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tv   Key Capitol Hill Hearings  CSPAN  December 5, 2014 9:00pm-11:01pm EST

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dollars. the frozen assets are very limited. it's hard to manage cuba appropriating money to pay american claimants. so is there another option? i think there could be if u.s. sanctions were relaxed and if the cubans were prepared to create the right opportunities for private investment. american entities with large claims against cuba might be able to recoup some of their losses through new investment. but absent a comprehensive claims settlement, the investors would have to worry about political risk both in the united states and in cuba. big problem. what could the president do with his own authority? robert asked me to focus on this
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and it's my conclusion that the president could not make an -- do on his own authority an executive agreement which looks like a traditional bilateral tree because that exposes the united states' government the treasury to reciprocal liability for cuban claims. that doesn't mean he can't negotiate a framework agreement. i think the president does have authority to negotiate an executive -- a formal executive agreement with cuba which would provide a framework for cuban guarantees to american investors who voluntarily subscribed to the terms of these arrangements. that agreement could spell out the protections cuba is prepared to offer. it would provide impartial dispute settlement. it could even provide funding for the -- let's say a claims
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try tribunal, it could provide funding for the awards, if any had to be issued. where would the money come from? it could come from contributions from cuba and from the investors. commercial insurance, political risk insurance, could play a role in this. i've done that in private practice for some clients. there is a quasi precedent not directly employed not going quite this far but in the clinton administration, they negotiated germany and other countries in europe relating to holocaust claims, these agreements that were binding the
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two governments, for the germans to fund claims' pool that would then be distributed by an impartial process created under that agreement. in this particular case, the supreme court held that a california statute that was deemed inconsistent with the policy of that agreement was unconstitutional, in other words, the executive agreement which really didn't have any rules of decision for the courts in it. it was a policy document from as far as the united states' law is concerned, was held to be supreme. the supreme law under the land article 6 binding on the states. a very interesting precedent but it was a 5-4 decision. in conclusion and i am running out of time here, i want to
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sound one note of caution on this question of presidential power and congressional power. as we speak, and this came up earlier, the nation is deeply divided over president obama's action on immigration. and the supreme court is about to decide -- case has already been argued -- whether the president can disregard a statute, allowing an american citizen, born in jerusalem, to insist on a u.s. passport that describes his place of birth as jerusalem. such a statement in a formal diplomatic communication would be inconsistent with long-established u.s. recognition policy since the time of harry truman. every administration since harry truman's recognition of israel
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has adopted the position that the status of jerusalem remains to be determined by negotiation of the parties and the area. in oral argument, however, the court was sharply divided on ideological ground, contrary to traditional expectations, the conservative justices were strongly resistant to the government's foreign policy concerns. the liberals were supportive. the justices also directed a surprising amount of attention to current events in the middle east. it was a very interesting day to be in court. we have to wait for the decision, but my worry is that the political divisions that we have now or will have in the coming years between a democratic president and a republican congress might be reflected in a more political judicial process than we have
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ever seen that could influence constitutional juris prudence in coming years. we'll just have to wait and see. >> thank you, mark. i want to make a brief comment about executive authority. senator flake brought it up. when this event was conceived, there was no premonition that barak obama was going to use executive powers to at least regularize 5 million people in the united states. does this bleed over into executive action over cuba? to some extent but i would argue not greatly. this has been true as mark said for 200 years. bold endeavors by presidents are necessary in foreign relations when richard nixon made the
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decision to normalize decisions with cuba, that was not subject to a national referendum. historical referendum has been proposed with the president. number two, immigration, of course, is a domestic issue and this is extremely controversial. cuba, if it figures at all in the daily thoughts of most americans, it never reaches probably two on a scale of 100 in issues of great concern. so, not only is the public not much interested in the issue of cuba but on balance most polls would show broad support for normalizing relations with cuba. so i take the point and i take mark's final point particularly to heart that we live in an ever-more politicized environment where there are raids into one and other's constitutionally allocated authority, both by congress and executive and not surprisingly
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in recent -- this has always been true, the supreme court periodically legislates and performs executive functions whether they'll admit it or not. should we go to questions or keep going? we'll reserve questions for jake, vice president national foreign trade council. >> thank you. thank you, carl and csis and also to bob. bob is an expert in this field and has been provided a lot of advice for us and for me personally on cuba issues, so i really appreciate all of that. for those of you who don't know the national foreign trade council, we're a trade association based here in washington, d.c. we promote open marks in international trade on behalf of your multinational member companies. we run the u.s. in gauge koelation promotes economic and diplomatic engagement in the world and holds up u.s./cuba
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policy as the greatest failed unilateral policy. i wanted to make three brief points here today. the first is that if it already exists for the president to per mermt two-way trade with kieg moch to discuss how a president might go about using that in the short-term and to emphasize that the long-term trade relationship will depend on a lot more than altering or lifting sanctions policy. so, on the first, i think policymakers and practitioners dating back to the clinton administration but even more so over the past four to five years have done a great job in laying the intellectual basis it exists for the president to license additional exports and imports to and from cuba. when i was writing a paper on executive authority, i interviewed serena moe, a former o fak deputy council. either general or specific. if that weren't the case no, aid
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could be given to cuba without an act of congress. more recently bob in the article that you have before you does a good job of laying out the argument that the president has executive authority to license trade. i think second, how would the president going about using that authority in the short-term? the most elegant solution would be for the president to rip off the band ate all at once and allow cuban imports to license cuban imports and exports all at once and get back to baseline normalcy of most favorite nation treatment. i think that's unlikely given the history of u.s./cuba relationship which has been at best sbre mental. i think the reality will be in the short-term more incremental steps would be taken and i would like to suggest one here. my suggestion would be for the treasury department to grant
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looipss for immerse platforms like ebay and etsy and payment services like paypal to sell on platforms to customers that include the u.s. citizens. this would be a wedge to enable cuban entrepreneurs to engage the u.s. services but would help to reframe the debate about internath net access in cuba that senator flake talked about earlier. what i've seen -- one of the thing is do is run a project called the global marketplace. those that are connected to the internet grow faster almost 100% of them engage in the global marketplace as opposed to just locally. and that reliable internet access propels economic development on a very micro level of firms and individual
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entrepreneurs of just two or three people. and so finally, i think short-term moves aside, the long-term opportunity will depend more than an end to sanctions or significant exemption from sanctions for imports or exports. shutting off sanctions isn't like turning on a spigot for foreign investment in trade. i think longer term, the extent of trade and investment will depend on three things. the first is economic development and so trade will rise as gdp and disposable incomes rise. second is the policies the cuban government. so if you're going to trade with cuba same as if you're going to invest with cuba, you're going to care about their customs facilities and procedures, their import permit requirements the extent and reliability of internet access, the extent and relienlt of roads and things like that, tariffs, they're ability and willingness to
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protect intellectual property rights. my sense that the cuba doesn't score high in all of these areas. in part, i think that's probably due to its indifference to a global economy. and then the last thing that i think it depends on the attitudes of the u.s. and cuban governments. a closer trade relationship, you can't just stop you're going to stop being enemies. if you look at say the case of the u.s. and vietnam. so i think you could get pretty quickly back to this baseline normalcy with most favorite nation status, but if you want a closer relationship, that requires maybe not friendship but certainly a mutual decision that you want better diplomatic relations as well. just to give you -- maybe i'll end with an example of how this works. mechanically with vietnam. in 2001, the united states and
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vietnam signed a bilateral investment treaty. in 2007, the two countries signed a trade investment framework agreementcome is essentially a precursor to a full-fledged trade agreement and right now the united states and vietnam are negotiating a full-fledged trade agreement called the trance pacific partnership with other countries in the asia pacific. now, all of that was preceded by their relationship. cuba's case, the ability to negotiate investment provisions or implicated as well by claim settlement issues and so it makes it even more difficult. but i think just deciding that if the u.s. government decides that embargo has run its course and the president decides to use the authority that he or she has to change the trading relationship, that doesn't necessary mean we'll be like the u.s. and vietnam or the u.s. and the dominican republic over night. that will take a lot of time. so, thank you. >> thank you, jake. on to matthew, whom i first met
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at the council of americas when he was doing some of the most interesting work on the intricacies of telecommunications, banking and so on. matthew? >> thanks, bob. thank you, csis and the other groups that are involved in putting this together. bob gave me the complicated task of trying to discuss banking and financial services-related issues. i would like to begin by saying that this -- this issue, the issue of banking and financial services in my opinion really needs to be pushed to the very front of the line if we're going to approach anything close to normal regardless of white house policy. since 2009 as we all know, president obama has taken several executive actions unilaterally to increase contact between americans and cubans by promoting cuban/american travel.
