Fidel's Crony Capitalism

by Servando Gonzalez

Copyright © 1999. All rights reserved.

Just a few years after Fidel Castro took power in Cuba, Ramón Grau San Martín, a former Cuban president with a reputation for wit and corruption, made a comment to a friend. "These honest kids," said Grau referring to Castro and his associates, "will manage with their honesty to accomplish what we, the traditional corrupt politicians, never were able to do: totally destroy this country." In retrospective, it seems that Grau was right, but just on one count. Castro and his cronies have totally destroyed Cuba, but they have proved to be more corrupt than all the politicians of the old school.

According to Carlos Franqui, in the past there were many plantations in Cuba; now the whole island has turned into a big plantation, and it belongs to Fidel Castro. "Who enjoys the fruits of the revolution, the houses of the rich, the luxuries of the rich? The Comandante and his court."


A Cuban Robber Baron

Closely following the steps of his unscrupulous father, who made his fortune by stealing sugar and moving fences under the cover of the night with the help of his friends, Fidel Castro surrounded himself with a circle of cronies as corrupt as himself. Soon after he got power in Cuba, Castro accomplished two important things. First, he got rid of non-corrupt leaders like Frank País, Huber Matos and Camilo Cienfuegos and, secondly, he began an accelerated process of stealing other people's money and property.

Forty years later, there is no doubt that his plan worked to perfection. Today, Cuba is practically the personal property of Fidel Castro and his cronies, a small group of shamelessly corrupt feudal landlords. The economic system Fidel Castro has imposed in Cuba is a crony capitalism economy of systemic corruption which uses the overt application of state power as a tool to enrich the ruler and his cronies. Granted, throughout history, and particularly in Latin America, most political systems have served to benefit the rulers, but under Castro's crony capitalism, systemic corruption is more widespread and better organized in Cuba than never before.

One of the many myths still surrounding Fidel Castro is his utmost disdain for money and his honesty. "For those who do not know Cuban history," wrote Herbert Matthews, "it needs to be pointed out that the Castro regime is the first honest government that Cuba has ever had-honest in the sense that its leaders have not enriched themselves." And Matthews forecasted, "Whatever the future brings, Cubans know that Fidel Castro has no money deposited in the United States or Switzerland..." But, contrary to Matthews' predictions, the future brought a very different knowledge for Cubans.

Castro, who allegedly earns a modest salary in Cuban pesos as Cuban President and has no other sources of income, has actually amassed an incredible personal fortune. The July 28, 1997, issue of Forbes magazine lists Fidel Castro as one of the richest people in the world, with a net worth of $1.4 billion. However,Forbes' estimate of the funds that Castro actually controls may be lower than his true worth. It merely assigns to him 10 percent of an estimate of Cuba's gross domestic product. But the truth is that, in addition to controlling the Cuban economy, Castro possesses and personally controls international bank accounts and large amounts of gold and commodities, and has done so virtually from the very moment he grabbed power over the Island in 1959.

Castro may claim that he doesn't care for money, but he has a stash of cash totalling several millions of dollars hidden away in banks in Zürich and other financial centers of the very Capitalist world he profess to despise. He has a private fleet of large yachts, helicopters, planes and luxury cars, and keeps stately homes in each of Cuba's 14 provinces. While the Cuban people struggle with housing shortages, Castro reserves hundreds of houses in Havana's Jaimanitas beach section for the use of his security guards and aides. While Castro demands austerity from the people, he and his close associates order and send home foreign luxury items and use government satellite dishes to tune in to U.S. televised movies and sport events.

Until very recently Castro managed himself to push forward his image as a socialist Mr. Clean contrasting with the image of widespread corruption in Latin America and during Cuba's previous history. Now it seems that Mr. Clean has dirty hands. When Forbes published its estimate of Castro's personal fortune, some foreign observes believed that the revelation placed him in a difficult position before the Cuban people, because it tarnished his image as a sworn enemy of capitalism, constantly asking the Cuban people for sacrifices and austerity in the name of socialism. But that is not the case. Perhaps Castro fooled some of his admirers in the U.S., but he never fooled the Cuban people. From the very beginning Cubans changed the name of the political system Castro imposed in Cuba from socialismo to sociolismo (from "socio," Cuban slang for "buddy" or "crony"), a tropical version of crony capitalism.

