Tag Archives: Corruption

U.S. WELFARE FLOWS TO CUBA

“They’re taking benefits from the American taxpayer to subsidize their life in another country.”

Original Article Here: U.S. Welfare Flows to Cuba

By Sally Kestin, Megan O’Matz and John Maines with Tracey Eaton in Cuba

Orlando Sun-Sentinel,  October 2, 2015

Read  previous investigations into special treatment for Cuban immigrants

Cuban immigrants are cashing in on U.S. welfare and returning to the island, making a mockery of the decades-old premise that they are refugees fleeing persecution at home.  Some stay for months at a time — and the U.S. government keeps paying.

Cubans’ unique access to food stamps, disability money and other welfare is meant to help them build new lives in America. Yet these days, it’s helping some finance their lives on the communist island.

America’s open-ended generosity has grown into an entitlement that exceeds $680 million a year and is exploited with ease. No agency tracks the scope of the abuse, but a Sun Sentinel investigation found evidence suggesting it is widespread.

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Cuban arrivals in Florida

Unlike most immigrants to the U.S., Cubans are presumed to be refugees and can access special assistance. Since 2003, more than 329,000 Cuban immigrants arrived in Florida and were eligible for this aid, which includes cash, medical care and job training. They now make up nine out of 10 foreigners getting refugee services in Florida.

Fed-up Floridians are reporting their neighbors and relatives for accepting government aid while shuttling back and forth to the island, selling goods in Cuba, and leaving their benefit cards in the U.S. for others to use while they are away.

Some don’t come back at all. The U.S. has continued to deposit welfare checks for as long as two years after the recipients moved back to Cuba for good, federal officials confirmed.

Regulations prohibit welfare recipients from collecting or using U.S. benefits in another country. But on the streets of Hialeah, the first stop for many new arrivals, shopkeepers like Miguel Veloso hear about it all the time.

Veloso, a barber who has been in the U.S. three years, said recent immigrants on welfare talk of spending considerable time in Cuba — six months there, two months here. “You come and go before benefits expire,” he said.

State Rep. Manny Diaz Jr. of Hialeah hears it too, from constituents in his heavily Cuban-American district, who tell of flaunting their aid money on visits to the island. The money, he said, “is definitely not to be used … to go have a great old time back in the country that was supposed to be oppressing you.”

The sense of entitlement is so ingrained that Cubans routinely complained to their local congressman about the challenge of accessing U.S. aid — from Cuba.

“A family member would come into our office and say another family member isn’t receiving his benefits,” said Javier Correoso, aide to former Miami Rep. David Rivera. “We’d say, ‘Where is he?’ They’d say, ‘He’s in Cuba and isn’t coming back for six months.’”

The money “is definitely not to be used … to go have a great old time back in the country that was supposed to be oppressing you.”

 “They’re taking benefits from the American taxpayer to subsidize their life in another country.’”

One woman told Miami immigration attorney Grisel Ybarra that her grandmother and two great aunts came to Florida, got approved for benefits, opened bank accounts and returned to Cuba. Month after month, the woman cashed their government checks — about $2,400 each time — sending half to the women in Cuba and keeping the rest.   When a welfare agency questioned the elderly ladies’ whereabouts this summer, the woman turned to Ybarra, a Cuban American. She told Ybarra her grandmother refused to come back, saying: “With the money you sent me, I bought a home and am really happy in Cuba.”

Cubans on the island, Ybarra said, have a name for U.S. aid.  They call it “la ayuda.” The help.

Special status abused

Increasing openness and travel between the two countries have made the welfare entitlement harder to justify and easier to abuse. But few charges have been brought, and Congress and the Obama Administration have failed to address the problem even as the United States moves toward détente with Cuba.

Cubans fuel increase in Florida costs

The U.S. opens its borders and wallets to Cubans like no other immigrant group. The number of Cubans coming to the U.S. is increasing, along with the expense of supporting them. The cost of food stamps, welfare and short-term cash assistance for Cuban immigrants in Florida has increased 23 percent since 2011, compared to five percent for refugees from all other nations.

Adding it up

Florida’s costs are only part of the picture. To calculate the total cost of public assistance for Cuban immigrants, the Sun Sentinel included estimates for federal refugee assistance and welfare for seniors and the disabled. The $682 million total is conservative.*

Cubans’ extraordinary access to U.S. welfare rests on two pillars of special treatment: the ease with which they are admitted to the country, and America’s generosity in granting them public support.

Cubans are allowed into the U.S. even if they arrive without permission and are quickly granted permanent residency under the 1966 Cuban Adjustment Act. They’re assumed to be refugees without having to prove persecution.

They’re immediately eligible for welfare, food stamps, Medicaid and Supplemental Security Income or SSI, cash assistance for impoverished seniors and disabled younger people.

Most other immigrants are barred from collecting aid for their first five years. Those here illegally are not eligible at all.

The Sun Sentinel analyzed state and federal data to determine the annual cost of taxpayer support for Cuban immigrants: at least $680 million. In Florida alone, costs for welfare, food stamps and refugee cash have increased 23 percent since 2011, the last year data was available.

Not all Cubans receive government help. Those arriving on visas are ineligible, and some rely on family support. And many who receive aid do so for just a short time until they settle in, as the U.S. intended. Cubans over time have become one of the most successful immigrant groups in America.

“They come to the U.S. to work and make a living for their family,” said Jose Alvarez, a Cuba native and city commissioner in Kissimmee. “I don’t believe that they come thinking the government will support them.”

But some take advantage of the easy money — and then go back and forth to Cuba.

A public housing tenant in Hialeah, who was receiving food stamps and SSI payments for a disabled son, frequently traveled to Cuba to sell food there, records show. She admitted to a city housing investigator in 2012 that she “makes $700 in two months just in the sales to Cuba.”

Another man receiving food stamps admitted to state officials “that he was living in Cuba much of 2015.”

A recent arrival with a chronic illness got Medicaid coverage and turned to attorney David Batchelder of Miami to help him get SSI as well. But the man was “going back and forth to Cuba” so much that Batchelder eventually dropped the case. “It was just another benefit he was applying for.”

Concerns about Cubans exploiting the aid are especially troubling to exiles who came to this country decades ago and built new lives and careers here.  Dr. Noel Fernandez recalls the assistance his family received from friends and the U.S. government when they immigrated 20 years ago, help that enabled him to find work as a landscaper, learn English and complete his medical studies. Now medical director of Citrus Health Network in Hialeah, Fernandez sees Cuban immigrants collecting benefits and going back, including three elderly patients who recently left the U.S. for good.

