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Sugar tycoon Alfonso Fanjul now open to investing in Cuba under ‘right
circumstances’
By Peter Wallsten, Manuel Roig-Franzia and Tom Hamburger, Published:
February 2
Alfonso Fanjul fled Cuba as a young man, leaving behind his family’s
mansions and vast sugar-cane fields as they were being wrested away by
the communist Castro regime.

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 largess. 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.”

Evolving politics

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 if
she chooses to run 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. 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
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.”

An untapped market

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.

An opening for foreigners

Fanjul’s Brookings-organized trips coincided with calls by President
Raúl Castro to rapidly revive Cuba’s moribund sugar industry. Castro has
begun permitting 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 this past 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.”

Alice Crites contributed to this report.

Source: Sugar tycoon Alfonso Fanjul now open to investing in Cuba under
‘right circumstances’ – The Washington Post –
http://www.washingtonpost.com/politics/sugar-tycoon-alfonso-fanjul-now-open-to-investing-in-cuba-under-right-circumstances/2014/02/02/4192b016-8708-11e3-a5bd-844629433ba3_story.html

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