Cuba bristles at lawsuits, threatens to end U.S. phone links

             By JUAN O. TAMAYO
             Herald Staff Writer

             A Cuban government official has threatened to cut off direct telephone links with
             the United States if either of two U.S. judges, including one in Miami, rules in favor
             of groups involved in suits against Cuba.

             ``This is a very serious threat, but we're looking for ways to resolve this issue and
             we believe we will be successful, said one U.S. government official involved in
             last-minute talks on how to defuse the confrontation.

             The threat was made by National Assembly chief Ricardo Alarcon in a speech
             Friday in which he rejected several measures to ease U.S. commercial and travel
             restrictions on Cuba announced by Washington last Tuesday.

             ``If they do not pay us, we will not do it for free, Alarcon said of Cuba's income
             from U.S.-Cuba telephone links after noting that two cases now before U.S.
             courts could significantly affect Cuba's income.

             One involves a suit before U.S. District Judge James Lawrence King in Miami,
             who in 1997 awarded $187 million to relatives of three Brothers to the Rescue
             pilots killed when Cuban MiGs shot down their airplanes the previous year.

             Trademark at issue

             The second involves a case in New York federal court challenging Cuba's 1995
             sale of the Havana Club rum trademark to the French liquor giant Pernod Ricard.
             The trademark once belonged to a Cuban family now in exile.

             Family attempts to collect on King's award are opposed by State Department
             officials, who argue that the relatives cannot access an estimated $150 million in
             Cuban funds frozen and held under escrow by the U.S. government since
             Washington slapped a trade embargo on Cuba.

             Part of that money came from AT&T payments for Cuba's share of international
             telephone calls going back as far as 1960.

             But King late last year asked lawyers for the relatives and the U.S. government --
             the Cuban government did not defend itself in his court -- to file position papers on
             whether the relatives could lay claim to new monies being earned by Cuba for
             international telephone service.

             That amounted to $60 million to $70 million in 1997, the last year for which official
             figures are available, said Enrique Lopez, head of the Coral Gables
             telecommunications consulting firm AKL Group. That figure may have grown by
             30 percent last year, he added.

             Direct telephone links between the United States and Cuba, once routed through
             Canada, Mexico and even Italy, were restored in 1993 under provisions of the
             so-called Torricelli Act.

             Recent legislation

             The suit over the Havana Club trademark involves a little-known provision in a
             U.S. budget bill last year that bars U.S. courts from upholding the trademarks
             used ``in connection with a Cuban business seized by President Fidel Castro's
             government.

             The provision helped Bacardi-Martini U.S.A., which has produced its own
             Havana Club-brand rum under a deal with the exiled Arechabala family, owner of
             the brand in Cuba in the 1950s.

             Castro's government seized the Havana Club distillery in the 1960s and in 1995
             sold the trademark to a Luxembourg-based joint venture with Pernod Ricard.

             Cuba had long before registered the trademark in Washington, and the
             Luxembourg firm registered the transfer, apparently hoping to be able to distribute
             the rum in the United States if the U.S. embargo were ever lifted.

             But rival rum maker Bacardi-Martini objected, winning a court battle in New York
             over the transfer and then pressing on to challenge the trademark's basic
             registration. The next court hearing is set for Jan. 19.

             ``We do not want to see direct phone calls to and from Cuba disturbed at all, a
             U.S. government official said. ``To us, that is the best way of informing Cubans on
             what is going on outside the government-controlled circles of information.