Published Tuesday, January 12, 1999, in the Miami Herald

Cuba bristles at lawsuits, threatens to end U.S. phone links

By JUAN O. TAMAYO
Herald Staff Writer

A Cuban government official has threatened to cut off direct telephone links with the United States if either of two U.S. judges, including one in Miami, rules in favor of groups involved in suits against Cuba.

``This is a very serious threat, but we're looking for ways to resolve this issue and we believe we will be successful, said one U.S. government official involved in last-minute talks on how to defuse the confrontation.

The threat was made by National Assembly chief Ricardo Alarcon in a speech Friday in which he rejected several measures to ease U.S. commercial and travel restrictions on Cuba announced by Washington last Tuesday.

``If they do not pay us, we will not do it for free, Alarcon said of Cuba's income from U.S.-Cuba telephone links after noting that two cases now before U.S. courts could significantly affect Cuba's income.

One involves a suit before U.S. District Judge James Lawrence King in Miami, who in 1997 awarded $187 million to relatives of three Brothers to the Rescue pilots killed when Cuban MiGs shot down their airplanes the previous year.

Trademark at issue

The second involves a case in New York federal court challenging Cuba's 1995 sale of the Havana Club rum trademark to the French liquor giant Pernod Ricard. The trademark once belonged to a Cuban family now in exile.

Family attempts to collect on King's award are opposed by State Department officials, who argue that the relatives cannot access an estimated $150 million in Cuban funds frozen and held under escrow by the U.S. government since Washington slapped a trade embargo on Cuba.

Part of that money came from AT&T payments for Cuba's share of international telephone calls going back as far as 1960.

But King late last year asked lawyers for the relatives and the U.S. government -- the Cuban government did not defend itself in his court -- to file position papers on whether the relatives could lay claim to new monies being earned by Cuba for international telephone service.

That amounted to $60 million to $70 million in 1997, the last year for which official figures are available, said Enrique Lopez, head of the Coral Gables telecommunications consulting firm AKL Group. That figure may have grown by 30 percent last year, he added.

Direct telephone links between the United States and Cuba, once routed through Canada, Mexico and even Italy, were restored in 1993 under provisions of the so-called Torricelli Act.

Recent legislation

The suit over the Havana Club trademark involves a little-known provision in a U.S. budget bill last year that bars U.S. courts from upholding the trademarks used ``in connection with a Cuban business seized by President Fidel Castro's government.

The provision helped Bacardi-Martini U.S.A., which has produced its own Havana Club-brand rum under a deal with the exiled Arechabala family, owner of the brand in Cuba in the 1950s.

Castro's government seized the Havana Club distillery in the 1960s and in 1995 sold the trademark to a Luxembourg-based joint venture with Pernod Ricard.

Cuba had long before registered the trademark in Washington, and the Luxembourg firm registered the transfer, apparently hoping to be able to distribute the rum in the United States if the U.S. embargo were ever lifted.

But rival rum maker Bacardi-Martini objected, winning a court battle in New York over the transfer and then pressing on to challenge the trademark's basic registration. The next court hearing is set for Jan. 19.

``We do not want to see direct phone calls to and from Cuba disturbed at all, a U.S. government official said. ``To us, that is the best way of informing Cubans on what is going on outside the government-controlled circles of information.

Copyright © 1999 The Miami Herald