Cuba cracks down on "Guayabera" crimeBy Marc Frank in Havana
Published: May 20 2011 13:43 | Last updated: May 20 2011 13:43
One morning this month the nearly half a million inhabitants of Sancti Spiritus, a leafy province in central Cuba, woke up to find their local government had fallen.
Rather than some kind of US-inspired coup, however, the removal and subsequent arrest of five senior provincial officials was part of the increasing drive by Raúl Castro, president, against white-collar corruption – or white "Guayabera" crime as it is called after the distinctive Cuban dress shirt.
The crackdown, launched two years ago, has already cost hundreds of senior Cuban Communist party officials, state managers and employees their jobs and sometimes their freedom, as Mr Castro has struggled to shake-up the country's entrenched bureaucracy and move the country towards a less centralised and more market-driven economy.
Although such campaigns are not new, the intensity of the current drive is unprecedented, as are the number of high level targets and breadth of their illicit activities, Communist party and government insiders said this week.
As well as Sancti Spiritus's wayward officials, Havana's mayor resigned last month after most of the capital's top food administrators were swept away in another probe.
Last year, in the all-important nickel industry, which exports some $2bn annually, managers from mines and processing plants up to deputy ministers of basic industry were arrested after "diverting resources" and padding export weights, according to industry sources. Yadira García Vera, the minister, was eventually fired.
The drive began in earnest in 2009 when Mr Castro, 84, opened the Comptroller General's Office, saying it would "contribute to the purging of administrative and criminal responsibility, both the direct perpetrators of crimes and the secondary ones . . . [who] do not immediately confront and report them."
The move is designed to try and allow state-owned companies to operate more profitably, as Mr Castro wants them to, while also preventing the kind of corruption that marked Russia's and China's own moves to the market.
"The creation of the Comptroller General in 2009 was a significant step in the first phase of Cuba's reform," said Arturo López-Levy, a former analyst at Cuba's interior ministry and now a Cuba expert at the University of Denver in the United States.
"East Asia demonstrated the wisdom of creating an anti-corruption agency early in the economic transition from a command economy."
Cuba is fertile ground for corruption. After 20 years of economic crisis, and with state wages worth around $20 a month – a level that the government admits does not cover necessities – almost all Cubans engage in illegal activities to survive.
At the same time, the government is loosening regulations on small private business even as it cuts subsidies and lays off government workers, thereby requiring more sacrifice from state employees and pensioners.
"Raúl Castro has clearly gone to extraordinary lengths to make it clear that corruption – particularly at the higher levels – will not be tolerated, signalling he means business and higher-ups must sacrifice too," said John Kirk, a Latin America expert at Dalhousie University in Halifax, Canada.
Cuba does not suffer from drug-related corruption like many of its neighbours, said western diplomats and foreign security personnel who work closely with Havana on interdiction.
Rather, according to foreign investors, the biggest problems they face when forming domestic joint ventures are the long delays starting and then operating a Cuban business – in part due to draconian regulations designed to prevent white-collar crime.
That is not the case in the external sector, where foreign trade and off-shore activities make corruption easier.
"The huge disparities between peso salaries, worth just a few dollars a month, and the influx of strong currencies, even in very small amounts, create extremely strong incentives to become corrupted," said one western manager, who requested anonymity.
Cuban cigars have become the most emblematic case. Distributors in Canada and Mexico had long complained that millions of valuable "puros" – high quality cigars – were somehow making their way to other Caribbean islands and then being smuggled into their franchised territories.
But it was not until last year that the Cohiba-puffing Manuel García, the long-time vice-president of Habanos S.A., a joint venture with London-listed Imperial Tobacco and the exclusive distributor of the island's famous cigars, was arrested along with a number of other executives and staff.
"Turns out we were complaining to the very people who had set up the sophisticated operation, complete with shell companies and paths to avoid import duties," one foreign distributor said.
Spanish government pressing Cuba over imprisoned man
The Spanish government is raising the profile of the case of a Spanish hotel chain executive who was arrested in July 2010 upon arrival at the Havana airport, two years after he produced a TV documentary about youth prostitution in Havana as a freelancer.
