The Roaming Gnome Busted for 1,458 Trips to Cuba

Posted by at 6:35 pm on August 13, 2007
Category: Cuba SanctionsOFAC

The Roaming Gnome in front of the Cuban Capitol Building

The new OFAC penalty disclosure for August came out on Saturday with some embarrassing news about Travelocity’s Roaming Gnome. Seems that for for six years, between 1998 and 2004, the Travelocity site booked 1,458 reservations for travel to Cuba. The gnome, or rather his employer Travelocity, agreed to a fine of $182,750.

The report of the Travelocity fine follows the general OFAC “the less you know the better” policy and reveals no more about the violation than described above. But some educated guesses can be made. First, the violation was not voluntarily disclosed because the OFAC report almost always notes that fact if there has been a voluntary disclosure. Second, given the time frame, this violation probably involved Travelocity booking trips to Cuba through the sites of its foreign subsidiaries.

You may remember this letter which OFAC sent in 2002 to an unidentified company that operated travel websites in the United States and in foreign countries. That company (probably Travelocity, Orbitz or Expedia) had sent a letter to OFAC requesting OFAC to declare that those operations were permissible or, alternatively, to issue a license to cover them. In OFAC’s responding letter, OFAC asserted that the Cuban Assets Control Regulations apply to overseas subsidiaries and that the Berman Amendment’s exception for information didn’t apply to actually booking reservations but only to providing information about available flights. Accordingly OFAC held that the company’s overseas operations violated the CACR and declined to issue a license to permit such operations.

It’s now pretty safe to assume that the 2002 OFAC letter did not involve Travelocity. Travelocity appears not to have disclosed the violations leading to the fine, and the company involved in the 2002 letter had at least fessed up to its overseas operations. (My money is on Expedia, and not Orbitz, given the length of the whited-out references to the company in the letter.)

One part of the letter has an intriguing passage:

Your letter indicates that there are many U.S.-owned or controlled companies located in third countries that engage in providing travel services. OFAC has not granted a license authorizing any such companies to provide services associated with the tourism and business travel of third country nationals to Cuba. If you have specific information concerning apparent violations of the CACR by such companies, you may submit the information, preferably in writing, to the attention of OFAC’s Chief of Enforcement.

Does anybody else wonder if Expedia (or maybe Orbitz) snitched on Travelocity?

In other OFAC penalty news, the August disclosure indicates that your tax dollars are still being spent on fining individuals who bought Cuban cigars over the Internet, with one individual being fined $999.45 and another $510.00. Given what’s involved in the penalty process, it’s safe to assume that these fines won’t recoup the time spent by OFAC enforcement staff on chasing down the stogie-puffing miscreants, sending penalty notices and negotiating a settlement. Shouldn’t OFAC be chasing terrorists or something?


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Copyright © 2007 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)


Great post. The Gnome should be embarrassed not only for doing business with a terrorist state and violating the Trading with the enemy act but for wearing a Mexican sombrero to Cuba.

Comment by Henry Gomez on August 14th, 2007 @ 7:50 am

Good post. I put my money on American Express Travel Related Services Co., Inc. which I understand did voluntarily disclose to OFAC.

Comment by SB on August 14th, 2007 @ 9:05 am

What a relief! At first, I thought the Roaming Gnome was Michael Moore! (Obviously, I don’t use internet travel services.)

Comment by John Liebman on August 14th, 2007 @ 9:40 am


A terrorist state? Not hardly. We deal with China, North Korea, and Vietnam everyday. What do you call those? End the embargo on Cuba!

Comment by Tony Economou on August 14th, 2007 @ 9:44 am

Mr. Gomez: It would appear that this article is attracting notice from a wider readership than the usual suspects, please note that the official reason Cuba is branded as a “terrorist state” is that it refuses extradite those accused of “political offenses”, such as Marxist guerillas, the same reason that the United States used for refusing to extradite IRA members to Britain, not to mention countries with which we are less friendly, and not to mention a Cuban terrorist who bombed a Cuban airliner. The embargo goes beyond banning the import Cuban products or the export items controlled for terrorist or strategic reasons, but extends to exports and reexports of ordinary items available from many other countries. Given that the only country in the world to boycott Cuba is the US, this means that companies in all other countries that do business with Cuba won’t buy US goods if they have an alternative, because they don’t want to go to the trouble and expense of keeping separate inventories for harmless stuff. The only people being hurt by this total embargo on Cuba are real American workers who lose sales to places like Communist China just so the Cuban colonists in South Florida can vent their spite in a perfectly meaningless way, no mater what the cost to the people who gave them refuge. The ingratitude and disdain of the Cuban colonists for native-born Americans (not to mention native Americans, just ask my cousins among the Seminoles), coupled with their unearned sense of entitlement just boggles the mind. That said, there is no reason to end the import embargo, since that would just hurt the exports of US allies in the region; but, there is absolutely no sense for keeping the total embargo on export and re-export of otherwise uncontrolled goods and foreign-made products containing those gooods, especially as we suffer record trade deficits. Its all for spite.

