By LARRY LEBOWITZ | Miami Herald

(original title Company’s links to Cuba could dig port tunnel’s grave)

The future of a proposed $1 billion tunnel to the Port of Miami may be in limbo because the preferred contractor has close business ties to the Castro government, The Miami Herald has learned.

An affiliate of the French construction giant Bouygues Travaux Publics—heading a team that was the low bidder for the tunnel project—has built 11 high-end resorts in joint ventures with the Cuban military since 1999, according to a French government report and the company’s own website.

Cuban President Fidel Castro also mentioned the Bouygues affiliate in a 2003 speech during the opening of Playa Pesquero, a five-star hotel that the firm built in the northeastern province of Holguín, according to the official government newspaper Granma.

Lawyers for Bouygues strongly denied any wrongdoing, but the revelation of the Cuba connection could unravel a complicated financing package that is critically dependent on state, county and city tax dollars. The tunnel would link the port with the MacArthur Causeway and route thousands of trucks a day away from crowded downtown streets.

’‘I think once the public becomes fully aware of this, especially at the countycommission level, then Bouygues is going to have a very hard time winning this contract,’‘ said Miami attorney Nicolas Gutierrez, who has raised the issue about Bouygues’ possible violations of the Helms-Burton Act with officials in Miami, Tallahassee and Washington, D.C.

BACKGROUND

Gutierrez, who helped write the law, represents hundreds of descendants of the Sanchez-Hill family, including many in South Florida, whose ownership of undeveloped beachfront and sugar plantations in eastern Cuba dated to the 1850s. Gutierrez said the Castro regime expropriated the land in the early 1960s, including the beachfront spot where Playa Pesquero was developed.

Jean Francois Lalonde, a Bouygues executive in Montreal who is working on the tunnel project, referred calls to the corporate press office in Paris, where officials did not return a message left with a secretary.

KEY DISTINCTION

Bouygues’ Washington attorney, Ignacio Sanchez, who also worked on Helms-Burton, said in an April letter to Gutierrez that the parent company never participated in the Cuban hotel construction project.

The distinction is an important one legally for firms that may face allegations of violating the 1996 law, which extended the U.S. trade embargo against Cuba to cover foreign companies.

Also known as the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act, Helms-Burton gave U.S. nationals the right to seek damages from foreign companies allegedly ’‘trafficking’‘ in properties expropriated by the Cuban government. But the last two presidential administrations have repeatedly waived enforcement of the toughest parts of the law.

Last week, a Florida Department of Transportation committee selected the team led by Bouygues and global investment bankers Babcock & Brown to finance, design, build, operate and maintain the tunnel for 35 years.

`BEST PRICE’

Three of the four panelists are local Cuban Americans. One of them insisted Thursday that the decision should not involve exile politics.

’‘Look, I’m as sensitive to this issue as anyone,’‘ said Johnny Martinez, chief of the Miami-area FDOT district and chair of the selection committee. ``But this team was selected based on the technical and financial merits. They were, by far, the best price for the job. And it’s going to be a very expensive job.’‘

The proposed port tunnel is an unprecedented public-private venture in Florida, but part of a growing trend for large-scale infrastructure projects around the world.

State taxpayers would repay the private vendors for half of the construction and contingency budgets and all of the operation and maintenance. The state has its money lined up.

LOCAL MONEY

But the final contracts haven’t been negotiated because two local governments still haven’t firmly committed to their half of the construction and contingency budgets—about $382 million from Miami-Dade County and $50 million from the city of Miami.

Gutierrez (the Miami attorney) and others expect a full-scale lobbying firestorm at County Hall to prevent Miami-Dade from paying millions to a firm whose affiliate has done business with Cuba.

POLITICS

Both commissions are heavily influenced by large voting blocs of Cuban exiles and their U.S.-born descendants. Seven of the 13 county commissioners and Mayor Carlos Alvarez were either born in Cuba or raised by Cuban immigrants.

Miami-Dade used to require prospective vendors to sign affidavits declaring that they have no business ties to Cuba. But the ’‘Cuba affidavit’‘ was struck down by a 2000 U.S. Supreme Court ruling and a subsequent Miami federal-court injunction.

FDOT’s Martinez said the tunnel won’t work if the city or county backs out.

’‘Look, if the city or county backs away from the project, there is no project,’‘ Martinez said. ``We don’t just go to the No. 2 [ranked team]. With no money, there is no deal.’‘

Martinez said the state never asks whether bidders have done business with Cuba. FDOT vendors are asked to sign an affidavit saying they are in compliance with all state and local laws.

Because no federal funds are being used for the tunnel, the bidders weren’t required to declare that they are complying with federal law, Martinez said.

BACKUP PLANS

With the controversy stirring up, Martinez said Thursday night that FDOT was starting to research whether the other two international teams of tunnel bidders also have business ties to Cuba.

Sanchez, the Bouygues attorney, said they do.

He said his client is ``perplexed by the focus on its affiliate’s work in Cuba, since our client is aware of trade press articles and other publicly available information that appear to show that the other two bidders on the Port of Miami tunnel project have invested in Cuba.’‘