Money, Politics, and Cuba

The Federal Election Commission has a few questions for an influential Miami political action committee

As national political action committees go, the Miami-based Free Cuba PAC is not among the very rich. While PACs affiliated with some big industry groups and labor unions pour millions of dollars into political campaigns each election, the Free Cuba PAC invested a modest $106,000 in campaign contributions during the 1999-2000 election cycle, according to records published by the nonprofit Center for Responsive Politics in Washington, D.C.

But in the realm of so-called single-issue PACs, Free Cuba is among the most powerful. Compared with the other dozen or so PACs in the United States dedicated to advancing a foreign-policy agenda (this again is data from the Center for Responsive Politics, which classifies political action committees according to general areas of interest), Free Cuba has been the biggest spender by far during the two most recent election cycles and already has given $28,000 this year to seven candidates in the upcoming 2002 elections.

In the past few years, however, Free Cuba has not been able to shake increased scrutiny by the Federal Election Commission (FEC). Not only has Free Cuba been months late in filing all but one of its required financial disclosure reports for 1999 and 2000, but the reports contain a number of discrepancies and errors. An FEC spokesman is constrained by law from revealing if the commission is in the process of investigating Free Cuba's compliance with campaign-finance laws. During the past two years, though, Free Cuba's treasurer, Mario L. del Valle, has received at least ten telegrams and letters from the commission warning of a possible audit or enforcement action or both.

The attention from the FEC comes at the same time a number of dramatic events have stirred Miami's anti-Castro community and its most influential and wealthy representative, the 21-year-old Cuban American National Foundation, now officially renamed the Jorge Mas Canosa Freedom Foundation. The Free Cuba PAC is a parallel organization to the foundation, which also operates a Washington lobbying organization. It's a complex setup, mainly for tax purposes, but the same affluent group of Cuban exiles has always been the guiding force behind the organizations. Members of the foundation's board of directors have traditionally been the largest source of financial contributions to the Free Cuba committee.

Under federal tax laws and campaign-finance laws, however, the nonprofit, tax-exempt foundation and the political action committee must conduct their business as separate entities. "A tax-exempt organization should not engage in any political activities," affirms U.S. Internal Revenue Service spokesman Michael Dobzinski, who cannot discuss specific organizations or what the IRS takes into account when considering whether they're truly distinct. Nor can Dobzinski release any information about an audit of the foundation conducted by the IRS about a year ago. By several accounts the audit turned up no evidence of wrongdoing.

It was following that audit, according to foundation attorney George Fowler, that the venerable anti-Castro group legally changed its name to the Jorge Mas Canosa Freedom Foundation and the name of its Washington, D.C., lobbying branch from the Cuban American Foundation to the Cuban American National Foundation, "just so there would be no confusion between the two names," Fowler explains. "It was just a suggestion from the IRS that came out during the course of the audit." (There also was the Miranda matter: Last May, during the name changes, the foundation's incorporation lapsed with the Florida secretary of state and disgruntled former foundation director Mario Miranda appropriated the name, declaring he had "saved" the foundation. The organization now is suing Miranda for trademark infringement and other alleged transgressions.)

Perhaps it was in an effort to distance the Free Cuba PAC from the foundation that Mario del Valle, not a foundation director until last July, took over as the Free Cuba treasurer in 1998. Two months ago del Valle changed the PAC's address to his home address on Key Biscayne. Earlier PAC addresses had been the same as the businesses of several foundation directors. Del Valle, a BankAtlantic executive, is married to Clara del Valle, a prominent long-time foundation director and member of the Bacardi family of rum fame. (While several Bacardi executives and family members are generous donors to the Free Cuba PAC, the Bacardi corporation's own political action committee has been virtually inactive during the past two years.)

The recipients of Free Cuba donations are the same politicians -- more or less evenly divided between Democrats and Republicans -- who advance the generally hard-line foundation Cuba-policy agenda. Many of the biggest beneficiaries, such as Connecticut Sen. Joseph Lieberman and Rep. Patrick Kennedy of Massachusetts, share long-standing friendships with foundation leaders. In 1999, for instance, former Congressman Joe Kennedy was elected to the board of MasTec, the giant construction firm headed by foundation chairman Jorge Mas Santos.

Events during 2001, however, seem likely to affect the source of Free Cuba's income, if not the thrust of its giving. Last year the foundation, under the direction of 38-year-old Mas Santos, began an overhaul of its image, widely believed to have suffered badly in the wake of the Elian Gonzalez affair. The foundation hired new media-savvy officers, feted then-vice presidential candidate Lieberman in what many exiles considered a blasphemous endorsement of the Clinton administration that sent Elian back to Cuba, wrote and promoted federal legislation to support dissidents inside Cuba, and helped bring the Latin Grammy Awards to Miami (even though the show, which includes Cuba-based musicians as award nominees, eventually reneged on its Miami commitment, fearing violent protests from local anti-Castro activists).

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