Contrary to the image portrayed by some of his biographers, who paint Castro as a young, idealistic lawyer fighting for the rights of the poor and humble, the truth is that Fidel Castro never had a job and never made any money out of his work. The first and only case he defended in court was the one in which he represented himself as a defendant for the failed attack to the Moncada garrisons in Santiago de Cuba. Before 1959, Castro had only four known sources of income: the money his father periodically sent him; the money he borrowed from his friends; the money his wife, Mirtha Díaz Balart, gave him; and the money the CIA sent him when he was in the Sierra Maestra mountains.

 

Under the pretext of creating in Cuba an egalitarian, just society, Castro seized private country clubs, beach resorts, and other recreational facilities and made them available to the lower classes of the Cuban population. Soon after, he also deprived the upper classes of most of their properties. Under the Agrarian Reform Law large tracts of land were divided and distributed among poor farmers... to be taken away from them a few years later under the Second Agrarian Reform Law.

Likewise, homes left vacant by the wealthy leaving the country in drones were used as housing for students. But, contrary to government's propaganda, not all mansions were turned into schools. Most high-rank army officers appropriated mansions for their personal use. Later, when Castro found out that the number of available mansions was much larger than the number of his cronies, he created the so-called "areas congeladas" ("frozen zones"), whole areas in the best sections of the cities, where luxurious mansions were kept closed waiting for a Castroist crony to take them in the future as a gift from the magnanimous Comandante en Jefe. But, while Fidel and his cronies have been enjoying the stolen goods and properties since the very beginning, initially they did it with discretion, trying at the same time to keep their public image of simple, busy public officials working hard for the revolutionary government and the betterment of the new society.

Since Castro openly embraced "socialism," in the mid-sixties, he began a campaign appealing to the revolutionary sentiments of the people, like "socialist emulation," patriotism, disdain of selfish competition and individualism-in other words, nonmaterialistic incentives. The main thrust of the new society Castro had in mind was the creation of the "new man," fully imbued with collectivist, equalitarian, and non-materialist values. This new man was to prefer moral incentives over material ones, and his work would be based on a socialist morality, or conciencia, rather than on material rewards-like money, for example. The strict rationing, introduced in 1962 and still in place after 36 years, guaranteed all Cubans, regardless of their personal wealth, equal access to basic necessities... or so the Castroist government claimed.

Apparently, however, Castro and his cronies never followed the example they were teaching the masses. As early as 1974 professor Edward Gonzalez reported: "Most Cubans must subsist on their meager monthly quotas of food and clothing and must accept overcrowded or substandard housing and inadequate public facilities. In contrast, government and party officials enjoy privileges and amenities that simple are not available to the rest of the populace, such as supplementary rations, preferential treatment in housing, access to state vehicles, and special dining privileges."

Still, for more than three decades Castro and his cronies managed to maintain their public facade as honest, sacrificed managers. But those idealistic times are gone now. Not only the privileged nomenklatura does not care any more about their public image, but there is a noticeable trend to concentrate wealth in the hands of Castro and a few of his cronies.

 

Fidel's Happy, Good Life in His Proletarian Paradise

Though rumors ran for years all around Cuba about Fidel and his cronies' enjoyment of the dolce vita, all the information available was just that: rumors. Telltale signs, however, that Castro and his close friends were not affected by the food scarcities the Cuban people have been chronically suffering were evidenced in their health. By the mid-seventies most Cubans began showing in their skins, nails, and hair the effects of long years of poor diets, and were rapidly becoming a nation of very skinny people. But, contrary to the common trend, Fidel and his cronies were putting weight and their skin was showing the healthy luster characteristic of fat pigs ready for the slaughterhouse.

Rumors ran that some people had seen Celia Sánchez, Castro's trusted secretary and confidant, discreetly sneaking in and out of banks in Zürich's Banhoffstrasse. According to some sources these funds were used for paying Fidel's subversive activities all around the world. Others claimed that the main purpose of the accounts were to provide Fidel and his close circle of cronies of luxury items-ranging from cars and electronic equipment to clothing and food-unavailable in the island. A fact that gives some credibility to the rumors is that, though Cuba's trade with Switzerland is almost nonexistent, the National Bank of Cuba had kept for many years a relatively large office in Zürich.

