(s:
CUBA AND U.S. POLICY
Y 4. IN 8/16: C 89/7
Cuba and U.S. Policg/ 104-1 Hearing...
HEARING
BEFORE THE
SUBCOMMITTEE OX
THE WESTERN HEMISPHERE
OF THE
COMMITTEE ON
INTERNATIONAL RELATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTH CONGRESS
FIRST SESSION
FEBRUARY 23, 1995
Printed for the use of the Committee on International Relations
M J 8
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1995
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
ISBN 0-16-047156-7
^
.S. POLICY
Y4,INB/16:C 89/7
Cuba and U.S. Policy, 104-1 Hearing...
HEARING
BEFORE THE
SUBCOMMITTEE OX
THE WESTERN HEMISPHERE
OF THE
COMMITTEE ON
INTERNATIONAL RELATIONS
HOUSE OP REPRESENTATIVES
ONE HUNDRED FOURTH CONGRESS
FIRST SESSION
FEBRUARY 23, 1995
Printed for the use of the Committee on International Relations
M f 8 fS35
U.S. GOVERNMENT PRINTING OFFICE
90-346 WASHINGTON : 1995
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
ISBN 0-16-047156-7
COMMITTEE ON INTERNATIONAL RELATIONS
BENJAMIN A. OILMAN, New York, Chairman
WILLIAM F. GOODLING, Pennsylvania
JAMES A. LEACH, Iowa
TOBY ROTH, Wisconsin
HENRY J. HYDE, Illinois
DOUG BEREUTER, Nebraska
CHRISTOPHER H, SMITH, New Jersey
DAN BURTON, Indiana
JAN MEYERS, Kansas
ELTON GALLEGLY, California
ILEANA ROS-LEHTINEN, Florida
CASS BALLENGER, North Carolina
DANA ROHRABACHER, California
DONALD A. MANZULLO, Illinois
EDWARD R. ROYCE, California
PETER T. KING, New York
JAY KIM, California
SAM BROWNBACK, Kansas
DAVID FUNDERBURK, North Carolina
STEVEN J. CHABOT, Ohio
MARSHALL "MARK" SANFORD, South
Carolina
MATT SALMON, Arizona
AMO HOUGHTON, New York
Richard J. Garon, Chief of Staff
Michael H. Van Dusen, Minority Chief of Staff
LEE H. HAMILTON, Indiana
SAM GEJDENSON, Connecticut
TOM LANTOS, California
ROBERT G. TORRICELLI, New Jersey
HOWARD L. BERMAN, CaUfornia
GARY L. ACKERMAN, New York
HARRY JOHNSTON, Florida
ELIOT L. ENGEL, New York
ENI F.H. FALEOMAVAEGA, American
Samoa
MATTHEW G. MARTINEZ, CaUfornia
DONALD M. PAYNE, New Jersey
ROBERT E. ANDREWS, New Jersey
ROBERT MENENDEZ, New Jersey
SHERROD BROWN, Ohio
CYNTHIA A. McKINNEY, Georgia
ALCEE L. HASTINGS, Florida
ALBERT RUSSELL WYNN, Maryland
MICHAEL R. McNULTY, New York
JAMES P. MORAN, Virginia
VICTOR O. FRAZER, Virgin Islands (Ind.)
Subcommittee on the Western Hemisphere
DAN BURTON, Indiana, Chairman
ILEANA ROS-LEHTINEN, Florida ROBERT G. TORRICELLI, New Jersey
CASS BALLENGER, North Carolina ROBERT MENENDEZ, New Jersey
CHRISTOPHER SMITH, New Jersey ALBERT RUSSELL WYNN, Maryland
ELTON GALLEGLY, Calfomia TOM LANTOS, California
PETER T. KING, New York MATTHEW G. MARTINEZ, California
(Vacancy)
GiLEAD Kapen, Subcommittee Staff Director
ScOTT Wilson, Democratic Professional Staff Member
Scott Feeney, Professional Staff Member
Anita Winsor, Staff Associate
(II)
CONTENTS
WITNESSES
Page
Hon. Lincoln Diaz-Balart, a Representative in Congress from the State of
Florida 10
Constantine Menges, research professor, George Washington University 11
Jorge Mas Canosa, chairman, Cuban American National Foundation 14
Mark Falcoff, resident scholar, American Enterprise Institute 30
Gillian Gunn, director of the Cuba Project, Georgetown University 32
Otto J. Reich, president. United States-Cuba Business Council 35
APPENDIX
Prepared statements:
Constantine Menges 47
Jorge Mas Canosa 56
MarkFalcofF 61
Gillian Gunn 66
Otto J. Reich 81
Material Submitted for the Record
"Cuba's Hall of Shame," a list of companies compiled by the Cuban American
National Foundation 88
"Cuba's NGO's: Government Puppets or Seeds of Civil Society?" an article
from Georgetown University's Cuba Briefing Paper Series, February 1995,
by Gillian Gunn 91
'The Lion in Winter," an article from Time Magazine, February 20, 1995,
by Kevin Fedarko 101
(III)
CUBA AND UNITED STATES POLICY
THURSDAY, FEBRUARY 23, 1995
House of Representatives,
Subcommittee on Western Hemisphere,
Committee on International Relations,
Washington, DC.
The subcommittee met, pursuant to call, at 2 p.m., in room 2172,
Rayburn House Office Building, Hon. Dan Burton (chairman of the
subcommittee) presiding.
Mr. Burton. I will call this hearing to order. If you could take
your seats, please, as quickly as possible.
Good afternoon, ladies and gentlemen. It is my pleasure to wel-
come you to our subcommittee hearing today. We will be focusing
on the current situation in Cuba, and policy options for the United
States of America.
I want to take a moment at the outset to state for the record my
intense disappointment and disgust with the fact that the State
Department did not see fit to provide us with a witness for this im-
portant hearing. Up until yesterday, we were expecting Deputy As-
sistant Secretary Skol to participate in this hearing.
Yesterday, we were informed by Legislative Affairs that not only
was Ambassador Skol unavailable due to an unidentified "conflict,"
but that the administration was not even going to send a replace-
ment.
I do not want to cast aspersions at any one individual, but there
are people in the administration, and I believe that Morton
Halperin is one at the NSC, who have a different opinion about our
policy toward Cuba. One wonders if that kind of influence is being
exerted on the State Department to keep them from testifying at
a hearing like this. I hope that is not the case, because we believe
that administration representatives should be here, and should
state the administration's views on issues of this magnitude.
All of this took place yesterday, despite the fact that the adminis-
tration, according to a very reliable source, had already prepared
testimony for this hearing. This attitude is unacceptable, and only
serves to poison the atmosphere between the subcommittee and the
administration. We do not want that to happen. We want to have
a good working relationship.
As I mentioned several weeks ago, we intend to make the democ-
ratization of Cuba a high priority for this subcommittee. As the
only nondemocratic country in this hemisphere, Cuba deserves our
full attention. We intend to hold many hearings to cast light upon
what is happening in Cuba. It is my most fervent hope that during
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this Congress we will witness the liberation of Cuba from Com-
munist oppression.
This past weekend, I led a bipartisan delegation to Guantanamo
Bay and Haiti. Several of my colleagues here with me today were
on the trip. I think that I speak for all of them when I say that
we were profoundly moved by what we saw in the safe haven
camps in Guantanamo, Cuba.
We met with the base commanders, with many camp leaders,
and many of the Cubans now residing in Guantanamo. Almost
30,000 Cuban people — men, women, and children — are living there
in a state of limbo.
We learned that many of them were literally forced to leave their
homes in Cuba, often on rafts and vessels completely unseaworthy.
One man told us of being threatened by one of Castro's henchmen
with a 15-year jail sentence if he did not leave Cuba with his fam-
ily within 48 hours.
A person like that certainly should not be kept in limbo in Guan-
tanamo. He was forced to leave. He was seeking freedom, and set
out on the high seas despite a high probability of d3dng. Yet now
we are keeping him in Guantanamo. We should have a better ap-
proach to solving his problem. There are many like him down
there.
Anyone who has read Armando Valladares' moving book,
"Against All Hope," or who knows an3rthing about Cuban prisons,
will immediately understand the implications of threats like those
that I just mentioned.
It is crystal clear that Castro himself provoked this mass exodus,
and created this human tragedy. His Communist dictatorship in-
tends to rid the country periodically of the most likely sources of
discontent, thereby creating a pressure escape valve for him and
his dictatorship.
We must not allow Castro to obtain this relief, and thus prolong
the suffering of the Cuban people. Part of the reason we are here
today is to talk about how to best promote democracy in Cuba.
First, this means figuring out how to remove Fidel Castro and his
dictatorship from the scene.
Nothing illustrates more graphically the sheer evil of the Castro
dictatorship than the sight of so many decent, hard-working, pa-
tient, dignified Cuban citizens forced to live in Guantanamo. Many
are doctors, lawyers, and other professionals forced into these dif-
ficult circumstances through no fault of their own.
Our military in Guantanamo are, according to what I saw, per-
forming admirably under very difficult circumstances. However,
conditions for the displaced Cubans are very difficult despite the
best efforts of our American troops.
Guantanamo is not a long-term solution, although we were told
that they were building facilities that would house them for as long
as 5 to 10 years. That is unthinkable in my opinion.
Furthermore, it is costing the U.S. taxpayers $1 million a day to
maintain these camps. Cuban-American groups such as the Cuban-
American National Foundation are organizing efforts to ensure
that the migrants have jobs, housing, and private schooling for
their children.
Under these circumstances, would it not be more humane and
more cost effective to allow these people to come to the United
States?
I think that we ought to study this option. I want to emphasize
that this situation is not analogous to that of the illegal aliens that
are flooding across our borders from other areas.
These are people who would not be a drag on the U.S. public re-
sources and the taxpayers of this country. On the contrary, the
likelihood is that they will be productive taxpayers very quickly.
I heard, for example, about one young man who 1 month ago was
stuck in Guantanamo. Now, after being allowed to come to Amer-
ica, he is happily and productively working at a restaurant in
Miami. Our hearing today will explore the wider issue of policy to-
ward Cuba, but let us keep foremost in our mind that our first pri-
ority must be to consider the implications of American policy on
human lives — Cuban and American lives. That humanitarian im-
pulse, ladies and gentlemen, is nothing less than the American
way.
And with that, I will be happy to yield to my colleague and the
ranking member, Mr. Torricelli.
Mr. Torricelli. Thank you, Mr. Chairman, very much.
This subcommittee has a long and proud tradition. It is a com-
mittee that has not simply confirmed United States foreign policy;
but with regard to Cuba specifically and Latin America generally,
it made United States Government policy.
I am very pleased, Mr. Chairman, given your enthusiasm, and
ability, and your stated intentions, that you intend to follow that
tradition.
Indeed, if there is any committee in this Congress that ap-
proaches its responsibilities on not only a bipartisan basis, but
without philosophical differences in common and determined pur-
pose, it is the Western Hemisphere Subcommittee of the Inter-
national Relations Committee.
I am, therefore, very proud that you called this hearing today,
only 2 weeks after together we have introduced new legislation,
which is the next logical step in the Cuban Democracy Act, con-
tinuing the tighten the embargo against Fidel Castro's dictatorship.
Our policy from the outset, Mr. Chairman, has been clear. We
have stated to everyone that we will go an3rwhere and do an3rthing
for whatever is required to assure that freedom is returned to the
Cuban people.
I know that when the Cuban Democracy Act was passed that
Fidel Castro thought that he had survived the worst. Then we went
to the Russians to talk to them about their subsidized oil. Castro
adjusted. And then we went to the Venezuelans to talk about their
oil credit. Then he went for Mexican investment. And then we dealt
with the question of Mexican subsidized assistance.
We have proven by our deeds that no matter how hard Castro
works, no matter what price he is willing to have the Cuban people
pay in the loss of their freedom, we will work just as hard, and we
will do just as much. And we will never, never stop fighting to en-
sure that this dictatorship is brought to an end.
I look forward therefore, Mr. Chairman, to working with you
under your leadership. The new legislation that we have drafted
can and should become the law of the U.S. Government. We give
those who would profit by the blood of the Cuban people a simple
choice. To our friends in Spain, and in Canada, and Mexico, they
can come to their own determination. They can invest in the falter-
ing economy of Cuba, or they can continue to have access to the
United States of America. They will not have both.
