Monthly Archives: June 2016

Venezuela crisis evokes memories of Cuba’s ‘Special Period’



BBC News

The crisis in Venezuela shows little sign of easing up.

Inflation is among the highest in the world, there are long queues for basic goods and the atmosphere on the streets is becoming increasingly agitated.

Meanwhile politicians on both sides are so hostile to each other, a political solution remains remote.

For years, the opposition in Venezuela has claimed the country was “becoming another Cuba” but such claims were rarely given much credence, or dismissed as hyperbole.

But the BBC’s Will Grant, who has lived in both countries, says there are growing parallels to a specific point in Cuba’s past.

Suffering and austerity

Etched into Cuba’s collective memory is its infamous Special Period.
A reference to the years just after the collapse of the Soviet Union, it is a time forever synonymous with suffering, austerity and hunger on the communist island.

Without its wealthier benefactors in Eastern Europe, Cuba struggled to provide enough food for its people.

The stories from those days are legion. People remember selling family heirlooms to buy food and even stray cats ending up in the cooking pot.

Whether the tales are apocryphal or not, Cuba was certainly on its knees economically, and largely remained that way until a leftist former soldier took power in Venezuela.

Once Hugo Chavez became the president of Venezuela, which has the largest proven oil reserves in the world, things quickly started to look up for Cuba.

Mr Chavez aligned closely with Cuban leader Fidel Castro, and began to fill the gap that the Soviets had left behind.

Troubled ally
These days, though, Venezuela is the more troubled of the two socialist allies.

What’s gone wrong in Venezuela?

Having lived in Venezuela at the height of Mr Chavez’s power, when oil was worth more than $130 a barrel, and having last visited Caracas in April 2013 when Nicolas Maduro was elected president, it was quite a shock to see for myself how quickly things have deteriorated.

While the place was always chaotic, run by a sort of live-television ad-hoc form of policy making, I have never seen it quite like this.

We encountered the first queue, snaking back for over a block, almost as soon as we emerged into the west of the capital from the airport.

It did not take long to see lots more.

As in Cuba, the government subsidises and controls the prices of certain basic goods.

Now, with inflation spiralling, hundreds of thousands of Venezuelans spend their days waiting outside stores for bread, flour, baby milk, cooking oil, nappies and toilet paper.

Worse still, many join those queues based on rumour alone, in the forlorn hope of finding those products on the shelves only to be turned away empty handed after hours in the blistering sun.

Blessing in disguise

Needless to say, in such circumstances, tempers can easily fray.

Continue reading Venezuela crisis evokes memories of Cuba’s ‘Special Period’

Panama Papers show Cuba used offshore firms to thwart embargo


The Miami Herald

At least 25 companies in tax havens had Cuban links

A brother of Raul Castro’s son-in-law appears in the leaked documents

Cuba was at the heart of a deal to export Russian oil that involves a Lebanese company

The Cuban government used the Panama law firm involved in the Panama Papers to create a string of companies in offshore financial havens that allowed it to sidestep the U.S. embargo in its commercial operations.

El Nuevo Herald identified at least 25 companies registered in the British Virgin Islands, Panama and the Bahamas and linked to Cuba.

The documents found in the Panama Papers are dated as far back as the early 1990s, when the Cuban economy crashed following the end of Moscow’s massive subsidies to the island. But Cuba kept its links with some of the firms until very recently.

Listed as a director of one of the companies is a brother of Gen. Luis Alberto Rodríguez López-Calleja — husband of Cuban ruler Raul Castro’s daughter and powerful head of the Cuban armed forces’ business conglomerate, GAESA.

The Panama Papers, documents leaked to the International Consortium of Investigative Journalists and shared with the McClatchy Washington Bureau, Miami Herald and El Nuevo Herald, among others, contain hundreds of thousands of pages from the files of Mossack Fonseca, a Panama law firm with offices in 33 other countries.

Russia-Lebanon-Havana connection

One of the more intriguing schemes mentioned in the documents puts Cuba at the heart of a deal to sell Russian oil to Latin America through a company registered in Panama by the Bassatne family. The family controls BB Energy, a conglomerate founded in Lebanon in 1937 that buys and sells 16 million metric tons of crude and derivatives each year. One Bloomberg report showed BB Energy had $10 billion in revenues in 2012.