Ten months after his arrest, Sebatián Martínez Ferraté has yet to hear what he is accused of, according to Spanish officials. In a press conference in Madrid, Spain's Foreign Minister Trinidad Jiménez said Spain had asked the Cuban government to make a formal arraignment.
Martínez, who is a manager for Mallorca-based hotel chain Marina Hotels, is receiving consular assistance from Spanish officials in the Condesa prison near Havana.
Martínez' documentary on youth prostitution aired in 2008 in Spain's Telecinco. In it, he interviewed three students confessing they practice prostitution.
Obama Sees No "Significant Changes" in CubaPublished May 15, 2011EFE
Washington – The United States still does not see the kind of "significant changes" in Cuba that would make it possible for Washington to normalize ties with the Communist government in Havana, President Barack Obama said.
"I would welcome real change from the Cuban government," he said during an interview with Univision, the largest U.S. Spanish-language television network.
"For us to have the kind of normal relations we have with other countries, we've got to see significant changes from the Cuban government and we just have not seen that yet," Obama said.
President Raul Castro, who succeeded ailing older brother Fidel, has taken steps aimed at re-energizing Cuba's weak economy while releasing scores of political prisoners as part of a dialogue with the Catholic Church.
Among the aspects where no changes are to be seen in Havana's policies, Obama mentioned political prisoners and the economic system.
"The bottom line is political prisoners are still there who should have been released a long time ago, who never should have been arrested in the first place; political dissent is still not tolerated. The economic system there is still far too constrained," he said.
Finally, he spoke of the more than half a century that the Castro brothers have been in power.
"If you think about it, (Fidel) Castro came into power before I was born - he's still there and he basically has the same system when the rest of the world has recognized that the system doesn't work," Obama said.
Since taking office in the White House, Obama has eased some of the restrictions on academic, cultural and religious travel to Cuba imposed by Washington's 49-year-old economic embargo on the island. The president has also effectively eliminated restrictions on travel to Cuba by Cuban-Americans with relatives on the island.
"Mauricio Claver-CaroneExecutive Director, Cuba Democracy Advocates in Washington, D.C.
John Kerry Should Support "Regime Choice" for CubaPosted: 05/12/11 12:43 PM ET
The argument du jour for opponents of the U.S. Agency for International Development's (USAID) programs to promote democracy in Cuba is that they violate the island's "sovereignty" by advocating "regime change."
The latest congressional manifestation of this opposition comes from U.S. Sen. John Kerry (D-MA), chairman of the Foreign Relations Committee, who announced last week that he would unilaterally delay the Obama Administration's disbursement of $20 million appropriated by the U.S. Congress for FY 2010.
Never mind that these programs support the families of Cubans jailed for their support of democracy, their loved ones fired from their jobs and their children expelled from school. The programs also provide cell phones, laptops and other basic items that Cuba's bloggers need to break through the regime's censorship and information monopoly in their efforts to build a civil society; and that they provide books to independent libraries, paper and pencils to labor unions and journalists to allow them to exercise their fundamental human right of free expression.
For opponents of these democracy programs, that's all irrelevant. They want the programs scrapped altogether and replaced with ones pre-approved by Cuba's dictatorship.
According to Kerry, "there is no evidence… that the 'democracy promotion' (quotations are his) programs… are helping the Cuban people. Nor have they achieved much more than provoking the Cuban government to arrest a U.S. government contractor who was distributing satellite communication sets to Cuban contacts."
That U.S. government contractor is 62-year-old Alan Gross, who was helping Cuba's Jewish community connect to the Internet — a fundamental right protected by Article 19 of the Universal Declaration on Human Rights, which states:
Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive, and impart information and ideas through any media and regardless of frontiers.
Kerry also announced that he has requested an investigation by the Government Accountability Office (GAO) "into the legal basis and effectiveness of these operations."
Yet these programs are clearly prescribed in the 1996 Cuban Liberty and Democratic Solidarity Act (LIBERTAD Act). So, is Senator Kerry really responding to complaints raised by the Castro regime? The regime has made it abundantly clear — most recently to former President Jimmy Carter — that it considers these programs to be a violation of Cuban "law" (its dictatorial decrees) and views them as a nuisance to its totalitarian rule.
