SECTION: BUSINESS; Pg. 1D;

LENGTH: 710 words

HEADLINE: Castro isn't threatening, Hagel says The Bush administration says trade with Cuba would be risky.

BYLINE: By Jake Thompson

SOURCE: WORLD-HERALD BUREAU

DATELINE: Washington

BODY:
The Bush administration has attacked growing congressional support for lifting sanctions against Cuba by arguing it is a poor credit risk, a small-potatoes trading partner and a possible terrorist threat to the United States.

Otto Reich, the State Department's assistant secretary for the Western Hemisphere, last week laid out a case against overtures to Cuba and its longtime president, Fidel Castro.

"Castro has supported terrorist groups in every country in this hemisphere except Mexico," Reich told reporters Thursday. "So he is a terrorist." Sen. Chuck Hagel, a main sponsor of Senate legislation to lift economic sanctions on Cuba, countered Reich on Friday, saying that to term Castro a threat is "just goofy."

"This is a toothless old dinosaur," the Nebraska Republican added.

Reich said that members of Congress listen too much to farm groups like the American Farm Bureau Federation, a strong proponent of trade with Cuba.

Those supporters overlook Cuba's economic and human-rights track record, he said.

Cuba practices a kind of Ponzi scheme by using foreign credits from one country to buy goods from another, then never repaying its debts, Reich said. He released State Department figures showing that Cuba has more than $ 11 billion in unpaid debts to various European countries, another $ 1.7 billion in debts to Latin American countries and $ 1.7 billion in unpaid debts to Japan.

Reich said giving Cuba credits to buy U.S. goods will result in American taxpayers ultimately covering Cuba's bad debts.

"I really think the American public will end up holding the bag, an empty bag," Reich said.

Instead of considering exports to Cuba, which has a low per-capita income, American farmers should pursue making more exports to larger, more prosperous Latin American countries such as Brazil, Reich said.

Furthermore, Reich said, Cuba may be developing biological weapons, although he offered no direct evidence of that danger.

But that dire message hasn't reached or persuaded many in Congress, particularly those from the Midwest, who are pushing for increased trade with Cuba as a means to try to undermine the communist government and as a potential boon for American agriculture.

Hagel contends that trade with Cuba could "open the country up" and notes that the United States already trades with communist Vietnam and China as well as with other totalitarian countries.

He complained that the U.S. embargo hurts American businesses and is being driven by politics because Florida, where many anti-Castro Cuban-Americans live, is a key state in presidential elections.

A law passed in 2000 has opened the trade door a bit. It allows U.S. companies to sell goods to Cuba for cash.

In an attempt to take part in such sales, hundreds of American companies and officials from several states will attend a four-day food exposition in Havana next month.

Omaha-based ConAgra Inc., the agribusiness giant, is among American companies planning to attend the event, according to the U.S.-Cuba Trade and Economic Council, Inc. in New York.

"In general we're always looking to introduce our products to new customers, in this case the Cuban people, and we do that through a variety of ways with conferences, expositions," said Bob McKeon, spokesman for ConAgra Foods.

Hagel noted that Cuba has already paid at least $ 100 million in cash for American corn, rice, soybeans, apples and more.

"Now the smart boys in government might not think $ 100 million is very much," he said, "but I think most people in Nebraska would think that's a pretty good piece of change."

Last month, the House voted 262-167 to lift the ban on travel by U.S. citizens to Cuba, but rejected 204-226 a proposal to erase all economic sanctions. Midlands lawmakers who voted to end the travel limits were: Reps. Lee Terry, Doug Bereuter and Tom Osborne, Nebraska Republicans. Also supporting an end to the travel sanctions were Iowa Republicans Greg Ganske and Tom Latham and Democrat Leonard Boswell.

Bereuter and Terry opposed ending all of the economic sanctions, the others did not. Bereuter has favored lifting food and medicine sanctions on Cuba.



GRAPHIC: Color Mug/1 Hagel; The Associated Press/1

LOAD-DATE: August 19, 2002