Tampa, St. Petersburg families seek payback for seized Cuban land

The heirs of a mob legend are among two local families fighting to add to claims totaling $1.9B.
Published June 24 2016
Updated June 27 2016

Meyer Lansky was a Mafioso who owned a Cuban casino where Americans loved to gamble.

Burke Osborne Hedges, who operated Cuba's largest textile company, was revered as a boss who provided free health care and high wages.

Despite their differences, both men were lumped together by Fidel Castro as symbols of the corrupt government he battled to overthrow — Americans who amassed wealth at the expense of Cuban citizens.

Five decades later, long after they passed away, the two men and descendants who live in the Tampa Bay area are linked once again by their Cuba connections.

The families want to add properties they once owned in the island nation to $1.9 billion in claims filed by U.S. citizens over assets seized by the communist government.

What distinguishes the Lansky and Hedges claims are that they both missed a U.S. government deadline to have their losses certified as legitimate. The U.S. and Cuban governments are negotiating a lump settlement for certified claims.

Both families, however, reject the idea that it's too late for payback.

"If we don't fight, it is the same as saying it's okay to take something that doesn't belong to you," said Burke Francisco Hedges, a Puerto Rican-born St. Petersburg man whose father, Burke Osborne Hedges, fled Cuba and left the family textile empire behind in 1959. "We're fighters. We won't quit."

The Hedges family lost more than 20 properties valued at $50 million, including a textile factory and ranch.

Lansky, the Russian-born New York City gangster immortalized as the fictional Hyman Roth in the movie Godfather II, lost the Habana Riviera hotel and casino. His claim is worth an estimated $8 million.

If their losses were included on the list of 5,913 certified claims filed by Americans, Hedges would rank in the top 12 for total worth. Lansky would make the top 40.

Burke Osborne Hedges' widow, Maritza Hedges Smith, and son, Burke Francisco Hedges, who now live in the St. Petersburg area, recently requested an opportunity to file a belated claim with the U.S. government.

Lansky's heirs — daughter Sandra Lombardo and grandson Gary Rapoport, both living in Tampa — have been asking for the same opportunity. For seven months, the answer has been no.

"The government has basically told me tough luck," Rapoport said. "I'm furious. I guess there is a deadline for the government to protect its citizens."

Still, Rapoport feels energized knowing another family with much at stake in the issue has joined the cause. He said he hopes others follow their lead and put added pressure on the United States.

Neither family could explain why a claim was not submitted by the deadline.

But that shouldn't matter, said Jason Poblete, a Virginia-based attorney specializing in U.S.-Cuba policy.

Through 1972, the U.S. Foreign Claims Settlement Commission accepted proof of losses for Cuban properties that been nationalized.

Later, from 2005 through 2006, the commission reconvened to consider properties nationalized in Cuba after 1967.

That set a precedent that the claims program can be reopened, Poblete said.

"It will signal to foreign investors and governments around that world, that the U.S. will stand by its taxpayers, as long as it takes, anywhere foreign governments take property without compensation," he said.

One factor that might complicate claims by the Hedges and Lansky families is a clause in the Cuban Constitution barring compensation to any associates of former Cuban President Fulgencio Batista, who was overthrown by the Castro revolution.

Cuba could argue this ban applies to the Tampa Bay families.

Meyer Lansky worked with associates, including Tampa's mafia don Santo Trafficante Jr., to turn Havana into the top Caribbean destination for gambling. Lansky also was infamous for converting organized crime in the United States from regional operations into a national syndicate.

The Hedges family scoffs at the notion that Batista was behind their success in Cuba.

They point to articles published in the early 1940s in Fortune and Reader's Digest saying the family's textile company, Textilera Ariguanabo, was the largest in Cuba before Batista was president and that it known for taking care of employees.

"The company was loved," said Smith, Hedges' widow. "It wasn't an enemy."

Another complication is citizenship status.

Smith is a native of Cuba. Her late husband, Burke Osborne Hedges, who was born in New York, became a dual U.S.-Cuban citizen and served as the island nation's ambassador to Brazil.

Under U.S. immigration law in the late 1950s, taking a policy-making position with the Cuban government might have stripped him of his American citizenship.

For a claim to be certified, the properties in question had to be owned by someone who was a U.S. citizen at the time of the loss.

"My dad never gave up his citizenship and I will fight that," Burke Francisco Hedges said.

If he's proven wrong, he may have other options.

Under the Helms-Burton Act of 1996, signed by then-President Bill Clinton and which codified the Cuba embargo against travel and trade, a clause known as Title III allows Cuban-Americans as well as U.S. citizens to file civil lawsuits against companies using expropriated properties for profit.

Every president since then, however, has suspended Title III — presumably to avoid lawsuits by Americans against companies from friendly nations doing business in Cuba.

Lansky's hotel is now a state-run hotel in Havana.

The Hedges' losses include a 30,000-acre ranch in the Cuban province of Pinar del Rio. The family doesn't know what, if anything, stands on the other properties.

The Cuban government, or current or future private investors may decide on their own to compensate the families to avoid future legal entanglements should a president one day decide against suspending Title III, Poblete said.

Another route the claimants might take is invoking a U.S. policy that allows for suspension of the sovereign immunity enjoyed by foreign governments in cases where these nations commit an action affecting U.S. commercial interests. This would enable Americans to file suit against the nations in civil court.

"Taking a company owned by someone in the United States falls under this," said Charles Camp, a Washington, D.C., attorney who specializes in international commercial disputes. "The difficulty would be collecting.

If Cuba were found guilty and failed to pay, plaintiffs could try to seize anything belonging to the Communist government that makes its way into the United States — money transfers, for example, or famous Cuban products such as the cigar and rum.

This means that even if the embargo is lifted, these products might not be available on U.S. shelves until judgments are settled.

Don't expect the Hedges or Lanky families to feel sorry for U.S. consumers.

"My family built something," Burke Francisco Hedges said. "Castro stole it. We want it back."

Contact Paul Guzzo at pguzzo@tampabay.com or (813) 226-3394. Follow @PGuzzoTimes.

 
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