“They got Medicaid, they got everything, and they returned to Cuba,” he said. “I see people that said they were refugees [from] Cuba and they return the next year.”

State officials have received complaints about Cubans collecting aid while repeatedly going to Cuba or working as mules ferrying cash and goods, a common way of financing travel to the island.

Another way of paying for the trips: cheating. Like other welfare recipients, some Cubans work under the table or put assets in others’ names to appear poor enough to meet the programs’ income limits, according to records and interviews. Some married couples qualify for more money as single people by concealing marriages performed in Cuba, where the U.S. can’t access records.

Florida’s refugee costs by nationality in 2014

The United States accepts refugees from around the world if they can prove persecution at home. Cubans don’t need such proof – they are the only nationality with open-ended access to the U.S. and government benefits.

 “Stop the fraud please!” one person urged in a complaint to the state. Another pleaded with authorities to check airport departure records for a woman suspected of hiding income. “It would show how many times she has traveled to Cuba.”

Florida officials typically dismissed the complaints for lack of information, because names didn’t match their records or because the allegations didn’t involve violations of eligibility rules. Travel abroad is not expressly prohibited, but benefits are supposed to be used for basic necessities within the U.S.

“Our congressional folks should be looking at this,” said Miami-Dade County Commissioner Esteban Bovo Jr., a Cuban American. “There could be millions and millions of dollars in fraud going on here.”

Money to Cuba

Accessing benefits from Cuba typically requires a U.S. bank account and a willing relative or friend stateside. Food stamps and welfare are issued monthly through a debit-type card, and SSI payments are deposited into a bank account or onto a MasterCard.

A joint account holder with a PIN number can withdraw the money and wire it to Cuba. Another option: entrust the money to a friend traveling to Cuba.

Roberto Pizano of Tampa, a political prisoner in Cuba for 18 years, said he worked two jobs when he arrived in the U.S. in 1979 and never accepted overnment help. He now sees immigrants “abusing the system.”

“I know people who come to the U.S., apply for SSI and never worked in the USA,” he said. They “move back to Cuba and are living off of the hard-earned taxpayer dollars.”

Roberto Pizano of Tampa, a political prisoner in Cuba for 18 years, said Cubans are signing up for U.S. benefits and moving back to Cuba, “living off of the hard-earned taxpayer dollars.“ Photo by Taimy Alvarez

Federal investigators have found the same scenario in other cases.  A 2012 complaint alleged a 75-year-old woman had moved to Camaguey two years earlier and a relative was withdrawing her SSI money from a bank account and sending it to her. Social Security stopped payments, but not before nearly $16,000 had been deposited into her account.

Another recipient went to Cuba on vacation and stayed, leaving his debit card with a relative. Social Security continued his SSI payments for another six months — $4,000 total — before an anonymous caller reported he had gone back to Cuba.

One woman reportedly moved to Cuba in 2010 and died three years later, while still receiving SSI and food stamps, according to a 2014 tip to Florida welfare fraud investigators. A state official couldn’t find her at her Hialeah home, cut off the food stamps and alerted the federal government.

Former congressman Rivera tried to curb abuses with a bill that would have revoked the legal status of Cubans who returned to the island before they became citizens.

“Public assistance is meant to help Cuban refugees settle in the U.S.,” Mauricio Claver-Carone of Cuba Democracy Advocates testified in a 2012 hearing on the bill. “However, many non-refugee Cubans currently use these benefits, which can average more than $1,000 per month, to immediately travel back to the island, where the average income is $20 per month, and comfortably reside there for months at a time on the taxpayer’s dime.”

Rivera recently told the Sun Sentinel that he interviewed welfare workers, Cubans in Miami and passengers waiting for charter flights to Havana. He said he found overwhelming evidence of benefits money going back, especially after the U.S. eased travel restrictions in 2009.

The back and forth undermines the rationale that Cubans are refugees fleeing an oppressive government, Rivera said. And when they return for visits, they boast of the money that’s available in the U.S., he said. “They all say, ‘It’s great. I got free housing. I got free food. I get my medicine.’ ”

Five Cubans interviewed by the Sun Sentinel in Havana said they were aware of the assistance and knew of Cubans who had gone to America and quickly began sending money back. Two said they believed it was U.S. government aid.

“I don’t think it’s correct, but everyone does it for the well-being of their family,” said one woman, Susana, who declined to give her last name.

Outside welfare offices in Hialeah, the Sun Sentinel found Cuban immigrants who had arrived as recently as three days earlier, applying for benefits. They said family and friends told them about the aid before they left Cuba.

“Back in the ’60s, when you came in, they told you the factory that was hiring,” said Nidia Diaz of Miami, a former bail bondswoman who was born in Cuba. “Now, they tell you the closest Department of Children and Families [office] so you can go and apply.”

Crooks collect in Cuba

Miami bail bondswoman Barbara Pozo said many of her Cuban clients talk openly about living in Cuba and collecting monthly disability checks, courtesy of U.S. taxpayers.  “They just come here to pick up the money,” Pozo said. “They pretend they’re disabled. They just pretend they’re crazy.”  SSI payments, for those who cannot work due to mental or physical disabilities, go up to $733 a month for an individual. Most other new immigrants are ineligible until they become U.S. citizens.

Cubans collect, others don’t:

Some Cubans try to build a case for SSI by claiming trauma from their life under an oppressive government or the 90-mile crossing to Florida.  Diaz, the former bondswoman, said she has heard Cuban clients talk about qualifying: “‘Tell them that you have emotional problems. How did you get these problems? Well, trying to get here from Cuba.’”

Antonio Comin collected disability while organizing missions to smuggle Cubans to Florida, including one launched from a house in the Keys, federal prosecutors said. Comin claimed he rented the home to celebrate his birthday — after receiving his government check.

Casimiro Martinez was receiving a monthly check for a mental disability — but his mind was sound enough to launder more than $1 million stolen from Medicare. Martinez was arrested at Miami International Airport after returning from a trip to Cuba.

Outside welfare offices in Hialeah, the Sun Sentinel found Cuban immigrants who had arrived as recently as three days earlier, applying for benefits.