Comment by Mike Deal on August 14th, 2007 @ 10:50 am

What embargo? As a Canadian, have been to Cuba several times and can confirm there is no shortage of American products there. Such as Kentucky bourbon, which as one local bartender explained to me, is imported via Jamaica. Coca-Cola is exported via Mexico. And so on and so on. If Cuba really wants to end the embargo, instead of simply using it as an excuse for its own economic mismanagement, all it has to do is sit down with the U.S. like Red China did many years ago and settle outstanding expropriation claims. And if Cuba wants to retain socialism, it should consider the Swedish model, which includes opposition political parties, independent labour unions, a free press, small private shops, etc.

Comment by Cuban Pete on August 14th, 2007 @ 12:31 pm

Mike – well said. I would agree with all your points. complete hypocrisy is the only way I can describe this embargo.

Comment by Tony Economou on August 14th, 2007 @ 12:37 pm

Blah blah blah. I’ve disintegrated those lame ass arguments against the embargo so many times it isn’t even funny. But the fact remains Cuba is on the State Department’s list of terrorist states and doing unlicensed business with Cuba is a violation the the TWEA. Have fun fellas.

Comment by Henry Gomez on August 14th, 2007 @ 3:22 pm

Cuban Pete, you’re never going to talk sense into these people.

Comment by Henry Gomez on August 14th, 2007 @ 3:24 pm

Henry, I don’t think there’s a dispute here that Travelocity broke the law when its foreign subs booked Cuban travel. Instead, the argument is whether unilateral sanctions in general, and against Cuba in particular, make any sense. Rather than simply boasting that you have “disintegrated those lame ass arguments . . . so many times it isn’t even funny,” why don’t you share with us what your arguments in favor of the sanctions actually are?

Comment by Clif Burns on August 14th, 2007 @ 3:48 pm

I think Henry’s arguments were something close to “Cuba is on the State Department’s list of terrorist states and doing unlicensed business with Cuba is a violation the the TWEA.”

Comment by South Florida Jack on August 15th, 2007 @ 10:20 pm

Henry said he has dismantled the arguments “against the embargo.” Saying that the embargo has been enacted, doesn’t dismantle arguments that the embargo doesn’t accomplish its intended object.

Comment by Clif Burns on August 15th, 2007 @ 10:31 pm

Mr Deal:
From whence this vitriol? Cuban colonists?
First, Cuba expropriated millions of dollars of American, not Cuban American, property. Are you going to tell large American corporations like OfficeMax, which has one of the largest claims, to just forget about what they are owed?
Second, to whom are you going to sell American wares? The average Cuban makes twenty dollars a month. You are going to sell to a government that doesn’t pay its bills. Just check the financial papers. It essentially defaulted on its debt in 1986. Ask Mexico, India, Russia among others about selling on credit to Cuba. And you will have to sell on credit.
Third, I seriously doubt that companies give up doing business with a market the size of the United States because it would interfere with a market of eleven million impoverished souls.
As a Cuban American, I have no sense of entitlement. In actuality, I grew up as a second class citizen because of it. As to ingratitude, you can not be more mistaken. I once read that you have never seen an American flag being burned by a Cuban exile or a Cuban American. And it’s true.
Finally, if in it’s largesse this country provide drefuge for the Cuban diaspora, it is no more than it provided for your forbears, so get over it.

Comment by rsnlk on August 16th, 2007 @ 4:58 am

And, rsnlk, should we suppose the embargo is completely unrelated to the low wages and impoverishment of ordinary Cubans?

Comment by Clif Burns on August 16th, 2007 @ 7:26 am

The low wages and poverty of ordinary Cubans in related primarily to the implementation of Marxist economic theories. Red China and Viet Nam are doing much better because they have, in practice, dumped Marxism in favour of a system of state capitalism. The key word in the phrase “American embargo” is “American”. Cuba is quite at liberty to trade with the rest of the world, including Canada, Europe and Latin America. However, because of Cuba’s poor credit record, all trade is now on a cash basis.

