Mexican hotel 'reopens' after US-Cuban spat

A controversial decision to close Mexico City's Sheraton was reversed late Wednesday.

Bemused guests had to sneak in through side doors, throngs of reporters camped out front, and big signs reading "Clausurado" - closed down - were plastered on the windows. Still, Mexico City's landmark Sheraton Maria Isabel Hotel, caught in the midst of a diplomatic flap involving the US, Mexico, and Cuba, tried to keep up an air of normalcy this week.

The closed signs were removed late Wednesday after city officials reversed their controversial Tuesday decision to immediately close the hotel for trumped up code violations. Mexican businessmen and tourism officials welcomed the reversal, fearing the shutdown would have cost hundreds of jobs and scared off investors.

But a question lingers over the episode: Was this a one-off event or is Washington now ramping up pressure on US companies doing business with Cuba - even if they're a subsidiary operating on Mexican soil or some other foreign land?

The brouhaha started last month when American and Cuban guests of the US-Cuba Trade Association arrived at the hotel for a three-day seminar on investment opportunities in Cuba's petroleum industry. At the close of the second day of meetings on Feb. 3, Kirby Jones, head of the association, was called aside by the Sheraton's manager and informed the Cubans - 16 in all - would have to check out immediately.

The US Treasury Department Office of Foreign Assets Control, Jones was told, had contacted Starwood Hotels & Resorts Inc, of White Plains, N.Y., which owns the Sheraton, to complain that taking money from the Cubans violated the longstanding US embargo against the communist-ruled island. The Treasury Department, which enforces this embargo, cited the 1996 Helms-Burton Act, which extends related penalties - that could reach up to half a million dollars in fines - to US companies operating on foreign soil.

"My jaw dropped," says Jones, who has arranged nine similar such conferences - most at sister Sheraton hotels in Cancun - over the years. "I was shocked."

He was not the only one. After vacating their rooms and moving to a nearby hotel, the Cubans lodged a complaint with the Mexican government, calling the expulsion a "mean action" against Cuba, and a "trampling" of the sovereignty of the Mexican people. They also demanded their deposits back, which were confiscated, and, they claimed, handed over to the US Treasury Department.

"The tentacles of the blockade and the criminal economic war of the government of the US against Cuba are ready to extend to any corner of the planet, to the detriment of the sovereignty and legislation of other states," the official Cuban daily Granma said in a recent editorial.

Many Mexicans are just as outraged. "Our national honor has been sullied," wrote the newspaper Reforma, calling on the government to speak out against the US action and punish the hotel for discriminating against the guests.

Foreign Minister Luis Ernesto Derbez initially said the government would not intervene, but soon, in the face of mounting criticism, he said the hotel chain had shown a "disregard for Mexican law" that could lead to "appropriate sanctions." The Sheraton Hotel, he clarified, cannot attempt to enforce US law in Mexican territory.

The US embassy, situated a block away from the Sheraton, refused to comment on events. But, in Washington, State Department spokesman Sean McCormack said Wednesday that "US law would apply to US corporations or subsidiaries of US corporations no matter where they may be."

The dispute, which is playing out in papers here daily, feeds into bilateral tensions between Mexico and the US, which have been growing over immigration and border violence in recent months. Also, with Mexico in full campaign mode ahead of the July presidential election, the hotel incident - and US-Mexican relations in general - could become political ammunition for some of the candidates.

In fact, before the Mexican government could do anything about the problem, the Cuauhtémoc borough where the hotel is located took independent action.

On Tuesday, borough president Virginia Jaramillo Flores, a member of presidential candidate Manuel Lopez Obrador's left-leaning Democratic Revolution Party, which alleges that the conservative government of President Vicente Fox has been too compliant with US policy, ordered the hotel closed.

The reason given: 16 "violations of city building codes," including failing to have Braille writing on the menus, and the absence of anti-skid strips on 10 percent of the stairs. She became aware of these violations, Ms. Jaramillo says, "because of the controversy over the Cubans."

Jaramillo initially ordered the hotel to move its guests out within 24 hours, close down, and pay a $15,000 fine.

The move was popular among many Mexicans, but business groups were not happy.

"They have used absurd pretexts to justify the closure of the hotel," charged Tourism Secretary Rodolfo Elizondo in a statement Tuesday. "We do everything to get tourists here, and then these political games ruin everything," added Jorge Hernandez Delgado, president of the Mexican Association of Travel Agents.

As people here hold their breath for the next chapter in the saga, Seth Oliphant, a Manhattan businessman staying at the Sheraton this week, makes his way through the lobby in gym shorts and a tank top.

He says he hasn't been flustered by all the commotion and has no intention of checking out early. "The pool is still open, everything is fine. If you are from New York, you are used to strange things like this happening."

• Ms. Harman is Latin America correspondent for the Monitor and USA Today.