Government disability programs are vulnerable to fraud, particularly SSI, with applicants faking or exaggerating symptoms. Some view SSI as “money waiting to be taken,” said John Webb, a federal prosecutor in Tennessee who has handled fraud cases.

While benefits are supposed to be suspended for recipients who leave the United States for more than 30 days, the government relies on people to self-report those absences, and federal audits have found widespread violations.

The government could significantly reduce abuses by matching international travel records to SSI payments, auditors have recommended since 2003. The Social Security Administration and Department of Homeland Security are still trying to work out a data sharing agreement — 12 years later.

Jose Caragol, a Hialeah city councilman and Havana native, said aid for Cubans “was meant to assist those who were persecuted and want a new life. The bleeding has to stop.”

 

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CANADIAN CEO RETURNS HOME AFTER IMPRISONMENT IN CUBA

DANIEL TROTTA

HAVANA — Reuters; , Feb. 21 2015, 2:00 PM EST

Original here: http://www.theglobeandmail.com/news/national/canadian-ceo-returns-home-after-imprisonment-in-cuba/article23139650/

 Cuba has freed Canadian businessman Cy Tokmakjian after more than three years in jail, his company said on Saturday, resolving a case that had strained Cuban-Canadian relations and alarmed foreign investors.

Tokmakjian, founder of the Ontario-based company, was convicted of bribery and other charges and sentenced to 15 years in September in what the transportation company had called a “show trial” and a “travesty of justice.”

Cuban prosecutors had outlined a pattern in which Tokmakjian wooed Cuban officials and their families with a series of gifts, helping the Tokmakjian Group do business estimated at $80 million annually with Cuba until the company was shuttered and its founder arrested in September 2011.

Tokmakjian “was welcomed home by his family, friends, and thousands of employees,” said the company statement, which also thanked the Canadian government. A spokesman said the 74-year-old was released early Saturday.

The statement made no mention of two Canadian aides from the Tokmakjian Group, Claudio Vetere and Marco Puche, who were also convicted and sentenced to 12 and 8 years. They had been under house arrest pending trial and while their convictions were being appealed.

Fourteen Cubans including the former deputy sugar minister and the former director of the state nickel company were also convicted and sentenced to terms ranging from 6 to 20 years.

Foreign companies and diplomats had raised concerns that Tokmakjian’s case could scare off investors while Cuba was actively seeking foreign capital. It also annoyed Canada, a major trading partner.

“His ordeal is a cautionary tale to any investor who thinks the Cuban playing field is level,” said Peter Kent, Tokmakjian’s member of parliament.

Cuba seized about $100 million worth of company assets including bank accounts, inventory and office supplies, a ruling the company was challenging in international arbitration.

No immediate reason was given for the sudden release of Tokmakjian, whom Cuba had previously hailed as a model business partner over 20 years for supplying crucial transportation equipment during a severe economic crisis after the collapse of the Soviet Union.

The company was later caught up in an investigation of Cuba’s international trading sector, part of a crackdown on corruption.

cy7Cy Tokmakjian

Throughout the time Tokmakjian was tried in June and sentenced in September, the Canadian government was helping the United States and Cuba by serving as host to secret talks on restoring diplomatic ties.

It was unknown whether Canada’s role had any influence on Tokmakjian’s release.

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RAÚL CASTRO Y LA CORRUPCIÓN

Carlos Alberto Montaner | Miami | 7 Oct 2014

Original: http://www.diariodecuba.com/cuba

¿Cree Raúl Castro que puede haber un Estado medularmente corrupto con funcionarios honrados que cometen delitos pero no lucran con ello?

Esto es, en síntesis, lo que se ha publicado: Cy Tokmakjian un empresario canadiense de 74 años, presumiblemente de origen armenio, llevaba dos décadas haciendo negocios en Cuba, pero fue condenado a 15 años de cárcel por (supuestamente) sobornar a funcionarios cubanos.

En la redada —de acuerdo con Reuters— fueron apresadas, además, 16 personas. Otros dos canadienses, cinco empleados cubanos y 9 funcionarios del Gobierno. En el grupo hay un viceministro del Azúcar, Nelson Labrada, con el que se ensañaron, seguramente como una advertencia general. Lo condenaron a 20 años.

De acuerdo con el informe a que tuvieron acceso los periodistas, a Labrada le regalaron un televisor de pantalla plana, le pagaron unas vacaciones en Canadá y lo llevaron a un casino en Toronto donde jugó y ganó 2.500 dólares. En Cuba, ya le habían obsequiado una piscina plástica y una parrilla. En el lenguaje coloquial cubano era un “pacotillero”. Si existió corrupción fue de poca monta.

Escarmiento contra la corrupción

En todo caso, Raúl Castro cree en el escarmiento como forma de mantener la autoridad. Utiliza a Labrada para mandar un mensaje. Él y su hijo Alejandro Castro Espín están decididos a terminar con los delitos contra la economía nacional mediante una dosis de terror en el campo administrativo. Son dos versiones tropicales de Maximiliano de Robespierre, pero muy distorsionadas y llenas de contradicciones.

Para ellos ese comportamiento —la corrupción— pertenece a la permisiva era de Fidel. (Fidel se parece más a Georges Danton, de quien se dice que pagó por un cargo en el Consejo del rey Luis XVI, aunque luego pidiera su cabeza.) Los raulistas lo afirman desdeñosamente a media lengua: “Eso ocurría antes”. “Antes” es la palabra clave. “Antes” quiere decir cuando Fidel gobernaba.

El Comandante era más político, más manengue, regalaba vistosos relojes Rolex a sus subordinados, o les daba autos Alfa Romeo, o se hacía de la vista gorda cuando Ramiro Valdés se asignaba una casa con piscina y gimnasio en Santa Fe, o cuando el general Guillermo García Frías utilizaba dos yates suntuosos para sus francachelas.

Si Fidel, gran malversador de los recursos públicos, disfrutaba de 50 residencias suntuosas, coto privado de caza, y yates de lujo para pescar, si la Isla era suya del hocico al rabo, podía entender que la manera de mantener viva la lealtad de sus subordinados era alternando la intimidación con recompensas materiales. Él sabía que el discursito revolucionario del “hombre nuevo” que predicaba el Che Guevara era una tontería.