It is hard to imagine that this is the same Senator Kerry who has been a steadfast advocate of "regime change" in Egypt and Libya, and the biggest cheerleader of the Obama Administration's military operation in support of Libya's rebels, which cost $100 million on the first day alone.
Why is Senator Kerry so hostile to the concept of "regime change" in Cuba, but not in North Africa and the Middle East? How can he support financing the violent overthrow of the Gaddafi regime by armed Libyan rebels, but not the distribution of laptops and books for Cuba's opposition movement, which only advocates a peaceful transition to democracy?
As the well-known Washington maxim goes — "personnel is policy." And in the case of Senator Kerry, the answer can be found in his senior advisor for Latin America, Fulton Armstrong.
Armstrong is a former Central Intelligence Agency analyst with a known history of hindering the execution of U.S. policy towards Cuba. Together with his former colleague at the Defense Intelligence Agency, Ana Belen Montes, Armstrong authored an oft-cited 1998 report that argued that Cuba no longer posed a security threat to the United States. Ironically, just three years later (in 2001), Montes was identified as a Cuban spy, arrested, convicted and is now serving life in a federal prison.
Armstrong's strong opposition to USAID's Cuba democracy programs is widely-known in the halls of Congress and the State Department to be based on his strong personal objection to the concept of "regime change."
Here's a permanent solution to this semantic disagreement:
Let's discard the concept of "regime change" and, instead, coalesce around a new option of "regime choice" for the Cuban people.
Regime choice encapsulates what is surely our shared goal for Cuba — free and fair multi-party elections. And it is consistent with the LIBERTAD Act, which would consequently consummate (and expire) when Cuba holds free and fair elections.
Free and fair elections are also the only means for the Cuban people to legitimately vest "sovereignty" to Cuba's government; it cannot be inherited or seized by force — it is only granted to governments by the free choice and will of its people.
So, let's move forward and work together to promote "regime choice" for the Cuban people.
Surely, Senator Kerry would agree.
Mauricio Claver-Carone is a director of the U.S.-Cuba Democracy PAC and founding editor of CapitolHillCubans.com in Washington, D.C. He is an attorney who formerly served with the U.S. Department of the Treasury and has served on the full-time faculty of The Catholic University of America's School of Law and adjunct faculty of The George Washington University's National Law Center.
DEATH, DEATH AND MORE DEATH / Orlando Luis Pardo LazoOrlando Luis Pardo Lazo, Translator: Unstated
DEATH IN MAYOrlando Luis Pardo Lazo
It begins happening more every day. First as an accident, then as business-as-usual. The despicable childishness of the police beating innocents (in the street and in prison) is also a sinister little game, eventually an assassination.
As the pyramid of governability disintegrates in Cuba, as the budget for repressive personnel grows (the only sector of the economy that is never depressed), as the citizenry reclaims its streets as a natural place to demonstrate, political death in Cuba will again occupy this public space that was snatched away during decades of closed-door totalitarianism (skeletons stacked in a closet under an anonymous tombstone).
From the stretcher of a polyclinic it will pass to the provincial gutters. From slander against the victims it will become an unpronounceable list of the disappeared. Each cadaver will incite a fatal cycle of the next cadaver, and the frequency of State imposed violence will stretch to infinity (with replies from the population against such out of control authority, more deranged than despotic).
I just woke up this morning with the funereal fanfare on my cell phone. Martha Beatriz Roque reports in near real time the death of Juan Wilfredo Soto Garcia (46), member of the Central Opposition Coalition, beaten last Thursday morning by several police officers in Vidal Park in his city of Santa Clara, while they arrested and handcuffed him (these outbreaks of sadism are often spontaneous because of the low moral nature of those who are supposed to be agents of public order). From the Third Station of the People's Revolutionary Police they had to move him immediately to the Arnalso Milian Castro Hospital, decadent and wickedly free as is the entire national health system, where very little could be done to improve his critical condition.
