Jul

25

Your Tax Dollars At Work


Posted by Clif Burns at 9:15 pm on July 25, 2012
Category: OFAC

Zachary Sanders
ABOVE: Zachary Sanders

A long time ago in a galaxy far, far away, a young American teaching English in Mexico decided to take a trip to Cuba. Today, after fourteen years of legal maneuvering with the Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the young American, now a middle-aged lawyer, threw in the towel and agreed to give OFAC $6,500 to atone for his sins.

We reported on the travels and travails of Zachary Sanders, harmless tourist and OFAC target, back in 2009, and you can get more of the details of what originally happened in that post. The shorter version is that by the time OFAC got around to filing anything against Sanders, the five-year statute of limitations on his travel to Cuba had passed so they went after him for not answering a letter demanding incriminating details of his jaunt to the most dangerous country ever on the face of the earth. (Apparently OFAC’s copy of the Bill of Rights had the Fifth Amendment excised somewhere along the way.)

OFAC won here not because it was right but because it was persistent, not because it was fair but because it had an unlimited amount of the taxpayers’ money and Sanders had his salary as a public interest lawyer, not because it was defending the country against terrorists but because it bore a grudge against a little guy who wanted to drink a daiquiri at El Floridita.

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6 Comments:


A) Thank goodness for the new regulations that allowed me to go to Cuba legally this year.
B) Imagine how much good an additional $6,500 in humanitarian aid would do.
C) The grudge we bear is really, I think, against a now-aged revolutionary whose only foreign invasions have been education and medical care.

Comment by Laura French on July 26th, 2012 @ 8:52 am

Unfortunately, the same can be said of most of OFAC’s victims. They cut gentlemen’s agreements with large financial institutions that were knowingly violating OFAC regulations, as evidenced by stripping data out of wire transfers and other communications, while going after individuals and small businesses as though they (OFAC) were the Spanish Inquisition.

Comment by Hillbilly on July 26th, 2012 @ 10:01 am

With great respect to my learned colleagues, it seems to be a reasonable penalty. I made the following comments as “FormerOFAC” back in 2009, behind which I still stand:

Another ex OFAC guy weighing in. I always thought of the so-called “602 letter” as essentially an administrative subpoena. A response is compulsory where the respondent has an interest in property subject to a sanctions program, or as 31 CFR 501.602 puts it:

Every person is required to furnish … complete information … relative to any property in which any foreign country or any national thereof has any interest of any nature whatsoever, direct or indirect.

*****

The cigars triggered jurisdiction, I’m wagering. Regarding the 5th Amendment, I think the proper way forward would have been to respond by invoking the privilege. It seems that the complete lack of response is what is being construed as the administrative violation. But I confess, I’m a drive-by commentator who has not digested all the pertinent facts, so add a grain of salt.

AND:

One more thing: personally I concede the utter silliness of enforcing the Cuban embargo in any manner, especially under what appear to be all-too-typically picayune circumstances for OFAC’s Civil Penalties Division. These guys seem to breath life in the old axiom, “tripping over quarters to pick up nickels….”

Perhaps, though, the moral is that when OFAC has the arguably legitimate authority to compel the production of information (even if the response is pleading the 5th), the case was meant to confirm the agency’s investigative powers. Just spitballing….

John

Comment by John Pisa-Relli on July 26th, 2012 @ 12:16 pm

OFAC’s mission statement reads: “[OFAC] enforces economic and trade sanctions … against threats to the national security, foreign policy or economy of the United States.” Please explain how this mission is accomplished by pursuing a hapless hippy backpacker for 14 years, while allowing U.S. corporations to pay minimal fines for such atrocities as say, laundering Mexican drug cartel money (http://www.guardian.co.uk/world/2011/apr/03/us-bank-mexico-drug-gangs/print)?! It’s disgraceful!

Comment by nask on July 26th, 2012 @ 12:27 pm

The Obama Administration would serve its own and the country’s interests if it denied to OFAC the power of second guessing travel to Cuba. That can be done by granting for all people to people, study, performance and conference travelers the same self-attesting general license that is given to Cuban Americans, universities and religious organizations.

John McAuliff
Fund for Reconciliation and Development

Comment by John McAuliff on July 31st, 2012 @ 11:20 am

I attended a BIS export training in Miami in 2009. One of the presenters was an OFAC officer who said at the beginning of her presentation that she saw a line of people at the airport who were preparing to board a plane to Cuba, and if she’d “had the time” she would’ve stopped them all to inspect their licenses.

Comment by Chris W. on August 6th, 2012 @ 1:07 pm