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the flow of remittances from cuba to the united states has grown dramatically. he's attempted to increase the free flow of information to the cuban people by authorizing u.s. tell comes companies to negotiate things like international roaming agreements and also internet communications technologies. for example, as of 2011, it's been legal for cubans in cuba to sign on to a wifi connection and use g-chat or microsoft chat messengers. another pillar has been the desire to try to support cuban entrepreneurs and the rise of private economic activity in cuba. this involves allowing americans to send money to the island as well as to engage in training programs and other things. regardless of all of these -- the executive intent here, the fundamental issue is that to
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sustain all these activities it's required that providers, such as travel service providers that sell airline tickets or carrier service providers that handle charter flights, have the ability to access basic financial services, bank accounts, to engage in wire transfers. and without this, it's really impossible for the white house to actually implement its policies regardless of intent. so, to just give you a sense of where we stand right now and this is still relatively new but it's happening as we speak, the groups -- everything from diplomatic missions to companies authorized to sell plane tickets, are having an increasing problem accessing even basic banking services. i'll run through some examples that are actually happening
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right now. i have a client who about four or five months ago got a letter from his bank in the southeast united states. he had had a relationship with this bank for about 30 years. he is remittance forwarder, he is licensed to engage in activities. in fact, he is the -- one of the companies that makes it possible for the white house to carry out its policies of sending money to cuba. he got a letter out of the blue and it gave him ten days to close all of his bank accounts. they didn't give an opportunity to appeal it. it was just you have ten days to close your accounts. we appreciate your 30-year relationship with us but we've decided as a matter of bank policy that we're not going to bank remittance forwarders of any kind anymore. about a year ago, i think it's more than a year now, the cuban
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in washington, d.c. here announced that it was going to have to cancel services at its intersection because it had been dropped by its bank in up state new york. again, this is a bank that had a relationship going on with providing this licensed activity for 30-plus years, but as a matter of bank policy, the bank decided we're not going to bank diplomatic missions at all. the result was briefly a collapse of people to people travel and even now i have clients who are trying to get visas to go to visit gravely-ill family members who have not been able to get those visas because the payment system is so difficult. i have clients who have called and asked me whether it would be possible for them to drop a quarter of a million dollars in cash at the intersection in an
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armored truck here in washington because they couldn't get a wire transfer to go through. the answer to the question -- you know, i mean, it's almost absurd that these questions are arising but these are things that people are asking. and it's not at all uncommon at this point for companies to be operating almost on a cash basis. so the cuban intersections is another example. and then lastly, this is one of my personal favorites that came in a couple weeks ago. i got a panicked phone call from a client who has a license to engage in people-to-people activities, because a wire transfer from north carolina to the northeast united states was being held up, no one knew where or how, but being held up, it didn't arrive because we were told the word cuba was on the actual swift wire transfer instructions. these banks have automated
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systems, they screen the words, they see the word cuba, bingo, you know, you have your wire blocked. but the issue was, this is not a transaction that was every subject to u.s. sanctions. this is going from a non-profit organization in one state in the united states to a non-profit organization in another state in the united states getting held up. i know of an organization -- yeah, yeah. so, the bottom line of all the an tech dotes is to inject the element of perceived risk by banks. if banks perceive the risks to be too high to deal with an account holder that has an o fak license or a company that's trying to send money to purchase an import from cuba or expert from the united states of the united states to cuba, it doesn't matter what the white house decides to do because at the end it's not going -- where the rubber hits the road they're going to be a lot of roadblocks.
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so i want to move along quickly. but the idea that banks are dealing and grappling with these risks and that these risks have become more complex is new, it's growing and there has to be a way to reduce perceived risks. the bottom line, if licensed entities can't access banking services, white house policies will be undercut. i don't want to get into the risk discussion too much because it's very multidimensional, it's difficult and banks evaluate risks differently, it's quite subjective. needless to say the basic regulatory risk is at the center of this. the state and federal regulations o fak compliance regulations are complex. they require a tremendous amount of expense on the part of organizations that are trying to engage in licensed activities but compliance is costly and failure to comply even if it's,
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you know, a mistake on a wire transfer instruction, can lead to tremendous fines, millions if not even in some cases billions of dollars of fines. this potential risk, the risk of being fined a billion dollars or more has the effect of really throwing off kilter the risk/reward balance that banks in the u.s. and overseas are facing. if the accounts are probably quite small, the profit from engaging in these activities isn't high and if the potential risk is billions, you're just going to decline the business. so, any way, in terms of reduction, we've been talking a lot and thinking about a lot how do we reduce the risk to banks. if this is going to gum up the works, how do we make it move
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smoothly? i don't have an answer. we've sat around debating this recently quite a bit, but we know there's certain steps that the president can take that would go a long way to helping. i know we don't discus can merits of any individual policy decision at this forrum, but let's begin with the state sponsors of terrorism list. when dealing with a sanctioned entity, banks are already assigning a pretty high level of risk to that entity. that can be, you know, syrian militia or north korea, what have you. if you're sanctioned, that's high. banks are grappling with a whole variety of other issues, counterterrorism, money laundering, et cetera. but when you add a state sponsor of terror to this web of perceived risk, it really is, i think, in many cases the straw that breaks the camel's back.
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a banking executive can point at it and say we're not going to deal with state sponsors of terrorism. so, that's one place to begin. another is clarity from the white house about what its policies are and a desire to see its policies implemented and carried out. i think it can be certainly rhetorical -- the administration can be more vocal about saying we want people-to-people travel happening and remittances to be happening. those businesses that are involved in sending funds that are licensed and legal should not be punished by federal agencies. and so i think, you know -- and injecting a degree of discretion, prosecutorial discretion and clarity at the enforcement level. so, you know, these are a few. it's complicated. i look forward to questions, but the bottom line, obviously it's
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in the mutual benefit of the u.s. government, banks, account holders, companies that are engaged in these activities to collaborate to find solutions on current and future policies toward cuba cannot effectively be implemented in the current risk environment. there has to be something done to address it. >> thank you. i think now is a good point to go to questions and then we'll resume. christine, welcome aboard. >> thank you. >> so how do you want to handle that? pass your microphone? >> yeah. if folks have questions, just raise your hand and we'll get to you with a microphone. there's one over there with the gentleman with the glasses. >> john, fund for reconciliation development. mr. feldman, two specific.
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legislatively there was a move -- and i don't know how it's -- what control it has to say that people who are now u.s. citizens, cubans who have become u.s. citizens retroactively were covered by whatever exists for american citizen property in cuba. how much of a factor is that? the second is whether within this parameter of presidential authority, the president could announce tomorrow that everything that is produced by the non-state sector in cuba was exempted from the embargo and every purchase by the non-state sector, that is co-ops as well as self employed, whether that was raw materials, machine tools, technical advice, that that also could be exempted from the embargo. would those specific things be within presidential authority?
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>> well, i will defer to robert on the technical details there. my understanding on the first point is that helmsburton, which provides a framework for assessment of claims against cuba that that extends to claims by -- that would not have traditionally been recognized as claims for which the united states was diplomatically responsible. that is to say, that -- let's say for example, there was a taking by the cuban government of property of cuban nationals in cuba. historically the united states government would not be -- and then that person migrated to the united states. historically the united states government would not represent that person diplomatically.