It was not until 1990, however, that the cat escaped from the bag. In those days Fidel was enjoying his favorite form of entertainment: badmouthing Russia and its leaders on a daily basis. Then, Soviet journalist Alexei Novikov, a correspondent for Konsomoslskaya Pravda, (most Soviet "journalists" make some money on the side moonlighting for the KGB) decided that he was mad as hell and was not going to take it any more. Novikov retaliated in kind by publishing a long article that brought a first glimpse at Fidel's corrupt lifestyle. Though articles critical about Cuba in general had been appearing in the Soviet press, this was the first one that went after Fidel himself. U.S. officials believed that the details of Fidel's personal life were leaked to Novikov by Soviet officials unfriendly to Castro who believed Russia should loosen its ties with the Castro government.

Just a few months after Novikov's piece appeared in Moscow, the journalist was forced to leave Havana after having been the victim of a suspicious "accident." According to Soviet sources, the "accident" happened a few days after Novikov's report provoked a violent reaction in the official Cuban media.

"Castro's private life," wrote Novikov, "like the rest of the Cuban party and government elite, is shrouded under an impenetrable veil of total secrecy. Like most secrets, however, with time they become known." According to Novikov, Fidel has 32 stately mansions scattered around the whole island. In Havana alone he has three bunkers where, if need be, he can hide together with his retinue of 57 generals.

Novikov's account apparently touched a raw nerve among the Castro government. A Mexican television crew in Moscow made the mistake of reporting on the story and immediately the Castro government expelled from Cuba a crew from the same network that was on assignment in Havana.

The article pointed out that Castro has a personal guard of more than 9,700 men located throughout the island, with 2,800 of them in Havana. When Castro travels to any of Cuba's provinces, additional units are deployed, enlarging his personal security to up to 28,000 of the best trained troops. When Castro decides to go bathing or sailing on one of his three luxurious yachts, "all naval forces in the area go on alert, and a special unit of more than 122 divers comb the sea.

No wonder Fidel Castro now ends all his speeches by yelling: "¡Sociolismo o Muerte!"

Fidel's Crony Capitalism

by Servando Gonzalez

Copyright © 1999. All rights reserved.

Just a few years after Fidel Castro took power in Cuba, Ramón Grau San Martín, a former Cuban president with a reputation for wit and corruption, made a comment to a friend. "These honest kids," said Grau referring to Castro and his associates, "will manage with their honesty to accomplish what we, the traditional corrupt politicians, never were able to do: totally destroy this country." In retrospective, it seems that Grau was right, but just on one count. Castro and his cronies have totally destroyed Cuba, but they have proved to be more corrupt than all the politicians of the old school.

According to Carlos Franqui, in the past there were many plantations in Cuba; now the whole island has turned into a big plantation, and it belongs to Fidel Castro. "Who enjoys the fruits of the revolution, the houses of the rich, the luxuries of the rich? The Comandante and his court."


A Cuban Robber Baron

Closely following the steps of his unscrupulous father, who made his fortune by stealing sugar and moving fences under the cover of the night with the help of his friends, Fidel Castro surrounded himself with a circle of cronies as corrupt as himself. Soon after he got power in Cuba, Castro accomplished two important things. First, he got rid of non-corrupt leaders like Frank País, Huber Matos and Camilo Cienfuegos and, secondly, he began an accelerated process of stealing other people's money and property.

Forty years later, there is no doubt that his plan worked to perfection. Today, Cuba is practically the personal property of Fidel Castro and his cronies, a small group of shamelessly corrupt feudal landlords. The economic system Fidel Castro has imposed in Cuba is a crony capitalism economy of systemic corruption which uses the overt application of state power as a tool to enrich the ruler and his cronies. Granted, throughout history, and particularly in Latin America, most political systems have served to benefit the rulers, but under Castro's crony capitalism, systemic corruption is more widespread and better organized in Cuba than never before.

One of the many myths still surrounding Fidel Castro is his utmost disdain for money and his honesty. "For those who do not know Cuban history," wrote Herbert Matthews, "it needs to be pointed out that the Castro regime is the first honest government that Cuba has ever had-honest in the sense that its leaders have not enriched themselves." And Matthews forecasted, "Whatever the future brings, Cubans know that Fidel Castro has no money deposited in the United States or Switzerland..." But, contrary to Matthews' predictions, the future brought a very different knowledge for Cubans.