We welcome investment and travel by people from throughout
the world. But our circumstances in this country are not such that
we need to invite and encourage people to visit our country, who
would seek to make a living for themselves by profiting on the mis-
ery of those that are held in bondage in Cuba.
That is a central element of the new legislation that we have in-
troduced, but it is not the end. To those who would be listening to
us in Havana, trying to come to their own determination about
whether to remain with the Castro dictatorship or strike out and
create a new government, listen to us very carefully. This is not the
end. This is not as bad as it can get. And we have not begun to
tire.
Those in positions of responsibility in the Cuban Government
need to come to their own decisions, and stand up for their country
and for its freedom. We are here to help, and we are here to do
whatever is required. But ultimately, this much must be clear by
the actions of this committee and the new legislation that we have
introduced. And that is simply that as we see Castro adjust, we
shall also adjust the laws of this country.
Mr. Chairman, I am also particularly pleased that in addition to
the members of this subcommittee, that we have brought before us
today people who are architects of our policy, and who helped in
enormous ways with the Cuban Democracy Act.
Together with the members of this committee, no one has fought
more in this Congress than Lincoln Diaz-Balart. He is a friend, and
he is a great leader. His service has been invaluable. And of course,
Jorge Mas-Canosa, without whom many would have consigned
Cuba to permanent economic and political slavery a long time ago.
He brought this issue to many of us in the Congress. He is the rea-
son that we have come so far. And ultimately, he is the principal
reason as to why we shall succeed to restoring freedom to the
Cuban people.
I think you, Mr. Chairman, for yielding me the time, and for
holding this hearing, and for helping us again with new legislation.
Mr. Burton. Thank you, Mr. Torricelli. I would like to say once
again, and I do not want to sound like a broken record, but Mr.
Torricelli deserves so many accolades for all of the hard work that
he has put in, during previous years as chairman of this sub-
committee. If every subcommittee or committee in the House had
the working relationship that Mr. Torricelli and I have, I think
that this place would function a lot better. I thank him once again
for his tireless efforts.
With that, I would like to yield to my dear colleague, Ms. Ros-
Lehtinen.
Ms. Ros-Lehtinen. Thank you so much, Mr. Chairman.
First of all, welcome to Radio and TV Marti. I know that they
are broadcasting them to the enslaved people of Cuba. So we wel-
come them. Bien venidos y muchas gracias a Radio y TV Marti.
I would like to echo your comments, Mr. Chairman, about the
strong disapproval about the news that the administration is not
participating in this hearing. However, I am optimistic that they
are using this time to write their positive position paper on the
Helms-Burton bill, and that during these hours they are taking the
time to formulate their administration strategy in trying to have
a safe and prompt passage of H.R. 927. I am sure that that is
where they are right now.
Mr. Chairman, tomorrow, as many of us know, February 24, is
a great celebration. We celebrate the 100th anniversary of Cuba's
war of independence known popularly as el grite da Ballei. And on
that day, February 24, 1895, the Cuban people across the nation
called for independence and freedom from their Spanish colonist ty-
rants. And this battle for freedom, as all of us know, lasted until
finally the realization of independence in the year 1902.
Well, those same calls for freedom are still being heard, whether
from the thousands of Cubans who rebelled in the streets of Ha-
vana this summer, or from those who are detained in the camps
of Guantanamo. Let us answer those calls for freedom by not let-
ting up on Castro now that his end is near.
And Mr. Chairman, I hope that this subcommittee under your
very able leadership will ask if not subpoena United States execu-
tives who are flaunting United States laws, and are courting Cas-
tro, and have them come before this subcommittee to answer ques-
tions about their participation in Cuba's economy.
The Time magazine article of February 20 said, and I quote.
Eager to help pave the way, a handful of savvy consultants from New York City,
Washington, and Miami jet in monthly to maintain relations with Cuban officials
for American companies shy of openly violating U.S. laws. Other firms simply take
the risk themselves. Executives from such companies such as Hyatt, Marriott,
Merck, and Eli Lilly have been seen around Havana. One Western diplomat in Cuba
laughs at the increasingly flagrant violations.
I know, Mr. Chairman, that none of us on this subcommittee are
laughing. None of us are laughing at the suffering of the Cuban
people. And I hope, Mr. Chairman, and I will give you this copy
that I know that you have, that our subcommittee will make a very
strong statement to those executives of American companies asking
them point blank what their participation has been, and if they
have been in fact violating the law.
But certainly, this hearing today, Mr. Chairman, is a very timely
one, given the controversial issue of United States policy towards
Cuba. We continue to rightly maintain the U.S. economic embargo
against the Castro regime, an embargo which we must strengthen.
And we will soon have the opportunity to do so under the recently
introduced legislation, which Lincoln and I call the Helms-Burton
bill, that is the right way to pronounce your name in Miami, the
Cuban Liberty and Democratic Solidarity Act.
This policy is in response to the reality that Castro has not
changed his tyrannical ways in the 36 years that he has been in
power. In today's Cuba, no freedom exists. Just as Castro took over
36 years ago, as instituted by his state policy, he continues to ex-
port violent revolution abroad, as the recent press reports uncover-
ing Castro's connection to the Mexican Zappatista leader, Marcos,
fully reveals.
The Cuban dictator continues to run a command-controlled econ-
omy with the Cuban citizens having no economic freedom, and
where private property is prohibited, and hundreds of Cuban citi-
zens still dwell in prisons for daring to speak out against the re-
gime.
And even though communism has been slowly discredited and
mostly vanished from the world, Castro continues to hold on to his
failed Marxist philosophy, as he himself declared in that recent
interview.
Given these facts, Mr. Chairman, and the reality that Castro is
slowly losing grip on power, now is the time to increase pressures
on his regime. The embargo has been working effectively since it
was strengthened through the Torricelli bill in 1992, after decades
of allowing it to erode almost completely.
The embargo has strangled Castro and has denied him many re-
sources, which he desperately needs to maintain himself in power.
Unfortunately, yet willingly, many foreign investors are now bail-
ing out Castro without regard to his total disregard for human
rights, and for the political rights for the people of Cuba. Thus, the
need to further strengthen the embargo through the Helms-Burton
bill, which addresses this phenomenon.
However, our Cuba policy became incoherent this summer when
we began to punish those Cuban rafters who looked toward the
United States as their last beacon of hope. Instead of opening our
arms to these desperate souls, the administration preferred to de-
tain them at camps in Guantanamo and formerly in Panama.
Thus, our three-decade-old commitment to receive and help
those, like myself who escaped the repression of Castro, was indis-
criminately broken.
Mr. Chairman, as you correctly pointed out in your opening
statement, many members of this subcommittee just returned from
Guantanamo, and saw the quality of the people detained there,
many of them professionals, some young and some old, but all of
them dreaming of living in freedom, and democracy, and beginning
a new life of opportunity in the United States.
Unfortunately, the administration's policy of detainment has
turned to ashes the dreams and the aspirations of these rafters to
live in freedom. This policy makes no sense, and I believe it cannot
hold. How long can the administration detain thousands of Cuban
nationals who have committed no crime. How long will we continue
to punish the victims. The 20,000, 30,000, or even 40,000 visas are
not the answers. The answer is to rid Cuba of Castro. As one rafter
put it to us, we do not need 20,000 visas. We only need one for
Fidel, and one for Raoul.
United States policy toward Cuba stands today at a crossroads,
and the choices at that crossroads are clesir. Will the United States
throw Castro a life preserver at a time when he is drowning by fol-
lowing a policy of reconciliation and dialog, or will we continue on
the path that we reignited in 1992 of placing strong economic and
political pressures on the regime, and which has led it to its weak-
est point in history.
I do not doubt in the least that under your able leadership, Mr.
Chairman, that we will take that correct path once again. Thank
you.
Mr. Burton. I thank the gentlelady for her comments. I can as-
sure you that if this committee has anything to do with it, we will
not throw Mr. Castro a life raft. We will throw him an anchor.
Let me also say in reference to your comments about the Time
magazine article, we will contact any company that we believe may
be doing business with Cuba in violation of the embargo, and ask
them to explain their actions. If we need to, we will call them be-
fore the committee. If we need to, we will see about subpoenaing
them.
We have many cosponsors on our bill. If there are any others
who would like to cosponsor, we are going to be pushing very hard
for as many as we can get in the next week or so. If any of my
colleagues have not yet become cosponsors, I hope they will. I urge
my committee colleagues to try to get additional cosponsors as well.
The next person to testify is Mr. Lantos.
Mr. Lantos. Thank you, Mr. Chairman. I just want to make a
few observations. The first one, of course, is that any hearing on
Cuba, as long as the Castro regime is in power, is a hearing on
human rights. And unfortunately, we learned the painful lesson
this past year with respect to China that looking away from the
issue of human rights and proceeding with business as usual, as
some of us predicted, results in a further deterioration of human
rights conditions.
What has been going on in China is appalling, and I think that
it has great relevance for Cuba. If you read the morning paper, you
find that our Embassy in Beijing is now putting in a plea for the
United States to abandon almost completely the subject of human
rights in its dealings with China.
We have paid a heavy price in respect by the international com-
munity, as we abandon the principle of human rights in our deal-
ings with China. There is not much danger that the same mistake
will be made with respect to Cuba. Because the economic interests
pushing for normalization of relations with Cuba are not nearly as
powerful as the ones that resulted in the change of United States
policy toward China.
I am one of a handful of members, and I do not know if there
were any others, who visited Cuba this past year. And while I have
personal experience in human rights violations across the globe, I
have rarely seen a society as devoid of spirit, as devoid of openness,
and freedom, and liberty as the crumbling and decaying dictator-
ship of Fidel Castro.
It would be the ultimate of absurdity to relax our trade restric-
tions with respect to Cuba. This regime is on its last leg. The
Cuban people, God only knows, deserve better. They will not get
better, as long as Castro remains in power. And the United States
has an opportunity in its dealings with Cuba to be true to its own
enunciated principle of placing human rights very high in the
range of issues that determine our foreign policy vis-a-vis a coun-
try.
I wish that a similar set of priorities could exist with respect to
China. But those who could not care less about human rights con-
ditions in China have prevailed and have carried the day. I think
that we have enough power in the Congress and across the political
spectrum to prevent the same thing happening vis-a-vis Cuba.
8
We are determined to see to it that the people of Cuba regain
their human rights, regain their right of self-determination, and
join their rightful place as members of a democratic and open soci-
ety here in the hemisphere. But not with the present regime, not
with the suppression, the brutality, the cruelty, the torture, the in-
carceration, the lack of political freedom, and press freedom that
permeates that island, so deserving of a better future.
It is indeed true, Mr. Chairman, that when we work on a biparti-
san basis, predicated on principle and not political expediency, that
we can be proud of the work of the Congress. I think that at the
end of this session that we will be proud of the work of this sub-
committee.
Thank you, Mr. Chairman.
Mr. Burton. Thank you, Mr. Lantos. I failed to mention that you
have been a tireless fighter for human rights as chairman of the
Human Rights Committee Caucus in years past. We appreciate
your efforts.
I believe that my colleagues on the Republican side do not have
an opening statement. Representative Menendez?
Mr. Menendez. Mr. Chairman, me permeta un palabra para cour
a que sufre y para me hermanos se que sequentran on Guanta-
namo.
Mr. Chairman, I want to do that as I cannot do it under Mr.
King's legislation anymore. So English only. But since we do have
Radio and Television Marti, I think that it is rather important.
Mr. Chairman, I want to commend you. I rarely make opening
statements. But on the question of Cuba and one or two other
areas, I have great interest. I want to commend you for holding
this hearing on U.S. policy toward the Castro dictatorship. And I
want to commend you for your principled commitment to democ-
racy and human rights throughout the world. And in the wake of
the historic summit of the Americas, that commitment will ensure
that this committee is well led.
On this first hearing on U.S. policy toward the Castro dictator-
ship of this Congress, I would like to underscore two basic points.
First, Cuba under Castro is inherently and increasingly unstable.