The Bassatne family incorporated BB Naft Trading S.A. in Panama, with Jürgen Mossack as a director. The company, which has offices in Havana and other countries, was created “to handle, among other things, its relationship with oil-exporting Latin American countries and with Cuba,” Mossack Fonseca lawyer Rigoberto Coronado wrote in an email.

BB Naft does not appear, however, among the subsidiaries listed on BB Energy’s Web site. They include BB Energy Trading Ltd., BB Energy Management S.A., BB Energy Holdings NV., BB Energy B.V., BB Energy (Asia) Pte. Ltd., BB Energy (Gulf) DMCC and BB Holding S.A.L.

BB Naft did business with Cuba between 1992 and 2001, trading oil for sugar “for $300 million, with credit facilities at low interest rate,” Coronado wrote. He added that in 1996 “there was agreement on a triangular Russia/Cuba/Naft Trading S.A. deal to deliver Russian fuel to other markets for a number of tens of millions of US$.”

One of the markets may have been Ecuador. A letter sent in 1998 by a Mossack Fonseca employee to the international trade office at state-run Petroecuador referred to documents sent by BB Naft “required to register the company.” A 2005 fax also points to an initial contact with the Venezuelan government’s Petroleos de Venezuela (PDVSA).

The relationship between the BB Energy Group and Petroecuador appears to have lasted until recent days. Petroecuador contracted BB Energy (Asia) Pte. Ltd., in February of this year to import 2,880,000 barrels of diesel fuel. In 2015, BB Energy won Ecuadoran contracts for more than three million barrels of naphtha, a petroleum distillate.

The Russian oil scheme appears to have been affected by the agreement between Cuba and Venezuela to exchange oil for medical services, and BB Naft expanded its work in Cuba in 2007 to include “the sale of spare parts and batteries for autos and trucks, work boots, farm machinery, hardware for USD 5.3 million.”

Continue reading Panama Papers show Cuba used offshore firms to thwart embargo

Gloria Estefan: ‘I Can’t Stand on a Stage in Cuba’



Singer Gloria Estefan, when asked by Larry Flick if she would consider returning to Cuba to perform in concert, stressed that it’s complicated. Her father fought in the Bay of Pigs, and life in the wake of the Dec. 2014 normalization of U.S.-Cuba relations is still pretty miserable:

“The Castro government, with this opening, has actually created and made the Cuban citizens second-class citizens, in their own home. The tourists can go and do things, Cuban exiles can go and enjoy the things in Cuba, that the people that live there cannot enjoy or afford, and won’t be able to for a long time…”

“You can go to a pharmacy for tourist that has everything. A Cuban pharmacy has nothing.”
Estefan, who was born in Havana Sept. 1, 1957, stated she can’t imagine standing on a stage in Cuba and staring out at images of Che Guevera and Fidel Castro, while these conditions persist. She also expressed concerns that an appearance could trigger violence. (At the same time, Estefan stressed that she has no problem with other performers who choose to now play in Cuba.).

Obama could agree to trade Cuban spy for a convicted cop killer hiding in Cuba


NBC News

Cuba and the United States are discussing possible exchanges of prisoners, including the release of a woman considered one of the most damaging spies in recent history, U.S. officials told NBC News.

The discussions, said to be in their early stages, are part of efforts by the two countries toward normalization of diplomatic relations.

Among the names floated by Cuban leaders, officials say, is Ana Montes, convicted in 2002 of spying for the Cuban government for nearly two decades while working for the U.S. Defense Intelligence Agency.

Her espionage compromised many aspects of America’s efforts to spy on Cuba, “calling into question the reliability of all U.S. intelligence collected against Cuba,” according to Michelle Van Cleave, a former national counterintelligence executive.

While at the Defense Intelligence Agency, Montes became the top Cuban analyst. Investigators said she memorized classified information on the job, typed it on a laptop computer in the evenings at her apartment, stored it in coded form on disks, and passed the information to her Cuban handlers.