Esta diferencia entre las posiciones de Fidel y Raúl con relación a la corrupción comenzó desde los primeros días del triunfo de la revolución. En sus memorias inéditas, Benjamín de Yurre, recientemente fallecido, secretario personal de Manuel Urrutia, el primer presidente de Cuba tras la huida de Batista (enero a julio de 1959), cuenta que estaba de visita en el despacho de Camilo Cienfuegos, situado en una suite del hotel Riviera, cuando Raúl entró como una tromba, rodeado por sus guardaespaldas, e increpó al popular comandante echándole en cara sus borracheras y orgías con el dinero de la revolución. Camilo le respondió airadamente y trató de sacar su pistola cuando el capitán Olo Pantoja se interpuso y los guardaespaldas de Raúl y de Camilo los separaron. De Yurre se evadió discretamente de aquella peligrosa trifulca.

imagesCAT03Z4EA Fidel, en cambio, le traía sin cuidado el comportamiento de Camilo. Para Fidel la corrupción era un arma de gobierno y se extendía al campo internacional. Usaba el dinero del país para “hacer revolución”. ¿Qué era eso? Con frecuencia, era expandir su influencia con los recursos de los cubanos. Era darles cientos de miles de dólares a las guerrillas, a los terroristas, o a los candidatos amigos durante los periodos electorales, a sabiendas de que una parte importante de esa plata se quedaba en el camino. Era invitar a 50 diputados mexicanos para que disfrutaran de Tropicana. Era convocar a cientos de personas, con todos los gastos pagados, para alinearlos tras alguna consigna política, o, simplemente, para que lo aplaudieran.

A Fidel le encanta que lo aplaudan. Tiene y alimenta con ese ruido su ego descomunal. Raúl, en cambio, posee conciencia de sus muchas limitaciones y es menos vanidoso. Entre sus defectos, no es de los menores su tosco desconocimiento de la naturaleza humana, lo que le llevó en los años 60 a proponer y llevar a cabo el cruel apresamiento de miles de jóvenes acusados de homosexualismo y “otras conductas antisociales”, formas de corrupción burguesa que él iba a corregir con durísimos trabajos agrícolas en los campos de concentración de la UMAP.

En definitiva, Fidel incurría en el terreno político, y para sus fines políticos, en las mismas prácticas delictivas por las que ahora Raúl acusa a Cy Tokmakjian en el campo empresarial. Sus intereses serían diferentes, pero sus métodos y su burla de las leyes son similares. ¿De dónde salía el dinero para “hacer revolución”?¿De qué presupuesto? ¿Quién lo fiscalizaba? Por la centésima parte de esa retorcida conducta las cárceles de medio planeta están llenas de funcionarios venales que incumplen las leyes.

La corrupción de Raúl

¿Y Raúl? ¿Advierte Raúl que cuando les alquila miles de profesionales de la salud a otros países y les confisca el 90% del salario está incurriendo en una falta tipificada en los acuerdos de la Organización Internacional del Trabajo de donde pueden deducirse consecuencias penales?

Pedirle 55 millones a la familia o a la empresa de Cy Tokmakjian a cambio de su libertad, ¿no es un clarísimo delito de extorsión típico de las mafias?

Quedarse con una parte sustancial de la plata que les produjo a los montoneros argentinos el secuestro de los acaudalados hermanos Born —60 millones de dólares—, ¿no es complicidad con un gravísimo delito?

Amenazar con la cárcel a los empresarios a los que el Gobierno cubano les debe dinero —como sucede con algunos exportadores panameños de Colón— si no les condonan las deudas a la Isla, ¿no es un comportamiento gangsteril?

No es verdad que Cuba le debe 500 millones de dólares a los exportadores panameños de la ciudad de Colón. Son casi 5.000 millones, y algunas deudas se arrastran desde hace más de 30 años, como me contó, indignado, uno de esos comerciantes atrapado entre la deuda, el miedo y la amenazada familia que ya formó en Cuba.

El mecanismo es diabólico: la manera de hacer negocios en Cuba es mediante la trampa y el amiguismo, dos conductas delictivas. Donde las reglas son deliberadamente opacas, en donde los tribunales son un brazo de la policía política, y en donde no funcionan el mercado y la competencia, sino el favoritismo, ¿qué otra forma hay de desarrollar actividades comerciales de una cierta envergadura?

No obstante, esos comportamientos corruptos son bienvenidos… pero solo mientra al Gobierno le conviene. Cuando llega la hora de ajustar cuentas comienza el calvario de los empresarios, a quienes someten a toda clase de chantajes y extorsiones. A fin de cuentas, Fidel y Raúl —en eso coinciden— sienten el mayor de los desprecios por los hombres de empresa que persiguen fines egoístas. Ellos, supuestamente, son revolucionarios puros a los que no les queda otro remedio que admitir a una gentuza deleznable para salvar la revolución

RC

La corrupción cubano-venezolana….

Read More: Raúl Castro y la Corrupción

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CUBAN PROSECUTORS SEEK 15 YEARS FOR CANADIAN BUSINESSMAN IN BRIBERY CASE

CyCy Tokmakjian

DANIEL TROTTA; HAVANA — Reuters; Jun. 30 2014  

Cuban prosecutors are seeking a 15-year prison term for a Canadian businessman who has been tried on bribery charges, and 20 years for Cuba’s former deputy sugar minister who is accused in the same case, official media reported on Monday. Prosecutors are also seeking a total of $91-million in fines or forfeitures from three Canadians and 14 Cubans in a case that has been closely watched by potential investors wary of how Cuba treats foreign executives.

Lead Canadian defendant Cy Tokmakjian, 74, was held for nearly 2 1/2 years before being charged.

Cuba has been touting a new foreign investment law that took effect Saturday, saying it was crucial for attracting foreign direct investment that’s needed for development. The main feature of the law is to lower taxes. But many foreign companies have said they are more interested in the general business climate, transparency and the rule of law, especially in light of this case.

Cuban authorities publicly revealed details of the trial for the first time with an account in Monday’s edition of the Communist Party daily, Granma, which said the evidence phase of the trial lasted from June 9-21 at a criminal court in Havana. The court has yet to reach a verdict, which is normally rendered within a few weeks of trial.

Diplomats with knowledge of the case have previously said that prosecutors were seeking 15 years for Tokmakjian and 12-year sentences for his top managers, fellow Canadians Claudio Vetere and Marco Puche. All three Canadians from the Tokmakjian Group, a transportation and trading company, say they are innocent, but its vice-president of finance, Lee Hacker, has previously said in a statement he feared the outcome of the case, which has strained Canada’s relations with Cuba, may be predetermined.