I hope that our National Security Council and the State Depart-
ment recognize this important fact.
Every day Castro requires more repression and more human
rights violations to remain in power. And the fact of the matter is
that Mr. Lantos' trip and his eloquent statement are part of the
testimony of that reality. Every day Fidel Castro, and not United
States policy as some would have it, makes the situation inside
Cuba more unstable.
It is in the United States national interest to pursue stability in
Cuba. But it is most definitely not in our national interest that
Castro remain in power.
Second, the 104th Congress recognizes a simple fact, which by
now should be evident even to Castro's most stalwart apologists.
Fidel Castro is bent on closing the century of the historic affirma-
tion of the right to self-determination with the bitter despotism of
one man rule.
Thirty-six years after he seized power and 5 years after the fall
of the Berlin Wall, Castro has moved only to further aggravate
Cuba's acute economic crisis, and to close shut any political space.
Thirty-six years is a long time. Yet after all of that time, Castro's
Cuba remains in the cold war deep freeze, and a thaw is not near-
ing.
The brutal Castro brothers have chosen not to reform their ty-
rannical rule. And I saw brutal, because we had a hearing, one of
your first hearings, Mr. Chairman, before this very committee on
the sinking of the Tugboat 13th of March for which 40 men,
women, and children drowned at sea innocently.
Instead they have chosen to sustain their own power rather than
provide sustenance to the Cuba people. They have chosen political
repression and economic deprivation over basic human freedom and
economic opportunity.
Nearly 2 years ago, I suggested that we develop a proactive pol-
icy toward the Cuban people, that we prepare today for a change
in Cuba tomorrow. I believe then, as I believe now, that we must
combine our principled and firm opposition to Cuba's oppressors
with a beacon of light for the Cuban people.
We must say clearly to the Cuban people that we are in solidar-
ity with you, but not with those who oppose you and deny your
basic rights. Let us help and work to remove the impediment to our
relations, and we will assist in making the reality of the dream of
a free and independent Cuba become that reality.
With strong bipartisan support, I introduced a Free and Inde-
pendent Cuba Assistance Act, which offers broad United States and
international support first to a transition government and later to
a democratic elected government. And it goes on. Members of the
committee know what the bill does. I will not take a lot of time.
But certainly, what it does is as soon as the President certifies
that there is a transition government in Cuba, the United States
would be ready to provide emergency relief, humanitarian assist-
ance, military adjustment assistance, electoral private sector devel-
opment, and other types of assistance necessary to move Cuba from
a Communist dictatorship and a command economy toward democ-
racy and a market economy. And we go on to state other aspects
of the bill.
We have introduced that as H.R. 11. But we are happy to see,
Mr. Chairman, that both you and Senator Helms have included
that in the legislation, which you referred to earlier, as title II of
the Cuban Liberty and Democratic Solidarity Act, which I have
been glad to cosponsor.
And despite utterances, such as recently found in Time maga-
zine, that Cuba is open for business, we find that in reality that
Cuba is not open not for business, but for exploitation. Cuba is not
open for business for the Cuban people, but only for foreigners in
terms that we would not allow here in the United States.
There is no serious tendency toward genuine economic or politi-
cal reform in Cuba, a process which ultimately must involve a fun-
damental transformation of the current system. And those are not
my views, but as someone in the Congress of Cuban descent lis-
tened to the former Socialist finance minister of Spain, Mr.
Shoulchaga, in his review of the Cuban economy, and hear that
even if we were to list our embargo tomorrow that nothing would
dramatically change because there is no economic change.
10
And finally, Mr. Chairman, there is nothing romantic about the
Cuban revolution. And we ask the international community and
our own media to acknowledge this. We ask them to demonstrate
the same commitment this year toward freedom in Cuba that they
showed last year toward freedom in Haiti. We ask that they join
us in making the commercial embargo on the Cuban dictatorship,
that Mr. Diaz-Balart has called for so many times, and which we
have joined in, a coordinated effort among the world's democracies.
And lastly, to the business community, our message is clear. The
highest yields await you in a post-Castro Cuba. The greatest risks
exist in Castro's Cuba today.
Mr. Chairman, I look forward to hearing all of the witnesses on
our first distinguished panel, and look forward to working with you
in realizing what you have said is this committee's No. 1 goal, a
free and independent Cuba.
Mr. Burton. Thank you, Mr. Menendez.
We will hear from our good colleague and friend, Lincoln Diaz-
Balart. Then, if it is all right with everybody else, we will recess,
go vote, and come right back, and then we will start with the pan-
els. Mr. Diaz-Balart.
STATEMENT OF HON. LINCOLN DIAZ-BALART, A REPRESENTA-
TIVE IN CONGRESS FROM THE STATE OF FLORIDA
Mr. Diaz-Balart. Thank you, Mr. Chairman. And I think Mr.
Torricelli for his kind words, as well as all of the members of this
important subcommittee for their leadership on this critical issue.
Mr. Chairman, I carry in my pocket the notes that I took when
you, and I, and Congresswoman Ros-Lehtinen, Congressman
Menendez, Congressman Sanford, and Mr. Fraser had the oppor-
tunity to speak with the elected leaders of the various Cuban refu-
gee camps in Guantanamo last week.
I will never forget meeting them, nor will I forget what they told
us. As you will recall, they pointed out their difficulties, and of
course their unanimous request that they be able to be reunited
with their families in the United States as productive, hard work-
ing, taxpaying members of this great Nation.
I know that you agree with me that it is time that all of the refu-
gees in Guantanamo be able come to the United States to contrib-
ute to this great land, and to help enrich it with their honest labor.
I also know that you agree with me, Mr. Chairman, that we have
an obligation to tell our colleagues and the American people, as
well as the international community, precisely what the elected
leaders of the Cubans who are detained in Guantanamo think
about the tragedy of their country, and what they told us that they
think we should be doing about it.
First, they told us to maintain the U.S. embargo and strengthen
it, like we are going to do. The fundamental reason that Castro has
been able to remain in power is because of the assistance and the
cooperation that he has received from other nations and their in-
vestors. And the bill, that you have introduced in the House of Rep-
resentatives and within which you so graciously allowed me to in-
clude a number of bills in a concurrent resolution that I had filed,
will strengthen the embargo, and directly attack the investments
in corroboration with Castro that some substantial capitalists in
11
the international community are msiking in Communist Cuba
today.
Second, as the elected leadership in Guantanamo told us, we, the
United States of America, have got to find a way to help the dis-
sident movements within Cuba throughout the island. And third,
we must find a way to help the people of Cuba confront the repres-
sive apparatus of the dictatorship.
As you recall, the elected leaders told us what all of the people
of Cuba know that Castro's violent repressive apparatus acts with
impunity. They must not be able to continue to act with impunity,
like they did on August 5 of last year in Havana. And we must find
a way to help the people of Cuba confront the repressive apparatus.
I am grateful, Mr. Chairman, for the opportunity to be able to
participate in this hearing, which is simply one of many that I
know that you plan to hold to raise the consciousness of our col-
leagues and the American people, as well as the international com-
munity about the need to help the Cuban people free themselves
from the yoke of oppression that has lasted 36 years, unfortunately
to a great extent because of the unacceptable and the unethical
lack of solidarity of much of the international community with the
Cuban people, and because of the cooperation and even the corrobo-
ration of part of that international community with the Cuban ty-
rant.
I commend you and the members of this committee for your lead-
ership, and I look forward to our continued work together.
Mr. Burton. Thank you, Representative Diaz-Balart.
The Chair announces that we will stand in recess for about 5 to
10 minutes while we vote, and then we will reconvene.
[Recess.]
Mr. Burton. Would you take your seats, please, so we can recon-
vene the hearing.
Is Mr. Mas in the room? Fidel Castro has not kidnapped Jorge
Mas, has he? There he is.
We were a little concerned, Mr. Mas, that maybe you had met
with some ill fate at the hands of one of Castro's agents or some-
thing. We are glad that you are back in one piece.
Congressman Chris Smith wanted to be with us, but he has an-
other hearing going on at the same time. So for those of you who
wonder where he is, he is doing his duty in another committee at
the present time.
I want to welcome our first panel. Constantine Menges is one of
the most imminent scholars of our time in the area of Latin Amer-
ican studies and democracy. We welcome him here today, and we
are glad that he could make it.
Jorge Mas Canosa, a Cuban-American patriot, and a tireless
fighter for democracy and freedom in Cuba, who is president of the
Cuban American National Foundation.
And with that, I think that we will start with Mr. Constantine
Menges. Then we will get to you, Mr. Mas.
STATEMENT OF DR. CONSTANTINE MENGES, RESEARCH
PROFESSOR, GEORGE WASHINGTON UNIVERSITY
Mr. Menges. Thank you, Mr. Chairman. It is a pleasure to be
with you, and with the committee, and testify this afternoon.
12
I am here to discuss a strategy for a peaceful transition to de-
mocracy in Cuba. I thought that the statements that you made and
your fellow Congressmen made were extraordinarily eloquent. And
perhaps I would like to begin with a comment that we have many
immigrants in this room who are grateful for the freedom that the
United States has given to so many people over the centuries. And
I am one of them, my parents having fled the Nazi dictatorship in
Germany, and having come here as a 4-year-old boy on a ship with
other children who were admitted to the United States.
Jorge Mas, who is another immigrant who fled another dictator-
ship, I might say is an individual who in 1980 gave me a concept
paper for Radio Marti. The idea of broadcasting the truth to the
people of Cuba was his idea and his concept. And I was pleased as
an advisor to then Candidate Reagan, when he was elected Presi-
dent, then to be able to move the idea into the Reagan administra-
tion, and to see the reality of Radio Marti, and its successor TV
Marti here. It is an honor to testify with Jorge Mas, and to testify
before you.
We know that the regime in Cuba represents a regime of repres-
sion, poverty, militarization, and aggression. I thought that the
statement of Congress woman Ros-Lehtinen was extremely impor-
tant. That an example of the aggression, which we see today, which
I believe is very dramatic, Mr. Chairman, and on another occasion
I hope to be able to talk with you and members of Congress about
it, is Castro's role now as we sit here, in my judgment and it is
my hypothesis, his role in the effort to help the far left use the eco-
nomic and political crisis of Mexico to bring a hostile antiregime to
power there.
I believe that Castro has been involved for many years in the at-
tempt to undermine the institutions of Mexico, and help the far left
within Mexico. And I believe that it is an example of the continuing
danger he poses to the people of this hemisphere and to the na-
tional security interests of the United States.
Let me turn, if I may, to the strategy for a peaceful transition
to a democracy in Cuba. As you know, there were few who expected
that in 1989 that Communist regimes in Europe could unravel. You
also know, Mr. Chairman, that it was because of the example of
the success of freedom in the United States and the other demo-
cratic countries of the world, because of the military strength of the
United States and our ability to deter aggression and maintain our
freedom, and because of the efforts of the men and women of those
countries who sought democracy and freedom that ultimately the
regimes, the Communist regimes, came to unravel.
I believe that if we now set our goal on helping to design a strat-
egy and plan to help the people of Cuba liberate themselves, that
they in fact will be able to do so. And I would like to suggest a 10-
part strategy. And I will briefly summarize the 10 steps to this
strategy.
First, a strategy of information to tell the truth about the Castro
regime in the world, and to the people of Cuba. That means to con-
tinue the work of Radio Marti and TV Marti, and have the Voice
of America do this on a regular basis, and to have all of us do this
as we move forward in Ihe zOiT.mg mor ih.; and years.
13
Second, to continue the isolation of the regime. And in that
sense, I endorse completely the Helms-Burton bill, and the very
positive ideas that you have come forward with. To continue and
deepen the isolation of the regime; political, military, and economic
isolation of the Castro dictatorship.
Third, I believe it is essential to help and encourage the
prodemocratic groups within Cuba. Over the years, the United
States has worked effectively and successfully in proper ways to
help prodemocratic dissidents in dictatorships. And the example of
Solidarity in Poland comes to mind, the 10 years of support that
preceded the sudden unraveling of the Polish regime. There is
much that can be done, much more can be done.
I agree completely with Congressman Diaz-Balart's call to do
that. And I think that you, Mr. Chairman, can be very important
in seeing that the executive branch takes this seriously.