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the question -- the second question relates to whether -- the broader question that robert has addressed and that is the premise, as i understand it of our discussion about helmsburton, is that the president has authority to modify the regulations and presumably that would implicate and incremental adjustment and not a comprehensive adjustmented, that that would raise much more difficult questions under helmsburton. i'm not prepared to address that broader question today but maybe robert is. >> in the handout, i talk about trade. under current regulations, all imports from cuba are prohibited. it's a specific section. but the president can amend that and has in areas like allowing cuban medical products to come
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into the u.s. the problem is -- you could do it wholesale, you could do it incrementally in the case of non-state producers in cuba or you could do it wholesale. but, you run into problems with tariffs pretty quickly. unless the president goes further and establishes most favored nation trade status with cuba, any cuban import would be subject to the old tariff schedules. they're still in effect but applied to very, very few countries and they're very odd. something like -- and they reflect trade union over many, many years. rot iron is subject to something like the full value the duty you pay if you bring it into the u.s. without most favored nation treatment, is the full value of the rot iron plus a 300% duty.
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clearly keeps it out. i looked at this in relation to some of cuban exports at one point. things like agricultural products usually get pretty decent tariff treatment. things that many people are interested in potentially, rum, cigars and cuban beer, i think the duty on cuban beer would be something like 5 cents a liter. so it's negligible. but you do have to cherry pick your way through to determine imports into the u.s. that could meet the duty requirements that arise from non-most favored nation treatment. jake may have something to add to this or not. we can go to -- jake wisely has stepped out. >> back here. hold on. >> peter, national security
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archive. thank you for the speakers so far. looking forward to the next several. for matthew and robert, what are -- what are the sanctions that relate to banking that are specific to the terrorism list and do those go away if cuba is taken off the list? and what are the issues about banking that remain with the embargo overall in helmsburton? >> i think it's an excellent question. i've tried to work this out. matthew has gone further into this than anyone who has survived to tell the tale. i think if you take cuba off the terror sponsoring list, many, many things evolve off of that, including the ability to sue the nation of cuba and that's created judgments against cuba becoming more and more complicating. i also requires certain o fak licensing because they're on the list. and if you violate an o fak
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regulation, the downside is very, very heavy. so if you take them off the list, i think you make substantial progress in reducing legal risk but alsoed a tudally, changing how banks are viewing this. do you want to be the bank -- there was a case recently in new york where victims of a rocket attack in israel sued a bank and claimed the bank should have known that one of its account holders actually was a front for hamas and it provided the money to fire the rocket. so, by being on the terror-sponsoring list just enclouds cuba in suspicion and mistrust. now matthew can give you a fuller answer. >> i fully agree with bob on this. another interesting example -- and i think that attitudinally or politically, we saw recently several months back a client was
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a midwest bank based out of minneapolis and they had carved out a niche becoming a remittance forwarder not for cuba but for somalia because of the large somali community in the minneapolis/st. paul. similar to cuba, they operate with an o fak license. and issues affecting remittance forwarders generally and this is to anywhere because the law requires not only the bank know its customers but in many cases the customers customers and that's a very high threshold for banks to reach. in the case of this bank, they were fully compliant with o fak for years, sending remittances to somalia on behalf of somali folks in minneapolis. and o fak, of course, had provided all the necessary clearances. one day they received a letter
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from the local -- it was a local officer from the justice department completely different agency. o fak inquiring about their activities and inquiring about variety of different money laundering and counterterrorism issues. and rather, of course, than face scrutiny, from the justice department for this, they shut down remittances for a period. at which point one of their local representatives quickly became very vocal in the house and cobbled together, i think, what became an effective political and bureaucratic solution to the problem. in other words, there were representatives of congress that were willing to take on this cause, stand with the bank and, you know, they were able to at least put it together a stopgap measure. the point being, somalia is not a state sponsor of terrorism.
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it's easier to get representatives to apply political pressure to search for solutions if you don't have that label. and it's a starting point. we can't perceived risks by the banks is very complicated. it's hard to get to the bottom of it. but what we do know, it's like an onion. we do know the state sponsor of terror f you take that last layer off, it will allow us to begin to get to some of the finer points of the later iss s issues. >> i think we can move on to the next segment, if you would like. is there another question? >> no, i guess not. >> no. on to gustavo who is going to talk about inter-american bank. >> thank you. bob, let me start off by underscoring something that carl and elizabeth mentioned at the beginning of their interventions which is that the purpose of this conference is not to talk
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about whether or not the united states should try to normalize relations with cuba. i was specifically asked to talk about under current u.s. law the charters of various financial institutions what is possible. i for one don't see -- i don't think it's realistic at all that there would be in the near term certainly any kind of effort by the united states to normalize relations. i don't see a unilateral lifting of the executive to the fully extent possible or certainly with the consent of the congress to liftd that embargo any time soon. for a number of different reasons. not the at least of which is that i believe that cuba has for a number of years held the key to a better relationship with the united states and has chosen not to despite protestations of contrary has chosen not to exercise that key. bob did mention that secretary
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clinton in her book questioned the usefulness of the embargo, but she also correctly pointed out that at various times in the history of the united states vis-a-vis cuba, when the united states has gotten close to doing certain things, importantly under the administration of her husband, cuba would take -- we're getting close, cuba would do certain things that would make it at least politically very difficult for the executive to move on. and so this is all by way of saying that, you know, it takes two to tango or in the cuba context, it takes two to salsa. the reason i mention this, regardless of whatever the law provides or the charters provide as i'll explain in a minute, one cannot ignore the political diplomatic and strategic context in which any of these actions would take place. now, let me move on.
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helmsburton, i want to talk about the prohibitions and limitations as well as the various charters of the various international financial institutions the world bank, the dif, because of my background, i'll focus primarily on the idb. helmsburton is a law that to a surprising degree ties the hands of the executive in the bilateral regime between the united states and cuba. bilateral and also multilateral. section 104 of that act specifically deals with the membership of cuba in any of those international financial institutions that i mentioned. and it requires that until the president sertdfied that cuba has a democratic government, it requires the secretary of treasury who is the governor of any of these institutions to instruct the united states executive directors at these institutions to vote against cuba's membership.