It is Sunday, Mother's Day, on the Island and in the world. On the bed of our room the horizontal body of my septuagenarian mother snores with emphysema and more or less references her imminent image within a coffin. Every time I take notice of this image I can't help but lie next to her with my almost forty years, trying to transmit some of my delirious life force, reviewing our little neighborhood lives with unfathomable sadness, so attached before (when my father was alive) and now so distant on an intellectual level.
And my mother, big heart and all, was a servant in peace as in capitalism as in the Revolution (her noble soul will remain so even in eternity) while I, with cynical brick un my sternum, became an extreme writer who does not fit into the pedestrian logic of this country. My mother knows and prays trembling on her knees every night for me, before and after taking a deadly aerosol for her asthma. I know she would give what remains of her existence if I would never end up like another Orlando (Zapata Tamayo). As long as no one in uniform (or in plain clothes) makes an end of me as was done to Juan Wilfredo Soto Garcia today, in honor of the hyena mothers of our nation.
It will begin to happen every day. First as usual, then like we failed to stop in time in the name of our children. Not my mother (it's obvious the prayers are not enough). Nor I (writing becomes humiliating in the face of the horror).
May 8 2011
Hookers, an Anonymous Society / Laritza DiversentLaritza Diversent, Translator: Unstated
On February 25, in a human-trafficking case, the Las Tunas Provincial Court recognized in Judgment No. 92 that the young Cuban women "were blinded in the presence of foreigners, seeing in them the possibility of wearing stylish clothing and shoes, and the ability to visit historic sites."
The trial resulted in penalties for seven residents of Las Tunas, five of them for illegally renting space in their homes to an Italian citizen, who had sex with five young women (including two 16-year-olds and one 18-year old), between 2005 and 2010. The age of the other two was not mentioned.
The initial indictment was for a crime of procurement and human trafficking, although only three of those involved were convicted. The rest were fined for "illegal economic activity." The owners, who were tried by the administrative clerk, were also punished with the confiscation of their homes.
Those involved were arrested in late March 2010. In August, the authorities found in the province of Granma the body of a 12-year-old girl, apparently murdered. In connection with this incident, three Italian citizens were arrested along with at least 12 residents in the eastern territory of the country.
After the discovery of the body, the authorities unleashed a major operation in Bayamo, which was concentrated on city residents who rented their homes to foreigners. Most of the houses were confiscated.
The preliminary investigation did not mention the Italian citizens arrested just two weeks after the crime or the girl's links with foreigners. However, popular versions of the facts indicate that the child visited a rented house where they were holding a party with foreigners, and there she consumed high amounts of alcohol and drugs.
In June 2000, the Committee for the Elimination of Discrimination against Women called on the Government of Cuba to expand official programs so that Cubans could achieve economic independence and, thereby, eliminate the need to resort to prostitution.
Ten years later, in June 2010, the United States reaffirmed Cuba as a country where people are trafficked. Earlier, in 2003, the U.S. government had included the island on the black list for "not meeting minimum standards for eliminating trafficking in persons and not making significant efforts in this regard." And it suggested that Cuba is "a source of children subjected to trafficking, especially for commercial exploitation within the country."
For its part, the Committee for the Elimination of Discrimination against Women also recommended that the Cuban government analyze the causes of prostitution and the results of preventive and rehabilitative measures taken, in order to make them more effective.
The legislation in force in Cuba provides special protection to children under 14 years against the crimes of procurement and human trafficking. After that age, the same laws govern as those for adults.
Cuba actively prosecutes prostitutes, mostly young ones, under the criminal offense of pre-criminal dangerousness. In the majority of cases, for their rehabilitation, they are confined to correctional work farms. Criminal liability is acquired on the island at age 16.
Laritza Diversent, Diario de Cuba
Translated by Regina Anavy
April 30 2011
A Cuban dissident, Juan Wilfredo Soto, died Sunday, days after allegedly being beaten by police and detained.
"There is not the slightest doubt that there was a cause and effect, and that Soto's death was related to the beating he was given," another dissident, Guillermo Farinas, said.
Soto died in the central Cuban city of Santa Clara. An official at the Arnaldo Milian Hospital told CNN that Soto died of pancreatitis.