Comment by Cuban Pete on August 16th, 2007 @ 10:03 am

If, in 2006 the US sold $347 million dollars worth of food, equipment and raw materials to Cuba, most of which does not appear in local State-run stores but in hard currency establishments, why haven’t the Cuban people been able to partake of it? Where are these shipments going?
Regarding Cubans’ low wages:
Rodolfo Seguel, the Chilean labor rights leader, former political prisoner and antagonist of Pinochet, has commented recently that there are no labor rights in Cuba. “The normal workday is 12 hours with the possibility of up to 18 hours without the consultation of the worker. Overtime is not compensated…No one has the right to make a complaint of any type…international companies don’t make agreements with workers without making agreements with the State first. If the company pays the workers $25 a month each, the State pays the worker $10 a month and the remainder is kept by the State. No Cuban can open a business in Cuba, but foreigners who have residency in Cuba can.” From a 2007 interview.

Those of you still holding on to Cuba as the example of a Worker’s Paradise had better think again. In fact, a number of American Communists have criticized the regime for not being Communist at all–at least in the real Marxist sense.

Comment by CA Sandra on August 16th, 2007 @ 5:46 pm

CA Sandra: I’m certainly not saying that Cuba is a nice place. But more than 40 years of a unilateral embargo haven’t made it any nicer either

Comment by Clif Burns on August 16th, 2007 @ 6:04 pm

Clif Burns:
If Cuba is free to trade with the rest of the world, isn’t it a bit presumptuous to think that the low wages and impoverishment of ordinary Cubans is linked to the embargo?
Rather more likely, they are linked to mismanagement and a failed economic system which has flourished nowhere in the world it has been tried. To anticipate the next objhection, as Cuban Pete indicates, both Vietnam and China have moved away from economic marxism.

Comment by rsnlk on August 16th, 2007 @ 10:45 pm

Of course, rsnlk, you are right — an embargo by a country 60 miles from Cuba has absolutely no impact upon the economic well-being of Cuba. Fortunately for Cuba, shipping costs are unrelated to distance shipped. How silly of me not to realize this.

Of course, since the embargo, therefore, has no economic impact on Cuba, then what is the point of the embargo? What does it accomplish in that case?

Comment by Clif Burns on August 16th, 2007 @ 10:51 pm

Mr. Burns, I see you have introduced new factors. So, here goes:
1. Food, interpreted quite liberally to include items such as lumber, and medicine are not covered by the embargo.
2. Shipping costs may be related to distance shipped, but China doesn’t seem to have any difficulty in stocking our shelves at lower prices than we could ever provide to Cuba. By the way, that was coy.

The embargo was placed on Cuba for seizing millions of dollars of American holdings in Cuba and refusing to pay for it. As the regime continues to refuse to negotiate the point, lifting it would essentially establish the principle that American property in foreign countries can be seized with impunity.

There is another dimension here from my perspective as a Cuban American. It was deemed laudable to apply sanctions in South Africa over apartheid, but a faux embargo against a regime that holds its citizens hostage is somehow wrong.

I do not hope to convince you, but rather I want to make sure that other readers of this blog know that there are two sides to this story. Oh, and I was taught Cuba is ninety miles away.

Comment by rsnlk on August 19th, 2007 @ 10:27 pm

rsnlk, you seem to be all over the place. You say that we need to embargo Cuba to protect some principle about seizing American property (in which case, of course, we need to embargo many more countries) but that it’s okay to ship agricultural products under TSRA. Which is it?

And your South Africa argument is a bit of a straw man. My opposition is to unilateral sanctions, not multilateral sanctions such as were imposed on South Africa. Even so, I have reservations about multilateral sanctions as well inasmuch as they often harm people that are not the intended targets of the sanctions.

Comment by Clif Burns on August 20th, 2007 @ 12:21 am

Forget your foreign policy arguments, this embargo is about electoral votes in Florida (hinging on the Cuban-Americans opposed to Castro). Everything else is just for show.

Comment by Tony Economou on August 23rd, 2007 @ 2:11 am

Anyone care to shed some light on Guantanamo Bay? How do US companies, under the existing US regulatory framework, supply the needs of a US military presence in a country which is the subject of a unilateral embargo?

I’d be interested to know if anyone has had any practical experience in this area and wisdom to share.