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now, i was curious about that language is that the executive directors at these institutions have nothing to do with cuba's membership or the moig of any country in these institutions. it's actually the governor himself or herself that would vote because this is a decision that's taken at the governor's level. so what do we make of this? you know, if we are to construe section 104 narrowly or literally, then it is inoperative, right? it just doesn't make any sense. it's a useless provision because like i said, they would never be involved in deciding whether or not cuba or any other country can become a member of the -- of those institutions. they certainly in preparation for the possibility of membership of cuba or anyone else, they certainly would work behind the scenes but at the end of the day, it's up to the governors to make that
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determination. now f this issue were litigated, i suppose a good argument could be made that the intention of the drafters of helmsburton, what they really meant was for the governor to vote against cuba joining these institutions. and i leave it up to others and lit gators to decide which way that would -- how that would be decided. but i just want to point out that specific -- that's what the language under section 104 of the helmsburton. now, let's assume that we have a broad interpretation. let's assume that what was really meant and what everyone agrees is that the governors should exercise their authority to vote against cuba becoming a member. if cuba wanted to become a member of the ifc, the world bank, at least those two institutions -- sorry the imf or world bank, deal with the idb separately. if you wanted to do that and a
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majority of the other countries wanted cuba to join, then there's actually -- even with the u.s. governor voting against cuba's membership, there's actually very little that the united states could do on a practical level, at that level. okay? in the case of the idb, it's a little different because although -- by the way, just like at the world bank and the ifm, it takes a simple majority of the governors represented the case of the imf the court is represented by the governors to vote in favor of membership of one country or another. however, there's an interesting wring t in the case of the idb the requirements require that 75% of the shares be represented for a core rum. because the united states owns
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30% of the bank, the united states could deny a core rum for any such meeting and effectively, the united states has a veto. i would have a difficult time managing a situation where every other country wants cuba to become a member except the united states. they call for a governor's meeting and everyone comes to washington, d.c. and the united states does not show up. so, again, the united states does have a effective of cuba becoming a member. now, this assumes that majority of other countries would want cuba to become a member. now, section 104 of helmburton also provides that in a case where cuba is a member and a
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sloan or other assistance is provided to cuba, contrary to the vote of the u.s. representative -- let's say in this case it would be the u.s. representative executive at the ibd, what the law requires the treasury department to do, is to cut back cuba's contributions to the capital of the bank by an amount equivalent to the value of that loan or assistance. so, say 10 million dollar loan to cuba to do whatever, the u.s. government opposes that. if the united states has capital -- paid in capital contributions that are due under helmburton the treasury is supposed to hold back that $10 million when it makes its next capital contribution. before it finishes making all these capital contributions. if they're not due and payable or there are no paid in portions of capital that have to be paid, then it goes to the callable
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capital. what ma means is that whatever the callable capital of the united states is under the last capital increase, it would be cut back by $10 million using that example. the reason i'm mentioning this is because this is a consideration that other countries would have to consider in allowing cuba to become a member or not. more broadly, this is where we get into the practical issues, if there's ever the need as i'm sure there would be on the part of any of these development banks to have a capital increase, under u.s. law, the congress has to approve any such increases in capital because u.s. law protects the -- against the illusion of u.s. interest in any of these institution. other countries, that's a consideration that they have to take into -- they have to think
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about in connection with allowing cuba to become a member. i don't know how much time, bob, i have. let me end there. i'm happy to come back to either deepen these issues or talk about under the charter of idb how that would work and the pros and cons of cuba becoming a member of any of these institutions. >> can you talk about what the advantages to cuba would be and potentially the united states if they were to join the inter-american bank. >> so again, this assumes that we have the right conditions in place and cuba becomes a member of the idb, the benefits are huge. cuba will have access to capital on very cheap terms. they'll have access to phenomenal technical assistance, access to grants, also it's important to point out the convening authority on an constitution like the idb that is so highly regarded in the region. i think the idb could put together a phenomenal investor conference. bring in investors, consultants
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and others to look at investing in cuba. cuba would have to subject itself on the conditions imposed by the idb in connection with all these loans. these are fairly rigorous. there are many of these. in general, they want to make sure they get paid back which will always be ris can with a country like cuba. there is a possibility that cuba, if it were to enter the idb, would join a number of countries under something called the frontal special operations or the fso which is a separate capital base separate from the ordinary capital of the bank. the reserve for those countries that have the greatest needs. nicaragua is win of them, honduras, these countries. now, a practical question is that whether those countries would raise any concerns about cuba joining the fso at a time
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when those resources, of course, are limited. i don't see that happening without the fso being replenished in order to allow that it would certainly be unfair to the other countries and then you get into the question about the congress of course having to agree to that kind of replenishment and whether or not that can happen just depends on what else is going on at that time and our budget deficits et cetera. >> thank you. next we go to christine b hate farley. she is going to talk about -- i thought we would end with dan who ask going to talk about the environment. christine, i would refer you to the biographies for the depth and scope of her scholarship in the area of intellectual property, but also to her great credit, she has practiced law. she is now a professor at american university. >> thank you. i'm delighted to be here. i understand that the intersection of people who have
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a sophisticated cuba policy understanding and a sophisticated intellectual property policy understanding is very small and i don't see that person in the room, so i'm going to -- and i don't have a sophisticated understanding of cuba policy. so that being said, i'm going to kind of rapidly run through what i have identified as some of the major issues and i'm sorry i can't give you the full landscape nor the full background because this is a really complex area. so, i thought i would tell you about some pending cases, some pending legislation and make a bit of a forecast for you. on the pending legislation front, it's really a joke here, maybe some of you are aware that in 2002, the world trade organizations appellate body ruled that section 211 of the
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omnibus appropriations act of 1998 violated certain provisions of the wto trips agreement which is the intellectual property agreement of the wto and the united states was given a reasonable amount of time to bring that law into compliance with the agreement and that was 2002. so, here is the legislative update -- there it is. there has been no development on that front. so this is still an outstanding issue that has made no progress in 12 years. on pending litigation, there's been a lot of activity and there are cases that have been litigated for decades that are important that i want to tell you about. again, you will be aware of various default judgments against cuba. there is a pending case in the d.c. circuit court of appeals
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which is harris versus cuba in which the plaintiff is seeking to execute his judgment against cuba upon 61 patents and 44 trademarks. so this is a very interesting invocation of intellectual property into one of these default judgments. there are a number of major issues in the case. one is really a cuba policy issue which is whether or not there's jurisdiction under the foreign sovereign immunities act. the other issue is whether patents and trademarks can be -- are properly considered as frozen property. and probably there will be a ruling on the jurisdiction question. also pending is still two cases that involve some of the most famous trademarks coming out of cuba. one case on koe hee ba, the
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trademark for cigars and one case on havana club, the trademark for rum. in the cohiba case, just a month ago, there was a petition for cert in the supreme court on that case. what's interesting about that is that that is the second petition for cert in this case. but this petition comes from the federal circuit where as the last petition came from the second circuit. and the issue presented to the court is whether the cow ban asset control regulations bars the cuban trademark owner from opposing and cancelling trademarks in the united states patent and trademark office. and what the petition for cert says is there a circuit split on this question. the federal circuit ruled this summer that the carc does not
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prohibit a party from opposing or canceling registrations in the trademark office. and according to the cert, the second circuit ruled quite the opposite. what's interesting about this circuit split is that it's a circuit split in the same case, right? this is the same case that has been appealed to two different circuits. so this is a case to watch obviously. if the supreme court does not grant cert, this case will go back to the trademark office and it looks i would say very favorable for the cuban party in this case given the prior rulings and given what the federal circuit has said. the last time the party was in this position of having some positive outlook, that was
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exactly when we got section 211 passed. so, you know, this is again a case to watch including whether there will be any legislative action. havana club has also been pending for a number of decade. in fact, havana club has also been litigated in two federal circuits, has also involved two federal agencies and has also been pending for two decades. there's a lot of duality here. cancellation. and that petition for review has not yet been denied since 2006. so that the still pending and has not fully been resolved.
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so, on to kind of issue spotting. in much of the litigation involving trademarks -- and there's been more litigation involving trademarks than copyrights or patents and i'll explain why in a moment. there has been a lot of arguments based upon very little known international convention which is the general inter-american convention for trademarks and commercial protection of 1929. and i've been writing a bit about this treaty. and it's a sleeping treaty is what it is. it's still in force between cuba and the united states and nine other latin american countries. and very few trademark attorneys in the united states are aware of it. it hasn't really been invoked as much as it could have been. and it was really a treaty that at the time it was drafted i think the u.s. trademark bar had
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its eye on the cuban market for u.s. goods. so i think that should relations normalize, it will become a treaty which more people will know about. i'll say that. now, the reason there have been this fleury of litigation around trademarks is because trademark protection is territorial. and that is why we have this weird situation where we have parallel trademarks in cuba and the united states. right? it's possible to have one word for the same good be protected as a trademark in cuba by one party and in the united states be another party. obviously if relations normalized that will be a big issue. and so that's why we've had attempts and we have had some success of different parties owning marks in the united
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states that are identical to those marks owned by other parties for the same goods in cuba. so looking forward to normalized relations, i can only expect that there will be more disputes. already there have been a number of applications for trademarks filed in the united states involving geographical terms from cuba, especially in the area of cigars. and those have been routinely -- recently at least, routinely rejected by the trademark office. i can manage with more travel to cuba there will be more interest in exploiting cuban cigar brands and cuban cigar attributes or other geographical attributes. so i expect that this intersection of knowledge about cuba and intellectual property might be a place of growth in
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future. thank you. >> thank you, christine. i've asked dan to speak last in the hope that he -- i should explain. he's with environmental defense fund, has been for some years and has pioneered the most important environmental projects currently at work on the island in the marine field of fisheries, conservation and so on. i've kept dan until last because i hope he's going to lead us into this bright, new dawn of normalized relations with cuba and what they might look like in the field of environmental cooperation. >> thank you, robert. and thanks, csis for having me today. i was going to talk about the bright new dawn until senator flake mentioned spring break in hava havana. and this normalization means
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spring break in havana. that's quite a specter i'll let you chew on. without normalization, there is very little interaction between government agencies in the u.s. and their counterparts in cuba on the environment. after the bp oil spill, the cuban government came to me and couple other groups asking for realtime information on the oil spill because of the lack of diplomatic relations. eventually over the course of several weeks there began to be a channel of communication. i think even noah vessel was allowed in cow buban waters to some samples. there has been a long history of scientific exchange but it's been piecemeal, fragmented and
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gradual. so, many people often ask me isn't the embargo the environment's best friend in cuba? i mean, isn't that why the environment in cuba is in such great shape and i would say no. u.s. policy gets in the way of the environ mental protection. that said, there are many challenges if you think about what a normalized world looks like, there are many challenges for the environment. when i was in cuba with bill riley, the former chief of the epa and former chair of obama's oil spill commission, we were very impressed with the rules and regulations in place in cuba with respect to off-shore oil, what bill riley said, once oil revenues start flowing, then it's a game changer.