Castro, who allegedly earns a modest salary in Cuban pesos as Cuban President and has no other sources of income, has actually amassed an incredible personal fortune. The July 28, 1997, issue of Forbes magazine lists Fidel Castro as one of the richest people in the world, with a net worth of $1.4 billion. However,Forbes' estimate of the funds that Castro actually controls may be lower than his true worth. It merely assigns to him 10 percent of an estimate of Cuba's gross domestic product. But the truth is that, in addition to controlling the Cuban economy, Castro possesses and personally controls international bank accounts and large amounts of gold and commodities, and has done so virtually from the very moment he grabbed power over the Island in 1959.

Castro may claim that he doesn't care for money, but he has a stash of cash totalling several millions of dollars hidden away in banks in Zürich and other financial centers of the very Capitalist world he profess to despise. He has a private fleet of large yachts, helicopters, planes and luxury cars, and keeps stately homes in each of Cuba's 14 provinces. While the Cuban people struggle with housing shortages, Castro reserves hundreds of houses in Havana's Jaimanitas beach section for the use of his security guards and aides. While Castro demands austerity from the people, he and his close associates order and send home foreign luxury items and use government satellite dishes to tune in to U.S. televised movies and sport events.

Until very recently Castro managed himself to push forward his image as a socialist Mr. Clean contrasting with the image of widespread corruption in Latin America and during Cuba's previous history. Now it seems that Mr. Clean has dirty hands. When Forbes published its estimate of Castro's personal fortune, some foreign observes believed that the revelation placed him in a difficult position before the Cuban people, because it tarnished his image as a sworn enemy of capitalism, constantly asking the Cuban people for sacrifices and austerity in the name of socialism. But that is not the case. Perhaps Castro fooled some of his admirers in the U.S., but he never fooled the Cuban people. From the very beginning Cubans changed the name of the political system Castro imposed in Cuba from socialismo to sociolismo (from "socio," Cuban slang for "buddy" or "crony"), a tropical version of crony capitalism.

Contrary to the image portrayed by some of his biographers, who paint Castro as a young, idealistic lawyer fighting for the rights of the poor and humble, the truth is that Fidel Castro never had a job and never made any money out of his work. The first and only case he defended in court was the one in which he represented himself as a defendant for the failed attack to the Moncada garrisons in Santiago de Cuba. Before 1959, Castro had only four known sources of income: the money his father periodically sent him; the money he borrowed from his friends; the money his wife, Mirtha Díaz Balart, gave him; and the money the CIA sent him when he was in the Sierra Maestra mountains.

 

Under the pretext of creating in Cuba an egalitarian, just society, Castro seized private country clubs, beach resorts, and other recreational facilities and made them available to the lower classes of the Cuban population. Soon after, he also deprived the upper classes of most of their properties. Under the Agrarian Reform Law large tracts of land were divided and distributed among poor farmers... to be taken away from them a few years later under the Second Agrarian Reform Law.

Likewise, homes left vacant by the wealthy leaving the country in drones were used as housing for students. But, contrary to government's propaganda, not all mansions were turned into schools. Most high-rank army officers appropriated mansions for their personal use. Later, when Castro found out that the number of available mansions was much larger than the number of his cronies, he created the so-called "areas congeladas" ("frozen zones"), whole areas in the best sections of the cities, where luxurious mansions were kept closed waiting for a Castroist crony to take them in the future as a gift from the magnanimous Comandante en Jefe. But, while Fidel and his cronies have been enjoying the stolen goods and properties since the very beginning, initially they did it with discretion, trying at the same time to keep their public image of simple, busy public officials working hard for the revolutionary government and the betterment of the new society.

Since Castro openly embraced "socialism," in the mid-sixties, he began a campaign appealing to the revolutionary sentiments of the people, like "socialist emulation," patriotism, disdain of selfish competition and individualism-in other words, nonmaterialistic incentives. The main thrust of the new society Castro had in mind was the creation of the "new man," fully imbued with collectivist, equalitarian, and non-materialist values. This new man was to prefer moral incentives over material ones, and his work would be based on a socialist morality, or conciencia, rather than on material rewards-like money, for example. The strict rationing, introduced in 1962 and still in place after 36 years, guaranteed all Cubans, regardless of their personal wealth, equal access to basic necessities... or so the Castroist government claimed.

