Mexico Says Closure Possible for U.S.-Owned Hotel in Cuba Flap

Mexico issued a formal complaint on Tuesday against an American-owned hotel that expelled Cuban representatives attending a meeting with U.S. energy executives, saying the company violated investment and trade protection laws.

An official with the U.S. Treasury Department confirmed that the Bush administration pressured the Hotel Maria Isabel Sheraton in Mexico City to comply with the U.S. embargo against business with Cuba or Cubans. The meeting was moved to a Mexican-owned hotel Saturday.

Mexico's Foreign Relations Department said Tuesday it had formally started a complaint process against the Sheraton for violating investment and trade protection laws, and that the hotel would have 15 days to respond. The hotel could face fines of nearly $500,000 or even be shut down, officials said.

"I think that there was evident contempt for Mexican law on the part of the Hotel Maria Isabel Sheraton ... and it is going to be punished for discrimination, consumer fraud and, moreover, for applying laws that do not apply in Mexico," Foreign Relations Secretary Luis Ernesto Derbez told reporters in London, where he is on an official visit.

Sheraton officials in Mexico City have declined to comment.

About 30 people protested outside the hotel on Tuesday, waving Mexican and Cuban flags and yelling "Get out Yankees!" The demonstrators plastered the glass doors with signs reading "Shut down" and "Closed for bowing to U.S. imperialism and harming national sovereignty."

U.S. efforts to extend its embargo of Cuba across international borders led to a burst of patriotic indignation in Mexico, Canada and other countries in 1996, producing "antidote laws" meant to outlaw compliance with the U.S. measures.

For the most part, the laws went largely unenforced. But now the U.S.-owned Starwood Hotels & Resorts Worldwide Inc. finds itself trapped between a U.S. government intent on punishing Cuba and a Mexican government fearful of seeming weak in an election year.

Other U.S. companies could face a similar dilemma.

State Department spokesman Sean McCormack said the United States had been contacted by Mexico regarding the incident. He declined to give more details.

Kirby Jones, president of the U.S.-Cuba Trade Association, which hosted the event, noted that a Starwood-owned hotel in Cancun, Mexico, had hosted similar conferences between Cuban officials and U.S. business representatives without incident.

The three-day energy meeting, which wrapped up Saturday, was the first private-sector oil summit between Cuba and the United States.