By Terrence McCoy
By Allie Conti
By Chuck Strouse
By Scott Fishman
By Terrence McCoy
By Ryan Yousefi
By Ciara LaVelle, Kat Bein, Carolina Del Busto, and Liz Tracy
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He may not be entirely happy with all the attention. A spokesman for the U.S. Treasury Department, whose Office of Foreign Assets Control enforces the Cuban trade embargo, affirms that the Canada bypass maneuver violates the embargo, and lawyers for the Federal Communications Commission say they have doubts about whether the Canadian companies are complying with other U.S. regulations.
Officials at the FCC, which governs all telephone operations in the U.S., say they can't know whether services such as Hola Cuba and Toronto Communications are violating U.S. laws unless they undertake a formal investigation. "This is the first we've heard of it," says Robert W. Spangler, deputy chief of policy for the enforcement division of the FCC, when reached at his office in Washington, D.C. "It raises a number of issues which aren't easily discussed over the phone."
John Copes, a lawyer in the FCC's international division, points out that the companies may be violating a federal law requiring that carriers obtain permission from the FCC before providing telephone service between the U.S. and any other country. An inquiry from New Times inspired Copes to look into whether the Canadian brokers had received authorization; he found no evidence that they had. As of Monday, however, the FCC had not opened an investigation.
If any of the Canadian companies were to apply for authorization, the FCC would likely consult the U.S. Treasury Department, in order to determine if the Cuban embargo were being violated. Under international communications laws, the governments of both the country of origin and the destination of any international call receive a portion of the fee charged for the call. Because of the embargo, the U.S. government deposits the Cuban government's share of these fees in an escrow account in Washington, to be released only when the embargo A or the current government A ends. Under the third-country calling arrangement, of course, the Castro government does receive its share of fees from Teleglobe, Canada's international carrier. (Taylor of Hola Cuba says neither his nor other Canadian services pay anything directly to the Cuban government; they pay Teleglobe to complete the calls.)
It can be argued that U.S. money is indirectly going to Cuba in the process, and an informed source in Washington who asked not to be identified says the Clinton administration might decide to crack down. "There are lots of embargoes on different countries and citizens often engage in activities that violate the embargo, and Treasury doesn't prosecute each one. But if the consequence of U.S. citizens dealing with these companies is U.S. dollars flowing to Cuba," the source says, "and if Treasury wants to do something about it, it conceivably could."
The Cuba Democracy Act of 1992, signed by George Bush last October, calls on U.S. allies, including Canada, to join in tightening the trade embargo. But each government must agree to participate, and Canada, with its commerce with Cuba on the rise, is among the nations expected to ignore the U.S. request. "[Canada has] different political and economic objectives," explains Hola Cuba's Taylor. "We've never really had the fear of communism like the United States has."
The new law, named after its principal sponsor, Democratic Rep. Robert Torricelli of New Jersey, also includes provisions intended to improve personal communications A telephone and mail service A between the two nations. Under the law, AT&T could significantly upgrade its service to Cuba; the company has long wanted to activate a six-million-dollar undersea telephone cable from West Palm Beach to Cojima, which was installed in 1989 and never used. But no one in the U.S. can improve anything without agreement from the Cuban government, and Castro so far has refused to cooperate because the U.S. won't release funds from Cuba's blocked bank account to cover installation and maintenance. "From our end we did as much as we could do," says Larry McDonnell, Torricelli's press secretary. "But it's Castro's dictatorship that is really not permitting upgrading."
AT&T, which loses money every time an operator fruitlessly attempts to connect a call to Cuba, also has begun "looking into the legalities of the whole issue," according to Al Quintana, the communications behemoth's public relations manager for Caribbean and Central American issues. "These companies are operating in Canada, so it's a different situation for them there, but they're advertising to our customers here in South Florida. That's the concern, especially with what seems to be the emergence of more and more." And while the calling services obviously aren't diverting any of its customers right now, AT&T has every intention of resuming and improving its service to Cuba in the future. Quintana declined to be specific about what AT&T might do if it detected any improprieties, a likely step would be a written complaint to the FCC, which would initiate a formal investigation.
And for the time being, the third-country calling services continue to satisfy a great demand. Hola Cuba is moving ahead with ambitious plans to expand service to Puerto Rico by May 1 and forge alliances with sales and marketing agents who can provide access to more potential subscribers. One such agent in Florida who doesn't want his name used says he has indeed considered representing Hola Cuba, but has decided against it. "We've talked," he says, "but this kind of service could be too controversial. It's not particularly popular in some segments of the social structure.