Apparently, however, Castro and his cronies never followed the example they were teaching the masses. As early as 1974 professor Edward Gonzalez reported: "Most Cubans must subsist on their meager monthly quotas of food and clothing and must accept overcrowded or substandard housing and inadequate public facilities. In contrast, government and party officials enjoy privileges and amenities that simple are not available to the rest of the populace, such as supplementary rations, preferential treatment in housing, access to state vehicles, and special dining privileges."

Still, for more than three decades Castro and his cronies managed to maintain their public facade as honest, sacrificed managers. But those idealistic times are gone now. Not only the privileged nomenklatura does not care any more about their public image, but there is a noticeable trend to concentrate wealth in the hands of Castro and a few of his cronies.

 

Fidel's Happy, Good Life in His Proletarian Paradise

Though rumors ran for years all around Cuba about Fidel and his cronies' enjoyment of the dolce vita, all the information available was just that: rumors. Telltale signs, however, that Castro and his close friends were not affected by the food scarcities the Cuban people have been chronically suffering were evidenced in their health. By the mid-seventies most Cubans began showing in their skins, nails, and hair the effects of long years of poor diets, and were rapidly becoming a nation of very skinny people. But, contrary to the common trend, Fidel and his cronies were putting weight and their skin was showing the healthy luster characteristic of fat pigs ready for the slaughterhouse.

Rumors ran that some people had seen Celia Sánchez, Castro's trusted secretary and confidant, discreetly sneaking in and out of banks in Zürich's Banhoffstrasse. According to some sources these funds were used for paying Fidel's subversive activities all around the world. Others claimed that the main purpose of the accounts were to provide Fidel and his close circle of cronies of luxury items-ranging from cars and electronic equipment to clothing and food-unavailable in the island. A fact that gives some credibility to the rumors is that, though Cuba's trade with Switzerland is almost nonexistent, the National Bank of Cuba had kept for many years a relatively large office in Zürich.

It was not until 1990, however, that the cat escaped from the bag. In those days Fidel was enjoying his favorite form of entertainment: badmouthing Russia and its leaders on a daily basis. Then, Soviet journalist Alexei Novikov, a correspondent for Konsomoslskaya Pravda, (most Soviet "journalists" make some money on the side moonlighting for the KGB) decided that he was mad as hell and was not going to take it any more. Novikov retaliated in kind by publishing a long article that brought a first glimpse at Fidel's corrupt lifestyle. Though articles critical about Cuba in general had been appearing in the Soviet press, this was the first one that went after Fidel himself. U.S. officials believed that the details of Fidel's personal life were leaked to Novikov by Soviet officials unfriendly to Castro who believed Russia should loosen its ties with the Castro government.

Just a few months after Novikov's piece appeared in Moscow, the journalist was forced to leave Havana after having been the victim of a suspicious "accident." According to Soviet sources, the "accident" happened a few days after Novikov's report provoked a violent reaction in the official Cuban media.

"Castro's private life," wrote Novikov, "like the rest of the Cuban party and government elite, is shrouded under an impenetrable veil of total secrecy. Like most secrets, however, with time they become known." According to Novikov, Fidel has 32 stately mansions scattered around the whole island. In Havana alone he has three bunkers where, if need be, he can hide together with his retinue of 57 generals.

Novikov's account apparently touched a raw nerve among the Castro government. A Mexican television crew in Moscow made the mistake of reporting on the story and immediately the Castro government expelled from Cuba a crew from the same network that was on assignment in Havana.

The article pointed out that Castro has a personal guard of more than 9,700 men located throughout the island, with 2,800 of them in Havana. When Castro travels to any of Cuba's provinces, additional units are deployed, enlarging his personal security to up to 28,000 of the best trained troops. When Castro decides to go bathing or sailing on one of his three luxurious yachts, "all naval forces in the area go on alert, and a special unit of more than 122 divers comb the sea.

No wonder Fidel Castro now ends all his speeches by yelling: "¡Sociolismo o Muerte!"

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