How Donald Trump's Company Violated the United States Embargo Against Cuba

How Donald Trump's Company Violated the United States Embargo Against Cuba

It begins, as viewers of Rachel Maddow know, like this.A company controlled by Donald Trump, the Republican nominee for president, secretly conducted business in communist Cuba during Fidel Castro’s presidency despite strict American trade bans that made such undertakings illegal, according to interviews with former Trump executives, internal company records and court filings.

Executives of his organization traveled to Cuba, attempting to hide the $68,000 expense of the trip by masking it through a charity. At the time, specific permission to do such travel was required from our government:

Without obtaining a license from the federal Office of Foreign Asset Control before the consultants went to Cuba, the undertaking by Trump Hotels would have been in violation of federal law, trade experts say.

Trump did not do so:

OFAC officials say there is no record that the agency granted any such license to the companies or individuals involved, although they cautioned that some documents from that time have been destroyed. Yet one OFAC official, who agreed to discuss approval procedures if granted anonymity, said the probability that the office would grant a license for work on behalf of an American casino was “essentially zero.”

Meanwhile, after the trip, Trump appeared before a Cuban-American group while seeking their support for his possible attempt to obtain the 2000 Reform Party nomination for President, at that time committing to no lifting the embargo before the Castros were gone.
Why did this trip occur?


The goal of the Cuba trip, the former Trump executive said, was to give Trump’s company a foothold should Washington loosen or lift the trade restrictions. While in Cuba, the Trump representatives met with government officials, bankers and other business leaders to explore possible opportunities for the casino company. The former executive said Trump had participated in discussions about the Cuba trip and knew it had taken place.

Why did it occur when it did, towards the end of the Clinton administration? Perhaps because there were indications the policy toward Cuba might be changing.


The first signs that American policy might be shifting came in March 1998, when President Bill Clinton announced several major changes. Among them: resuming charter flights between the United States and Cuba for authorized Americans, streamlining procedures for exporting medical equipment and allowing Cubans in the U.S. to send small amounts of cash to their relatives on the island. However, Americans and American companies still could not legally spend their own money in Cuba.

That fall, as critics pressured Clinton to further loosen the embargo, Trump Hotels saw an opportunity. Like the communist regime, the company was struggling, having piled up losses for years. In 1998 alone, Trump Hotels lost $39.7 million, according to the company’s financial filings with the Securities and Exchange Commission. Its stock price had collapsed, falling almost 80 percent from a high that year of $12 a share to a low of just $2.75. (After multiple bankruptcies, Trump severed his ties with the company; it is now called Trump Entertainment Resorts and is a subsidiary of Icahn Enterprises, run by renowned financier Carl Icahn).

Eichenwald goes through the transactions of the trip in detail, has talked with former Trump executives and examined documents, and takes great pain to explain the relevant law and policy in effect at the time.

For Trump, it was not a lot of money. But it represented an opportunity to get a head start on a huge amount of money if the embargo were lifted.

Eichenwald concludes this piece with these two paragraphs:


Though it has long been illegal for corporations to spend money in Cuba without proper authorization, there is no chance that Trump, the company or any of its executives will be prosecuted for wrongdoing. The statute of limitations ran out long ago, and legal analysts say OFAC’s enforcement division is understaffed, so the chances for an investigation were slim even at the time.

And perhaps that was the calculation behind the company’s decision to flout the law: the low risk of getting caught versus the high reward of lining up Cuban allies if the U.S. loosened or dropped the embargo. The only catch: What would happen if Trump's Cuban-American supporters ever found out?

Besides reading the article, you might consider the tweet that announced its posting:





A quick reaction — it is hard to see this story having a major impact. Perhaps the use of a charity after the fact will connect with the misuse of the personal charity as shown in the stories by David Farenthold at the Washington Post. Also, the fact that Trump has a pattern of pushing the legal system, and trying to get away with whatever he could get away with.

I do think that targeted ads in Florida could have some impact: there are still a chunk of Republican-leaning older Cuban-Americans so hostile to Castro, and the story makes clear that Trump was not only willing to violate the law to get set for a business advantage, but also to lie to Cuban Americans for political support.

While I think Trump will lose Florida anyhow, this makes it somewhat harder for him to catch Clinton there. And without Florida, he has no path to 270 electoral votes.