Cuba’s White Collar Corruption

Fernando Ravsberg*

HAVANA TIMES, April 1 – In Cuba they say that under socialism each person is the owner of the means of production, a principle that was apparently taken to heart by several important executives of Cubana Airlines and some travel agencies.

The removal of Gen. Rogelio Acevedo from his position as the head of Civil Aeronautics has exposed a Pandora’s Box. On the street, people are talking about how corruption within the airline industry rose to overshadow all previous cases; this latest instance involved the embezzlement of millions of dollars generated from clandestine commercial activities.

The national press is staying oblivious, as they always do concerning the most important events occurring in Cuba. However, the accounts of people at the airport, in customs, in transportation and at travel agencies all coincide.

Each new testimony I hear is more mind-boggling than the previous. The senior officials in the industry used Cubana de Aviación aircraft as if they were their own, conducting operations off the company books.

Cuban airlines sold space secretly to Latin American companies to transport their goods from one country to another as the island’s executives pocketed all the money. They even deployed additional planes if that was necessary for their dealings.

But it seems that all those millions still didn’t meet their expectations. Officials then began reporting that one or another plane was being repaired in Canada, when in fact they had these transporting passengers to other destinations.

Their managerial aspirations were such that apparently they decided to buy smaller airplanes to “rob” the market of Cubana de Aviacion [the main Cuban airline company]. Mexico would be the site of their first transaction: an airliner costing several million dollars.

Currently many people are being questioned at the State Security headquarters in Havana, known as Villa Marista. Word has it that every day more officials are being arrested thanks to confessions by those first apprehended.

I will not give the particulars on any of those accused, since they are only under investigation and it would be unethical on my part. However, the network is so extensive that those who are replacing the prisoners will perhaps end up accompanying them very soon.

No exception, it’s the rule

This case of the civilian airline industry is not an exception, but part of the rule; on a smaller scale the same situation occurs in a host of Cuban companies – bosses receive commissions from abroad, benefit from the fraud and open bank accounts in other countries.

The problem is one of the most complex that must be solved by the government, no matter what model it chooses to follow. Corruption seems to be a part of the way of doing things, characterized by a system of “stimuli” with very weak controls.

For decades leaders didn’t live off their wages. Houses and automobiles were “assigned” to them for no cost or at token prices as perks for their merits. This operated as a mechanism that took place on the fringe of the law and of established norms.

Some time back, a Cuban military officer who had fought in a Latin American guerrilla war admitted to me that when he returned to the island “they gave me a bunch of keys to empty houses and told me to choose the one I liked most.”

As is logical, the slope became increasingly steep as those perks extended to spouses, children and even girlfriends. Gradually this reward mechanism became generalized among the rest of society, where there was even less control.

By late 2005, the problem had reached such a proportion that Fidel Castro himself was alarmed. Speaking before students at the University of Havana, he exclaimed that the Cuban Revolution could only be destroyed from within, “by us ourselves.”

With Washington betting on the “biological solution” (awaiting the natural death of the Cuban leadership) and with an extremely small, isolated and fractionalized opposition, internal corruption seems to be the greatest challenge faced by President Raul Castro.

Even many of the reforms being pushed by the current government are being “hamstrung” by this corrupt bureaucracy, whose main interest is that everything continues as it is. These are the fishermen who amass their fortunes from the troubled water of the national economy.

They are devoid of ideology; they defend the system as long as it turns them a profit, as they wait patiently for it to collapse in order to become the owners of the companies they manage. They are a breed that —paraphrasing Marx— that could become the gravedigger of Cuban socialism.

*An authorized translation by Havana Times (from the Spanish original) published by BBC Mundo.