Mexico says it could fine or close American-owned hotel that expelled businessmen

MEXICO CITY -- Mexico issued a complaint Tuesday against an American-owned hotel that -- under pressure from the U.S. government -- expelled a group of Cuban businessmen meeting with U.S. energy executives, saying the company violated investment and trade protection laws.

The U.S. Treasury Department confirmed that the Hotel Maria Isabel Sheraton in Mexico City was told to expel the Cuban delegation in compliance with the U.S. embargo against business with Cuba or Cubans. The meeting was moved to a Mexican-owned hotel Saturday.

A subsidiary

"The hotel in Mexico City is a U.S. subsidiary, and therefore prohibited from providing a service to Cuba or Cuban nationals," said Brookly McLaughlin, a spokesman for the department's Office of Foreign Assets Control. He was referring to the Helms-Burton law, which tightened U.S. trade sanctions first imposed against Cuba in 1961.

"The hotel acted in accordance with U.S. sanctions," he said.

The hotel -- part of the chain of Starwood Hotels & Resorts Worldwide Inc. -- said in a statement it "deeply regrets this incident and any inconvenience it may have caused."

The statement said Starwood's policy "is not to discriminate against any person because of their nationality or any other reason, and to always respect the laws of countries where its hotels are located."

Mexican Foreign Relations Secretary Luis Ernesto Derbez said the Mexican government is considering a diplomatic complaint against the United States in the case.

He said his department 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," Derbez told reporters in London, where he is on an official visit.

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 hotel chain 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.