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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 m ansions
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
m istake 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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