Small Business

Target: Castro's Cuba. Victim: Small Business


By David E. Gumpert It's sometimes said that for every action, there is a reaction. The action I'm focused on is the Bush Administration's recent decision to play political hardball to win votes in Florida next November via heavy-handed government intimidation tactics and questionable maneuvering of terrorism-related resources. The reaction is that a handful of small businesses around the country are being creamed, forcing the layoffs of dozens of employees.

That's probably the simplest way I can begin to explain the weird circumstances surrounding the Administration's evolving Cuba policy.

IRON FIST. This story stems from a column I wrote last fall about the challenges of running a small business when the service you provide -- travel arrangements to Cuba -- is a political football (see BW Online, 11/11/03, "When Your Business Is a Political Football"). The small business I profiled, Common Ground Travel, was attempting to position itself to deal with two potential outcomes of the debate, then ongoing in Washington, about whether to restrict or loosen restrictions on travel to Cuba. The restrictive approach advocated by the Bush Administration won out.

For Common Ground, that not unexpected turn of events suggested it should become more aggressive in its diversification strategy -- offering a wider variety of trips to Cuba to compensate for the fact that the Bush Administration was tightening up. Most notably, the Administration eliminated the People to People program that allowed for the greatest amount of flexibility in terms of Americans meeting Treasury Dept. rules for traveling to the island nation the U.S. has tried for more than 40 years to isolate into submission.

What Common Ground and other travel agencies specializing in travel to Cuba didn't anticipate is that, with its victory in hand, the Bush Administration didn't just tighten up. It came down hard, sledgehammer-style. Here is what has happened:

OFFICIAL QUESTIONS. First, the Treasury Dept. began questioning seemingly legal trips the travel agencies planned. For example, it called into question trips organized by Common Ground for American lawyers to meet with Cuban jurists, and by teachers planning to attend an educational conference to learn about new technology in the classroom. The Treasury Dept.'s actions convinced both groups to cancel their trips rather than risk seeing them canceled at the last minute -- or worse, having visits called into question on their return, with possibly heavy fines as a result, says Merri Ansara, president of Common Ground.

Treasury killed another trip by a group of about 60 American doctors to attend a conference in Cuba on coma and death -- after allowing the trip the previous three years -- says Bob Guild, program director of Marazul Charters, the largest agency offering Americans travel to Cuba, with offices in New Jersey and Miami. Says Guild: "They now don't seem to think professionals can do research at a conference."

When Ansara planned a trip for a group of librarians in April to research on Cuba's library system, the Treasury Dept. wrote her that "your itinerary does not comprise a full work schedule of professional research in Cuba [and]?ppears to be a tour and visits to sites absent a description of the specific research that would be conducted." Ansara challenged that opinion, saying she wasn't responsible for the research program. A Treasury official verbally backed off, she says, and the librarians decided to take the risk of possible harassment, including possibly being pulled off the flight, to make the trip. It went off without a hitch.

MISPLACED PRIORITIES??The story doesn't end with the clumsy bureaucratic muscle-flexing. It extends to the war on terror. Resources are being diverted from that effort to prevent Americans from traveling to Cuba, according to Treasury Secretary John Snow. In a little-reported speech to Cuban-American leaders in Miami last fall (and posted on the Treasury Dept.'s Web site) Snow said:

"Sanctions, especially on travel, are being vigorously enforced by the Bush Administration. Treasury's Office of Foreign Assets Control (OFAC) is working closely with Customs agents on inspecting all direct flights to Cuba. That's hundreds of aircraft and tens of thousands of passengers. OFAC has provided on-site training, specifically on Cuba embargo travel restrictions, to over 500 DHS (Department of Homeland Security) Customs inspectorsand are now expanding our training."

In addition, Snow said that "nearly 300 passengers have been denied travel after an examination revealed they did not qualifyfor travel to Cuba, [and] Homeland Security has assistedwith almost 400 seizures of products like cigars and alcohol"

In other words, supposedly scarce resources from the Department of Homeland Security are being reassigned to make sure a few American professionals interested in meeting with counterparts in Cuba don't do so, and that those who make the trip don't bring back too many cigars. In addition, the Associated Press has reported that OFAC has two dozen agents working on Cuba embargo, vs. just four investigating the financial dealings of Osama bin Laden and Saddam Hussein.

LOST JOBS. The effect of the government's harassment has been to decimate the small businesses that provide travel to Cuba, and the employees they hire. Common Ground has seen its business cut in half, and has reduced its workforce of seven to three. Marazul Charters has let go six people because of the reduction in Cuba travel. Cross Cultural Solutions, a New Rochelle, N.Y., nonprofit organization, has completely shut down its Cuban travel operation, and trimmed its workforce by 8, to 27 people from 35. That's a total of 18 lost jobs at three small businesses. Presumably, other Cuba-oriented travel outfits also have fired workers.

All this questionable activity from an Administration that says it is focused first and foremost on fighting terrorism and secondly on helping American businesses create more jobs. Yet in the interests of winning votes in Florida, it is saying to hell with both goals. Ansara of Common Ground is just trying to hold on until November, because she figures business will come back once the Presidential election is over. I'm not so sure. The Bush Administration clearly takes its ideology very seriously, and may not pull back very easily from tweaking an old Communist in a dirt-poor island country. David E. Gumpert is the author of Burn Your Business Plan: What Investors Really Want from Entrepreneurs and How to Really Start Your Own Business. Readers can e-mail him at david@davidgumpert.com


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