Fourth, as a step, is in my view all of the prodemocratic Cuban
exile groups in the United States, Spain, and Latin America should
convene annually to consider in a forum of 1, 2, or 3 days — and by
the way, my university, George Washington University, would be
pleased to be the site of such an effort — should convene to discuss
governance issues of a free Cuba; social policy, economic policy, for-
eign policy, and also the way of dealing with the former Com-
munist regime.
There should be majority views, minority views, and a discussion
process that happens with civility, with tolerance, with the exercise
of freedom of speech, so that it itself becomes an example of free
Cubans discussing, debating, and disagreeing about their future,
but doing so in an agreeable way. And that ultimately, it becomes
a parliament in exile.
The fifth step. That the democratic exiles of Cuba working in
ways that are appropriate with the internal prodemocratic opposi-
tion establish a transitional regime in exile of a free Cuba, a transi-
tional free Cuba regime in exile.
Sixth, I believe that it is also very important to be explicit about
how the former Communist regime should be dealt with. In my
judgment, amnesty for all, including Castro, the Castro brothers,
should be given, as the price of a peaceful transition. In other
words, no retributive justice, and that is the price for a peaceful
transition.
And I think that the offer of amnesty should be made to all those
Communist elements of the apparatus, who are willing peacefully
to leave their functions, and let there be a transitional political
process of succession.
The seventh point is that I think that there should be an inter-
national effort, a strong and consistent international effort, to give
legitimacy to the free Government of Cuba in exile, to invite it as
an observer at the United Nations to provide it with an opportunity
to speak to the citizens and governments of the world.
Next I think there should be a withdrawal of diplomatic recogni-
tion from the Castro regime and dictatorship by the United States,
and a significant group of countries that agree with that.
Next there should be the conferring of diplomatic recognition on
the free government of Cuban in exile. And finally, the Organiza-
14
tion of American States taking the lead, and ultimately the United
Nations, should recognize the free Government of Cuba in exile.
Now these steps, the strategy I think has a beginning, a middle,
and an end. And the end point would be an opportunity then for
the Cuban people to vote the transitional government, and then
leading to a process in which the Cuban people vote freely on com-
peting political parties for their future.
I believe that with such a strategy in mind and with consistent
support by the United States and the other leading democracies of
this hemisphere and of the world, I believe that the people of Cuba
would be able to liberate themselves.
I would be happy to answer any further questions.
[The statement of Mr. Menges appears in the appendix. 1
Mr. Burton. We will ask you some questions in just a moment,
Mr. Menges.
You made some comments briefly about Mexico and Castro's di-
rect or indirect support of rebel forces there or things to destabilize
that government. If you have any information about that, I, my
staff, and the committee would like to see it. After we review that,
we may hold a hearing on Castro's involvement in those nefarious
activities.
Could you get those to us, so that we could look at them, please?
Mr. Menges. Certainly, Mr. Chairman.
Mr. Burton. And with that, I will recognize my good friend,
Jorge Mas. —
STATEMENT OF JORGE MAS CANOSA, CHAIRMAN, CUBAN
AMERICAN NATIONAL FOUNDATION
Mr. Mas. Thank you, Mr. Chairman.
Mr. Chairman and distinguished members of this subcommittee,
I would like to thank you for the opportunity to appear before you
today to talk about Cuba and United States policy toward that
enslaved island. It is indeed a great honor for me to be here with
such distinguished company, such as Constantine Menges and
Jorge Mas, the original founder of the Cuban American National
Foundation.
Before I begin, however, I would like to especially congratulate
you, Mr. Chairman, for you assuming the chairmanship of this sub-
committee, one that has become so critical and important, largely
through the effort of your predecessor, Mr. Robert Torricelli, for the
cause of freedom and democracy for the Cuban people.
If the democratic process of our great country calls for a change
in the leadership of this Congress, then the Cuban-American com-
munity could not have expected a dearer friend or someone more
devoted to securing Cuba's freedom to assume the chairmanship of
this subcommittee than you, Mr. Chairman.
I truly believe that. And I also believe without doubt that Fidel
Castro is going to soon find out that he is no match for the com-
bined leadership of you, Mr. Chairman, and the ranking member
of this subcommittee, Mr. Torricelli, as we pursue our long sought
goal of returning freedom and democracy to our beloved homeland.
It is very difficult to convey the deprivation and the destitution
that Fidel Castro has imprinted on that island. It is now clear to
all but the most devoted sycophants that Fidel Castro's obsession
15
with absolute power precludes him from ever introducing the fun-
damental economic and political reforms that the Cuban people cry
out for.
So let us please once and for all dispense all of this nonsense
about "reform" in Cuba, "moving toward free markets," "mixed
economies," and "Cuba: Open for business."
In fact, this myth helped along by the national media including
Time magazine and USA Today, that somehow Cuba is open for
business, and that United States corporations are allegedly being
left out, is nothing but a thinly disguised attempt to recruit United
States corporations by Castro himself and many of his friends here
in this country, to actually lobby against our great embargo of
Cuba, hoping that they can replicate the process whereby the em-
bargo of Vietnam was lifted.
^lat I would like to know is what is so attractive economically
about an island ruled by a totalitarian despot who maintains the
authority to seize property at will, where there exists no property
rights for the average citizens, where that citizen earns the average
of $5 a month, where no Cuban is allowed to own or organize any
private economic organizations?
I will tell you that what makes Cuba so attractive to those inter-
national profiteers, who have invested in Cuba and conducted busi-
ness as usual with its dictator, is forced and enslaved labor. No
independent labor unions, no right to strike, a regime that can
make you any offer no matter how desperate, because it has no ac-
countability to his people. No pollution standards, no work protec-
tion standards. The local population will not be a nuisance, because
they have no civil rights, no legal rights, no rights whatsoever.
There interest can be summed up in one word, Mr. Chairman, "ex-
ploitation."
It is really ironic, Mr. Chairman, to see how all of these activists
and public personalities who have built careers denouncing capital-
ist exploitation of the so-called developing world have been so defi-
nitely silent on what is .going on in Cuba.
I would like to introduce for the record just this one newspaper
article that pretty well sums up what is going on there. It origi-
nally appeared in the London Observer, and the title says it all.
"Cuba: A Paradise, but not for Cubans; Communist island lures
dollar bearing tourists to hotels off limits to local residents; vaca-
tioners find trips to sandy beaches are cheap, amenities expensive,
except for sex."
It goes on to label Cuba the "Bangkok of the Caribbean" for its
promotion of sex and virgin Cuban women willing to spend a night
with a tourist in order to buy the next day's meal.
Where is the outrage, Mr. Chairman? Canadians raping the is-
land of its mineral resources and polluting its delicate environ-
ment. Spaniards embracing tourism apartheid, while tourists,
when they are not defiling Cuban women, are ferried about in Jap-
anese cars denied the Cuban people, who are sold bicycles by the
dictator. And Mexicans are also shipping their pollution-laden oil-
refining business to Cuba. And every single one of them profiting
off the poor, defenseless Cuban citizen.
Well, the outrage is right here, Mr. Chairman. Cubans on the is-
land might be powerless to oppose these deals, but free Cubans are
16
not. We are committed to doing all in our power to disrupt this
profiteering on the misery of the Cuban people.
I would like to submit for the record what we call Cuba's Hall
of Shame, a list of companies from Canada to the United Kingdom,
to Latin America, who are investing in Cuba and conducting busi-
ness as usual with the Cuban tyrants.
These are blood deals, Mr. Chairman. These contracts are ink in
the blood of every Cuban man, woman, and child, who has died at
the hands of these despotic regimes since 1959. They are contemp-
tuous of the pain and sacrifice endured by 11 million Cubans, both
on the island and in exile.
And I will promise to you today, Mr. Chairman, that as long as
I live and as long as the Cuban American National Foundation ex-
ists, we will work to see and to ensure that when the dawn of de-
mocracy finally arrives in Cuba, each one of these deals will be ren-
dered null and void by a new democratic Cuban leadership. And
those profiteers will be run out of town one step behind the tortur-
ers and executioners of the Cuban people.
That is my promise. And I encourage the U.S. Congress, Mr.
Chairman, to join us in our effort to expose and punish any com-
pany with the blood of the Cuban people on its hands.
Lastly, Mr. Chairman, I want to briefly respond to a current ar-
gument being made by some that United States trade and travel
will succeed where the alleged current United States policy has
failed in restoring freedom and democracy to Cuba with the so-
called flooding the island with goods and people.
I say has that approach ever succeeded in undermining a dicta-
torship? Give me one specific example. In fact, let us look at what
is happening in China, as Congressman Tom Lantos so eloquently
expressed.
Let us look at what is happening in China. In the State Depart-
ment's just released human rights report, it shows that the human
rights situation in China has not improved since the Communists
received most-favored-nation status. In fact, it has gotten worse.
The Chinese Government continues to abuse and jail dissidents,
brutally suppresses and uses labor to produce goods for goods for
exports, and have been of absolutely no help in our efforts to deal
with the North Korea problem.
And the only time that the U.S. Government has stood up to
Beijing is only when they pirate U.S. CD's and video tapes.
I am sorry, Mr. Chairman, that is my vision for a future Cuba.
If the United States does not consider the human rights of the
Cuban people important enough to stand up for, but will stand up
for the commercial rights of U.S. entertainment industry.
In conclusion, Mr. Chairman, I would like to thank you for con-
vening this hearing. I would also like to thank you and your prede-
cessor, Mr. Torricelli, for your leadership, and for providing those
forums that have given a voice to the voiceless, the people of Cuba,
that has given them a measure of respect and dignity that has
been denied them by Fidel Castro for more than three decades.
Your contributions to a free and democratic Cuba are known to
them through Radio Marti and TV Marti, and the radio station of
the Cuban American National Foundation. And I have no doubt
17
that it will be known to the children and to the generations of
Cuban who will surely be leaving as free men and women.
Thank you very much, Mr, Chairman.
[The statement of Jorge Mas Canosa appears in the appendix.]
Mr. Burton. Thank you, Mr. Mas.
You have a list there of companies that are continuing to do busi-
ness with Cuba?
Mr. Mas. Yes, Mr. Chairman.
Mr. Burton. Are many of those American companies?
Mr. Mas. No, sir, they are not.
Mr. Burton. Could we get a copy of that list? And if you and
your foundation has any other information about American compa-
nies or otherwise that are doing business with Cuba, we would like
to have those. If they are not American companies, we can at least
write them a letter and tell them of our concern.
If they are American companies, we can tell them that they are
in violation of the embargo and put some heat on them, like the
companies that Representative Ros-Lehtinen mentioned a moment
ago. Any information you can give us along those lines, we would
appreciate.
[The list of foreign companies doing business in Cuba appears in
the appendix.]
Mr. Burton. I have a few questions that I would like to ask be-
fore I yield to my colleagues. Two days ago, President Clinton
signed an agreement with the Mexican Government regarding a
bailout to save the peso and the Mexican economy, even though the
Congress of the United States chose not to do that.
One of the concerns that I have and continue to have is that the
Mexico Grovemment and Mexican entrepreneurs have been pur-
chasing confiscated United States property in Cuba, investing
there, giving Castro hard currency with which to keep his regime
in power.
Could either of you comment on that, and to the extent that it
is taking place, and maybe give us some examples?
Mr. Mas. Yes, Mr, Chairman. Around 6 months before NAFTA
was approved by the United States Congress, I visited with Presi-
dent Salinas Equatares in Mexico; and a delegation of Cuban-
Americans including the former Ambassador, Jorges Osano; Diego
Suarez; and Alfonsho Vanhor from the State of Florida.
President Salinas told us at that time that Mexico was not doing
business with Cuba. That if NAFTA was approved and passed by
the United States Congress that Mexico would move away from
Cuba, that there would be no Mexican investment in Cuba, that
there would be no selling of Mexican subsidized goods to the Cuban
Government. And that there would be no swap for equity with
Cuba, and that there would be no guarantees for the Mexican Gov-
ernment to private investment in Mexico.
