Anti-Cuba Law Poses Business Challenge for Miami's Odebrecht
A new law signed May 1 by Florida Gov. Rick Scott (R) banning state and local governments from hiring firms with business activity in Cuba or Syria has put Odebrecht's Coral Gables office in the spotlight over its work in the Caribbean nation.
HB 959 bans Florida public agencies from contracting for goods or services valued at $1 million or more with any firm that has business operations in either of those countries. The state Senate passed the bill by a vote of 39-1; the House of Representatives approved it unanimously.
Scheduled to go into effect July 1, the anti-Cuba law faces potential legal challenges. When Gov. Scott originally signed the bill, he also issued a signing statement that indicated the law would not be enforced, citing the U.S. Supreme Court’s 2000 decision in Crosby v. National Federal Trade Council. That case involved a Massachusetts law that barred agencies from buying goods or services from firms with business in Burma, also known as Myanmar. The court decided unanimously in favor of NFTC, citing the constitution’s Supremacy Clause, which holds that federal law supercedes state legislation.
In reaction to Gov. Scott’s signing of the Florida law, NFTC issued a statement that read, in part: "In Crosby v. NFTC in 2000, the U.S. Supreme Court ruled unanimously that in the case of sanctions, when the federal government has acted, the states are preempted." Because Congress has issued sanctions against Cuba and Syria that do not bar the hiring of firms with business activities in those countries, a state cannot overrule the federal action.
NFTC President Bill Reinsch told Engineering News-Record that the NFTC is awaiting Florida's publication of a list of firms potentially affected by the new law prior to filing suit in this case. While an impacted company would have to be an NFTC member in order for the group to have legal standing to sue, Reinsch expects a private company to take legal action first.
"We think the constitutional issues in the Florida case are the same (as the Massachusetts law)," he said. "The legal analysis that (Gov. Rick Scott) got suggested it was unconstitutional. I can’t think of a lawyer that would come to an opposite conclusion."
Odebrecht's business activity in Cuba came to light last year when the county commission was reviewing the award of a Port of Miami contract to the firm. Though many businesses are expected to be impacted, the law was widely viewed as targeting Odebrecht. The firm reported $122.7 million in 2011 revenue from Florida projects.
Odebrecht officials would not answer ENR's questions about the law or the company's business plans in Cuba. The firm instead issued a lengthy statement that included: "Odebrecht USA is fully committed to complying with all local, state and federal law."
The engineering and construction firm’s Coral Gables office is concluding its work for Miami International Airport's Capital Improvements Program, but was last year tapped to develop and build MIA’s proposed Airport City project. The project—currently under review by the Federal Aviation Administration—is a privately funded mixed-use development that includes hotels, office space and retail development. Odebrecht estimates the value of the project at $800 million.
The U.S. Attorney's office in Miami would not comment.