Senate Finance Panel Gets Battle of Rum

Posted December 11, 2007 at 6:12pm

A decade-long trademark brawl between French liquor company Pernod Ricard and its rival Bacardi tumbled into the Senate Finance Committee hearing room on Tuesday, leaving Pernod Ricard lobbyists crying foul after a witness answered a question relating to the dispute without disclosing his connection to Bacardi.

The hearing, which largely focused on promoting trade and medical supplies to Cuba, veered into the trademark issue when Sen. Jim Bunning (R-Ky.) brought up the battle for the U.S. trademark for “Havana Club” rum. The two companies both claim ownership rights to the trademark.

After calling language in Cuba trade legislation by Finance Chairman Max Baucus (D-Mont.) “a virtual gift” to the Cuban government, Bunning asked University of Miami professor Jaime Suchlicki his “candid” opinion on the matter.

Suchlicki vehemently opposed Baucus’ proposal to repeal Section 211 of the 1998 omnibus appropriations bill — which took the trademark dispute out of the courts — calling such a move a “gift that Cuba has not earned.”

With those words, Suchlicki stepped into the middle of a lobbying battle that has both sides trying to put pressure on Congress to put an end to the dispute. Section 211 language, Pernod Ricard lobbyists say, was slipped into the 1998 bill at the last minute, giving Bacardi a leg up in their litigation with Pernod Ricard over the “Havana Club” label. Meanwhile, Bacardi USA spokeswoman Patricia Neal argued in an e-mail that Section 211 ensures trademarks that were confiscated by the Cuban government are not recognized by the U.S. courts.

“This law is founded on the basic and long-standing principle of non-recognition of foreign confiscations, which is accepted worldwide,” Neal wrote.

Suchlicki did not disclose his connections with Bacardi in his response to Bunning.

In the testimony that he submitted to the committee, Suchlicki omitted that his position is endowed as the Emilio Bacardi Moreau professor of History at the University of Miami. Suchlicki also serves as director of the Institute for Cuban and Cuban-American Studies at the university.

The institute also features “Casa Bacardi,” which, according to the institute’s Web site, is an interactive center highlighting Cuban history and culture. The doors to Casa Bacardi feature the Bacardi liquor logo and the institute was made possible through a $1 million donation by the Bacardi Family Foundation, according to press reports.

Suchlicki was unavailable for comment Tuesday afternoon because he was on a flight to Miami.

Pernod lobbyists questioned Suchlicki testifying on the issue without first coming forward to the committee with his Bacardi ties.

“I’m kind of surprised that he would do that given the experience he had in 2004 with the Judiciary Committee when he submitted something for the record and his affiliation with Bacardi became known shortly thereafter,” said Mark Orr, Pernod Ricard USA’s chief lobbyist.

In 2004, Suchlicki provided testimony to the Senate Judiciary Committee for its hearing on Section 211. In the letter to the committee, Suchlicki identified himself as a professor of history at the University of Miami. He later caught flak in media articles for failing to disclose the connection.

But committee staffers contend that all sides of an issue need to be heard and that the endowment of Suchlicki’s chair at the University of Miami is public record.

“In working with Senator [Chuck] Grassley’s office to select witnesses for this hearing, we sought to have all points of view represented on the panel — as there are very divergent views on Cuba among Committee members,” a Baucus aide wrote in an e-mail. “Mr. Suchlicki is a respected professor who represents a position that differs significantly from Senator Baucus’. Section 211 was one of the many issues that the hearing, and this witness, addressed.”

“If a conflict of interest does exist for any hearing witness, that should be disclosed in the course of answering related questions,” the aide wrote.

Ethics experts agree.

“In the spirit of full disclosure it would have been better for that information to be known to the committee,” said Kenneth Gross, a legal ethics expert at Skadden, Arps, Slate, Meagher & Flom, of Suchlicki’s ties. “But I don’t think it runs afoul of any legal restriction or any explicit disclosures that the committee seeks prior to testimony as much as I recall.”

Bunning’s spokesman Mike Reynard said Bunning doesn’t know Suchlicki and he “just has an interest in Cuba.” Bunning has been an advocate of maintaining the Cuba trade embargo and is a co-sponsor of legislation introduced by Sen. Pete Domenici (R-N.M.).