And a few months after NAFTA was approved, President Salinas
Equatares did completely the opposite. He went to Cuba, and he
signed a couple of deals with the Castro government. The first deal
was to get Pemex, the oil giant company, Mexican company, owned
by the Mexican Government, to joint venture with Castro with the
oil refinery of Cienfuegos, which is just a recently built oil refinery
by the Soviets in Cuba which is idle, because they do not have oil
18
to refine. And the refining capacity of the Cuban Government is in
excess of the domestic demand of the Cuban people.
And SaHnas Equatares signed a deal on behalf of the Mexican
Government to joint venture that giant governmental-owned oil
company, Pemex, with the oil refinery in Cienfuegos.
There was another deal, which included a former U.S. corpora-
tion that was illegally confiscated by the Castro government with
no compensation whatsoever to the former U.S. owner. And that is
the former telephone company in Cuba owned by IT&T, which was
illegally, I repeat, confiscated by the Castro government with no
compensation whatsoever.
Together with President Salinas, there was a group of Mexican
investors headed by the Gases family out of Monterey, who owned
the cellular telephone system in Monterey together with South-
western Bell in the United States. And the Domos family signed a
deal with the Cuban Government to purchase that telephone com-
pany, 49 percent of the telephone company in Cuba, for $1.5 billion
to the Castro government.
The Central Bank of Mexico, the Banco of Mexico, owned by the
Mexican Government provided a $10 million cash pa3anent to the
Cuban Government.
And those are two specific instances where I know that the Mexi-
can Government is supporting investment in Cuba, and guarantee-
ing that investment in Cuba. Our concern is that now with this $20
billion to the Mexican Government that Castro in some way and
somehow is going to get it recycled indirectly from the Mexican
Government.
Mr. Burton. Is there any tie between the pressure that has been
brought on Mexico to sever relations and what Castro is doing now
to keep the pressure internally on Mexico, so that they do not cut
Castro adrift?
But before you answer that question, you said Southwestern Bell
was a partner with a Mexican telephone company that purchased
a phone company in Cuba?
Mr. Mas. Southwestern Bell is a partner of the Domos group in
Mexico. They have an investment together with the Gases family
and the Domos group in the telephone industry in Mexico and spe-
cifically in Monterey. I do not think that Southwestern Bell is in-
volved at all in the Cuban deal. But still they are partners of this
group of Mexicans who went to Cuba to purchase the telephone
company.
Mr. Burton. I might make an inquiry of Southwestern Bell to
see if any American resources are being directly or indirectly fun-
neled to Castro in this purchase. And we will at least make that
inquiry.
Mr. Menges, do you want to comment?
Mr. Menges. Mr. Chairman, I think that the pattern of events
in 1994 suggests
Mr. Burton. Could you pull the mike a little closer. Your voice
is not carrying very well.
Mr. Menges. The pattern of events in 1994 suggests to me — and
as you know, I served as special assistant to President Reagan for
national security affairs, responsible for Latin America among
other issues, for quite some time in the 1980's.
19
The pattern of events in Mexico suggests to me that when the
guerrilla group began operating on January 1, 1994, the 35th anni-
versary of Castro's seizure of power, I thought the date was inter-
esting, in a region which had been controlled by the Communist
guerrillas of Guatemala for at least 10 years, that this could never
have begun as a process without the approval both of the Com-
munist guerrillas of Guatemala and their key sponsor, Castro and
the Castro regime.
And the process of the political destabilization represented by the
guerrillas started the ending of investment in Mexico. The assas-
sination of the Mexican Presidential candidate in April started the
process of capital flight. And that started the economic crisis.
The kidnappings in Mexico of more than 120 wealthy people in
1994, many of whom were on a list found in the hidden head-
quarters of the Sandinistas in Nicaragua in May 1993, altogether
suggests a pattern in which part of Mexico's political and economic
crisis, which I believe will grow more severe, is caused by oper-
ations in which Castro and the Castro regime are a part.
And I believe that there was a form of basically political black-
mail in my sense of the $1.5 billion pseudo purchase of Telephonas
de Cuba. After all, bu3dng 49 percent of a so-called state owned
telephone company is like buying nothing. So the $1.5 billion, I
would say in some respects, represented an effort by President Sa-
linas of Mexico to buy off Castro, and to reduce the pressure before
the August 1994 election.
Again these are judgments, Mr. Chairman. These are inferences
I am making from historical facts based upon patterns of action
over many decades. But I believe that one can say that there is a
pattern of events that suggest both that the purchase had a politi-
cal blackmailing aspect to it, an appeasing of Cuba, and that there
is a continuing question and problem of the Cuba involvement with
the far left within Mexico, which merits serious attention.
Mr. Burton. Well, thank you. We will follow up on that maybe
in the next round. Right now, I will recognize my colleague, Ms.
Ros-Lehtinen.
Ms. Ros-Lehtinen. Thank you very much, both of you, for excel-
lent testimony. Dr. Menges and Mr. Mas. I wanted to ask you some
questions. Certainly, this week is a very important week for all of
us whose strong desire is to have a free and democratic Cuba very
soon.
The human rights discussions that are taking place in Geneva
this week, what is your outlook or general comments that you
would like to make about how important our policy statement is to
the future of a democratic and free Cuba, Dr. Menges?
Mr. Menges. I believe that it is extremely important always to
hold out and to point to the truth about the repression of the peo-
ple of Cuba by the Castro regime. That is why I think the state-
ments by all of you members of Congress today have been ex-
tremely important, and they need to be widely reported.
Ms. Ros-Lehtinen. Dr. Menges, if you could keep your remarks
short. We are going to have a vote very soon. So I will keep my
questions short.
Mr. Burton. If you would take the chair. I have to go to the
floor.
20
Ms. Ros-Lehtinen. Yes.
Mr. Burton. And I shall return, along with Congressman
Torricelli, in just a few moments.
Ms. Ros-Lehtinen. Thank you. Gro ahead. I apologize.
Mr. Menges. I have answered. Let me defer to Mr. Mas.
Mr. Mas. I think that it is very important to be specific. The
Human Rights Commission that met in Geneva today should look,
and I think that there has been effort undertaken at this point, to
expose what happened with the tugboat, 13th of March. And to
show the real criminal nature of the Cuban Government under the
instruction of Fidel Castro himself, who is responsible for the
drowning of 23 children when they tried to gain freedom by board-
ing that tugboat toward the coast of Florida.
And it is important that we denounce that, and that the U.S.
Congress and the American people know about the violation of
human rights in Cuba. Because it is a shame for Time magazine,
for example, to have a spread of nine pages in last week's edition.
And there is not one single word there about dictatorship. They call
Castro the lion in the winter. They call Fidel Castro the last ro-
mantic revolutionary. But the word dictator is not at all in any of
those nine pages published by Time magazine.
And I think that the American people deserve better, and should
be better informed. And we should not rely only on a newspaper
organization like Time magazine, or the New York Times, or the
Washington Post that are just involved in the propaganda effort to
rescue Fidel Castro in some way or somehow to get the embargo
lifted.
I do not think that they are being objective. I think that the
American people are denied the right to know the truth about
Cuba. And I think that 20 percent of the Cuban population in the
United States as victims of the Castro government is the best testi-
mony to let the American people to really know what is happening
in Cuba, and what Castro stands for, and the criminal nature of
that government.
Ms. Ros-Lehtinen. Thank you. TV and Radio Marti and this
budget problem, all of us know that it is going to be difficult to
keep even beneficial programs alive. We just survived a subcommit-
tee meeting today where TV and Radio Marti was able to stay in
the budget. We do not know in the recision bills what will happen.
What would you say to those members who believe that it is time
to eliminate those programs? And also, if you have some rec-
ommendations about what we can do to make it even more success-
ful, so that the message of hope and democracy gets to the people
of Cuba.
Mr. Mas. I believe that the strongest weapon that we have as a
Nation is the truth, to convey the truth and freedom of information
to the rest of the world. I think that we all realize that in the
downfall of communism in the Soviet Union and Eastern Europe
that freedom of information probably played a most vital and im-
portant role in freeing those countries.
And we would be neglecting those values if we do not support the
tremendous and modest economic effort that we are doing regard-
ing Radio and TV Marti. With a few million dollars, we have been
able to convert the Cuban population into what the Cuban popu-
21
lation has always been. A devoted people friendly to the United
States, who treasure the same values that we share in this nation.
Before that, the only information that the Cuban people would
obtain came from the Cuban Grovemment. They have a monopoly
on information to the Cuban people. And therefore, they were ma-
nipulating everything that comes into the propaganda machinery of
the Cuban Government. We broke the monopoly. On May 20, 1985
is going to be the 10th anniversary, and we are doing it at an ex-
pense of I think $13 or $14 million a year.
I think that it would not be consistent with the history of the
United States if we cutoff the funding for Radio and TV Marti, and
we would be den3dng 11 million people just 90 miles offshore of the
United States the right to gain access to freedom of information.
Ms. Ros-Lehtinen. Thank you.
Dr. Menges, if I could stop you even before you start, in the in-
terest of time. I had some other questions that I wanted to ask. But
since the bell just rang and we have a vote, if I could ask Mr.
Menendez if he has questions for these panelists before we break.
Mr. Menendez. Yes, thank you. Madam Chairlady.
I want to commend both of your testimonies. I appreciate it very
much. I am sure that the committee does as well. It was very
strong with a lot of food for thought.
I would like to ask Mr. Mas, as someone who is president of a
national foundation, does the foundation do research on what is
going on in Cuba today?
Mr. Mas. Yes, and we constantly do that. And we have more
than seven people fuU-time devoted to research on what is happen-
ing in Cuba, and what the factual situation in Cuba is today.
Mr. Menendez. Are you familiar with the Lourdes facility in
Cuba?
Mr. Mas. Yes, I am.
Mr. Menendez. Could you tell the committee what that facility
is and what it does?
Mr. Mas. It is espionage based to listen to every single telephone
conversation that is taking place in the United States, not only
among the civilian population but among the military personnel. It
is handled, administered, and directed by Soviet personnel. And
Castro has sold that piece of the island to the Soviets to spy on the
United States.
Mr. Menendez. And is my understanding that the sum of about
$200 million that the Russians pay Cuba the correct sum for the
use of that location?
Mr. Mas. That is the same number that the Cuban Government
and the Soviets have agreed publicly that that is what the Cuban
Government collects from the Soviet Union for the leasing of that
base.
Mr. Menendez. Are you familiar from your research in the foun-
dation with a nuclear power plan that is being built at Cienfuegos?
Mr. Mas. Yes, we are.
Mr. Menendez. And what can you tell the committee about that?
Mr. Mas. Well, the nuclear plant that has been built in Cienfue-
gos under the direction of the Russians, I think that the Congress
before has heard a lot of testimony from an expert who has worked
on the construction of the nuclear plant, that is posed a tremen-
22
dous risk to the United States. It is faulty construction. And if that
nuclear power plant is ever finished, we are in danger of having
another Chernobyl right in the Caribbean.
And I think that there has been ample evidence by those people
who have left the island, and have worked with that nuclear power
plant that there is tremendous risk, if that plant is ever finished.
Mr. Menendez. Now there are many who suggest that that plant
is a dead matter.
But have you read accounts or have you had opportunity through
the foundation to research accounts of various countries looking
into the possibility of assisting in a joint venture with the Castro
dictatorship for the completion of that power plant?
Mr. Mas. The Cuban Government has tried to enlist the coopera-
tion of France and Germany, and even the Japanese, to see if they
could finish the construction of that nuclear plant. I do not think
that he has received any serious commitment from any of those na-
tions to finish that nuclear plant.
Mr. Menendez. And this plant, if it were to be finished, would
be 90 miles away from the United States?
Mr. Mas. Very close. Cienfuegos is on the south coast of Cuba.
Mr. Menendez. Let me ask you a final question. There could be
so many more, but let me ask you a final question. We read a lot
about economic reform in Cuba, and I think that you alluded to it
in your statement.
Is there true economic reform in Cuba, or do we just see invest-
ment; and what is the investment like?
I hear stories of people, Cuban workers, who are not paid directly
by the employers, but are paid through the Cuban Government
with the individual company, the foreign company, paying the
Cuban Government. And the Cuban (government in essence paying
the worker what would be the equivalent of a slave wage.