Montes was sentenced to 25 years in prison and is due to be released in 2023.

For their part, American officials say the U.S. is interested in getting back Americans who sought refuge in Cuba from U.S. prosecution.

“Cuba has been a haven for U.S. fugitives,” said one federal law enforcement official.

Among those U.S. officials would like back is Joanne Chesimard, who escaped from a New Jersey prison in 1979 where she was serving a life sentence for killing a state trooper by shooting him with his own gun at a traffic stop.

The State Department declined to discuss specifics. But a spokesman said, “The United States continues to seek the return from Cuba of fugitives from U.S. justice. The Department repeatedly raises fugitive cases with the Cuban government and will continue to do so at every appropriate opportunity.”

“I don’t think the idea of a prisoner exchange is surprising,” author David Wise, who has written several books about espionage cases, said. “We’ve swapped with the Russians since the early days of the Cold War. It’s by no means unprecedented.”

Cuba’s Export Blood Business: An Unprecedented Case of State-Trafficking

Part I: Export Sales, Blood Collection, and Rights of Donors. 

 Cuba Archive 
For decades, the Cuban state has run a multi-million dollar business with blood, collected from unknowing and un-remunerated citizens.

As early as the mid-1960s Cuba was reportedly selling blood to at least Vietnam and Canada. By 1995, blood exports of US$30.1 million were Cuba’s 5th export product after sugar, nickel, crustaceans, and cigars.

Cuba’s official statistics, published by the Oficina Nacional de Estadísticas (O.N.E.), do not report these exports, but global trade data indicates that in the 1995-2014 twenty-year period), Cuba exported $622.5 million —an annual average of $31 million— under SITC (Standard International Trade Classification) 3002 for human blood components (plasma, etc.) and plasma-derived medicinal products (PDMPs). (See export data by year and country of destination here).  The bulk of these exports has gone to authoritarian governments, politically allied with Cuba, presumably to state entities applying laxer standards, ethical and otherwise (Iran, Russia, Vietnam, Algeria until 2003, then to Venezuela, Brazil, Argentina, and Ecuador).

Cuba reports that 95% of all collected units of human blood is fractionated into components, allowing for a much more lucrative trade than for plasma alone and for the production of highly valued PDMPs such as interferon, human albumin, inmunoglobulines, coagulation factors, toxins, vaccines, and other medicinal products. This export business has an important edge over competitors by saving the usual cost of paying donors for the raw material, their blood.

The business could be much larger than as reported under SITC 3002. In 2012, O.N.E. reported $808 million in exports of pharmaceutical/medicinal products, of which some —or many— might also be derived from human blood and not classified as such. Cuba’s unreliable statistics are standard fare and, in fact, Cuban officials have reported to the media that pharmaceutical and biotechnology exports are more than $2 billion.

Blood collection in Cuba: massive government deception and exploitation
Mass blood drives soliciting volunteer and altruistic donation began very soon after Fidel Castro’s rise to power in January 1959. But, a much more sinister approach was also put in place. In the 1960’s, the blood of political prisoners was drained right before their way to execution. The Inter-American Commission on Human Rights denounced this in a scathing April 1967 report. Cuba Archive has documented at least eleven cases and obtained numerous anecdotal accounts of this island-wide practice lasting several years. (See our report).

Cuba has long had a 100% donation rate. By 1998, Cuba was reporting that the ratio of voluntary altruistic blood donation had surpassed the PAHO/WHO goal of one per 20 inhabitants. In 2014, the last year of official statistics, it reported 407,989 voluntary non-remunerated blood donations, of which 392,244 (96%) were useful. Surprisingly, citizens are required to donate blood before any medical procedure, even minor ones, and there is often no blood when needed for emergencies or surgeries. PDMPs are also not readily available to the population, reserved for foreigners, the nomeklatura, and the well-connected.

Continue reading Cuba’s Export Blood Business: An Unprecedented Case of State-Trafficking

Proceed with caution on Cuba military cooperation

Obama wants to increase military cooperation with Cuban thugs who are involved in human rights violations, spying, drug trafficking and other crimes.