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then the will to implement and enforce those rules will be tested. and the same thing goes with, you know, if there's a surge of american tourism in cuba there will be a demand for golf courses, gated communities even. that will be an explosion in fishing boats. in a time when overfishing is amounting concern in cuban waters. you know, will this surge in tourism result in more caribbean settlement sun and sand, more cancun or more costa rica. cuba has phenomenal land use planning. will that be diminished when relations are normalized? will the pressure to develop in
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coastal areas be so great that the land use rules fall. there's many opportunities with normalized relations. i think the u.s. policy gets in the way, i think. more american visitors. americans demand a high quality tourtism product. they like bird watching and echo tourism. so in many respects cuba could become more like costa rica, less like a cancun but it has so much more to offer in terms of why the american tourists want to do, art, history, music, et cetera, sports. also, we would see much greater transfer of technology. waste water treatment, pollution control, geographic information systems that would help and assist cuba to do better planning. also i think the renewable energy potential in cuba is quite high. the u.s. under normalized
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relations could be a great friend and ally to cuba in developing its wind, solar, bio fuels et cetera especially in light of the issues with oil and cuba's dependence on venezuela and the future of that oil pipeline. in terms of how we get to normalization, how the u.s. government would move forward, there is precedent. there are several u.s. agreements on environmental cooperation in the case of the north american agreement in tandem with nafta there's a pretty impressive agreement on environmental cooperation. there's two good models with peru and chile as well. i would suggest that as we move forward with normalization that we start with these umbrella agreements. north american agreement is a
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good example. start there. that's the agreement that we have with mexico and canada. if you look at the preamble of that agreement, it sovereign right of states to export their own resources pursuant to their own environmental and developal policies. also reaffirms their responsibility to ensure that activities within their borders do not cause damage to the environment outside of their borders. that's a very important principle in terms of u.s./cuba relations on the environment. the notion that we are dealing with two separate states and the environmental and economic development programs will in fact be different. it's also important that we recognize how interrelated our environments are. environments are. usually:]oom8h7a i start myc how connected we are ecologically. our marine echo systems in the florida straits are extremely
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tightly connected. the objectives i will just mention a few. one is to promote sustainable development based upon cooperation and mutually supportive environmental and economic policies to increase the cooperation between parties to better preserve -- the great bio diversity in these countries. in the case of nafta and our trade agreements with chile and peru, it's critical that environmental policy does not create trade distortions or trade barriers and finally another objective is to strengthen cooperation on development and improvement of environmental laws. i'm a lawyer. although i work mostly with cuban scientist and my own team is comprised mostly of scientists. i got started in cuba by looking
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at their very impressive suite of environmental laws. it could and should be updated and would benefit if there was cooperation between our two countries. i'll also the u.s./peru agreement, it lists a number of mechanisms for cooperation. i'll just mention a couple. basic exchanges of professionals, technicians, specialists et cetera from ngo and government and cuba right now, u.s./cuba relations allows text change, the interchange of ngos and academic institutions but not government agencies who are in charge of managing the resource on either side of that line. the ultimate goal is transfer of knowledge and common best practice when it comes to environment and resource management. and then finally i'll just mention there's a number of areas of cooperation that we've
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already begun but that are in serious need of enhancement. hurricane preparedness and response. there is some government to government relation there that could be expanded. oil spill prevention and response. there is an agreement between the u.s. and cuba. it's a significant step forward on coordinating on oil spill prevention and response. we could have a bilateral agreement with cuba. and then there are opportunities on fisheries management. that's what my group does. we're trying to end over fishing in cuba. we're trying to manage better the migratory marine life in the gulf of mexico. there are international conventions that cuba could become a part of, the icat which manages migratory species. there's a sanctuary program that
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noah has with mexico called the sister sanctuaries. there's so much more that we share with cuba, we should expand that program into cuban waters. we share this deep water coral network extending from where i live in north carolina into cuban waters but there's been no science done yet on those corals in cuban waters. then finally i think there's a great opportunity for groups like mine, world wildlife fund, the nature conner is vennsy, the sierra club to have a greater presence in cuba or an office in cuba so we can continue to provide assistance, training, exchange. also there's a great opportunity to expand the environmental community in cuba. there's several good environmental groups. the foundation of antonio jimenez is a leading example ngo
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and groups like that could proliferate in a scenario of normalized relations. thank you. >> thank you. we'll have questions now for -- relating to gus, christine and dan. i see dan ericson in the back. >> thank you. the question is actually for the whole panel, not just the last three. my name is dan ericson. i work at the state department. i really appreciated this panel. it's very interesting. it was refreshingly tech know cattic if i was use that phrase. and i know that everyone clearly got instructions to stay on the more technical lane which i think is good. i wanted to bring it back to one of the core political questions which is on democracy and human rights in cuba. people can debate how far cuba is moving in that field or whether the united states should continue to try to advance
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democracy in human rights. some people think we should, some think we shouldn't. either way, it will remain a core u.s. foreign policy goal. i want to better understand how some of the different proposals that were laid out here fit into that question? is it the view of the panelists that would help the situation in cuba with regard to democracy and human rights? is it the view that may or may not help but, in fact, some other core u.s. national interests would be advanced? i think dan eluded to that. i think the macro question why should the president choose to kind of revamp and roll the dice on cuba policy if the future benefits are hypothetical but the goftds the clear.
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thank you. >> why don't we start with what might be the benefits to the u.s. in normalization. jake could speak to trade and the benefits to the u.s. trade sector. we can take some other allocatio allocations. i would say one of the great benefits of normalization and it's not much talked about is senator flake eluded to it, that we exist today in a very curious realm of compromised civil liberties in the -- we can't go to cuba. the united states sits in judgment. these are fundamentally
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un-american. one of the first would be felt domestically at home. i think jake might speak for a minute about -- he's followed this for many years, as to some of the trade advantages in the united states. dan, i'm not neglecting your question about the impact any of this might have within cuba and some of the values your department and others share. we'll come back to that. >> maybe i will address your question a little more directly, if that's okay. i think engaging economically in cuba can support broadly the idea of democracy and human rights, goals that are sort of shared goals. the proposal i laid out for enabling cuban entrepreneurs to sell to the united states and elsewhere around the world supports economic freedom.