Mr. Mas. The answer is no, absolutely no. There are not any eco-
nomic reforms taking place, but cosmetic changes, just to develop
the perception that he, in fact, is introducing economic reforms on
the island. What Castro is really doing is selling the island off to
anyone who will walk in and buy whatever is left in Cuba, regard-
less of who was the former owner, and regardless of the interests
of the Cuban people.
What is really happening is that some of those investors are posi-
tioning themselves. So with this opportunistic approach of going to
Cuba, and buying very cheap property that they think is going to
be worth tremendously in a post-Castro Cuba. By doing that, he is
denjdng the Cuban people part of what is the national patrimony.
The hotels that have been built in Cuba, for example, what they
really doing is setting an economic opportunity. The Cuban people
cannot go into those hotels. They cannot eat in those restaurants.
They cannot buy on those beaches that those foreign investors are
exploiting. The tourists, the Canadian tourism, the French, or
Spanish.
And the Cuban people resent that. Because whoever goes into
Cuba is only with the mentality to serve the tourist industry or to
serve foreigners, and not the Cuban people. No infrastructure
whatsoever has been developed in Cuba today. No services, no
manufactured products. There is not a currency in Cuba. There is
23
no incentive to any Cubsin worker to engage in any productive eco-
nomic activity.
But even worse, it is the Cuban people who cannot do the same
thing that foreigners and foreign investors are doing in Cuba. No
Cuban citizen can engage in any economic activity that any foreign-
ers can do in Cuba. That is denied to the Cuban people, the right
to organize themselves and participate in the economic well-being
of the nation.
Cuban workers are not paid by those foreign investors. They are
sold to those foreign investors. The Castro government pays those
workers with pesos, which are worth nothing. And then the foreign
investors in turn pay Castro a tremendous amount of dollars for
those workers.
It is a crime what is happening in Cuba. You do not read that
in the papers in this country. You do not read that in the New
York Times. You do not read that in the Washington Post. You do
not read that in Time magazine, but that is what is happening in
Cuba.
And if you just read the testimony of a tremendous list of people
who have come to the hearings here and have testified as to how
they have been exploited by the Cuban Grovemment, the fact will
come out and the real nature of the Cuban Government will be ex-
posed.
Mr. Menendez. Thank you very much.
Ms. Ros-Lehtinen. Members, what we will do, we have a vote
on right now. Mr. Torricelli has voted. I will recognize Mr.
Torricelli to ask the questions. You see, we took power, and already
we are relinquishing it. How much more democratic can you get?
And we will dismiss ourselves to go vote, but Mr. Torricelli will ask
the questions. And then after his round, we will recess and convene
the next set of paneUsts. Thank you. Mr. Torricelli.
Mr. Torricelli. Thank you very much. This is a great honor. I
am the last Democrat to actually be presiding over a hearing.
Mr. Mas. But the best one.
Mr. Torricelli. Thank you.
There has been so much said and so much information about the
American embargo and how it might end. Knowing that this is
being broadcast to Cuba, it is an opportunity to put to rest some
of the misunderstandings, and to establish clearly some of our own
positions.
First, there are repeated attempts in the media to convince
President Clinton to end the embargo and to begin trade. Those ap-
peals are of no moment. The embargo exists in the laws of the
United States. Absent certain events occurring in Cuba, the Presi-
dent of the United States has no authority, nor any other official
of the U.S. Grovemment, to end the embargo with Cuba. It is per-
manent unless and until there are certain political events occurring
within Cuba.
Mr. Mas, you helped with the drafting of this, and you know the
bill as well as I do.
Is that your understanding of the current state of American law?
Mr. Mas. Absolutely. And I think that anyone who might doubt,
for the first time we have a tremendous political consensus in this
country. Democrats alike with Republicans, that this is the policy
24
of the United States toward Cuba, I think that they would be de-
ceiving themselves. I think that is the policy, and that it is going
to continue. I think that the consensus of the American people is
that as long as Castro does not introduce real democratic political
reforms in Cuba, that there will be no lifting of the embargo.
Mr. TORRICELLI. And that gets to my second point that I wanted
to make. To suggest that the President of the United States does
not have the authority to end the American embargo does not sug-
gest that there are not some people who do have that power.
It is both my memory and my interpretation of the Cuban De-
mocracy Act that the American embargo on Cuba ends, and that
it ends immediately and completely upon the holding of a free and
fair election in Cuba. Therefore, ironically, the only person in the
world who has the power to cause an immediate suspension of the
embargo is Fidel Castro. By calling an election and ensuring that
there is a free press, and that it is monitored, and that the genuine
rights of the Cuban people to express themselves in an electoral
process exists.
What I think is significant, however, Mr. Mas Canosa, is that the
Cuban people here themselves and that your position remains the
same as that of the U.S. Government. Our objective is simple, a
free and a fair election. When it is held, there is no embargo. Just
as in South Africa, when the apartheid government yielded to a
multiracial election, there was no longer an embargo on South Afri-
ca.
Just as when the Soviet Union allowed Jews to begin to emi-
grate, we lifted sanctions on trade. There is no unique provision
here for Cuba. You respect the most basic element of human rights,
and then you are granted the full rights to trade in the inter-
national system.
What I think is important for the Cuban people is that they rec-
ognize that not only Democrats and Republicans and this govern-
ment shares that position, but indeed the most notable exiled
Cuban leaders in the American community hold that view.
Mr. Mas. Absolutely. I concur, Mr. Torricelli. And we will all join
together on the day that free and democratic elections are held in
Cuba, and a democratic government emerges from that election.
We do not support tne embargo just to deprive the Cuban people
of any resource. We have an embargo not against the Cuban people
but against the Cuban Government, the repressive policies of the
Cuban Government which keeps in jails in Cuba thousands and
thousands of political prisoners, and which is responsible for the
drowning of thousands and thousands of Cubans in the Gulf of
Mexico and just recently a few months ago.
It is up to Fidel Castro to make his mind up, and think about
the Cuban people and think about the nation. And the day that he
calls a free and democratic election, I think that we are all in
agreement and have a full consensus. That that day the embargo
should be lifted. And then I would be able to join with the Cuban
Communist delegation, which some of them are attending this
hearing here, to request the lifting of the embargo.
Mr. Torricelli. It is important, of course, not only for Fidel Cas-
tro to understand, but for members of the Cuban military estab-
lishment, and the Communist Party, and others who may have a
25
belief that if Fidel Castro is there or whether he leaves is of no par-
ticular consequence, because they remain in an embargo against
the United States. That is exactly the opposite of what the law
states.
If indeed any segment of the Cuban society were to seize power
by any particular means and hold a free and fair election, the em-
bargo ends. That this embargo does not continue after a Castro dic-
tatorship ends as long as the people, whatever they have done in
the past, and whatever their backgrounds might be, whoever they
might be, nevertheless hold a free and fair election, and allow a le-
gitimate government to take place.
That is a critical message to the Cuban military and other mem-
bers of the Communist Party to understand. There is a chance to
start Cuban history over again. And that no one is excluded from
the Cuban future, whether they have been in Miami or whether
they have been in Cuba, whether they have been in New Jersey or
they have been in Spain. If they believe in pluralism, to get them-
selves to the people, then they too can come back together in a new
Cuban future.
Could you comment on that, and express your own views?
Mr. Mas. Yes, Mr. Torricelli. And I want to commend you and
to express our gratitude on behalf of not only the Cuban exile com-
munity, but on behalf of the Cuban people who cannot express
themselves. Because when the Torricelli bill, as we call it — ^you call
it the Cuban Democracy Act, and that is the official name, but we
Cuban-Americans and the Cuban people know the Cuban Democ-
racy Act by the name of the Torricelli bill — I think that you do not
underestimate the Cuban people when that bill makes certain and
guarantees that the only way to lift the embargo and to establish
normal diplomatic relations, and to allow Cuba into the Inter-
national Monetary Fund, is the day that Castro or any transition
government holds free and free and democratic elections.
The Cuban people are not above any other people, but are not
under any other people in the world, and it is entitled to the same
rights that all of the rest of humanity today is being considered
and is being allowed. We need free and democratic elections for the
Cuban people. We have not held free and democratic elections in
Cuba for over 40 years now.
So to make certain, and that is why this bill defends and respects
the rights of the Cuban people so much by calling on anyone who
would succeed Fidel Castro that free and democratic election
should be held immediately. And that should drive out any fear by
anyone either in the Uberal media or in the political establishment
that after Castro that a dictatorship might be established.
We have made clear, and I think that there is not only a consen-
sus of the American Nation but also the Cuban nation inside the
island, that normal diplomatic relations with the United States
should only be estabUshed the day that free and democratic elec-
tions are held.
Mr. Torricelli. But I want to provide to the Cuban people and
to the American media a contrast between Jorge Mas Canosa and
the Cuban American Foundation and the Communist Party and
Fidel Castro in the clearest possible terms. By not holding a free
26
and fair election, it is clear that Fidel Castro will not subject him-
self to the will of the majority of the Cuban people.
If Cuba were to hold, under international supervision, a free and
fair election where the media could cover this both internally and
internationally, where every Cuban citizen is guaranteed their
most basic rights and could express themselves, that Fidel Castro
will not go by the majority will of the Cuban people, whatever the
outcome might be, but is it clear and unmistakable that in your be-
lief in the democratic process that you will subject yourself to the
desires of the Cuban people whatever it might as long as that proc-
ess meets the highest standards of being free and fair.
Mr. Mas. Absolutely, yes, Mr. Torricelli. Castro is constantly
claiming that he is the most popular leader in Cuba. And I will
challenge Castro to hold free and democratic elections, and submit
himself to the vote of the Cuban people. And if the Cuban people
elect Fidel Castro, then I think that we all should respect that new
democratic government elected and Fidel Castro as the head of
that government.
Castro does not hold a free and democratic election, because he
knows beforehand the result of that election. And all we are asking
for the Cuban people is the same rights that the Colombian people
have, and the Mexican people have, and the Venezuelan, and the
Argentinean, and the United States people have.
Let the people decide. Let the people elect their own officials. We
ask and would challenge Castro to submit himself to a free and
democratic election.
Mr. Torricelli. Well, that is the contrast that I wanted to see
established. I have got the advantage of not having to have anyone
take my time here, and I have a captive audience. I want to take
full advantage of it.
Some people do not understand why both in our legislation and
in the policy of this Government is to require the licensing of peo-
ple who want to make donations to the United States and to Cuba.
And so some, the Pastors for Peace, for example, have attempted
to go to Cuba and to distribute their donations without a United
States Government license or any supervision.
I read a report only this morning in my office that once again,
and it is important that the Cuban people hear this through Radio
Marti, that the tourist hotels that line the beaches of Cuba are
once again being stocked with items that are being donated by hu-
manitarian organizations in the United States.
People, American families, with the best of intentions who care
for the Cuban people and want to help, even if they do not agree
with your policy, are giving of their hard-earned money, and they
are giving items. And they are showing up again in tourist hotels.
It is important that the Cuban people know that a part of their
deprivation is because the government is literally stealing humani-
tarian donations in order to sell them at marked up prices to Euro-
pean tourists. And it is critical that the humanitarian community
in the United States, as well intentioned as they might be, under-
stands that that is the reality of what is happening.
Our law requires a simple license to make humanitarian dona-
tions, because we want those groups to distribute the items them-
selves. If you go from the United States to Cuba and actually hand
27
medicine or food to a Cuban citizen, the U.S. Grovemment allows
that.
Indeed, today, the United States distributes more donations of
food and medicines to the Cuban people per capita, citizens of the
United States, than any other nation on Earth. That is how much
we are giving.
Now how much is getting there? That is another matter. Because
everybody is not getting these licenses. Instead of giving it to
Cuban citizens, they are giving it to the Cuban Government, where
it goes right to the Communist Party, or it goes to a tourist hotel.
Mr. Mas. That is absolutely true, Mr. Torricelli. And I am glad
that you brought the point up that the Cuban people are listening
to this testimony through Radio Marti. Because the Torricelli bill
has been criticized by the liberal media by saying that you just re-
inforced the embargo against Cuba.
