State Politics

Backlash possible if anti-Cuba law signed

Florida's top two foreign trading partners and the Florida Chamber of Commerce are sounding alarms about a new state law banning governments from hiring companies with business ties to Cuba.

The warnings from economic powerhouses Canada and Brazil pit mighty business interests against the Miami-Dade lawmakers who authored the bill and the near-majority of legislators who voted for it, placing Florida's pro-business governor in a political bind.

The frustrated business lobbies have made their concerns known to Gov. Rick Scott, who has until May 5 to sign or veto the legislation, which was formally sent to him Friday. He could also let the measure become law without his signature.

Florida Chamber President Mark Wilson told The Miami Herald he received an unusual phone call from the office of the Canadian ambassador to the United States, which is concerned that the law would affect a slew of Canadian companies that work in both Florida and Cuba.

Wilson said the companies told the Canadian government "that they will not be making any more investments in Florida for fear they might get hit by this."

Canada is one of Florida's largest trading partners, second only to Brazil -- whose similar complaints about the law have gone all the way to Washington.

Brazilian Minister of Trade and Industry Fernando Pimentel brought up Florida House Bill 959 earlier this month with U.S. Commerce Secretary John Bryson, who told him the administration could not do anything until the state legislation becomes law, according to a Brazilian official.

The legislation, which prohibits state and local governments from hiring companies that work in Cuba or Syria for contracts worth at least $1 million, appears to target Odebrecht, a Brazilian engineering and construction conglomerate. Odebrecht USA has long been based in Coral Gables. A separate subsidiary in Cuba is making major upgrades to the Port of Mariel.

Gov. Scott, accompanied by Chamber of Commerce delegates, traveled to Brazil earlier this year on a trade mission. Last year, Brazilian tourists became Miami-Dade's first $1 billion vacation market.

Wilson, the chamber president, said companies should not do business with oppressive regimes in Cuba and Syria. But having a state, instead of the federal government, setting foreign policy is unconstitutional, he said.

"Florida has gone around the world and said, 'We want to be your trading partner,'" Wilson said. "How do we go tell the world, 'We want the world here' and then send an unconstitutional message to them that, 'Oh, by the way, we're going to start doing country-by-country rule-making?'"

Still unclear is how broadly the law would apply to U.S. companies tied to or owned by foreign companies, as is the case with Odebrecht, which the bill's sponsors have said would be affected.

The legislation has triggered little public outcry. The governor's office said Friday it had received only one piece of correspondence regarding the bill, an email from a person in Miami calling for Scott's veto.

Yet the behind-the-scenes offensive -- geared at Scott and Attorney General Pam Bondi, who could weigh in on the law's constitutionality -- could imperil the legislation, which was championed by Miami-Dade Republican lawmakers and garnered near-unanimous support in the state Capitol. The state and international business communities hold significant clout with the Republican governor, who has set out to brand Florida as "open for business."

But in Miami-Dade, where the most reliable voters are Cuban American, the legislation is good politics. City councils in Hialeah and Doral have vocally supported the legislation and taken votes urging the governor to sign it. Hialeah's measure also calls on the county to enforce the legislation once it becomes law.

The bill's backers pushed for the votes after County Attorney Robert Cuevas issued an opinion last month saying the county should not enforce the state legislation because it conflicts with federal law. His opinion prompted a sharp rebuke from Commissioner Esteban Bovo, who questioned Cuevas' legal analysis -- and proposed that commissioners vote to follow the new law despite the attorney's opinion.

Last year, Bovo reversed his vote awarding Odebrecht USA a $57.1 million contract to upgrade wharves at PortMiami after he said he learned about the company's dealings in Cuba.

"[Y]our assertion that Miami-Dade would be 'exposed to liability' for complying with a state law is patently absurd and borders on the realm of legal malpractice or incompetence," Bovo -- who is not an attorney -- wrote to Cuevas.