Comment by Matthew J. Lancaster on August 24th, 2007 @ 12:00 am

I was in Cuba in June. It’s a sad place, but Old Havana is booming – the hotels were full of young tourists, and the restaurants were doing well. I really enjoyed my stay. I was there under a US Treasury license for journalists. From my perspective, the embargo and sanctions are just ridiculous. We placed them on Cuba because we felt betrayed by its brief liaison with Russian nuclear warheads, and the punishment was well-deserved. 30 years later, it’s just proof we have mntop grown an inch as a nation, and our foreign policy is as bad as always – that’s all it proves. Cuba, meanwhile, does the best it can, struggling forward as mcuh as tourist dollars will permit. There is almost no crime, which is a nice thing, and the people are more open about their lives and circumstances than capitalists would be. It’s efreshing to hear them as they talk constantly – conversation is a dead art hjere, while they’re living in what is almsot a pre-television age. They have tremendous artists and chefs who make do with very little and can really forget about any kind of fame of financial reward, which ironically has taken the money re off and let them bloom, however much in isolation. They are completely unindated by adveretising. To the same degree that we have it absolutely everywhere, they have it nowehere, and that is wonderful. Also, and this is the greatest thing, going to Cuba is very much lkike taking a trip back into the 1950’s. That was an era I really liked, and it was wonderful to travel back in time and be there again. On the expropriations, frankly, the gangsters are all in Miami now and they complain the loudest. Sorry about your casino, Mo Dalitz – that’s life. The United States ahould have a foreign policy uindepndent of all lobbyists, whether for Korea or China or Israel or Cuba – let’s have a foreign policy that is good for all Americans, not just a few. I say, end the sanctions and embargo now and begin a new “Era of Good Feeling” with all our Latin neighbors. Otherwise, let’s watch Venezuela, Bolivia, Ecuador, Peru and others peel away from our sphere of influence into that of homegrown socialists like Chavez, relationships that will then be fully exploited by the Chinese. Just to buttress that, China is Cuba;s strongest ally now – even though there are few Chinese in Cuba, there are three 24-hour Chinese stations on Cuban TV. We’re not any better off vis a vis the Russian influence because the Chinese influence is potentially far worse and far more dangerous, if faer more subtle, long term and insidious.

Comment by Joe Shea on September 2nd, 2007 @ 3:20 am

First of all, I not only respect but love the idea of people like Henry fighting for the Freedom of my Island.
However Henry, the embargo is old news. Listen, unlike you I do have almost my entire family in Cuba, and they and they alone are suffering the consecuense of the strugle between Castro and those whom are keeping the embargo alive.
With out a doubt Castro deserve to die now, with out a doubt he was and is a dictator, but I hardly doubt that him and him alone are responsibles for the destruction of my Island. Castro and his people along those of you whom for years have been fighthing for the Cuba that no longer exist and us, the Cubans like me whom decided to scape the Island instead of stay and fight the goverment are responsible for everything that happen to Cuba.

Henry I am sure you do have the best intentions in your heart when it come to your fight for Cuba, but brother I think you are fighting for the Cuba of your Mom and Dad, and that Cuba is long gone thanks to Castro, thanks to all of those Cuban like your parents whom scape early on, thanks to me for doing the same.

No more embargo please. At this point I don’t give rat shit if Castro people get some or most of my money, all I care if for my family and littler sister to eat while they are alive. (But what do you care, your twins are going to have a great meal every evening here in Miami righgt)

Comment by Willie Suarez on September 4th, 2007 @ 8:53 pm

You refer to the recipinet of the 2002 letter form OFAC as, “probably Travelocity, Orbitz or Expedia”.

I think it actually highly unlikely, based on on my knowledge of the industry (particularly the online market for discounted international airline tickets) and the reference in the OFAC letter to “a business model in which [redacted] acquires inventory at discounted wholesale prices from suppliers for resale at more competitive prices to customers. [Redacted] transactions include the sale of negotiated rate air tickets, hotel rooms and trip packages….”

Orbitz was create by airlines precisely to give them control over pricing, and to avoid what they perceived as a problem of prices to end customers being set by intermediaries (including online and offline travel agencies). Orbitz sells air tickets only at prices published by airlines, and never at prices based on “negotiated rates”. So the recipient of the 2002 letter definitely wasn’t Orbitz.

Particularly since 11 September 2001, Travelocity and Expedia have sold a significant volume of *hotel nights” obtained at negotiated rates, but that segment of their business was small, and definitely not something they would have described (particularly when requesting an OPAC opinion that was isseud in April 2002, and was presumably requested some time earlier) as a significant part of their business model. Moreover, sales of *air tickets* obtained at negotiated rates by Expedia and Travelocity are a small portion of their air ticket sales, were an even smaller portion of their air sales in 2002, and have never been a central part of their business model.

I suspect that the recipient of the 2002 letter was some other travel agency (with an online presence) more focused on the discount market including sales of “consolidator” tickets, rather than an exclusively published-fare agency (Orbitz) or one for whom international air tickets were a minor and low-priority portion of their product mix (Travelocity or Expedia). There are many possible candidates (Priceline would be the largest), and no real clue in the OFAC letter as to which it was.

Comment by Edward Hasbrouck on December 14th, 2008 @ 2:15 pm