The Washington Post Editorial

Idael Fumero Valdes is not someone you’d expect to see as an honored guest of the U.S. military. As chief of investigations for Cuba’s National Revolutionary Police, a part of the military-controlled Ministry of the Interior, he plays a key law enforcement role in a state where beating and arresting human rights activists is considered law enforcement. Yet there he was at a U.S. naval air base in Key West, Fla., on April 21, touring the facilities at the invitation of the U.S. military command for Latin America.

Accompanying Valdes were senior officials of the Cuban anti-drug agency and border guards, plus a diplomat. Separately, U.S. officials have attended a security conference outside the United States with a Cuban delegation headed by Gustavo Machin Gomez, who was expelled from a previous diplomatic post in the United States 14 years ago due to his involvement with a highly damaging Cuban espionage operation against the Defense Intelligence Agency. Apparently the White House has decided to let that bygone be a bygone.

Welcome to the brave new world of military-to-military contact with Cuba, the Obama administration’s latest idea for engagement with that island nation. Direct communications between the two countries’ security forces have been going on for years, of course — in limited, operational contexts such as avoiding clashes around the Guantanamo Bay naval base and repatriating Cuban rafters plucked from the sea by the U.S. Coast Guard. That’s necessary and appropriate.

As the Key West visit suggests, however, the administration has a wider agenda in mind. For the first time, the United States accepted Cuban participation, alongside military officers from democracies, in this year’s Caribbean Nations Security Conference in Kingston, Jamaica. The deputy secretary of homeland security, Alejandro Mayorkas, visited Havana recently to discuss law enforcement cooperation. At a conference on the benefits of expanded contacts Thursday sponsored by the American Security Project think tank, a retired Army colonel suggested that the United States could seek information from Cuban military intelligence about North Korea and other countries.

Latin American military and police crave the legitimacy that comes from ties with their U.S. counterparts. A great bipartisan achievement in U.S. foreign policy toward Latin America over the past three decades has been to condition military cooperation and assistance increasingly on respect for the rule of law and human rights — rather than turn a blind eye to military abuses in the name of either anti-communism or the war on drugs, as U.S. officials so often did in previous years.

Today, in a hemisphere where military dictatorship was once widespread, no generals rule. The exception is Cuba, where Gen. Raul Castro’s word is law. Normalizing military-to-military ties between the United States and Cuba, for the sake of fighting drugs or other “common threats,” would imply that civilian rule doesn’t matter so much to us anymore — that Cuba’s military is morally equivalent to its hemispheric counterparts — when, in fact, it is deeply complicit in political repression and corruption.

Legislation pending in Congress would block full military-to-military normalization until Cuba democratizes. At a time when Cuba’s beleaguered civilian democracy activists need unequivocal U.S. moral support, the administration and outside supporters of its Cuba policy should not be eager for potentially compromising relationships with the Cuban people’s uniformed oppressors.

Bacardi evokes Cuba’s ‘golden age’ in taking Havana Club rum national

havana club

The Miami Herald

Cuba may have won the latest salvo in the trademark battle over who has the right to use the Havana Club rum brand in the United States, but that isn’t keeping Bacardi from rolling out nationwide distribution of the iconic rum brand with a splashy ad campaign that harkens back to the island’s “golden age.”

Bacardi, which contends it is the rightful owner of the Havana Club name because it purchased it and the rum recipe from the family that made the rum in Cuba prior to the 1959 Revolution, plans to kick off its new marketing strategy Wednesday with the introduction of Havana Club Añejo Clásico, a dark rum, and its “The Golden Age, Aged Well” advertising campaign in Florida.

Among the tag lines for the new campaign are: “Even a Revolution Couldn’t Topple the Rum,” and “The Freedom, The Decadence, The Dazzle, The Glamour. If Only Someone Had Bottled It.”

Through the summer, the new dark rum, which is double-aged in oak barrels for one to three years, and Havana Club white rum, which are distilled in Puerto Rico and bottled in Jacksonville, will be introduced in new markets across the United States.

Because of the interest in all things Cuban with the resumption of diplomatic relations between the United States and Cuba, “it’s a good moment to introduce a new generation” to the brand, said Fabio Di Giammarco, global vice president of rums for Bacardi. “It’s an exciting time for us and the Havana Club franchise in the United States.”