Cuba shuttered the Canadian company in September, 2011, arrested Tokmakjian and took the passports of the other managers. The charges include bribery, fraud, tax evasion, falsifying bank documents and other economic offences.

Granma said prosecutors were asking for 15 years for Tokmakjian and 20 years for Nelson Labrada, former deputy minister of the defunct Sugar Ministry, which has since been replaced by a state sugar enterprise. Prosecutors requested sentences of eight to 12 years for the remaining defendants.

Among the Cuban defendants is Ernesto Gomez, former director of the state nickel company Ferroniquel Minera SA.

The Ontario-based Tokmakjian Group did an estimated $80-million in business annually with Cuba, mainly selling transportation, mining and construction equipment. It was the exclusive Cuba distributor of Hyundai, among other brands, and a partner in two joint ventures replacing the motors of Soviet-era transportation equipment.

The company was caught up in an investigation of Cuba’s international trading sector, part of a crackdown on corruption by President Raul Castro

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Canadian Parliament Member Warns Cuba Investors

A businessman from his district has been jailed in Havana for 3 1/3 years without trial, says Peter Kent.

By Juan O. Tamayo, El Nuevo Herald,

A senior Canadian parliament member has taken a punch at Cuba’s new foreign investment law, saying that one of his constituents has been jailed on the island since 2011 without trial and has been offered leniency if he pays questionable debts.

“The international financial community should ponder long and hard the investment blandishments of Cuban ministers, diplomats and trade officials,” said Peter Kent, chairman of the House of Commons Defense Committee.

“Reality is at stark odds with the platitudes” of those officials, Kent added, going on to detail the case of his constituent, Cy Tokmakjian, one of several foreign businessmen jailed in Cuba on what they say are fraudulent corruption charges.

Tokmakjian, 73, a Canadian citizen of Lebanese descent, is president of Tokmakjian Group, at one point the second largest Canadian firm operating in Cuba. He has been jailed since Sept. 10, 2011 for investigation by Interior Ministry officials.

Kent described the ministry as modeled on the Soviet KGB and East German STASI security services. He also noted that all of the other jailed businessmen come from Canada and Europe — not Cuban allies such as China, Venezuela or Russia.

cy7

Cy Tokmakjian

Tokmakjian’s assets in Cuba, worth more than $90 million, have been frozen and “it seems no coincidence” that the total value of the government’s claims against him exceeds that amount, Kent wrote in a column published Tuesday in the Huffington Post.

“There have been suggestions to company representatives that additional millions sent from Canada could result in a more ‘lenient’ outcome,” he added. “He has been told, many times, that, if he drops International claims against Cuba or admits to minor ‘offenses,’ he would have a lenient trial and be released immediately.”

Tokmakjian has repeatedly denied all the allegations against him, which include bribery and tax evasion. Kent said the businessman is ready to defend his case vigorously in a Cuban court.

Kent said that when he visited Cuba in 2010 as Minister of State for Foreign Affairs in charge of the Americas, Tokmakjian “was characterized as a valued partner by Cuban interlocutors.” The Canadian company largely sold imported vehicles to the island’s government.

The parliament member also noted that among the foreign investors who lost millions in Cuba when they came under suspicion of corruption were Briton Stephen Purvis, who was working to develop a golf course, and Frenchman Jean Louis Autret, who ran a string of bakeries and other businesses.

Another Canadian businessman, Sarkis Yacoubian, was expelled from Cuba in February after serving about one third of a nine-year sentence. He was arrested in July 2011 and was convicted in April 2013 of bribery, tax evasion and “activities damaging to the economy.”

Yacoubian, who ran a $30 million trading company in Cuba, Tri-Star Caribbean, told the Toronto Star newspaper that he had cooperated with investigators and hoped to receive a lenient sentence. Cuban officials never explained his expulsion.

He and Tokmakjian were imprisoned at La Condesa, a facility on the outskirts of Havana reserved for foreigners and important Cuban government officials.

Peter KentPeter Kent

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Stephen Purvis, Wrongfully Accused of Spying and Fraud: Letter to the Economist

From The Economist, August 13, 2013

“Dear Editor,

I enjoyed reading about my misfortunes in the Economist, albeit many months after publication and in the company of fellow inmates in the Cuban high security prison, La Condesa. I would ask you to correct the impression that you give in the May 9th 2012 edition and subsequent articles that I was accused and detained for corruption.

During my 8 month interrogation in the Vila Marista I was accused of many things, starting with revelations of state secrets, but never of corruption. After a further 7 months held with a host of convicted serious criminals and a handful of confused businessmen, most of whom were in a parallel predicament to mine, I was finally charged and sentenced for participating in various supposed breaches of financial regulations. The fact that the Central bank had specifically approved the transactions in question for 12 years, and that by their sentencing the court has in effect potentially criminalised every foreign business investing or trading in Cuba was considered irrelevant by the judges. I am thankful however that the judges finally determined that my sentence should not only have with a conditional release date a few days before the trail thus conveniently justifying my 15 months in prison, but, bizarrely was to be non-custodial. So my Kafkaesque experience at the sharp end of Cuban justice ended as abruptly as it began.

I spent time with a number of foreign businessmen arrested during 2011 and 2012 from a variety of countries, although representatives from Brazil, Venezuela and China were conspicuous in the absence. Very few of my fellow sufferers have been reported in the press and there are many more in the system than is widely known. As they are all still either waiting for charges, trial or sentencing they will certainly not be talking to the press. Whilst a few of them are being charged with corruption many are not and the accusations range from sabotage, damage to the economy, tax avoidance and illegal economic activity. It is absolutely clear that the war against corruption may be a convenient political banner to hide behind and one that foreign governments and press will support. But the reasons for actively and aggressively pursuing foreign business are far more complicated.  Why for example is the representative of Ericsson in jail for exactly the same activities as their Chinese competitor who is not? Why for example was one senior European engineer invited back to discuss a potential new project only to be arrested for paying technical workers five years ago when he was a temporary resident in Cuba?

