Gov. DeSantis warns Floridians against ‘kleptocratic scheme’ allowing U.S. investment in Cuba

Ron DeSantis takes a question from press. Image via Colin Hackley.

Gov. Ron DeSantis is slamming President Joe Biden’s administration for rolling back sanctions on Cuba and warning Floridians against investing in the island nation’s so-called private sector, a move he says will benefit “the racketeers” running the country and not its entrepreneurs.

DeSantis announced Friday that he directed the Florida Department of Economic Opportunity and Enterprise Florida to issue an alert warning Floridians “not to let the communist Cuban regime steal their money through a recent scheme seeking to attract foreign investment for the ‘non-state sector.’”

Under Cuba’s communist regime, Cubans have no way to leverage investments to improve their circumstance, a press release from the Governor’s Office said.

“Over the past year and a half, the Biden administration has rolled back American sanctions on Cuba and has failed to assist the Cuban people in their fight for freedom,” the release said.

“This has emboldened the racketeers who run the Cuban regime to launch a kleptocratic scheme claiming that they will welcome American investment in the island’s supposed private sector, but foreign investment is meaningless when there are no property rights for Cuban citizens and when the Cuban government will limit which ostensibly private businesses will be allowed to receive foreign funds.”

Any money sent to those in Cuba “will inevitably end up in the pockets of (former Cuban President) Raúl Castro, (current President) Miguel Díaz-Canel, and the rest of the Cuban mafia who will use that cash to continue to enrich themselves, impoverish their people and further destabilize the Western Hemisphere,” the release said.

On July 11, 2021, the largest demonstrations in decades against the Cuban regime erupted across the island as people flooded the streets amid shortages in food and medicine, a record surge in COVID-19 infections and demanding “libertad” — freedom — from more than half a century of totalitarian control.

As the Cuban government cracked down on its citizens, rallies supporting the protests sprung up around the U.S. There were also marches to Washington to demand more action from Biden, who announced new sanctions targeting “elements of the Cuban regime responsible” for suppressing protesters.

In the days and months that followed, DeSantis and other Republicans — many from South Florida, which is home to the country’s largest population of Cuban Americans — castigated the President  and others, including Pope Francis, for their tepid responses.

DeSantis was among Biden’s earliest and most vocal critics over the U.S. response to protests in Cuba. Just two days after protests broke out, the Governor held a roundtable at the American Museum of the Cuban Diaspora in Miami to demand the Biden administration ensure continued internet access to the island so Cuban citizens could continue to share information with supporters around the world.

He spoke alongside Sens. Marco Rubio and Rick Scott, U.S. Reps. Marío Díaz-Balart, Carlos Giménez and María Elvira Salazar of Florida, as well as several other GOP members of Congress and elected leaders from South Florida. They all agreed it was time for strong action, but they offered few details as to what Biden could do beyond helping Cubans maintain an internet connection.

Now more than a year since the protests — and roughly six months since Cuban authorities handed down sentences of up to 30 years to 128 anti-government protesters, some of them minors — the Biden administration has lifted several Donald Trump-era restrictions on Cuba, including on travel to the island, nonfamily remittances and caps on family remittances and immigration visas.

The administration also opened the door to American investments in Cuban businesses, the first of which, an up to $25,000 cash infusion in a Cuban private service company, received U.S. Treasury Department approval May 10.

A May 16 statement from the U.S. Department of State indicates more such investments may follow.

“We will encourage the growth of Cuba’s private sector by supporting greater access to U.S. Internet services, applications, and e-commerce platforms,” the statement said. “We will support new avenues for electronic payments and for U.S. business activities with independent Cuban entrepreneurs, including through increased access to microfinance and training.”

Months before the July 2021 protests, the Cuban government announced that it would allow private businesses to operate in most business sectors, a major change in the country’s state-controlled economy spurred by a plummeting economy and a nationwide shortage of basic goods.

That’s a ruse, according to DeSantis, who said Biden is putting Americans at risk of being swindled by playing into the Cuban regime’s deception.

“The weak policies of this administration have led the regime to attempt to perpetrate a financial fraud against the American people under the guise of private investment opportunities,” he said in a statement.

“Only when Cuba allows free elections, stops jailing people in the middle of the night for simply saying they want human rights, and ensuring private property rights for its citizens should the American people feel confident that money sent across the strait will truly benefit the Cuban people and not the racketeers who run their regime like a mafia.”

Added Lt. Gov. Jeanette Nuñez, “The same regime that robbed Cubans, like my parents, of their livelihoods is now desperately begging Americans to ‘invest’ in the island. This scheme is nothing more than a scam that fools only the sympathizers in the Biden administration.”

DeSantis’ comments did not go uncriticized. In a Saturday web post, the U.S.-Cuba Trade and Economic Council — a nonprofit business organization whose president, John Kavulich, created the company cleared in May to invest in a Cuban business — took aim at DeSantis’ business expertise and messaging, which it characterized as nonconstructive and unoriginal.

DeSantis’ “livelihood has been provided by taxpayers,” the group said, adding that the Governor has “no private sector (or) entrepreneurial experience — nothing in the public domain about his trying to start a business, succeeding, failing, etc.”

The group noted that the majority of remittances, flights and packages to Cuba, as well as unauthorized investments in businesses on the island, originate from Floridians, many of them of Cuban descent. Rather than “parroting the writer(s) of editorials published by The Wall Street Journal … and The Washington Times,” the group said, DeSantis should have suggested guidelines by which the Cuban government could operate to engender trust and build accountability.

Such guidelines, the group said, could include a clear and workable list of regulations for the delivery of investments and financing to privately owned companies in Cuba, uniform regulations for all privately owned businesses there and a requirement that all monetary transactions be done through direct correspondent banking to ensure the funds move directly, efficiently and transparently from the U.S. to Cuba and back in the form of dividends, profit-sharing and loan payments.

“His advice could have been constructive — ‘My message to the Díaz-Canel-Valdes-Mesa administration in Havana is if Cuba wants a private sector, and I am not convinced they do, (it’s) more of a prop for them, but if they do, then the process for receiving direct equity investment and direct financing for the private sector in the United States — individuals and companies — must by transparent, must be simple to understand, must be equal for everyone, and taxes and fees must be fair so as to permit profits to be reinvested, to be repatriated, and to benefit first (micro, small and medium enterprise) owners and their employees rather than further support misguided decisions of the government,” the group said.

“The state of Florida is a magnet for entrepreneurs — Cuba should follow our example.”

The group offered no recommendations for how the U.S. might enforce its proposed rules.