About 80 people, including other prominent dissidents, attended his funeral Sunday, Reuters reports.
Anti-government activist Lizet Zamora told CNN she saw the beating of Soto on a cell phone.
Soto had previously served 12 years behind bars as a political dissident.
"If we do not do something, so that the government changes its stand toward peaceful protestors, we are going to be reporting even more deaths," Farinas told.
The Story That Wasn't / Yoani SánchezTranslator: Unstated, Yoani Sánchez
Today I was going to publish a text about Mother's Day, a brief vignette where I would tell of my mother, her hands smelling of onions, garlic and cumin… from all the time she spends in the kitchen. I had the idea of telling you of the pleasure it gave me to see her come to the door of my high school in the countryside, bringing the food that had cost her an entire week–and great effort–to get. But just as I put the finishing touched on my little material chronicle, Juan Wilfredo Soto died in Santa Clara and it all became senseless.
The police batons are thirsty for backs in these parts. The growing violence of those in uniform is something that is whispered about and many describe it detail without daring to publicly denounce it. Those of us who have ever been in dungeon know well that the sweetened propaganda of "Police, police, you are my friend," repeated on TV, is one thing, and the impunity enjoyed by these individuals with a badge is another thing entirely. If, on top of that, those arrested have ideas that differ from the prevailing ideology, then their treatment will be even harsher. Fists want to convince them where meager arguments can't succeed.
I don't know how the authorities of my country are going to explain it, but I doubt, this time, they will manage to persuade us it wasn't the fault of the police. There is no way to understand how an unarmed man sitting in a downtown park could represent a major threat. What happens is that when intolerance is given free rein it feeds public disrespect and gives a green light to the police, and these tragedies occur. As of today, a mother in Santa Clara is not sitting at the table prepared by her children, but in a dark room at a funeral home, keeping vigil over the body of her son.
8 May 2011
8 May 2011 Last updated at 21:35 GMT
Cuba dissident Juan Wilfredo Soto 'dies after arrest'
Juan Wilfredo Soto, 46, had to receive hospital treatment after being detained during a protest Santa Clara.
One prominent dissident, Elizardo Sanchez, has called for an independent inquiry, saying Mr Soto's death should not go unpunished.
Cuban authorities have made no immediate comment on the death.
Mr Soto died on Sunday in the central city of Santa Clara, fellow dissident Guillermo Farinas told the Associated Press news agency.
He said Mr Soto had been detained and beaten on Thursday during an anti-government protest.
Mr Soto was among those who supported a 134-day hunger strike by Mr Farinas last year to press for the release of political prisoners.
"If we do not do something, so that the government changes its stand toward peaceful protestors, we are going to be reporting even more deaths," Mr Farinas told AFP.
Elizardo Sanchez, leader of the dissident Cuban Commission for Human Rights and National Reconciliation, said he was convinced Mr Soto's death was linked his detention.
"We believe that the blows he received were a catalyst," he said, adding: "We do not think there was a political intent to kill him, but there was a struggle when he was yelling anti-government slogans."
Cuban authorities generally refer to dissidents as common criminals or mercenaries paid by Washington to destabilise the communist system.
Corruption in Cuba – Greed or just survival?
Posted May 06, 2011 by publisher in Business In CubaRob Sequin | Havana Journal
Corruption. Unfortunately it's a way of life in Cuba due to the failure of Communism and a centrally controlled economy.
A visit to the Black Market is an every day event for most Cubans so they can "resolve" the challenges of living in Cuba. When you see the word "resolve" used in this way, it means to borrow (and never return) something, usually from the government.
Three generations of Cubans have lived this way. Couple this with the "go along to get along" mentality in order to stay out of trouble in Cuba and there is little reason to wonder why there is corruption in Cuba.
Everyone is careful not to "resolve" too many problems or too be too successful or too openly critical of the government or to be too corrupt but, cross the invisible, moving line and you are arrested. You are removed from your state job and even your family may suffer in one way or another by losing their job, a promotion or some other perk from the cradle-to-grave Cuban social security/free healthcare/free education system.
I just read Cuba: Catching Kleptocrats by Nick Miroff from Global Post.