You interpret the economic liberalisation evident at street level as an indication of a desire for fundamental change. It is true that these reforms are welcomed, especially the dramatic increase in remittance flows that have injected fresh hard currency into the bottom strata of a perennially cash strapped economy. But until the law relating to foreign investment and commerce is revised and the security service changes its modus operandi for enforcing these laws, Cuba will remain extremely risky for non-bilateral foreign business and foreign executives should be under no illusion about the great personal risks they run if they chose to do business there.  As businessmen emerge from their awful experience and tell their individual stories perhaps the real reasons for this concerted attack against business’s and individuals that have historically been friends of Cuba will become a bit clearer. In the meantime your intrepid reporters could usefully investigate the individuals and cliques who are benefitting from the market reorganization and newly nationalized assets resulting from this “war on corruption”.

Yours faithfully, Stephen Purvis”

Stephen Purvis and Family after his return to Britain

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Toronto Businessman Sarkis Yacoubian sentenced to 9 years in Cuba on corruption charges

Toronto man sentenced to 9 years in Cuba on corruption charges

thestar.com/ By: Julian Sher Investigative News reporter, Published on Wed Jun 19 2013

For almost two years as he sat in a Havana prison awaiting trial on corruption charges, North York businessman Sarkis Yacoubian held out hope that by collaborating with the Cuban authorities and fingering a wide web of foreign and domestic corporate intrigue, he would get some leniency.

“They are going to bring down my sentence, provided that I go along with them,” he had told the Star in a series of exclusive jailhouse phone interviews.

But that didn’t happen.

Three weeks after he was put on trial in late May, Yacoubian finally got word he has been sentenced to nine years in jail.

Sarkis Yacoubian

“We were shocked,” said Krikor Yacoubian, Sarkis’ brother in Toronto. “We were anticipating less with the collaboration, but they did not budge much.”

Krikor says his jailed brother was stunned when he first heard the news from his Cuban lawyer.

“He was silent for awhile, for a good minute,” he said. “Not tearful or angry. He said, ‘OK let’s go to the next step.’”

That next step, the family says, will be a protracted battle to try to get the 53-year-old Yacoubian transferred to Canada to serve out his sentence here.

“To my knowledge it is the first time that any Canadian businessman has been sentenced for corruption,” said John Kirk, a professor at Dalhousie University’s Department of Spanish and Latin American Studies who has written several books on Cuba.

“Clearly this is intended to send a message to Cubans and foreign investors alike,” he said. “Several deputy ministers in Cuba and dozens of bureaucrats have also received heavy sentences.”

Yacoubian’s cousin and business associate, a Lebanese citizen named Krikor Bayassalian, was sentenced to four years as a co-defendant, the family says.

The details of the key Canadian connection to Cuba’s widening corruption scandals were revealed last month in a joint investigation by the Toronto Star and El Nuevo Herald, the Spanish-language affiliate of the Miami Herald.

Arrested in July 2011 and detained without charges, Yacoubian – a McGill MBA graduate who operated a $30 million transport and trading company called Tri-Star Caribbean — was formally accused in April of bribery, tax evasion and “activities damaging to the economy.”

Yacoubian disputed many of the specifics of the case but he said he decided to cooperate with the Cubans, exposing what he called the “black forces” of corruption and naming more than a dozen foreign companies and executives.

“I told everything and I told how these schemes were done,” he told the Star. “It was just eating me alive. Maybe in my conscience I wanted my company to be brought down so that I could tell once for all things that are going on.”

In September 2011, Cuban authorities arrested a second GTA man –73-year-old Cy Tokmakjian, whose $80 million Tokmakjian Group company is one of the largest foreign operations in Cuba.

His family told the Star he has still not been charged.

Krikor Yacoubian says the family has decided not to appeal his brother’s sentence but to immediately start the lengthy legal and diplomatic manoeuvres to get Sarkis transferred to Canada under a prisoner transfer treaty Canada signed with Cuba in 1999.

“I don’t want my brother to rot in Cuba,” said Krikor Yacoubian.

 

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The Economist: “A tale of politics, corruption and golf”

 

May 25th 2013 | HAVANA |THE ECONOMIST

AFTER the 1959 revolution Fidel Castro declared that golf was a “bourgeois” hobby, unsuitable for communists. Most of the island’s courses were built on, and no new ones have been developed since. But the government has just given the go-ahead to a new golf resort, in what it claims is “the start of a whole new policy to increase the presence of golf in Cuba”. In the same week it pressed ahead with the prosecutions of several foreign businessmen for corruption. The developments, which seem to be linked, show how Cuba is changing its attitude to business.

The $350m Carbonera Club, near the beach resort of Varadero, is to be developed by Esencia, a British company. A few days before the project was approved, Esencia had staged a golf tournament which was won by Mr Castro’s son Antonio. The development will include residential properties available for purchase by foreigners. Other big tourism projects are under way. The government has given the go-ahead to the construction of a 1,300 berth marina, also in Varadero, which would be the largest in the Caribbean. The island’s airports are to be upgraded too, with help from Brazil’s development bank.

Raúl Castro, Fidel’s brother, has slowly begun to open Cuba’s economy since becoming president in 2008. Cubans may now buy homes and cars, and small businesses such as restaurants and bars have proliferated. But Raúl has been at pains to stress that his intention is to “update” Cuba’s socialist model, rather than reintroduce full-blown capitalism. Perhaps to make that clear, foreign businessmen on the island have had a particularly hard time under his watch. Several have been held without charge for almost two years, ostensibly for corrupt practices. Now, in a move which could be a precursor to their release, they are about to go on trial.

Sarkis Yacoubian, a Canadian of Armenian origin who ran a transport and trading company, will probably be first in court. In July 2011 state security officers raided his office and took him to Havana’s notorious detention centre, Villa Marista, where he apparently admitted paying bribes to state employees (all of whom, from labourers to managers, earn about $20 a month). Some officials were slipped a few ten-dollar notes, or a dinner. At least one was given $50,000.

Mr Yacoubian’s confession soon triggered further arrests. In September 2011 authorities detained his business partner turned rival, Cy Tokmakjian, a fellow Canadian-Armenian. His company, Tokmakjian, had the lucrative sole concession to import Hyundai vehicles to Cuba, and also supplied heavy machinery to the nickel industry.

A month later Amado Fahkre, a managing partner of Coral Capital, a British fund with property and art investments on the island, was arrested. The following year Coral’s chief operating officer, Stephen Purvis, was taken into custody, too. Many other foreign investors fled following the crackdown. Those who stayed complained that it had become much harder to meet Cuban officials.

