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Thursday, November 3, 1994 - Page updated at 12:00 AM

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Poorly Enforced Sanctions Botch U.S. Embargo Of Haiti

Knight-Ridder Newspapers

For three years, the United States tried to squeeze Haiti's economy, figuring that a mix of sanctions, threats and proclamations would drive the coup leaders from power.

But the embargo never measured up to the rhetoric, a Miami Herald inquiry shows.

The United States failed to take many steps that it had promised to choke the flow of money and goods to the Haitian dictators and their wealthy supporters.

According to documents and interviews with federal officials, investigators and targets of the sanctions, the U.S. government:

-- Never seized U.S. homes owned by coup supporters, despite a vow to the contrary.

-- Eroded its own embargo by buying baseballs and black-market gasoline from alleged backers of the regime and training military men who worked for it.

-- Subverted its own goals by granting embargo exemptions to U.S. companies and wealthy Haitians.

-- Delayed freezing Haitian leaders' assets for almost 15 months after the coup. By that time, the Bank of Boston found only 50.71 Haitian gourdes, worth about $5.07, in the accounts of Brig. Gen. Philippe Biamby, the Haitian army's chief of staff.

To be sure, the United States did impose penalties during the Haiti embargo, which ended last week. It fined 136 embargo violators $540,000. It confiscated three weather-beaten freighters and seized shiploads of rum, perfume and motor oil smuggled through the Miami River.

But more serious complaints - such as charges that Texaco distributed tankers of fuel - were allegedly left on the back burner.

Now the U.S. attorney's office and the General Accounting Office are examining the Texaco case and the handling of the embargo by the Office of Foreign Assets Control, the little-known agency that enforces sanctions. Investigators want to know if OFAC - or some other agency - bowed to political or business pressures and deliberately avoided taking action against sanction violators.

OFAC says it administered the Haiti embargo "consistent" with instructions from the White House, the State Department and the National Security Council. It didn't run an airtight embargo, because it wasn't told to run an airtight embargo.

"OFAC is not a foreign-policy-making office," agency chief R. Richard Newcomb said.

The scrutiny comes at a time when embargoes are emerging as an increasingly important U.S. foreign-policy tool, deployed from Iraq to Cuba. But the verdict on their effectiveness is mixed.

Many experts say that sanctions rarely force big policy changes. Countries often impose them as symbols of retribution - more for publicity than for pressure. But others credit tough embargoes with bringing the white government of South Africa to the negotiating table, undermining Gen. Manuel Noriega's strength in Panama and nudging Fidel Castro toward free-market reforms.

Haiti, some argue, was one case where sanctions should have worked. It is, after all, a weak country, heavily dependent on the United States.

Lawrence Pezzullo, the former U.S. special envoy to Haiti, attributes the embargo's failure to "a lack of leadership" in the Bush and Clinton administrations.

He said sanctions succeeded only once during the three-year embargo - in the summer of 1993, when an arms and petroleum ban forced Gen. Raoul Cedras to negotiate.

Before and after that summer, Pezzullo said, the White House failed to take serious action.

"They just fuddled around," he said in an interview last week. "We made fools of ourselves, because we didn't go forward with a commitment we made."

Embargo advocates say that leaky sanctions nourished a burgeoning black market that enriched the military regime.

"It provided them with new sources of revenue through their rake-offs on contraband," Sen. Bob Graham, D-Fla., said during a recent Senate hearing on Haiti. "It emboldened them, because they have seen the failure of the international community to carry out its protest against the coup."

Airtight ban - on paper

On Oct. 4, 1991, four days after the military toppled Haitian President Jean-Bertrand Aristide, President Bush froze all Haitian government assets in the United States. Three weeks later, he banned most trade with Haiti.

On paper, it looked airtight.

"We thought the embargo would be over in a couple of months," said Kimberly Ann Elliott, who studies embargoes for the Institute for International Economics in Washington.

