PUNISHING CUBA'S PARTNERS

By Adam Zagorin/Washington

Not long ago, Coca-cola chairman Roberto Goizueta showed up to salute a group of American immigrants as they took the oath of citizenship at Monticello, the home of Thomas Jefferson. Coke's boss eloquently recalled his own family's flight from Cuba and eventual naturalization as proud Americans. Said the courtly ceo: "When my family and I came to this country, we had to leave everything behind...our photographs hung on the walls, our wedding gifts sat on the shelves."

The most powerful Cuban-born executive in the U.S. also seems to have left behind any vindictiveness, at least in a commercial sense. Goizueta has said nothing about a controversial new law aimed at keeping foreign companies from investing in Cuba. It's a law that many FORTUNE 500 companies such as Coke--which lost a plant to the revolution--would like to see go away.

The law allows American citizens and corporations to sue foreign firms that use confiscated American assets in Cuba. While the U.S. maintains a trade boycott against the island, hundreds of foreign companies, from Benetton to Toyota, have poured at least $5 billion into Cuba; and most U.S. companies would jump at the opportunity to invest--just as they are doing in Vietnam. Sponsored by two conservative Republicans, North Carolina Senator Jesse Helms and Indiana Congressman Dan Burton, the bill enjoyed strong support among Cuban Americans and the right. President Clinton, with an eye to re-election, signed it in March.

U.S. allies are furious at what they see as unwarranted meddling in foreign trade. Canada's Minister of Foreign Trade, Arthur Eggleton, told TIME, "The U.S. is doing nothing more than using Helms-Burton to shoot at its friends instead of its enemies." Last week Canada made clear that it would soon retaliate against the U.S. for Helms-Burton. Mexico's President, on a state visit to Canada, denounced it, as did Italy's Prime Minister at a meeting with Clinton in Washington.

Meanwhile, says Nicholas Gutierrez, a Miami lawyer, Cuban Americans are expected to sue ED & F Man, a British sugar-trading company; ING, a huge Dutch bank; and other members of a consortium that lent some $300 million to the Castro government in 1995. The loan collateral: sugar grown or milled on properties that allegedly belonged to Cubans who are now American citizens. A similar target: BAT, the giant British tobacco firm.

Firms such as Boise Cascade, United Brands, Archer-Daniels-Midland and Lone Star (a big cement company), as well as Coke, either opposed Helms-Burton quietly or ducked the issue. Observes Robert Muse, an international lawyer who represents Amstar, an American sugar company with $81 million in property claims in Cuba: "Helms-Burton does not have a lot of support among big American companies because it threatens to complicate their re-entry into Cuba as well as U.S.-Cuba relations after Castro."

Under the law's provisions, executives of offending companies could be barred from the U.S. The heads of Sherritt, a Canadian mining company, Grupo Domos, a Mexican telecommunications giant, and Stet, an Italian telecom firm, have each received letters from the State Department warning that they may soon be personae non gratae.

Protests aside, the law is producing the desired effect, and a slowdown in investment has not gone unnoticed by El Jefe. In a recent speech, Castro noted, "They want no one to invest. They must want 100% socialism in Cuba." Actually, they want 0% Castro.

--By Adam Zagorin/Washington