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i think generally trade agreements and i was listening to dan and christine talk about environments. present a very useful frame work for dealing with a host of different issues under that umbrel umbrella. labor is also included and transparency. as you get into these negotiation, you deal with issues that you have an impact on workers and on freedoms. so, i think for all of those reasons economic engagement and working towards these longer term trade agreements is really useful. the one big omission that i forgot to add in my opening
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remarks, when it comes to change tariffs, that's a place where congress has a role. it's congress's prerogative to change tariffs. talk about working towards a full-fledged trade agreement, which i realize how ridiculous that sounds given the current state of their leadership, but over the longer term that would involve congress's involvement. >> mark, you had? -- >> question that's been asked and it's really a different agenda than what we were invited to address. but i'm happy to address it. starting point is senator flake's point that the embargo -- we're 50 years into the embargo and it's failed to
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achief the objectives. i think the embargo was fully justified back in the day when castro was supporting gorilla movements in the hemisphere and elsewhere and welcoming soviet military presence in cuba, but that's a long time ago. gustavo gustavo's point is very well taken. cuba has not really cooperated in providing conditions for normalization. the way i see it, the primary u.s. interest in cuba right now is to -- it's not within our control, but to provide a political diplomatic environment for the cubans to decide that they want to move on their own to loosen up the restrictions to
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somewhat authority tear yan on their own society. the cubans are, i think, are somewhat in the same position as the authorities in teheran right now. they're afraid that it would weaken their system in place in cuba. that's my take. i'm not a political scientist, but that's my judgment. we are not getting anywhere with our current policy. i think that's established. and i would hope that we could begin to take moves that might encourage the cubans to enter into a relationship with us that would benefit the cuban people as well as american -- america's posture in the world, i think we're entering a phase -- i think it's pretty clear that the -- our cuban embargo policy has become a burden on our relations with the rest of the
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hemisphere and will become more costly in the future as i see it. >> gustavo. >> let me see if i can answer this question. so, one of the requirements of being a member of the world bank is that you're a member of the imf. and almost by definition being a member of the imf would subject cuba to certain conditions that would quite frankly expose cuba's policies -- the fundamental contradictions that exist currently in cuba. whether or not this would have political implications in cuba or not, i don't know. but that would certainly be one of the advantages of cuba being a member of the imf. by the way, cuba left in 1964 because they were about to be kicked out of the imf for a failure to comply with a number of different requirements
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including the provision of information and they had to leave the world bank. with respect to the idb and i didn't have a chance to talk about this earlier. so, cuba was an original member -- cuba signed a charter of idb back in 159, but they never ratified the agreement. they never took the steps to sub vibe to tariffs. having lost the opportunity to become a member at the original -- when the charter was signed, cuba would have to come in through another provision which is that membership is open to the members. cuba's membership was suspended in 1962, i believe it was. that suspension was reversed in 2009, but subject to the condition that cuba agree to certain obligations under the
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charter including signing the inter-american human rights charter something that they have said specifically they're not willing to do. and as of today, cuba has take an very negative stance towards joining it. my reading is that currently cuba would not be able to join the idb simply because it doesn't itself consider a member of the oais. at the end of the day, the idb would defer to the oais. i'm not sure they would be willing to do that in the current context. >> thank you. do we have other questions? >> can i jump in? >> sorry, christine. go ahead. >> maybe dan wants to as well. so intellectual property law -- the purpose of the intellectual property slau to promote the development of human expression and research and development of sciences and also to facilitate the sharing of human expression and research. so it definitely relates to
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human rights objectives. anybody who knows anything about cuba knows that the sciences and arts are flourishing in cuba, but most u.s. intellectual property lawyers would be very surprised to know that intellectual property law is also flourishing in cuba. the cubans are very sophisticated about intellectual property law and their laws are as harmonious as any other countries. they're very up to date. we just have the embargo which is now providing the block of that sharing of research and expression. and i don't see how that can be consistent with the goals of human rights. >> i'll add here quickly. a clean and healthy environment is a basic human right. i think that's why we agreed upon around the world.
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that's reflected in article 26 of cuba's constitution. i would note that our own constitution does not give citizens a right to a clean and healthy environment. progress has been made to some extent at least under the body of environmental law that started in 1997 and continues. i think that environmental cooperation would do three things. increase awareness of the importance of cuba's environment in bio diversity in national heritage. both inside and outside of cuba. i don't think there's that much awareness in the u.s. about how important cuba is to the region. number two, i think it would increase environmental standards and living conditions in cuba. that would result in imply mentation of these laws we discu discussed. finally, i think -- this is already happening in cuba, i think environmental cooperation will lead to greater public participation and decision
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making and particularly in environmental decision making, take fisheries management for example, the cuba government is in the process of trying to update its fisheries management rules so that they're very sustainable. you're not going to achieve this in cuba unless fishermen in local communities participate and buy into that process. we're already seeing that. i think environmental cooperation can only advance that further. >> the only thing i would add, i think that the white house has already taken very important steps to promote the free flow of information to the cuban people, to support economic activity in cuba and all of these have an important democracy to human rights to them. if groups carrying out those missions are impeded by their inability to access financial
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services in bank iing that is a problem and addressing that problem first can take things at the white house has already authorized and make them far more effective on the island. >> do we have other questions of this panel? >> my name is dan nicoles. a couple of items that the panel brought up earlier went by in a blur. and i thought we could maybe revisit one or two of them. one is you mentioned that the u.s. -- or excuse me, the cuban interest section had a 30-year relationship with the bank and then that relationship was halted.
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and the question that i have is what prompted the sus sags of that relationship and then i have three other questions that revolve around the same topic, but not a small one which has to deal with the state-sponsored terrorism. what are the arguments for keeping cuba on the state sponsored terrorist list and when were they put on and why were they put on? >> maybe i should begin with the terror sponsoring list and we'll come back to matthew. cuba was put on the list i'm pretty sure in 1982 and there were expressed reasons for being put on the list that principally support for in marxist movements in central america. and as an interesting legal note, the supreme court upheld
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the embargo based on affidavits from the department of defense saying there's a national security element to this cuban support for these liberation movements, as cuba styled them. they were put on the list in 1982. they've been on ever since. fidel castro said in approximately 1995, we're broke and we're out of the revolution business here. at least as far as exporting it. and i think that has held true ever since. the current stated reasons by the state department for keeping cuba on the list become ever more difficult to tease out each year. there's -- it said that there are some fark relations, but, in fact, cuba is hosting the negotiation between fark and the government of colombia. there's some community periodically -- wayne smith has
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spoken on this issue for many years by some separatists living in cuba. well, they're living there at the request of the spanish government that doesn't particularly want these hard men back home. so we're left then with very little. there is a comment periodically that cuba is harboring fugitives from the u.s. justice. that alone does not constitute support for international terrorism. i've written on that subject if you're interested. so, as long ago as the clinton administration, his principle cuba adviser not long after leaving the job said to "the miami herald," everyone agrees, cuba doesn't belong on this list and there's a perceived cost in taking it off. if somebody wants to correct me and give objective details of
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why cuba is still on that list but i haven't heard. i don't mean this to sound like advocacy, i mean it to sound like frustration at this point. so, i hope that's answered your question. matthew? >> yeah. on the banking issue. i think the key thing to remember and i've had discussions with the bank about this is that the decision to cease providing services to the cuban diplomatic was a business no longer going to provide services to diplomatic missions of
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kind. it considered those types of accounts, diplomatic accounts, to rise above a threshold that it was comfortable with. i think almost more interesting component to that sort of issue is that since the diplomatic mission was dropped -- and mind you, this is a case in which the u.s. government is prepared to provide assurances not only to the bank but also provide licenses to the mission itself is the fact that for over a year now the u.s. government has reached out to dozens of banks in an effort to find a replacement. talking here about a checking account. so they can stop receiving cash. and as of now, at least in the case of intersection, there has not been a bank, large or small, u.s. or nonu.s. that's been willing to take on these accounts. and it's, again, it boils down
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to risk and to bank's perceived risks. and i think an important things to tease out which is that if the risk matrix reaches a level of complexity of which it's almost incomprehensible, the issue is that it's the unknown, it's the bank that was doing everything compliant with o fak and gets a letter from the justice department. it's the fact that there is no rule book that is clear enough and compelling enough that a bank would follow it. and this is, you know, it started with the intersection, i assure you it's bleeding into other areas. some of the big dollar clearinghouse banks are getting very anxious about wire transfers. i've gotten several calls in the last few weeks about wire transfers that just disappear. these are from groups that have licenses that have been engaged
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in these activities for many years. it's not that the money doesn't resurface, it does. but figures out where it is and why it never reached its rec recipie recipient. >> i would like to make the point it's not cost free to the united states as matthew has been describing. one of the reasons to take cuba off the list is cuba can be sued. it loses diplomatic -- the sovereign immunity because its on the list. this is resulted in dozens of lawsuits being filed in miami. they're awarded by default. they're not defended by the government of cuba and then these cases are now starting to hit the international financial markets. they're trying to seize dollar transfers. they're going after accounts. their ill lustrytive case has a
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judgment of a man close to $4 billion, default judgment. he got it in the dade county court and that's based on his father committing suicide, i believe, after their car dealership and gasoline nation was nationalized in cuba in 1960, i believe. all these years later, a $4 billion freshly delivered judgment against cuba. that lawyer was quoted only a few days ago as saying he hopes to harvest $20 million out of these dollar accounts, which in this cases represent legitimate trades cubans buying wheat from argentina, all dollars come through the new york depositatory system so these ravenous packs of lawyers are now trying to grab this money. they have an interest in doing it. they get 33 1/3% of anything they can grab, as you know on a contingency arrangement, so it
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is not -- it's further complicating attempts good things the president has done, support people-to-people travel. these transfers are being held up. so i would ask the u.s. government to start intervening in these cases. there's a legal procedure for doing it and saying the cases are baseless because you have to demonstrate. cuba was a terrorist-sponsoring nation at the time of the complained of action. cuba was listed in 1982. this man committed suicide in 1960 or '61. not one of those lawsuits meets the basic jurisdictional requirement of the statute which mark feldman was very much involved in, the foreign sovereign immunity's act. so that requires our government moving on this and ideally they will. >> any other questions?