But they do not talk about the humanitarian part of the
Torricelli bill. For the first time in the history of the Cuban exile
community in 36 years, we have direct calls to our relatives and
friends in Cuba. It used to take weeks and sometimes months and
years to make a telephone connection with any relative or friend
in Cuba. Now we can just pick up the telephone in Miami and dial
direct any friend or any relative on the island of Cuba.
It is important for the record to know that the Cuban-American
community is sending $400 million a year in humanitarian assist-
ance to the Cuban people. Where does that assistance go? That is
another thing. Most of it is manipulated by the Cuban Govern-
ment, as you expressed.
And it is important also that the Cuban people and the liberal
media know that the Torricelli bill authorized humanitarian assist-
ance to the Cuban people in large quantities as long as that hu-
manitarian assistance goes directly to the Cuban people, and does
not go through the hands of the Cuban Government.
Mr. Torricelli. That is all we ask, and then it is unlimited. And
I do not think that that is an inappropriate thing to request. That
is in the interest of all parties.
Now additionally, I wanted to share with you the experience of
having gone to Guantanamo last year. Arriving in the camps, and
this is important for the international community to hear as well
as those within Cuba, several hundred people rushed to me and to
Lincoln Diaz-Balart. And although my Spanish is good, when peo-
ple are excited and they speak, sometimes I cannot understand it.
Mr. Mas. Much better than my English.
Mr. Torricelli. And I said to Lincoln Diaz-Balart, "I kept hear-
ing them sajdng Mexico and Spain. What are they say?" They were
repeating over and over again, without us prompting them, that if
it were not for investments by Spain and by Mexico that Castro
would have fallen a long ago.
To our friends in Europe and Latin America, I think that it is
important for them to understand a generation of Cubans are
never going to be able to forget that in this moment of peril of the
Cuban people when they were fighting for their freedom, that there
are those who would take advantage of their suffering.
And the Cuban people unprompted rushed to us to share with us
the names of the countries. They may think that it is good busi-
28
ness, and maybe there are a few gold coins in the next few months
that they will gain. But they risk the enmity of those people for a
generation, and lost business opportunities.
And finally, Ms. Ros-Lehtinen, if I could. I want only to add that
before me I have what is appropriately titled from the Cuban
American National Foundation Cuba's Hall of Shame. It is inter-
national corporations that are investing in trading with Cuba, I be-
lieve as I have cited for short term advantage and long-term loss.
Could you just say for me what is the difference in the purchas-
ing power between Cuban-Americans and those within Cuba, if you
were only to take it in monetary terms?
Mr. Mas. Well, the purchasing power of the Cuban people is just
about nil. It is nonexistent. They have to trade in the black market,
and grab whatever dollars they can.
Mr. TORRICELLI. What do you estimate the purchasing power of
Cuban-Americans to be?
Mr. Mas. Well, we have an economy in South Florida close to $32
billion a year GNP, the combination of manufactured products and
services. You had an economy in Cuba of less than $3 billion. So
it shows the contrast of it between one system and the other.
Mr. TORRICELLI. Well, let me then finally conclude by suggesting
to the board of directors, and the executives, and the investors of
only a few of these corporations that not only do they risk long-
term investment in Cuba by a new Cuban Government, which is
inevitably going to hold them responsible for being complicitious
with the dictatorship, but there are hundreds of thousands of
Cuban-Americans and others who believe in freedom, and do not
like corporations to take advantage of the loss of freedom of other
people. That you are risking them as well.
To Cuban-Americans in South Florida who buy Toyotas, Nissans,
Mitsubishis. They do business with Fidel Castro. I would not do
business with them.
Unfortunately, an Italian company, Benetton, likes to do busi-
ness with Fidel Castro. I would not be visiting Benetton in Miami
any time soon.
For those in the construction business in the Cuban-American
community who might do business with Cemex. And those who im-
port oil, with Pemex from Mexico. I would think about it all again.
In the telecommunications business from France, Alcatel. I would
think long and hard. The fashion industry from France, Pierre
Cardin.
Page after page of corporations. If I were a Cuban-American and
I had a radio station in Miami for a newspaper, I would read this
list every day.
One thing that I respect about the Jewish-American community.
It took 50 years before many Jewish-Americans would buy products
of corporations that participated in the Holocaust.
If I were a Cuban-American, it would take 50 years before I
would buy the product of a corporation that helped enslave the
Cuban people. This is a record of shame. I hope that every radio
station in Miami will begin reading these products, and asking peo-
ple to stay away from these corporations.
Thank you for being so generous with the time.
Ms. Ros-Lehtinen. Thank you very much.
29
Mr. TORRICELLI. I hope you voted for my amendment when you
were over there.
Ms. Ros-Lehtinen. Well, I doubt that. I voted the right way.
Mr. Mas. Madam Chairman, would you allow me just 30 sec-
onds?
Ms. Ros-Lehtinen. Yes, Mr. Mas, but if we could wrap it up, be-
cause we have the next panel.
Mr. Mas. Mr. Torricelli brought up a very important statement
about Guantanamo, the people asking for Mexico and Spain to stop
the trade from Mexico and Spain with Cuba. I think that the best
expression and the best testimony of what the Cuban people inside
the island believe is of those 30,000 people in Guantanamo who
just arrived a few months ago, and they must have a clear opinion
of what the thoughts of the Cuban people are.
And those who doubt the popularity of the embargo or the
Torricelli bill, I would like to refer them to something that hap-
pened in Guantanamo. And Madam Chairman, you were a witness
of what happened there.
When Bob Torricelli the first time got into Guantanamo, he was
carried on the shoulders of the Cuban people in Guantanamo. And
that showed to the world how popular the U.S. embargo against,
not the Cuban people, but the Castro government is.
Ms. Ros-Lehtinen. Definitely. And on your return trip, which
took place just on Friday, we talked to many individuals there, not
only leaders, but the other rafters there, some of them recently ar-
rived by being transported back from Panama, and all of them had
told us that they believe that the correct United States policy is to
have a tough stance against Castro, and to further isolate him.
And I believe that some of the future leaders of a free Cuba are
in those camps at Guantanamo. And they are architects, and engi-
neers, and teachers, and doctors, and lawyers. And they are among
the best and the brightest. And they have said no to Fidel. And in
fact, they are the new men of the revolution that Castro said that
he was going to fashion. And all of them are saying good-bye to
that life of enslavement, and saying yes fervently to democracy.
Thank you to both of you gentlemen for being here with us.
Mr. Mas. Thank you.
Mr. Menges. Thank you.
Ms. Ros-Lehtinen. And I would now like to invite the second
panelists to join us. Dr. Mark Falcoff, research fellow at the Amer-
ican Enterprise Institute. Ms. Gillian Gunn, director of the Cuba
project from Georgetown University. And Ambassador Otto Reich,
the president of the United States-Cuba Business Council. Wel-
come to you.
Th£ink you so much for being here today to provide testimony.
And thank you for your patience, as we wind down this hearing.
But we have certainly saved the best for last. So thank you, all
three of you, for being here. I am just going to do it the diplomatic
way, and the same way that it was listed is how I will have you
speak, starting with Dr. Mark Falcoff. Thank you, Doctor.
QA_*3/1C rv _ QK _ O
30
STATEMENT OF MARK FALCOFF, RESIDENT SCHOLAR,
AMERICAN ENTERPRISE INSTITUTE
Mr. Falcoff. Madam Chairman and distinguished members of
the subcommittee, I am honored to respond to your invitation to
share some of my thoughts with you this afternoon on the Castro
regime in Cuba, as it enters its 36th year.
Let me begin my emphasizing two points. First, the longevity of
the Castro regime should not dazzle us. It is neither unique nor
given regional standards all that impressive. Many authoritarian
regimes in Latin America have endured well into three decades.
Castro's is unique only in that it possesses an ideology. And until
recently, it enjoyed a powerful international patron.
Also, unlike Generalissimo Rafael Trujillo or the Somozas, and
this has been pointed out already, Castro continues to exercise a
peculiar fascination over intellectuals, journalists, and academics.
Stripped of its ideological and cultural trimmings, however, the
Castro regime is an archetypical version of a traditional Latin
American dictatorship. It is and remains a one man show. In spite
of all of the talk about generational renewal, the revolution is still
not institutionalized. And even Fidel's brother Raul is widely re-
garded as heir apparent, not many people think that he possesses
the qualities necessary in Fidel's absence to hold together an in-
creasingly dysfunctional revolutionary family.
Second, Castro seems peculiarly uninterested in testing his legit-
imacy at the ballot box, not just in competitive elections, but even
in convoking a plebiscite, such as the one that took place in Chile
7 years ago. One cannot help wondering why, given the obvious ad-
vantages that he would possess control of the media, the lack of an
obvious alternative, and command of the only organized political
force on the ground.
To win such a plebiscite would be a devastating blow to the Unit-
ed States and to the enemies domestic and foreign of what he likes
to call the Cuban Revolution. Why, I ask, does he hold back? Per-
haps he knows something we do not.
These days, Castro's No. 1 priority is his desire and in a certain
sense his need to rule his country until his death. What happens
to Cuba after he is gone is of no great concern to him.
How does he propose to achieve this goal? First, by getting the
United States to lift its economic embargo. This would open to
Cuba a whole new universe of credits with American private banks
replacing those lost or exhausted with credulous Europeans or Jap-
anese.
It would also make him eligible for soft loans to finance the pur-
chase of U.S. agricultural products, presumably guaranteed by the
U.S. taxpayer. It would allow him access to loans from the multi-
lateral banks and membership in the International Monetary
Fund. Such "constructive engagement" has prolonged the life of
more than one Communist regime. The Pole and Czech regimes in
the 1980's, and China and Vietnam today.
While Cuba would not be a particularly good credit risk, it would
be some years before Castro would have to declare default during
which time he could postpone political and economic reform indefi-
nitely.
31
Second, once the embargo is lifted and United States businesses
begin to operate in Cuba, Castro could anticipate the emergence of
a new constituency here in Washington, to line up behind the re-
gime whenever it is embarrassed by its human rights violations,
and also to explain away its lack of progress toward political de-
mocracy.
In this connection, let me explain something about the debt/eq-
uity swaps and other deals which Cubans are now offering Mexi-
cans, Canadians, Spaniards, and others. In my view, Castro's major
purpose in opening industries to these non-U.S. investors is less
economic reactivation than to convince the American business com-
munity that it is missing out on the fire sale of the century, and
to pressure our Government to lift the embargo.
As long as the embargo is in place, these new ventures, at least
many of them, have very limited possibilities of making a profit.
Third, by expanding the range of contact with foreign businesses,
Castro hopes to buy the continued loyalty of his armed forces by
cutting them in on new joint ventures. Presumably, this would in-
sulate the Cuban military from the island's economic decline and
neutralize it politically. But whether this is possible in the absence
of a U.S. component remains to be seen.
One may well ask why is it that Castro is so certain that lifting
the embargo would strengthen his hold rather than undermine it?
After all, the United States was always a pole of attraction for ordi-
nary Cubans, and presumably would remain so. Can the Castro re-
gime survive thousands of American tourists and the impact for ex-
ample of renewed United States-Cuban trade?
The answer, I submit, is that Castro intends to manage the new
relationship in such a way as to minimize the ripple effect of in-
creased contact. It is worth noting that even today that ordinary
Cubans have little or no contact with foreign tourists. Many tourist
centers are isolated along the island's periphery, and the access
roads are forbidden to ordinary Cubans, even on bicycle.
Let us also understand that normalization of relations with the
United States does not mean a return to the pre- 1959 status quo.
Cuba can never again enjoy privileged access to United States mar-
kets, at least under the current political arrangement.
Above all, given the overriding political objectives of the regime,
the wider impact of economic liberalization will be extremely lim-
ited because it must be. To assume that it would acquire its own
momentum overruling and engulfing the regime is to descend into
a kind of crude economic determinism of which Castro himself, I
am sure, would never be guilty.
To summarize, if Castro believes that he can survive and flourish
in a postembargo environment, the question we ought to be asking
ourselves is, Why that is, and what policies ought to follow from
that?
Thank you for your attention. I look forward to your questions.
[The statement of Mr. Falcoff appears in the appendix.]
Mr. TORRICELLI. Thank you very much.