By announcing the new golf investments at the same time as ending the legal limbo of the jailed foreigners, Raúl may be signalling that once again the island is open for business. The trials and the more relaxed attitude to investment are part of the same process, says one Western diplomat: “After two years of indecision, something is happening.”

Something has to. Cuba’s economy has long been propped up by Venezuela, which provides most of Cuba’s oil in return for tens of thousands of Cuban doctors and security advisers. Nicolás Maduro, Venezuela’s new president, has pledged loyalty to Cuba. But his narrow, disputed election victory last month, and Venezuela’s nosediving economy, mean that Cuba needs other options. Much as Fidel may disapprove, it seems that the sport of stockbrokers is part of the plan.

A Game for Revolutionaries?

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Canadian jailed in Havana corruption scandal speaks out

By Julian Sher of The Toronto Star And Juan O. Tamayo; Posted on Wednesday, 05.15.13

Speaking over a scratchy telephone line from inside a Cuban prison, Sarkis Yacoubian’s voice goes suddenly silent. He’s crying.

“I was so depressed at times, I wanted to commit suicide,” says the 53-year-old entrepreneur.

In exclusive interviews from the La Condesa prison, Yacoubian provides an insider’s view of a sweeping anti-corruption campaign by the government of Raúl Castro that has seen several foreign businessmen — including himself and another Toronto-area businessman — jailed.

A joint investigation by The Toronto Star and El Nuevo Herald has found that in a corruption-plagued country described in secret U.S. government cables as “a state on the take,” the two jailed Canadians are embroiled in a high-stakes diplomatic and legal stand-off between Havana and Ottawa, potentially jeopardizing millions in taxpayer dollars that underwrite Canada’s trade with Cuba.

Arrested in July 2011 and detained for nearly two years without charges, Yacoubian, who ran a transport and trading company, was finally handed a 63-page indictment last month accusing him of bribery, tax evasion and “activities damaging to the economy.”

Sarkis Yacoubian  from Toronto, is in prison near Havana awaiting trial on corruption-related charges.

A suspect who says he quickly pointed the finger at widespread wrongdoing by other Canadian and foreign businesses, Yacoubian now faces up to 12 years in prison after he pleads guilty at his trial set to begin next Thursday. The charges were filed in a special Havana court for Crimes against the Security of the State, which can effectively hold trials in secret.

“They found out this was an epidemic going all over the place and I was the fall guy,” says Yacoubian. “They want to give an example to the rest of the businessmen. They want to scare them to death.”

The second Canadian — 73-year-old Cy Tokmakjian who runs a global transportation firm called the Tokmakjian Group — was picked up by Cuban authorities in September 2011 and remains in jail with no specific charges filed against him.

“We’re as worried as anyone would be if their father is in a place where they shouldn’t be,” said his son and company president Raffi Tokmakjian in an interview at their corporate headquarters in Concord, Ontario.

Raffi and his two sisters say they are in daily phone contact with their father. “He worries more about us. He says: ‘You guys stay strong, I’m okay,’” said Anni Tokmakjian, the company’s director of sales. “We’re just focusing on getting him home, that’s all we really care about.”

But that might not be easy. The two entrepreneurs of Armenian origin, one-time business associates turned bitter rivals, ran multi-million dollar trading companies that sold heavy equipment, vehicles and supplies to Cuban state companies in the transport, construction, nickel and other industries.

Today, their Havana offices are shuttered, their fortunes frozen and their future in limbo.

Cuban authorities in Havana and at the country’s embassy in Ottawa declined to be interviewed for this story.

Complicating matters is that millions in Canadian taxpayer dollars funded by the Canadian Commercial Corporation (CCC) — a kind of broker that underwrites contracts between the Cuban government and select Canadian firms — may be at stake.

In 2011 and 2012, the CCC signed 38 contracts in Cuba worth more than $68.4 million, the latest in its $650-million business with Cuba since 1991. Much of that financial support — for privacy reasons, the agency won’t disclose its client list — went to back deals made with the Tokmakjian Group.

Now that Tokmakjian is in prison and the Cuban government has officially revoked his company’s license to operate, there are questions about what the Cubans will do if their courts rule that Tokmakjian contracts backed by the CCC were tainted by corruption.

The Tokmakjian Group is reported to be the second largest Canadian operation in Cuba, with at least $80 million in annual sales in the country.

Raffi Tokmakjian says his father “fell in love with the place” when he began investing in Cuba in the 1960s.

Yacoubian, too, had big dreams when he first came to Cuba in 1993. He quickly became fluent in Spanish and, after working briefly for Tokmakjian, he built his company, Tri-Star Caribbean, into a flourishing $30-million-a-year enterprise.

It all came crashing down when plainclothes security officers swept into his offices in Havana in July 2011.

Whisked away to a “safe house” for questioning and allowed outside for only one hour a day, Yacoubian says he slipped into desperation and depression. “I had lost my mind,” he says. “I was talking to myself, banging my head.”

Then Yacoubian made a fateful choice: He blew the whistle. “Maybe in my conscience I wanted my company to be brought down so that I could tell once for all things that are going on,” he says. “It was just eating me alive.”

He told his interrogators that he had little choice but to hand over money to bureaucrats or officials to secure contracts or even to ensure they were honored after winning a bid.

“If I didn’t pay, at the end of the day they would just create problems for me,” he says. Prosecutors allege in their court filing that Yacoubian or his employees bribed at least a dozen state officials with everything from nice dinners and prepaid phone cards to cash — $300 for a tip on a deal, $50,000 for a 2008 contract on earth movers.

Yacoubian disputes many of the details in the charges. But he says what bothered him was that some of the foreign businessmen were “bigger crooks” than the Cubans, profiting unduly from shady business dealings — often, he says, with support or subsidies from Western governments.

Yacoubian says he spent the next few months turning what could have been a police grilling of him into a kind of Corruption 101 class for his interrogators.

“I tried to explain to them systematically how things could be done,” he says. “I gave them drawings, designs. I gave them names, people, how they do it, why, when, where, what.”

Yacoubian did not know that his tell-all tale would become fodder for a campaign against corruption led by Raul Castro.

The Reuters news agency reported in February 2012 that Yacoubian’s videotaped confession was the centerpiece in a video titled “Metastasis” that describes payoffs and bribes “spreading like cancer” into high levels of the Cuban government.

In the video, shown only to top government and Communist Party officials, “Yacoubian confesses he passed packets of money to Cuban officials,” Reuters reported.

