U.S.-Cuba Ties Restored Today, but What About All Those Old Property Claims?

The Cuban flag will fly over an embassy in D.C. today for the first time in decades.
The Cuban flag will fly over an embassy in D.C. today for the first time in decades.

In a few hours, a delegation from Havana will raise a red-white-and-blue flag that hasn't officially flown in Washington for more than five decades. The Cuban standard will rise above the nation's embassy on NW 16th Street in D.C., symbolically marking a change that became official at the stroke of midnight last night: Diplomatic ties are now officially restored between the United States and Cuba.

That doesn't mean there aren't plenty of thorny issues left to hash out, though. Among the thorniest is the question of what to do with the $8 billion or so in claims of lost property by families booted out by Castro's revolution. Many of those families live in Miami, and they've been waiting decades to be compensated for houses and farms seized by the Communist government.

“In order for Cuba to become truly market-friendly, to have a favorable business climate for international investment, the outstanding claims issue has to be resolved,” Richard Feinberg, a fellow at the Brookings Institution who's studying the issue, tells the New York Times this morning.

The backstory behind the claims dates to Castro's revolution. In the months after he seized power in 1959, many top landowners and businessmen were arrested or forced to flee to the States, and their property was seized by the government.

The U.S. government later created a Foreign Claims Settlement Commission, which eventually certified 5,911 cases in which businesses or families had lost property — claims that today are worth upward of $8 billion.

That is only the tip of the iceberg, though, when it comes to unsettled claims against the Cuban government in the States. In 1996 — after the Oklahoma City bombings — Congress passed a law allowing civil lawsuits against foreign governments, opening the door for hundreds of Cuban exiles, many of whom missed out on the Settlement Commission's narrow window, to sue Cuba over their losses.

In Miami, dozens of families have filed such suits, and many of the judgments have been massive. Gustavo Villoldo, a former CIA operative who took part in the hunt for Che Guevera, won a $1 billion claim in Miami civil court five years ago (the verdict was later upped by $2.8 billion by another judge).

From a New Times feature story on his case, here's a brief rundown of some of the other outstanding legal judgments: 

The families of pilots who flew for Brothers to the Rescue, which used small planes to save Cuban rafters, sued after Cuban MiGs shot down two planes and killed four pilots. They won $187.6 million in 2001. Others followed: The survivors of Howard Anderson, an American businessman with CIA ties who was executed in 1961, filed suit and won $90 million. Janet Ray Weninger, whose father, Thomas Ray, was shot down during the Bay of Pigs and later executed, got $23 million. In late 2006, a jury awarded the family of Bobby Fuller, who was executed in Havana in 1960, $400 million.

It's so far unclear how far the U.S. and Cuba will go to try to resolve these claims as ties strengthen between the two, but it certainly seems unlikely that Villoldo will ever see his $1 billion payday.

Either way, change marches on. Later this morning in Washington, a delegation from Havana will officially raise the Cuban flag at the embassy in front of a mass of TV cameras:

This morning, the Cuban flag was quietly added to the State Department lobby, where the flags of every nation with full diplomatic ties to the U.S. fly: 

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