Over and over, the government said it was tightening the screws. In November 1992, Bernard Aronson, assistant secretary of state for inter-American affairs, told Congress the administration planned to freeze the U.S. assets of all coup supporters. In June 1993, Clinton-administration officials announced plans to seize that property immediately.

The truth: Not one house was seized; not one lien was filed.

OFAC said it took substantive steps in only one case - it sent a notice to one homeowner telling him that his house could not be sold. It sent similar notices to the owners of 30 vessels, including the three on the Miami River.

OFAC's Newcomb said the government focused its efforts on freezing bank accounts, figuring that people would be unable to get mortgages.

But delays in freezing those accounts allowed people later identified as supporters of the de facto regime to buy and sell property with little fear of punishment.

"I wasn't worried about sanctions," Bernard Sansaricq, a 50-year-old Haitian senator, told The Miami Herald.

Sansaricq wasn't identified as a supporter of the regime until June 1994. By then, he had already bought a $116,000, three-bedroom house in Pembroke Pines, Fla. He put 10 percent down in November 1993. A bank mortgage covered the rest. Sanction created confusion

Individuals' bank accounts weren't frozen until June 1993 - 20 months after the first sanctions were imposed. President Clinton told OFAC to issue lists of "specially designated nationals" - the Haitian military men who supported the coup and the civilians who financed them.

But the new sanctions created confusion.

There were mistakes: Paul Pascal, a pastor, was confused with Paul Pascal, a lieutenant with the Haitian military. The Bank of Boston, at the government's request, froze the account of a man named Jean-Claude Dominique. It turned out that Dominique wasn't in the military - and by the time the bank checked him out, he was dead.

There were omissions: Although the agency listed two Haitian leaders of the paramilitary group Front for the Advancement and Progress of Haitian People (FRAPH), it failed to list FRAPH members who opened offices in New York.

Then - after Clinton briefly lifted sanctions in the wake of what appeared to be a settlement in August 1993 - the administration failed to reimpose many names as promised when the settlement collapsed.

In a letter to Congress, Clinton said sanctions were back in "full force."

In reality, only 16 of the 83 people whose accounts had been frozen in June 1993 were refrozen in October 1993.

The government decided there wasn't enough evidence tying the rest to the coup or that they were now playing a positive role in the country.

U.S. erodes own sanctions

Haiti's biggest moneymaking industry is the assembly-plant business. Nearly 75 percent of the island's exports - like clothing, furniture and baseballs - are assembled in factories.

Within a month of the initial embargo, businessmen began clamoring for the right to continue trading. Within three months, they won a major victory. In February 1992, President Bush allowed assembly plants operating in Haiti to trade with the United States - provided the goods included U.S. parts or raw materials and the companies received licenses from OFAC. Clinton continued the Bush policy for 16 months.

Bit by bit, the United States eroded its own embargo.

"You had a huge loophole early on," said Elliott, the researcher for the Institute for International Economics. "The embargo pretty quickly started unwinding after that."

Among those to get a license: Star Sports, a fledgling Miami-based maker of baseballs and softballs. The company is a subsidiary of Home of Champions S.A., which is co-owned by the Mevs family. The Mevs made their fortune in sugar, soap and shoes.

Star Sports landed contracts with the government. The U.S. General Services Administration agreed to buy up to $75,000 in cowhide-covered balls for federal agencies such as prisons and military installations. Dade County, Fla., signed a three-year, $38,000-a-year contract for red-stitched softballs to be used by Little Leaguers in county parks.

In June 1994, the Treasury Department put the Mevs family on the list of Haitians with assets to be frozen - not because they were coup supporters, Newcomb says now, but because of their "status" among Haiti's elite.

Nobody ever told the General Services Administration or Dade County. "We have no indication in our files that the Mevs are involved," the GSA's Pat Loomis said.

Said Gary Fabrikant, Dade's assistant director of procurement: "There was never any discussion about the Haiti embargo when the contracts were awarded."