Tokmakjian is also featured and accused of corruption. His children say he firmly denies any wrongdoing, insisting there have been yearly audits of their business partnerships with the Cubans with “no issues.”

Tokmakjian and Yacoubian were eventually transferred to La Condesa, a prison reserved for foreigners and disgraced government officials — although the Canadians are kept apart in separate barracks.

The families of both men say they have received support from the Canadian embassy in Havana and assurances that Foreign Minister John Baird and Minister of State of Foreign Affairs Diane Ablonzy have pushed the Cubans “at the highest levels” to provide justice for the jailed Canadians “in a more timely matter.”

Close observers of Canadian business and political affairs in Havana say Ottawa and the CCC have to be concerned when a major player like Tokmakjian, backed by federal money, runs afoul of the Castro regime. Canada is one of Cuba’s largest trading partners and its single largest source of tourism revenue

One long-time Canadian investor with many years of experience in Havana, who asked to remain anonymous because of the uncertain political climate there, said “a lot of people” were frustrated that CCC was an exclusive club, most of its money being “eaten up by a handful of companies,” including the Tokmakjian Group.

For now, the CCC says it is not worried.

“The Corporation has consistently been paid by the Government of Cuba on time regardless of the external environment,” said Joanne Lostracco, the CCC’s manager of Government Relations.

Asked about the perils of a Canadian corporation operating in a Cuban economy tainted by corruption, Lostracco said the CCC has a “strong due diligence process” that imposes “full financial disclosure” on Canadian companies and allows the CCC to withdraw from any contract “obtained through illicit means.”

The Tokmakjian children remain optimistic their father will be home soon, taking heart from the fact that 10 other foreign employees of their company who were detained by Cuban authorities have been released in the past four months.

For his part, Yacoubian says he hopes to get a reduced sentence after he pleads guilty at his trial next week “because I collaborated closely” — a collaboration acknowledged by Cuban authorities in his indictment.

Yacoubian takes anti-depressants during the day and sleeping pills at night, but he says the poor ventilation in the stifling heat and the lack of chairs for his bad back are taking a toll.

Reflecting on the role he has played in unraveling Cuba’s corruption scandals, he has mixed emotions.

“It’s a victory because now, how things were done (in the past) has been unwrapped,” he says. But he also recalls the lyrics from a rock song that was popular when he and his family lived through the difficult years of civil war in Lebanon:

“Don’t be a hero,” Yacoubian says. “Heroes are so sad.”

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Canadian, British executives face corruption charges in Cuba

By Mark Frank, Havana — Reuters, Globe and Mail, May 15, 2013

Canadian and British executives of three foreign businesses shut in 2011 by Cuban authorities, ostensibly for corrupt practices, have been charged after more than a year in custody and are expected to go on trial soon, sources close to the cases told Reuters.

The arrests, part of a broad government campaign to stamp out corruption, sent shock-waves through Cuba’s small foreign business community where the companies were among the most visible players.

Until then, expulsions rather than imprisonment had been the norm for those accused of corrupt practices.

The charges against the executives involve various economic crimes and operating beyond the limits of their business licenses on the communist-run island, according to the sources, who asked to remain anonymous and who include a close relative of one of the defendants. Some of the foreigners are alleged to have paid bribes to officials in exchange for business opportunities.

Dozens of Cuban state purchasers and officials, including deputy ministers, already have been arrested and convicted in the investigation into the Cuban imports business that ensued.

Cuba has mounted a crackdown on corruption in recent years as part of a gradual reform process to open up the state-run economy to greater private sector activity. Under Cuban law, trials must begin within a month of charges being filed, though small delays are common and postponement can be sought by the defendants’ lawyers.

“There is definitely movement and the trials could begin soon,” a Western diplomat said.

The crackdown began in July 2011 with the closure of Canadian trading firm Tri-Star Caribbean and the arrest of its chief executive, Sarkis Yacoubian.

In September 2011, one of the most important Western trading firms in Cuba, Canada-based Tokmakjian Group, was also shut and its head, Cy Tokmakjian, taken into custody.

In October 2011, police closed the Havana offices of the British investment and trading firm Coral Capital Group Ltd and arrested chief executive Amado Fakhre, a Lebanese-born British citizen. Coral Capital’s chief operating officer, British citizen Stephen Purvis, was arrested in April 2012.

All four men are being held in La Condesa, a prison for foreigners just outside Havana, after being questioned for months in other locations.

A number of other foreigners and Cubans who worked for the companies remain free but cannot leave the island because they are considered witnesses in the cases.

Cuban officials and lawyers for the defendants could not be reached for comment.

The legal limbo of the foreign executives has put a strain on Cuba’s relations with their home countries, where the legal process protects suspects from lengthy incarceration without charges, diplomats told Reuters.

Cuba says the cases are being handled within the letter of Cuban law. Attorney General Dario Delgado told Reuters late last year that the investigation had proved complex and lengthy.

“These cases, which involve economic crimes, are very complicated. They do not involve, for example, traffic violations or a murder,” he said.

Comptroller General Gladys Bejerano has said the length of investigations depended on the behavior of those involved.

“When there is fraud, tricks and violations … false documents, false accounting … there is no transparency and the process becomes more complicated because a case must be documented with evidence before going to trial,” she said.

Transparency International, considered the world’s leading anti-graft watchdog, last rated Cuba 58 out of 178 countries in terms of tackling corruption, ahead of all but eight of 33 nations in Latin America and the Caribbean.

Soon after taking over for his ailing brother Fidel in 2008, President Raul Castro established the comptroller general’s office with a seat on the ruling Council of State, even as he began implementing market-oriented economic reforms.

The measure marked the start of the anti-corruption campaign. Since then, high-level graft has been uncovered in several key areas, from the cigar, nickel and communications industries, to food processing and civil aviation.

Rodrigo Malmierca, the minister of foreign commerce, last week delivered a report to the cabinet highlighting “irregularities” in foreign joint venture companies, according to state-run media.

Malmierca blamed “the lack of rigor, control and exigency” of the deals “as well as the conduct and attitudes of the officials implicated,” the reports said.

Castro has been less successful, however, in tackling low salaries and lack of transparency, which contribute to the problem, according to foreign diplomats and businessmen.

There is no open bidding in Cuba’s import-export sector and state purchasers who handle multimillion-dollar contracts earn anywhere from $50 to $100 per month.

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