New Florida law prohibits government hiring of companies with Cuba ties

Mar. 14, 2012
New Florida law prohibits government hiring of companies with Cuba ties
Patricia Mazzei and Martha Brannigan | The Miami Herald

Delving into Miami-Dade’s tricky exile politics, Florida lawmakers passed sweeping but little-noticed legislation this session prohibiting local governments from hiring companies that do business with Cuba.

The law appears to target one of the county’s largest contractors: Odebrecht USA, the Coral Gables-based subsidiary of the giant Brazilian conglomerate. The parent company’s Cuban affiliate is participating in a major expansion at the Port of Mariel.

Miami-Dade legislators, with near-unanimous support of the Florida House of Representatives and Senate, pushed the bill as a way to keep taxpayer dollars out of the hands of repressive regimes. The law also applies to companies that work in Syria, which, like Cuba, is on the U.S. list of state sponsors of terrorism.

“It puts the decision on the companies that are affected,” said Rep. Michael Bileca, a Miami Republican and one of the bill’s sponsors. “Do they want to do business in Florida, or do they want to do business in these countries?”

Yet a major portion of the legislation, which applies to contracts worth at least $1 million, seems likely to face a court challenge for interfering with the federal government’s power to set foreign policy, experts said.

Statutes limiting local governments’ contracting decisions based on the vendor’s international work oversteps a state’s power, said Dan O’Flaherty, vice president of the Washington D.C.-based National Foreign Trade Council, which advocates trade with Cuba.

“It’s unconstitutional,” he said, citing a 2000 Trade Council case in which the U.S. Supreme Court struck down a Massachusetts law restricting state businesses from dealing with companies with ties to Myanmar, formerly known as Burma.

“States are barred by the Supreme Court decision from enacting procurement sanctions targeting companies doing business in foreign country ‘X,’ ” added O’Flaherty, whose organization sent letters to Gov. Rick Scott and House and Senate leaders in opposition.

In general, state and local governments are barred from setting policy that conflicts with federal law.

A Florida House staff analysis suggested Congress has authorized the type of contractual restrictions in the legislation, which takes effect July 1 and is not retroactive. But Miami-Dade has lost past battles over Cuba policy.

In 2007, county attorneys advised that Miami-Dade couldn’t consider contractors’ Cuba ties in awarding the Port of Miami tunnel project. Activists opposed giving work to Bouygues Travaux Publics because an affiliate of the French firm built 11 resorts in ventures with the Cuban military.

And in 2000, a federal judge struck down the county’s “Cuba affidavits,” which tried to deny funding to nonprofits with ties to the island.

Bruce Rogow, who challenged that policy, predicted the new law — if it passes muster with the governor — won’t stand.

“It’s unenforceable,” said Rogow, a constitutional law professor at Nova Southeastern University. “If there is no federal law making it illegal to do business with Cuba or Syria, state law can’t make it so.”

Not so, countered Mauricio Claver-Carone, director of pro-embargo U.S.-Cuba Democracy Political Action Committee.

“This doesn’t say Odebrecht USA has to leave,” said Claver-Carone, who has criticized the firm on his blog, Capitol Hill Cubans. “They can stay and do private business in Florida. It basically does not allow for public taxpayer money to be used — that is money from many of the victims of the Cuban government.”

Though the new legislation doesn’t name Odebrecht, Claver-Carone called the firm “the most egregious” example of a foreign company doing business in Florida and Cuba through subsidiaries.

Largely by landing lucrative deals with local governments, Odebrecht USA has flourished in Miami for two decades, operating like a homegrown Florida company. Gilberto Neves, the local subsidiary’s president and CEO, is a U.S. citizen and immediate past chairman of the board of the YMCA of Greater Miami.

But another arm of Odebrecht is a prominent player in Cuba. On a visit to the island in late January, Brazil’s leftist president, Dilma Rousseff, touted Odebrecht’s plan to help revitalize sugar production there.

Odebrecht’s success in Miami includes taking part in some of the region’s biggest projects. It is close to finishing the gleaming new $3 billion North Terminal at Miami International Airport and is working on the Metromover link to MIA. Odebrecht was involved in the construction of the Adrienne Arsht Center for the Performing Arts, the American Airlines Arena and the stadium at Florida International University.

Neves said his company learned of the legislation only Friday, when it passed.

“We are a very good corporate citizen, because we care,” he said of Odebrecht USA. “My kids were raised here. This is home for us, and we’d like to continue that legacy.”

The company already faces opposition from some Miami-Dade commissioners who have signaled they are unlikely to give the Brazilian giant more county work.

Odebrecht has been negotiating more than a year with county aviation officials on a deal to build the proposed Airport City, a massive, $700-million complex including two hotels plus office and retail space on airport grounds. The company envisions a public-private investment in which it would build and operate the facility and pay the airport a share.

According to an economic impact study, Neves said, the project would generate about 5,800 jobs during construction and about 10,000 jobs afterward. “It’s a major, major economic boost for Miami-Dade County,” he said.

The plan, now under Federal Aviation Administration review, would ultimately have to win commission approval.

Last June, when Commission Chairman Joe Martinez asked County Attorney Robert Cuevas for options on contracts with Odebrecht, Cuevas wrote that “state and local governments cannot generally take action’’ on foreign trade matters already subject to federal law.

Nevertheless, when aviation director Jose Abreu mentioned the Airport City project while addressing the commission last month, Martinez told Abreu not to waste his time, indicating the proposal would not move forward because of the firm’s ties to Cuba. In particular, Martinez mentioned Odebrecht’s sugar venture.

There is other dais opposition. Commissioner Javier Souto, a Bay of Pigs veteran, said Tuesday that it would be “horrible” if the commission voted for the Airport City project.

“It would be adding insult to injury,” he said in an interview, adding that the new legislation “takes care of that.”

Last year, Commissioner Esteban Bovo changed his vote on a deal awarding Odebrecht the contract to strengthen the wharves at the Port of Miami, saying he had learned of the firm’s Cuba ties after his vote.

“I don’t think we should be playing the role of hypocrites and saying one thing to our community and then doing something else as a governing body,” said Bovo, who favors the new law.

A separate part of the law restricts state investments, such as those made for pension funds, in businesses linked to Cuba and Syria.

“Why are we going to continue to do business with them?’’ Sen. Rene Garcia, a Hialeah Republican, said of the new legislation he sponsored. “It doesn’t make sense.”

Miami Herald staff writer Toluse Olorunnipa contributed to this report from Tallahassee.