But with the recent resurgence of U.S. travel to Cuba, many Americans have already been discovering another version of Havana Club, the one distilled in Cuba and distributed worldwide by a partnership of Cubaexport and French spirits maker Pernod Ricard.

While American travelers can now purchase a combined total of $100 worth of alcohol and tobacco products while visiting the island, the embargo against Cuba still precludes the sale of Cuban Havana Club or any other Cuban rum in the United States.

The day when the embargo is lifted and Cuban rum can be exported to the U.S. market is what makes the trademark so valuable. Bacardi and Cuba have been fighting over it for the past two decades in U.S. courts.

Cuba Ron, the Cuban rum company, and Pernod Ricard contend the “authentic” Havana Club rum is made in Cuba.

“Havana Club is the true spirit of Cuba: a genuine Cuban rum produced in Cuba from Cuban sugarcane,” said Apolline Celeyron, a spokesperson for Pernod Ricard. “If the U.S. embargo on Cuban products is lifted, we’ll be the first company to offer a true Cuban rum to our American neighbors.”

But not if Bacardi can help it. Bacardi stakes its claim to the use of the Havana Club name to the early 1990s when it purchased the name and recipe from the Arechabala family, who made the rum in Cuba between 1934 and 1960. After their plant was seized, they went into exile.

The Arechabalas, however, allowed their U.S. trademark to lapse in 1973, and three years later, Cubaexport snapped it up, registering it with the U.S. Patent and Trademark Office.

After purchasing the trademark from the Arechabala family, Bacardi began making its own Havana Club in Puerto Rico in very limited quantities and won a string of court victories against Cubaexport and Pernod Ricard, claiming that Cuba had “fraudulently obtained” the trademark and that it was not valid because it dealt with a property that was illegally confiscated.

But the tide turned in mid-January, when the patent office renewed Cubaexport’s registration of the Havana Club trademark.

Now the two sides are back in U.S. District Court in Washington, D.C., fighting over ownership of the trademark, and Bacardi is reinventing its version of Havana Club.

Bacardi has asked the court to reverse Cubaexport’s trademark registration and declare Bacardi the rightful owner of the common law rights to the Havana Club name, said Rick Wilson, Bacardi’s senior vice president of external affairs and corporate responsibility. Common law, he said, “for the most part is based on usage.”

So Bacardi’s Havana Club is going national.

There will be new vintage-style packaging featuring the Arechabala family crest, which was used on the family’s rum packaging and advertising beginning in1934, and a portrait of the company’s founder.

“We are extremely touched by the new packaging and direction for Havana Club in the U.S.,” said José “Pepo” Arechabala, a great-grandson of founder José Arechabala Aldama. “Our family was disheartened after the forced exile from Cuba, and has always felt the need for justice for what happened to our ancestors. We feel that their life’s work continues to live on through this re-branding of Havana Club, and is something that we can all be truly proud of.”

Wilson said the Arechabalas sold Havana Club in the United States from the 1930s through the 1950s, positioning it as “an export brand to showcase the family’s rum abroad.”

The new advertising campaign that will accompany the Havana Club relaunch will capture the “exuberant spirit of the Golden Age In Havana,” from the 1920s when Americans flocked to Cuba during prohibition, to the 1950s “when everything stylish and glamorous reigned supreme,” according to Bacardi.

Billboards for the relaunched Havana Club should begin appearing in the Miami area this week.

After the repackaged dark and white rums roll out in Florida, distribution will spread to Colorado, Georgia, Illinois, New Jersey, Nevada, New York, Pennsylvania and Texas in July and August. Havana Club will begin appearing in liquor stores and high-end restaurants in the rest of the country in September, according to Bacardi. A bottle of the dark rum will retail for $21.99 and the Añejo Blanco for $19.99.

The company is targeting the millennial generation, and the new campaign will emphasize the resurgent cocktail culture. Among the featured cocktails is the Rum Mule, a concoction of dark rum, ginger beer, bitters and two lime wedges in a highball glass.

“Now we are doing the brand justice,” Di Giammarco said.