Mayor Carlos Gimenez is not taking sides on the controversy. He told The Herald he has not discussed the opinion with Cuevas.

"I'm Cuban American and certainly want Cuba to be free," Gimenez said. "We need to follow the laws, whatever the laws are ... The final outcome of this law is yet to be determined. It will all be decided in the courts."

Commission Chairman Joe Martinez did not respond to a request for comment.

The legislation, which adds Cuba and Syria to an existing statute restricting the hiring of certain "scrutinized" companies that do business in Iran and Sudan, flew under the radar in Tallahassee for weeks. When it was filed in December, it was titled, "An act relating to scrutinized companies."

Two weeks before the end of the legislative session, after revisions and amendments, it was re-christened as "An act relating to state and local government relations with Cuba or Syria." The U.S. lists Cuba, Iran, Sudan and Syria state sponsors of terrorism.

The legislation drew virtually no opposition.

"I didn't get a lot of pushback," said Rep. Michael Bileca, a Miami Republican and one of its sponsors. "I was surprised."

Wilson, the chamber president, said interest groups didn't react to the legislation in part because it kept changing.

"I don't think many people thought this bill was going to pass," he said. "When I bring it up, people are very alarmed that the state would consider setting its own foreign policy."

The problem, critics say: While the federal government has given states the express authority to restrict hiring of firms working in Iran and Sudan, it has not done so for other countries. And the consequences of extending the restrictions could be far-reaching.

It is unclear how many, or which, companies could be affected by the law. The office of state Chief Financial Officer Jeff Atwater, who sent the governor a memo backing the legislation, has not studied its potential impact. Neither has the department of management services.

"It's so broadly defined that we don't know what companies would be impacted," department spokesman Kris Purcell said.

In its analysis of an early draft of the legislation, State Board of Administration staff created a preliminary list of 238 companies the state invests in that could have business ties to Cuba. Only a handful had ties to Syria.

Most companies were foreign; the American ones are allowed to trade with Cuba under federal rules.

Among the 238 firms listed were major airlines, banks, pharmaceuticals and oil companies. Miami-Dade County has contracts with at least several of the companies, and at least a dozen appear on Broward County's list of active vendors. Both counties also contract with listed airlines operating at their airports; those firms likely would be excluded from the new law because they fly to Cuba with permission from the U.S. government.

The Miami Herald contacted a half-dozen companies that could be affected by the law, including foreign banks that do business with governments in South Florida or own U.S. banks. Several of the firms did not respond, declined to comment or said they are still reviewing the law.

City National Bank, which won a 2010 competitive bid for several Miami-Dade County accounts, said in a statement that it does not do any business with Cuba and "has a rigorous program in place to ensure complete compliance with the embargo against Cuba or any other country subject to U.S. sanctions." The bank, however, is owned by Caja Madrid of Spain, which the Cuban Central Bank lists as one of several financial institutions operating on the island. Caja Madrid did not respond to a request for comment.

A spokesman for another bank operating in Cuba, the Barcelona-based Banco Sabadell, said he did not think the law would affect the bank because it does not carry out regular business -- such as lending money or opening accounts -- in Cuba. Instead, the bank provides consulting services for its Spanish clients, such as hotels, setting up shop on the island. Miami-Dade County has an account with Sabadell in which the government deposits federal grant money.

And a spokeswoman for Sumitomo Corporation of America, which as part of a joint venture operates and maintains the Skytrain and MIA Mover at Miami International Airport, said the U.S.-based subsidiary does no business in Cuba. But its Japanese parent, which did not immediately respond to a request for comment, lists on its website a liaison office in Havana.

Wilson, the chamber president, said if the governor vetoes the legislation, he could "redirect" lawmakers to write a narrower law to avoid spending public money in Cuba or Syria.

Miami Herald staff writer Martha Brannigan contributed to this report, as did McClatchy White House correspondent Lesley Clark from Washington and special correspondent Vinod Sreeharsha from Sao Paulo.