In retrospect, the assembly-plant waiver was what a top State Department official called "a very bad idea," an invitation to defiance by prominent supporters of Haiti's regime and a license for the government to grant more licenses.

OFAC, in consultation with the White House, chipped away at the embargo by issuing licenses that authorized shipments of eggs, propane, school supplies and generators. One business got a license to import a religious statue. Explanations of exceptions

In explaining embargo exceptions, Bush and Clinton usually said they wanted to spare Haiti's poor from more hardship.

But some explanations bordered on the bizarre.

Take mangoes. The government said it would allow Haitian goods made at least partly of raw materials shipped from the United States to Haiti to be imported back to America. One grower argued that his Haitian mango trees had American branches - grafted on. Eventually, the United States granted licenses not only for mangoes but also for limes and breadfruit.

The U.S. government even had exemptions for the U.S. government. In Port-au-Prince, embassy staffers were allowed to buy black-market gas and rent houses from Haitians suspected of supporting the regime.

OFAC was flooded with complaints.

None was more eloquent than Antoine Izmery's.

Izmery, a wealthy Haitian businessman and Aristide supporter, faxed letter after letter to the embargo agency. In sprawling black script, he named smugglers, offered their phone numbers, attached bills of lading.

As time passed, Izmery grew bitter.

"It is me again questioning myself if I am doing my job for you," he wrote on Oct. 8, 1992. Accusing the United States of complicity with the military, he said, "The less you act, the more I feel I am right!"

On Sept. 11, 1993, thugs dragged Izmery from a church service and shot him dead. The State Department lists him as one of 3,000 killed during Gen. Raoul Cedras' three-year reign of terror.

"We have responded to repeated violations with silence," OFAC policy chief John Roth complained in a July 1992 memo to Newcomb, his boss.

Rep. John Conyers, D-Mich., asked the GAO to investigate.

"It didn't take a genius to see that the embargo was being violated," Conyers said.

As the sanctions dragged on, thousands of barrels of oil flowed into Port-au-Prince aboard foreign vessels. Texaco distributed fuel from at least 26 tankers brought in by the Haitian regime. A Texaco spokesman says the company distributed the fuel "under duress" from Haiti's military.

Shippers diverted goods to Port-au-Prince from third countries. Suppliers hid motor oil under legal loads of rice and flour. Even goods intended for Hurricane Andrew victims may have ended up for sale on the streets of Port-au-Prince.

All told, the U.S. spent $14.9 million trying to enforce the embargo. OFAC collected fines from nine banks, 55 companies, 49 vessels and 23 people for violations. The agency referred some cases for criminal investigation. But prosecutors say these cases are rarely successful because vague regulations allow defendants plenty of wiggle room.

One of the biggest problems was the agency's lack of jurisdiction over foreign countries. American efforts to freeze bank accounts had little impact when the Haitian elite could simply move money into other countries.

In November 1993, after Cedras reneged on an agreement to step down from power, the Clinton administration announced plans to close that loophole. It promised to get, through the United Nations, an international freeze on assets and ban on travel if Cedras refused to step down by Jan. 15, 1994.

Jan. 15 came and went. The Clinton administration backed down.

Pezzullo, the special envoy, was outraged.

"You don't reach an agreement and say, `I'm going to be tough,' and the moment it's your time to make the input, run for the high grass," he said.

Under fire for insisting that Aristide compromise with the Haitian military, Pezzullo was forced to resign last April.

Two months later, the U.S. government cracked down.

Clinton banned financial transactions of more than $50 a month. And the administration promised better enforcement: more patrols, more equipment, more night-vision goggles for U.S. monitors trying to stop smugglers.

By September, the embargo was the tightest it had ever been, and the military still wouldn't budge. It was time for something tougher.

President Clinton ordered up the troops.

Copyright (c) 1994 Seattle Times Company, All Rights Reserved.

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