Cuba’s White Collar Corruption

Fernando Ravsberg*

Havana's Jose Marti International Airport, Photo: Caridad

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.

7 thoughts on “Cuba’s White Collar Corruption

  • So…

    greed on Yumaland™ = good
    greed on Commie Island™ = bad


  • Helen
    Capitalism is base on greed. We as humans some of us are more greedy than the rest. Those individuals in a capitalist society are put to good use. Thru their greediness they create jobs for others and also money for others. So greed into itself is not a bad thing. Thru taxes they create a benefit to society as a whole.
    Now corruption is not a good thing because society does not benefit from it in any way.
    Yes there is corruption in capitalism but their is far more corruption in the “socialistic paradise” I lived there. I have experience it myself.
    Intentionally they eliminated the free press that could look out for corrupt people. This lack of transparency is the ideal medium for corruption to germinate and grow.
    Those at the top have been unable to fix this endemic problem. Because they do not want to tolerate a free press since they know that absolute control of information will keep them in power.

  • Thanks, Julio, for that statement of profound truth.

    The key difference between the Marxist, bureaucracy-creating prescription of full state ownership of everything in sight, & a new hypothesis for the further socialist experiment–in Cuba & in every country–is that the new experimental form would be based on “direct” cooperative ownership of industry & commerce by the workers, managers, scientists, salespersons, designers, etc.

    This ownership would be structured on the successful model of the Basque cooperatives of northern Spain–the Mondragon Co-ops.

    But, how would the socialist state get its revenue under such a socialist “cooperative republic”? By holding partial, non-controlling ownership of these cooperative corporations. (In this way taxes & tax bureaucracies would be avoided.)

    As you suggest, Julio, the workers, freed from wage serfdom to the one-big-employer state, would run things without corruption. They wouldn’t steal from themselves.

  • Corruption is not exactly unheard of in the capitalist system, for goodness sake, Julio. There are greedy people everywhere, and people who find loopholes and lax controls to take advantage of. Not everyone can own a business and even those that do can undermine the system or play the field when it suits them.

    I feel very badly for the ordinary citizens swindled out of country revenue by these greedy individuals and worry about them getting by this year.

  • Thank you, Fernando R. for a very revealing article. We socialists in the US and other capitalists countries need the truth, in order to develop our own political programs & win the people.

    This glimpse at the reality of Cuban state socialism based on the Communist Manifesto of Engels and Marx is enlightening in the extreme. It is easy to see how many of the former Soviet bureaucracy became millionaires & billionaires with the collapse of the USSR.

    It’s also easy to see why the bureaucracy in Cuba is so obstructionist with regard to meaningful, worker-owned cooperative reform.

    What is not so easy to see is why so many sincere socialists–inside & outside Cuba–refuse to see that the corrupt bureaucratic system is the natural result of the Marxist stipulations, rather than of the evil monster Stalin.

    It’s more & more apparent that real, workable, non-bureaucratic socialism will not exist in the world until the socialist vanguard wakes up re Marxism.

  • As a frequent visitor to Cuba, I often see instances of theft and corruption at a low level. These are very costly to the hotels or attractions that I’ve visited. Many could easily be thwarted with proper controls but some are obviously the result of employees having seen much worse occurring at the levels immediately above them. In some cases a system of mutula, mutual, up-and-down-the-line blackmail is in place and there are few that can be trusted to implement controls against their own illicit activities. Moving people around would be a necessary start to implementing controls.

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