Sugar tycoon Alfonso Fanjul now open to investing in Cuba under ‘right circumstances’

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