internal family politics — Alfy backs Democrats and brother Pepe Sr. supports Republicans — reflect both the complexities of the Cuban American experience and perhaps the shrewdness of a family dynasty that knows how to hedge its bets.
Asked about his brother’s trips to Cuba, Pepe, in an e-mailed statement from his office, said he has “always held firm that when the time comes and Cubans are reunited, I will return and help our fellow Cubans rebuild my birthplace.” But, he added: “As you know, I have yet to return.”
In recent years, other prominent Cuban Americans have begun to talk more about opening relations with the island. A number of these exiles see Cuba, communist or not, as a potentially lucrative market that has been closed off to American corporations by decades-old trade barriers they helped erect. Now, some say, the long-standing embargo has failed. They say increased foreign investment in Cuba and greater engagement with people there could spur greater reforms.
But such suggestions have frequently been met with anger by the older generation of Cuban exiles.
Miami businessman Carlos Saladrigas, for instance, said he has been openly branded a traitor in some circles because of his visits to Cuba and his interest in possibly changing U.S. policy.
“I used to be as hard-line as they come,” said Saladrigas, a member of corporate boards for firms such as Duke Energy and Advance Auto Parts. But now he warns that U.S. businesses, without the ability to invest in Cuba, could find themselves sidelined if the island begins to open up. “Do we as Cuban Americans, or do we as Americans, want to be left out of the picture?” he asked. “You can influence Cuba’s future much more by participating in Cuba’s future than by staying away.”
But the shift by Fanjul is far more significant. Not only do he and his family control one of the largest sugar operations in the world, but they also have been major donors to activist groups, such as the Cuban American National Foundation and the U.S.-Cuba Democracy PAC, that have been vocal advocates for trade sanctions.
Rumors of Fanjul’s Cuba visit prompted Mauricio Claver-Carone, a Washington-based board member of the U.S.-Cuba Democracy PAC, to confront the sugar magnate during a recent private lunch in West Palm Beach.
Claver-Carone said that he told Fanjul his trips had served only to help the Cuban regime. “I told him they were using him as a tool,” Claver-Carone said, “and that with his stature comes responsibility.”
Fanjul’s trips followed policy shifts by the Cuban American National Foundation, which has lost a number of its more conservative members amid its support for loosening restrictions on travel and money as a way to help Cubans living on the island. “Having known Alfy for 40 years, I think we can trust him to do the right thing,” said Pepe Hernandez, president of the foundation.
Fanjul said repeatedly during multiple interviews that “this is a highly sensitive issue.” He said he needed to “stay at a high altitude” in discussing potential changes in U.S. policies toward Cuba because of the political challenges involved. “What I say can be taken in the wrong context,” he said.
Fanjul’s Brookings-organized trips coincided with calls by President Raúl Castro to rapidly revive Cuba’s moribund sugar industry. Castro now permits foreign companies to participate in sugar production for the first time since the 1959 revolution, and Brazilian firms would be likely candidates to seize new opportunities in Cuba.
Fanjul said his visits were unrelated to Castro’s sugar initiative. He said he has not met with Castro and held no specific discussions with Cuban officials about investments in Cuban sugar. Yet experts say there are many reasons that the Cubans would hope to entice the Fanjul family.
“The Cuban government can revive its sugar industry only with an infusion of foreign investment,” said American University professor Philip Brenner, an expert on the Cuban economy and politics. “The old Cuban mills are enormously inefficient, and the country needs modernization and mechanization to increase productivity.”
Investments by Brazilian sugar companies in Cuba put those companies in the back yard of the Fanjuls’ operations, which dominate the Dominican Republic and Florida and have recently expanded into Mexico. Brenner, who regularly meets with Cuban officials, thinks the Cuban government may now “be willing to consider the possibility of permitting aging sugar barons” from the United States to invest and participate.
Fanjul joined the Brookings board last July and has donated at least $200,000 to the think tank, which has hosted Cuban officials for panel discussions geared toward encouraging greater communication and loosened restrictions on doing business with Cuba. Ted Piccone, Brookings’ acting vice president and foreign policy program director, wrote an open memo to Obama last month urging him to use his executive authority to give direct aid to entrepreneurs on the island and expand travel licenses.
The memo did not mention Fanjul, but it said, “These measures would draw support from key political and business constituencies in the United States (including Florida).”
The Fanjul trips to Cuba reflect a broader, though still subtle, easing of Cold War-era tensions between the United States and the Castro regime. In recent months, U.S. and Cuban officials have engaged in small-scale diplomatic talks on issues such as immigration, drugs and offshore oil drilling. And Obama drew attention to the relationship in December when he shook hands with Castro at the memorial service for Nelson Mandela in South Africa.
Obama hinted at a November fundraiser in Miami of more changes ahead when he said U.S. policy toward Cuba should be “creative” and “thoughtful.”
“Keep in mind that when Castro came to power, I was just born,” he said. “So the notion that the same policies that we put in place in 1961 would somehow still be as effective as they are today in the age of the Internet and Google and world travel doesn’t make sense.”
Fanjul’s own travel to the island gave him insights not only about business possibilities, he said, but other possibilities, too.
“Do I have a soft spot in my heart? Yes, that’s my country. My interest is finding a way to unite the Cuban family,” he said. “When you talk with people and hear them, it humanizes. Talking is the first step.”
Source: Washington Post