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>> this is a followup -- before you go, this is the last question because we're at noon now and we're going to wrap up. go on. >> sure. >> this is a question on the followup. this is james williams. this is a followup on the banking question. given all that, you know, and sort of this is not just a cuba problem although their case is probably the most severe example of all of this, is there -- are there steps, right, the state-sponsored terrorism list goes, say there's more sanctioned relief, is that still going to -- is that going to be enough to incentivize a bank to want to thak account? at some point, all these other steps are untenable if cuba can't get a bank. are there things beyond that need to happen to make it worthwhile enough? or what are we looking at here in terms of the future
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prognosis? >> james, i wish that i knew the answer to that question. i think that there are other people in this room even potentially some from the u.s. government who wish they could answer that question. you know, one of the important differences between cuba and the united states and this frustrates the cubans to no end i assure you the u.s. government can't tell a bank to take the accounts. the bank has the right to make its own business decision about whether or not it services a customer. and there's a risk reduction side which obviously needs to be met. the removal of cuba from the state sponsors of terrorism group i think we're in consensus would remove some elements of risk but there are other. where we reach that tipping point on the risk side i can't tell you for sure. on the reward side because from a business decision it's cost/benefit. on the benefit side, you know, a
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lot of these groups are already working in a high fee area, you know, groups are willing to pay high costs for a banking relationship on a much higher than normal costs. but, you know, it's not -- if you're a large bank, let's say -- i don't want to name a specific large bank. let's take a large bank and this would be a very small portion of your overall portfolio. and you run afoul somehow of o fak licensing provisions. the issue is that it's not the funds in question in those particular accounts that are at risk, it's the assets of your bank, all the other assets. and so name a bank that's going to put, you know, millions or billions of dollars of assets in one area on the line for this small other area? i'm not sure. so we don't have a full answer.
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i will say that there are cases -- there are success stories. western union is clearly a success story. they have continued operations, they have global operations in some complicated and complex areas. and they've been successful. they spend a quarter of a billion dollars a year on compliance. so maybe the niche is the answer, but it's going to be combination of different things and assurances from the u.s. government would go a long way. >> jake, quickly. >> yeah. just real quickly. i do think something that matt talked about before was there's this threshold issue that would make a lot of difference in terms of removing them from the terror list. what bangs face is sort of o fak officials speaking out of both sides of their mouths. they'll go to banks and say, well, yes, it's okay if you do this business with cuba, but
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then they'll go back to them and say, by the way, iran is on the state sponsors of terrorism list and you have to divulge yourself of all cases related to iran. just by virtue of being associated with these other bad actors, there's this additional amount of risk that banks take and they don't tend to differentiate. >> i want to thank everyone on this panel. i think it's been most informative. thank you. [ applause ]. >> so in closing, elizabeth, could you please join me up here. my co-host, i want to thank all of you for coming. i think this was a lively, useful, bipartisan, mixed very diverse group which i think
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already symbolically means something when dealing with cuba. we have all kinds of different views. i think it was important in that regard. i think we did what we said we were going to do for the most part. it was a tech cattic panel as was said and i think folks's views came up at the end. so if the president of the united states was interested in normalizing relations with cuba, this would be a great way to start. thank you. [ applause ]. on the next "washington journal" we'll look at the november jobs' report and what it says about the u.s. economy with ben of the "wall street journa journal". then princeton professor julian
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zelizer. and carey gill ham will talk about the current debate over genetically modified foods and on going efforts to improve product labeling. we'll take your phone calls and look for your comments on facebook and twitter. washington journal live everyday 7:00 a.m. eastern on c-span. ann compton who recently retired as abc news white house correspondent on your over 40 years of covering the white house. >> we sat and we watched him listen to a grown of second graders go through their drill. and andy card came and interrupted the president and whispered to him. i was stunned. i wrote it down 9:07 a.m., andy whispers. nobody interrupts the president, even in front of second graders. the president stood and said that he had to go and he went into a side room and then we
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heard, we discovered that it was two planes down -- two plane crashes in new york. ari flesher came out to the pool. we were now outside in the parking lot and said stay right here. the president will come talk to the pool. no, there are live cameras in the cafeteria. he did not want to scare the children. he said it's an apparent terrorist attack and i must return to washington. we raced to the plane. we were pushed aboard quickly. the door slammed and then the pentagon was hit. >> sunday night at 9:00 p.m. eastern and pacific on c-span's "q&a". here are some of the programs you'll find this weekend on the c-span networks. saturday at 11:00 a.m. eastern on c-span, live coverage of the memore kbral service for former washington ann compton who recently retired after over 40
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years. saturday night at 10:00 p.m. on book tv on c-span 2, university of new hampshire assistant professor jason sokol on how the u.s. northeast -- and sunday at 12:00 p.m., our live three-hour conversation with author and american enterprise institute president arthur brooks with your phone calls, e-mails and tweets. and on american history tv on c-span 3 tonight on 8:00 p.m. on lectures and history, martha jones on female slaves and the law. and sunday at 8:00 p.m. on the presidency, president george h.w. bush president of state, james baker on the fall of the berlin wall. find our complete schedule on and let us know about the programs you're watching. e-mail us at comments or send us a tweet.
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join the c-span conversation. like us on facebook. follow us on twitter. a new law passed this year requiring that the federal government make all federal spending data available in digital form. the house oversight committee held a hearing to determine what progress is being made toward that goal. witnesses include and representatives from the treasury department and the white house. congressman darrell issa chairs this two-hour hearing. >> the committee will come to order. the oversight committee exists to secure two fundamental principles. first, americans have a right to know that the money washington takes from them is well spent. and second, americans deserve an efficient effective government that works for them. our duty on the government
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reform committee is to protect these rights. our solemn responsibility is to hold government accountable to taxpayers because taxpayers have a right to know what they get from their government. it's our job to work tirelessly in partnership with citizen watchdogs, the general accountability office, the inspector generals and others to help bring genuine reform to the federal bureaucracy. this is our mission. this is our passion. and this is why today we are celebrating that over the past four years on a bipartisan basis the committee's majority and mie noshty has taken up and moved several bills to reform government. without a doubt, one of the most important transparency reform initiatives done by this committee has been the data act. the data act is the first shot in what should be a technological revolution that will transform how we govern.
