Another Cuba Folly

By Hannah Wallace June 30, 2007

After reading a previous Outside In column on the mind-bogglingly counterproductive Cuba politicking in Florida, one disgruntled reader suggested I must have been eating mushrooms. Disclosure: My favorite is the pfifferling, also known as Cantharellus cibarius. I love it fried, with heavy cream, parsley and white pepper. There are no known side effects, though. And for those with lingering doubts, let me assure you: All I’ve ingested as I’m writing this column is a bowl of cereal and a cup of coffee.

All right, back to the island. Here’s another Cuba folly, this time emanating from Washington: Sometime in the course of the past two years, the Bush administration quietly hijacked the Patriot Act to bully foreign banks out of Cuba. By the way, Washington has yet to provide a shred of real evidence for Cuba’s alleged backing of terrorists or producing weapons of mass destruction.

Nonetheless, armed with printouts of an anti-money laundering provision of the Patriot Act, U.S. Treasury officials have been traveling the world to visit bankers and finance ministers, telling them to take their fingers off North Korea, Iran and, apparently, Cuba—or else face being cut off from the U.S. market.

As far as Cuba goes, the whispering campaign has been a smash success: Over the past year and a half, at least a dozen foreign banks partially or completely pulled out of Cuba, including the cream of the crop of global finance, including Barclays Bank, Crédit Suisse, Union des Banques Suisses (UBS), Mitsubishi Bank, Dresdner Bank, Deutsche Bank, Scotiabank, HSBC and ANZ. A Havana foreign finance executive in March described the effect of the pullout as “troublesome.” 

“Actually, I think U.S. efforts could be effective,” he told me. “A little more squeezing, and most foreign banks would probably fold.”

Wonderful, you might think, if you can’t accept the fact that Cubans have failed to overthrow Fidel Castro over the course of his past 15 vulnerable years.

The problem for Washington is that it’s rather unlikely that the disappearance of Crédit Suisse and Scotiabank from Havana will cause Cubans to riot in the streets. In fact, the longer-term effect of the renewed underground economic warfare is about as beneficial for Washington’s interests as a shot in the foot.

For one, the bank pullout hasn’t made a dent in Cuba’s rapid economic growth. Business in Havana continues to thrive. Cuba has begun to replace the Big Guys with second-tier European and Canadian banks, and banks from friendly nations that are less vulnerable to U.S. bullying, namely Venezuela and China. Particularly, the Venezuelans are working hard to include Cuba in their efforts to build a pan-Latin American banking system. Plus, when traveling to Cuba these days, you’d better bring Euros. Responding to the Bush Administration’s underground activities, the Cuban central bank is systematically purging the U.S. dollar from all transactions, replacing the greenback with their own convertible peso and the Euro where they can. In other words, our secret economic warfare has helped create the first major Eurozone bridgehead (the other Caribbean islands are tiny compared to Cuba and its 11 million people) in this hemisphere.

In the meantime, the Cuban government continues on a steady course, despite Fidel Castro’s half-year disappearance from the political stage.

What’s more, although at least a dozen banks buckled under the threat of being excluded from the U.S. market, our friends in Europe and Canada deeply resent Washington’s bullying to include Cuba in global anti-terror efforts. The most popular conspiracy theory among European and Canadian businesspeople in Havana these days is that the United States government wants to make sure U.S. companies will keep Cuba for themselves. Let’s put it this way: hijacking their institutions to bully Cuba isn’t exactly adding to the willingness among friendly nations to support our particular war on terror efforts.

And the Clearwater businessman whose cargo was stuck at the Port of Mobile for a week last summer because his Cuban customer couldn’t obtain a letter of credit may not be in business with Cuba the next time around. Your guess if he votes for the Republican candidate in the next elections.

So the only positive outcomes of the Patriot Act hijacking for administration officials in Washington are 1) a righteous feeling, and 2) the continued flow of contributions from the U.S. subsidiary of anti-Castro, Bahamas-based Bacardi Ltd. to GOP campaigns.

We businesspeople here in Southwest Florida have a big stake in bringing sanity back to the U.S. Cuba policy. How about calling elected officials and telling them what you think?

>>Mexican cement giant, Cementos Mexicanos SA de CV, also known as Cemex, continues its global shopping spree, and this may change who we buy our concrete from here in Southwest Florida. In October last year, Cemex, which already controls a good chunk of the ready-mix and concrete block business in Sarasota-Bradenton, made a $12 billion hostile bid for Australian competitor Rinker Group. Rinker rejected the offer, but in April, Cemex sweetened its bid to $14 billion.

On April 4, the feds sued Cemex, saying a takeover would “substantially lessen competition” and raise prices for ready-mix concrete in Fort Walton Beach, Panama City, Pensacola, Jacksonville, Orlando, Tampa, St. Petersburg, Fort Myers and Naples. The U.S. Justice Department told the Monterrey, Mexico-based company it must sell 39 Rinker facilities in Florida and Arizona to a single buyer if it wants to proceed.

Cemex is already the world’s third-largest cement manufacturer and the largest in the United States.

>>Here’s our next featured foreign businessperson in the “I-didn’t-know-they’re-here” series. His name is Gerd Petrik, he hails from Germany, and his main business address is in the Sarasota golf course community TPC at Prestancia.

Petrik’s name is uttered in awe by extreme sports car buffs across North America. He has owned such rare automotive jewels as two McLaren F1s and a Bugatti EB110. An automotive magazine wrote that the president of super-exclusive dealership West Coast Motor Sports at one point parked 30 cars worth $10 million on his Casey Key compound.

Petrik’s wealth stems from his family’s pharmaceutical business, Berlin-based Helopharm W. Petrik GmbH & Co., a company that registered a series of international patents on heart drugs in the early 1990s. Among others, Petrik owns the Rythmol trademark, which he licensed to Chicago-based Abbott Laboratories.

About 15 years ago, he decided to move his medical research from Germany to Florida and started a half-dozen medical companies, under the roof of Sarasota-based Stone Enterprises. Most of them are now defunct. He still controls Stone Life Science Holdings Ltd., which invests in biotech companies. 

Apparently unavoidable for people with money to spare in Sarasota, he also invested in real estate and became the front man in a larger waterfront residential development, Hidden Bay, in Osprey.

Johannes Werner is a Sarasota-based business journalist who has worked in Europe, Mexico, the Caribbean and the United States. He is the editor of Cuba Trade & Investment News and hosts the Florida-Caribe radio show on WSLR 96.5 FM. 

Filed under
Show Comments