He writes "As part of his economic reform push, Castro wants to give more independence to Cuba's state companies and local governments, freeing them from the need to obtain Havana's permission for every little decision and expenditure. But a series of corruption scandals among Cuban executives in recent months has been a reminder as to how the island's state-run economy got so centralized in the first place. As soon as the government eases up its controls, company managers steeped in graft tend to get even greedier."
Manuel Garcia – Habanos
Manuel García, Habanos's commercial vice-president has been in jail since August 2010. He and ten of his staff also face corruption trials for allegedly accepting bribes in exchange for selling Cuban cigars at a discount to black market distributors.
Rogelio Acevedo – Cubana
Nick goes on to write "Rogelio Acevedo, the country's former top aviation official, was arrested last year for allegedly running a side business that chartered jets of the national airline, Cubana de Aviacion, for outrageous personal profit. There are also new reports this week that executives in the country's lucrative nickel-processing industry are in custody and facing corruption charges."
Alejandro Roca – Food Ministry
As reported in Granma (the "you read what we want you to read newspaper), Roca has been sentenced to fifteen years in prison after being found guilty of several crimes "continuously accepting bribes and acts harmful to economic activity".
Max Marambio – Chilean businessman
Friend of Fidel Castro, Chilean businessman Max Marambio was sentenced to twenty years in prison for the crimes of accepting bribes, fraud, and falsification of bank or trade documents with regards to his Rio Zaza company. The crimes committed were particularly grave and required a vigorous legal response, in correspondence with the extensive damage to the national economy. This trial was connected to the Roca trial. Both men were convicted in absentia. There was no mention as to why Roca was not present.
Pedro Alvarez – Alimport and Cuba Chamber of Commerce
Pedro Alvarez, former President of the purchasing agency Alimport who then moved (or was moved) to the Cuban Chamber of Commerce is under investigation for alleged corruption. It has been reported that he was detained several times by the Technical Investigations Department in Havana.
In April 2010, Esteban Morales, said some top Cuban officials are preparing to divide the spoils if Cuba's political system disintegrates. He continued "In reality, corruption is much more dangerous than so-called internal dissent," Morales wrote in the piece, which appeared on the Web site of the state National Artists and Writers Union of Cuba. "The latter is isolated … but corruption is truly counterrevolutionary because it comes from within the government and the state apparatus, which are the ones that really control the country's resources."
In November 2010 we heard from a source who believes that many of these charges may be "inflated" and targeted against people loyal to Fidel Castro. In other words, there is speculation that Raul Castro is removing anyone loyal to Fidel. As many know, Carlos Lage and Felipe Perez Roque were removed from office for being seduced by the "honey of power".
So, today, maybe Raul is done cleaning house or maybe the new economic opening is seducing more government officials to be corrupt or maybe the Cuban government is looking harder for corrupt officials. The Global Post article is wrapped up this way "Cuba's Comptroller General Office's is currently engaged in an audit of 750 state companies, sending 3,000 investigators to look into "all sectors, all organizations and territories" and evaluate "discipline, legality and economic control," Comptroller General Gladys Bejerano announced on state television last month. So more managers may fall in the coming weeks."
Life in Cuba is the definition for "Damned if you do and damned if you don't".
Cuba: catching kleptocratsAs soon as the government eases up its controls, company managers tend to start cooking the books.Nick Miroff May 5, 2011 06:36Cuba business 2011 05 02
As part of his economic reform push, Castro wants to give more independence to Cuba's state companies and local governments, freeing them from the need to obtain Havana's permission for every little decision and expenditure.
But a series of corruption scandals among Cuban executives in recent months has been a reminder as to how the island's state-run economy got so centralized in the first place. As soon as the government eases up its controls, company managers steeped in graft tend to get even greedier.
Nearly a dozen executives from Cuba's Habanos S.A. tobacco company are now in police custody, suspected of taking bribes and kickbacks on millions worth of premium Cuban cigars, The Economist reported last week.
It was hardly the worst recent case of Cuban managers appropriating "social property" as their own. Rogelio Acevedo, the country's former top aviation official, was arrested last year for allegedly running a side business that chartered jets of the national airline, Cubana de Aviacion, for outrageous personal profit. There are also new reports this week that executives in the country's lucrative nickel-processing industry are in custody and facing corruption charges.