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shortly before we sent the data act to the president for his signature in may, the gao controller general came before this committee and testified that the status of federal program data is abysmal. agencies have no standardized performance, metrics for programs. agencies cannot tell us how many programs they even have. but most importantly, agencies do not and usually cannot tell us or no themselves how much taxpayer money has been spent or given to a particular program. spending information that has been provided has been historically incomplete, out of date and most often inaccurate. we in the transparency world recognize that you have a right to know that the american people have a right to know that your leaders in congress have a right to know but what we're talking
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about with the data act is manageability within the executive branch has the greatest single need to know and if they can't tell us that means they can't be told for their management purposes. today we're joined by the controller general who again will discuss his initial work on data act implementation and update us on the status of problems data is designed to address. the american people deserve to know if federal tax money is wasted or wisely spent. but the performance information collected today is almost useless because we cannot determine the amount of resources a program actually consumes. there's an expression that is not used in government but it's used in business and senator warner who joins us today very well knows this. you must be able to count if you're able to manage. the absence of the ability to
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count performance is the absence of the ability to receive performance. this is true in a sales force. this is true in every single individual that works for a company. people want to be evaluated not based on somebody's opinion but based on facts. performance data is essential in good management both in the private sector and in government. to better oversee the federal government, congress and the president have appointees that must be able to better leverage technology. particularly appointees of a president who come in and stay for two to four, maybe up to eight years, come in from the outside world where they're used to knowing and getting worthwhile data. they're usually shocked that they ask career professionals for answers and career professionals give them answers based on years of experience but not based on quantitative and
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measurable data. the data act is possibly going to change that if it is properly implemented. by compelling agencies to report their financial information in standard formats, the policymakers in congress and in the executive branch will have the information necessary to truly make informed decisions. more importantly, we can give the american people better information to evaluate the government's performance for them. the bill directs the department of treasury and the white house office of management and budgets to establish these data standards and otherwise implement the law. today, we are joined by senior officials from both actsies charged with the implenation of the data act. under the act, treasury department is authorized to establish a cutting-edge data analysis center, modelled on the successful recovery operation center better known as the rock. the data act calls on treasury
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to build on innovative technologies and ideas. the rock that were used in the rock and extend its applications to across the government. it specifically provide for the technology currently in place at the rock. if treasury acts to establish the new data analysis center, it will be a vital tool of law enforcement agency and the inspector generals in their investigations. the center will also help agencies protect against improper payments. today we will hear from treasury department officials about the progress in establishing the center. we also expect to hear from omb about progress made toward establishing a pilot program. hundreds of billions of federal taxpayer dollars are spent by state, local and tribal governments, universities and private constitutions every
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year. today, these entities may well and often do waste millions of taxpayer dollars complying with duplicate and complicated reporting requirements. in a modern era, there is no reason for an entity to fill in mindless forms with the same information time and time again. at the end of the two-year pilot under which some recipients were told to report to standardized mapper. they will issue on how to streamline and consolidate reporting requirements. when fully implited financial reporting by agencies and other recipients will give unprecedented insight into federal spending. the american people will finally be able to track how we spend their dollars by simply4%
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but bi camera will. our partners in the senate, senator mark warner from virginia and senator portman of ohio who are with us today have shown amazing leadership and in fact the bill signed by the president was authored by senator warner. they join us here today for a few remarks. and i'm pleased to welcome them and at this time i'm pleased to recognize my ranking member with just one caveat, i want to take a moment to look at jerry connolly and say something. jerry, you've often been the bain of my existence.
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but when it comes to your leadership in this and your tenacity, i want to personally thank you because in fact, mr. cummings is a fine ranking member, but you are in fact an advocate for technology and improvement in the government sector. and for that, you deserve a special shout-out. so thank you and i recognize the ranking member. >> thank you very much, mr. chairman. i would echo your words about congressman connolly as a matter of fact, he and i talking about his efforts just yesterday. and i said almost the identical words. i swore you overheard me. but i want to begin by recognizing mr. chairman, that it was your vision and bipartisan approach that patched the way to the successful -- and i really do mean that.ched the way to the successful -- and
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i really do mean that.vched the way to the successful -- and i really do mean that.hed the way to the successful -- and i really do mean that.ed the way to the successful -- and i really do mean that. this is not about this moment but about generations yet unborn. we are to track tax dollars that hardworking taxpayers pay. they give their blood, sweat and tears. they look at their returns on april 15th and say, well, where does the money go. they look at their paychecks, every two weeks, every month. and they say, where does the money go? and i think this legislation goes a long ways towards helping them understand where the money goes. they simply want it spent in an effective and efficient manner. hopefully it'll cause those who are spending it to do just that. from the very beginning, mr. chairman, you work closely with me and my staff as well as the administration and senate to craft a bipartisan bill that would provide the american people with information about
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how the money is being spent. senator warner and senator portman, we thank you for all of your efforts and what you've done. you've been part of the watch and we congratulate you. your leadership and commitment got this landmark over the finish line and you should be commended for that leadership. now the ball has zj} รท handed of to president obama aep his administration and they have to run with it. i look forward to hearing from our witnesses from the office of management and budget and about the administration's efforts to implement the data act. president obama has shown his support for open data. he issued an executive order on may the, 2013 that requires all newly generated government data to be available in open machine readable formats. president obama also joined
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seven other countries in launching the open government partnership of the united nations in 2011. that partnership has now grown to 65 countries that pledge to create action plans to make government information open and accountable. the data act builds on this ongoing work. this new law requires agencies to report detailed information about how they are spending money. agencies required by 2017 to begin reporting information using common data standards developed by o & b and the treasury. o & b and the treasury are to report the information in a searchable and downloadable format. once implemented was these will improve oversight and accountability. congress and the public will have an unprecedented amount of transparency into agency
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spending. agencies will also be able to better use their own data to identify trends and make smarter funding decisions. comptroller sent this testimony before this committee earlier this year that the data act is one of the single biggest things congress could do to address wasteful spending. i agree with this assessment and congratulate all of our stake holders for working together to get this legislation passed. our work did not end with the enactment of the data act, however. it is critical for congress to stay engaged with regular bipartisan oversight just like this hearing. congress must also ensure that agencies have the resources they need carry out the requirements of the data act. as many of you know i frequently say we need make the government work more effectively and efish eptly.
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aep i've often looked at i way government is run sometimes and said, we are better than this. so the data act is long now and so it's been implemented and now behave to make sure that we move forward with it. and so it can be as effective and efficient as we intended it to be. with that, mr. chairman, i yield back. >> i thank the gentleman. members will have seven days to submit for the record -- >> mr. chairman, can i ask you to speak out of forward one minute. >> without objection, so ordered. >> i wanted to take an opportunity here at one of our last hearings with-in this 113th congress and on behalf of members on both sides of the dial i want to thank you for your service and your tenacity and love of and passion for this committee and your love and passion for this country. you have tackled very difficult issues. you plowed ground that hasn't been plowed before and there are
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members here again on both sides of the aisle, very grateful for your service, commitment and your love of what we do. and it's contagious. i personally came here as young fresh eager-eyed person and you opened up the opportunities and gave a lot of leash to a lot of us to do things that we didn't think we would be allowed to do. and other committees they aren't allowed to do. but you have made us proud in every respect. we want to thank you for your leadership in every way, shape and form. you have carried a fairly big gavel here. we have a token of our appreciation. little indulgence here. i would like to present that on behalf of the members here and committee and thank you again for all that you've done. wow.
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[ applause ] >> i needed this sooner. >> mr. chairman, surprise. >> senators, you got behalf. behave. >> mr. chairman, may i be recognized for one minute out of order. >> with indulgence of our visiting senators, so poerpd. >> surprise. i have never enjoyed -- i enjoy fighting with you more than anyone. and believe me, this is a compliment. you don't need that big thing. you are not a push-over. you stand up for what you believe in. and briefly, this bill is incredibly important, implemented properly, it'll make a more trust in government from the american taxpayer. it is a significant tribute to you and mr. cummings working
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together to make government work better for people. so i join my words in congratulating you. >> thank you. and senators, i apologize for not giving you a fox moment. mr. chairman -- >> the gentleman from virginia. thank you, i hope my colleagues from the senate will indulge. i want to congratulate you also. thank god you didn't have that gavel when you began your chairmanship. but it is fitting that you get it at the end of your tenure. i want to congratulate you today on the news that the legislation, the federal i.t. acquisition reform act is in fact headed for passage both in the senate and in the house and i say congratulations to you. it was an honor collaborating with you on such an important topic. such a great way to cap your career.
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congratulations. >> thank you. all other accolades can wait until you vote because you ni k you have a vote in a few minutes. senator warner and junior senator from ohio, senator portman, and senior goes first -- mark you haven't taken your self out of run for president either. >> i don't feel that's senior. >> thank you. my friend mr. connolly took the words out of my mouth already. having watched some of your proceedings, if you had that gavel your whole tenure, you might see different results. let me add my congratulations to you as well. it is great to be here with my friend rob portman and ek yog what you both said, it is remarkable when we do something significant.


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