The wave of arrests is no fluke. Castro created a special Comptroller General's Office in 2009 to audit and investigate state companies, and it's unknown how many crooked administrators have been snared since then. The closer scrutiny is a key part of Castro's plan to give Cuban managers more administrative leeway in order to make their state-run business more profitable, while also adding new layers of oversight.
In his speech to open last month's Communist Party Congress in Havana — the first major event of its kind in 14 years — Castro described Cuban administrators as frozen with inertia and unable to make decisions on their own.
"The lesson taught by practical experience is that an excessive centralization inhibits the development of initiatives in the society and in the entire production line, where the cadres got used to having everything decided 'at the top' and thus ceased feeling responsible for the outcome of the entities they headed," Castro said.
Still, it's not hard to imagine the temptations faced by Cuba's captains of socialist industry. While working long hours for miniscule pay, they are expected to uphold the ideals of self-sacrifice and austerity, yet their lifestyles and business relationships require them to wine and dine with fantastically wealthy capitalist counterparts. Many have tens of millions of government dollars under their management, despite drawing salaries that — at least officially — amount to not much more than the average Cuban wage of $20 a month.
The rise and fall of top Cuban executive Pedro Alvarez is a case in point, and one of the more embarrassing ones for the Cuban government. As the longtime head of the state food import agency, Alimport, Alvarez arranged billions' worth of bulk food purchases abroad, much of it from the United States under a special exemption to the Cuban embargo.
For the U.S. farmers and agricultural executives who did business with Cuba, Alvarez was the face of the Castro government. In 2008, he negotiated the purchase of $711 million worth of U.S. foodstuffs, an all-time high.
Only now Alvarez is reportedly living in Tampa, after fleeing Cuba in December amid rumors he'd skimmed a personal fortune from the food deals. According to Miami news accounts, Alvarez left the island by sneaking through the Havana airport dressed as a woman.
Historically, the Cuban government has promoted military officers to executive positions at state companies in part to discourage corruption, but they have hardly been immune to the temptations of high-volume commerce.
Acevedo, the disgraced aviation official, was a Cuban army general who fought as a guerrilla soldier under the original icon of Cuban workplace rectitude, Ernesto "Che" Guevara. And Cuba's most notorious corruption case came in 1989 with the stunning trial of top military commander Gen. Arnoldo Ochoa, who was convicted of treason and sent to the firing squad for his role in a drug-trafficking scheme.
On balance, Cuba tends to rank relatively low on corruption indices in comparison to other countries in the region, rated 69 out of 178 nations evaluated last year by Transparency International. Among Latin American states, only Chile, Uruguay and Costa Rica ranked better.
Still, kickbacks and "commissions" are standard practice among Cuban executives who make bulk purchases abroad on behalf of the government. They then stash the money in foreign bank accounts or with relatives abroad.
Cuba's Comptroller General Office's is currently engaged in an audit of 750 state companies, sending 3,000 investigators to look into "all sectors, all organizations and territories" and evaluate "discipline, legality and economic control," Comptroller General Gladys Bejerano announced on state television last month. So more managers may fall in the coming weeks.
Foggy Forecast for Cuba-US RelationsPosted: 05/ 2/11 06:21 PM ET
Winds of change are blowing in both Havana and Washington these days, but in what direction no one really knows. Prevailing headwinds from entrenched interests on both sides are scrambling the signals, and may leave the Cuban and American people in the dust.
Let's try to read the variables currently in play. In Cuba, the sixth Communist Party Congress recently met for the first time in 14 years to ratify President Raul Castro's promising yet cautious plans to liberalize Cuba's economy while maintaining a firm grip on political power. The gerontocracy of "historicos" present at the birth of the revolution anointed 80-year old Jose Ramon Machado Ventura as deputy to 79-year old Raul. Only three new members were named to the political bureau, with 12 retreads, including five generals, holding on to their seats. Younger Cubans once groomed to lead a post-Castro Cuba had been sidelined earlier for a variety of transgressions. Raul Castro's older brother Fidel, now officially out of power, appeared on stage to bless the proceedings as a sort of cheerleader-in-chief.
And yet, underneath the sad spectacle of a fading elite, Raul Castro has managed to get a potentially sweeping set of economic reforms adopted by the party apparatus. Framed as essential "to ensure the revolution's very survival," these new measures look like a desperate attempt to stave off bankruptcy. They range from licensing private economic activity, opening idle land to farmers and allowing businesses to hire employees, to empowering people to buy and sell houses and cars and encouraging foreign investment. They include tough measures too, like shrinking the buying power of the longstanding ration card that every Cuban gets to subsidize basic goods, cutting unemployment benefits, and eventually dismissing anywhere from 500,000 to one million employees from the state sector.
It is too early to tell whether these measures will have the intended effect of breathing new life into a moribund Cuban economy. One key question is whether Cuban citizens will register enough small businesses to generate the kind of tax revenue the Cuban regime calculates it needs, and whether they will have enough left over to survive under a less generous welfare system. But at least they will have an opportunity to become more independent of the state, which employs about 85 percent of the five million strong workforce.
With greater self-employment may come a taste for some political freedom as well, though the Castros and their allies will no doubt continue to clamp down on dissent. In a nod toward the younger generation, Raul Castro agreed to devote a special party congress next January to address political reforms, including a proposal to limit presidential terms to ten years. And the recent release of all the 75 political prisoners caught up in the infamous "Black Spring" crackdown on dissidents in 2003 is one small sign that pressure for change, both internal and external, is having some effect.
It is not clear, then, whether this cloudy forecast will lead to brighter days for Cubans or the next Caribbean hurricane. But to the extent the United States can influence the trend (an assumption too easily taken for granted), now is the time to try. Unfortunately, a different type of old guard — this time on Capitol Hill with roots in the Cuban-American diaspora in Florida and New Jersey — is determined to block any meaningful change in U.S. policy.
In the earliest days of his administration, President Obama promised "a new beginning" in U.S.-Cuba relations and to his credit took some initial steps to expand travel and remittances for Americans with family on the island. He quickly fell, however, into the trap of a tit-for-tat approach, demanding additional reforms even as the Castro regime moved in a more positive direction. Despite having clear executive authority to do much more to loosen the embargo, Obama chose a timid approach of hiding behind the case of a USAID contractor arrested in late 2009 for distributing computer and satellite equipment under a Bush-era democracy promotion program. This certainly kept the hardliners in Washington and Miami happy for a while, but did nothing to protect Democrats from eventual defeat in the 2010 midterm elections. With the ascendancy of the Republicans to control of the House, including pro-embargo legislators as chairs of key committees, all hope for congressional action to soften the embargo is gone.
And yet, swirling below the hot air in Congress, President Obama managed to release new regulations last January that potentially could unleash new forces for change here and in Cuba. The new rules, which largely return us to the Clinton era years of expanded people-to-people exchange, provide general licenses for religious, media, research and educational travel; allow more U.S. airports to fly charter flights to the island; and permit Americans to make financial transfers up to $2000 a year to any Cuban not part of the government or party leadership. This latter item could open a critical lifeline to new microenterprises seeking small grants and loans to get started. The Treasury Department's guidelines, however, still cling to a strict interpretation of the rules, at least on paper. Humanitarian organizations, for example, may not rely on one-off volunteers to carry supplies to needy people, and travelers "are prohibited from importing into the United States any merchandise purchased in Cuba, including but not limited to cigars and alcohol." So much for helping struggling small businesses sell their handicrafts to eager Americans with cash to spend.
Nonetheless, with little room for political change in Cuba or the United States in the short term, it looks like this is as good as pro-reform constituencies in both countries are going to get. The key question is what they make of it. A determined effort by Americans to reach out and provide help to Cubans willing to take risks for economic and political freedom could make a difference in building constituencies from below for further reforms. In the meantime, be prepared for a bumpy ride.
Ted Piccone, Senior Fellow and Deputy Director, Foreign Policy at Brookings and former senior policy advisor on Latin America in the Clinton Administration