Ms. Gunn.
32
STATEMENT OF GILLIAN GUNN, DIRECTOR OF THE CUBA
PROJECT, GEORGETOWN UNIVERSITY, WASHINGTON, DC
Ms. GUNN. Thank you very much for the opportunity to testify
today. When it became known among my colleagues that I was
going to be testifying today, I was given some humorous advice,
whicn was as I was likely to be the lone voice with my point of
view, that it might be wise for me to conveniently get sick today.
As you can probably tell from my somewhat flu ridden voice, my
body must have been listening. In fact, I wonder if the State De-
partment representative had received the same advice, and their
body was listening as well.
But in any case, after having been taunted with that challenge,
I decided that I would turn up even if in a wheelchair. So forgive
me if I gasp a little as I try to breathe through my cold.
I would like to start by sajdng that everyone on this and the pre-
vious panel, and in fact I am sure everyone in this room
Ms. Ros-Lehtinen. If your views change, your cold will get bet-
ter.
Ms. GUNN. I am sure that everyone wants the same thing for
Cuba, which is a peaceful transition to a democratic government
which no longer abuses human rights. I certainly agree with that
wholeheartedly. However, the shift in U.S. policy contemplated by
the Helms and Burton bills would be very counterproductive. In
fact, to use a metaphor from British football that you would call
soccer, it would be an on goal, a player inadvertently kicking the
ball through his own net giving a free point to the other side.
Most importantly, given the statements concerning human
rights, very eloquent statements that were being made at the be-
ginning of these hearings, with which I fully agree, these two bills
if passed would make it far harder to build the international con-
sensus to exert greater pressure on Cuba to improve its human
rights record.
Now on to some specifics. I fear that the most likely outcome of
a passage of these bills would not be immediate overthrow, cer-
tainly not peaceful overthrow of Castro, but that Castro would sur-
vive in power for at least some time to come, however with the liv-
ing standard of the Cuban people declining, further declining, due
to the economic provisions in these bills.
Why do I say that he would be likely to survive for a time at
least? One reason is that the repressive apparatus is still efficient,
and it is still loyal. The ruling group remains unified. Therefore,
the lowering of the standard of living in my view would not cause
a revolt. The fear of repression is just too great. The efficiency of
that repressive apparatus is too great. And instead, people would
try to deal with the falling standard of living by trying to flee the
island.
We know what happened the last time that a large number of
Cubans tried to flee the island in August. We ended up with the
crisis in Guantanamo. I fear that if these bills are passed, that we
could have another such migration crisis and the Guantanamo
problems would become still worse.
A few words about the ongoing situation in Guantanamo. There
will be about 26,000 by March 6 when the Panama refugees are re-
turned. This is costing the U.S. taxpayer between $200 and $300
33
million a year. There are four options for dealing with the Guanta-
namo refugees. Although I have addressed all of them, I will only
address two here.
One is what my heart definitely agrees with, to admit them to
the United States. Anyone who knows of the difficult conditions
that these people are living under, and the courage that it took for
them to leave Cuba in the manner in which they did, has to S3rm-
pathize with that very humanitarian cause.
However, there is a profound danger that the decision to admit
the refugees to the United States would solve a short term problem
only to create a much larger long term problem. The admittance
would remagnetize the United States for Cubans looking for a bet-
ter life. One could see a reenactment of the situation of last sum-
mer.
And perhaps even more seriously, once it was known that people
from Guantanamo were going to be admitted, you could see Cubans
trying to crash the gates of the Guantanamo Base to get onto to
the base, so as to be able to participate in that humanitarian ad-
mittance.
What about the option of leaving people in Guantanamo indefi-
nitely? Well, due to the laudable policy of taking out elderly, ill,
and young people, the population of Guantanamo is primarily
young unaccompanied men. As we have seen in Panama, this par-
ticular population group, and probably any population group sub-
jected to these kinds of conditions of indefinite detection, are prone
to occasional riots. There is the danger to both the detainees them-
selves and to U.S. personnel.
There is also a very serious human rights consideration that is
being brought up by Amnesty International and other organiza-
tions. By what right does the U.S. Government hold foreign citizens
on an offshore naval base? What about the entitlement to political
asylum that every citizen of the world is at least entitled to have
a hearing on?
And finally, there is the question of the expense.
I will now move on to some other problems that I see in the shift
of U.S. policy other than the migration ones, which I think I have
exhausted.
One problem with these bills is the damage that they would
cause to relations with U.S. trading partners. As you know, these
measures are being considered extra-territorial and a violation of
sovereignty by many European countries and Western Hemisphere
countries. They are seen as a violation of both NAFTA and GATT.
And I think that if they were to pass, that we could expect coun-
tries to undertake to have hearings and legal recourse through
these treaties.
There is also a danger that these bills will cause such anger in
Europe, that they will galvanize Europe into unified opposition to
United States/Cuba policy. As you may know, there has been some
thought in the European Community to signing a cooperation
agreement with Cuba. Several countries in Europe have been reluc-
tant to support this idea due to various concerns, including out of
respect for the United States.
The rumors in Europe currently is that there may be such anger
should these bills be passed, that these remaining foot draggers
34
would change their minds and unify to display opposition to U.S.
policy by supporting such a cooperation agreement.
Then there is the question of the sugar provisions and the trade
component. The provision that says that the United States will not
import sugar from a country which imports sugar from Cuba would
affect 14 States. These include important trading partners, such as
Canada, China, France, Grermany, Japan, and the United Kingdom.
It is possible in fact, as has been stated by some diplomats, that
a few of these countries if not more of them would retaliate by re-
fusing to buy U.S. sugar should their sugar purchases be canceled.
As of 1993, these 14 countries bought $257 million worth of U.S.
sugar. I think that if those purchases were canceled, the U.S. sugar
industry would have some concern.
However, as I mentioned in my opening paragraph, the most im-
portant concern I have about these bills and their relations with
trading partners and the international community is that it would
be much harder to build an international consensus on human
rights. The irritation at the United States, and the anger at the
extraterritorial provisions, and the visa denials would not create an
atmosphere conducive to building a concerted coordinated policy on
human rights.
Another problem of these bills is that they would erode the abil-
ity of the United States to influence Russia's nuclear policy. If the
Lourdes payments of $200 million were deducted from United
States aid, that would cut United States aid to Russia by over one-
half.
The United States needs leverage with Russia in order to influ-
ence its nuclear policy. The pending deal with Iran, I think, is a
particularly important thing to note at this time. It seems unwise
to curtail influence with a country that possesses nuclear weapons
in order to pressure a small state that represents no military
threat.
Another concern is the isolation of the United States at the Unit-
ed Nations. As you know, the bill calls for the Security Council to
consider multilateralizing the embargo. In the last vote in the Gen-
eral Assembly, only Israel supported the embargo along with the
United States.
I think that it is highly unlikely given that record that the Secu-
rity Council would agree to multilateralize the embargo; in other
words, adopt it as an international policy. And the United States's
isolation would be highlighted.
In fact, such a move at the Security Counsel could backfire, and
could cause Cuba to be able to present itself as the poor little
picked upon nation, and it could use this as a public relations
weapon with which to gamer still more support for its resolutions
against the embargo. Which as you know, those resolutions have
been gaining support over the last few years.
Again in the United Nations, you would have the problem of
greater difliculty building international support for a concerted
human rights policy.
A final comment that I would like to make about the bill is that
there is no track two. As much as I disagreed with some aspects
of the Cuban Democracy Act, it did establish and I think wisely so.
35
the basis that along with pressure that there needed to be contact
with the Cuban people and communication.
I think that it would be wise for these bills to build on that prin-
ciple, particularly in the area of humanitarian assistance via
NGO's. Some European NGO's have joined together in a coalition,
and are contemplating a strategy by which they would distribute
a small amount of money to a large number of Cuban NGO's, in-
cluding some whose independence they are not confident of.
They would then go back a year later and check whether these
funds had been used to make the NGO's more or less independent.
Those who had used the funds to become more independent of the
state would be given more funds. And those who had not used the
funds in such a manner would not receive more funds.
When I was in Cuba last summer, I discussed this strategy with
the Catholic Bishop of Santiago and with the renowned Cuban dis-
sident, Gustavo Arcos. They both endorsed the approach.
I will just briefly quote the bishop. He said, and I asked him if
this could be on the record and he agreed, I did do the translation
however,
It is important that a space be created in Cuba, a no man's land, where one can
do things without having to declare oneself for or against the state. The more the
no man's land grows, the better. This strategy would expand that space.
I have written extensively on this matter in a briefing paper that
we have produced. It is with the testimony, and I hope that it will
go into the record.
In sum, if you are going to tighten the embargo, this is not the
way to do it. It damages U.S. relations with important allies and
trading partners. It creates an ideal opportunity for Castro to use
his public relations image of the picked-upon little island to build
greater support for his antiembargo campaign.
By damaging the relations with allies, it damages the ability of
the United States to build an international consensus on human
rights in Cuba. And in sort, with this bill, the United States is
about to overplay its hand.
[The statement of Ms. Gunn appears in the appendix.]
Mr. TORRICELLI. Thank you very much.
Mr. Reich.
STATEMENT OF HON. OTTO J. REICH, UNITED STATES-CUBA
BUSINESS COUNCIL
Ambassador Reich. Thank you, Mr. Chairman. I appreciate the
opportunity to be here today, while you are acting chairman. I
want to summarize my statement, which I have submitted for the
record.
There has been a lot of talk here about the fact that Cuba is
open for business. The Canadian, Mexican, and European firms are
rushing in. Fidel Castro says that foreign firms are gobbling up so
many sweetheart deals that soon there will not be a grain of sand
left for U.S. companies.
How is it possible that this is happening in a country with an
income of $5 a month, and where private property is outlawed? The
answer, Mr. Chairman, and Congressman Torricelli, and Congress-
man Menendez, is that these stories actually respond to Castro's
strategy rather than anything having to do with reality.
36
The fact is that Cuba's economy has been cannibalized for 36
years as a result of Marxist economics and Leninist political con-
trol. The Castro government's true strategy is not just lifting the
embargo. Castro is desperate for U.S. financial credits, loan guar-
antees, and multilateral aid. The lifting of the embargo is just a
means to an end.
To achieve the objective, he is trjdng to get U.S. companies to be-
lieve that they are losing business to foreign corporations. He hopes
that.,those companies in turn will put pressure on you, on you plu-
-ral, on the U.S. Congress to lift the embargo without conditions.
U.S. companies, however, know, because they are well informed,
that such commercial anxiety attacks are baseless. In fact, the lift-
ing of the embargo without a corresponding shift to political and
economic reform in Cuba will actually punish American citizens
and companies who have supported United States policy and would
benefit those few foreign firms that have bet that a dictatorship
will stay in power in Cuba in order to protect them from the trans-
parency of a free market.
Ironically, in the past 5 years, Castro has increased his political
repression. As I illustrate in my testimony, Mr. Chairman, Castro
is wrong in his strategy. His view is that all businessmen, and
Americans in particular, are selfish, capitalist exploiters interested
only in profits and oblivious to the plight of ordinary citizens.
With few exceptions, my experience tells me differently. When a
stable democratic and market oriented Cuba opens the door to gen-
uine economic development and commercial opportunity, I have no
doubt that United States companies will be second to none in gain-
ing access to this market of 11 million people only 90 miles from
our shores.
However, until that happens, any firm participating in Castro's
fire sale of assets is building on economic and political quicksand.
The commercial environment in Cuba is a chamber of horrors. The
Communist Party controls 100 percent of membership of all three
branches of government. There is no independent judiciary; not one
newspaper, magazine, radio, or TV station that is not controlled by
the party; no civil organizations, no independent trade unions, no
business groups that are not run by the party.
Even the Chamber of Commerce of Cuba and the Red Cross are
run by party officials and military officers. Military elites have
taken over Cuba's tourism, construction, hotel management, agri-
culture, and other industries.
Cuba's so-called self-employed workers are banned from forming
private businesses, and face stiff prison sentences if they are
deemed to have become unduly wealthy by the Cuban Government,
which is what we call successful in the real world.
In addition to the economic risk, foreign investors have to under-
stand that if you are doing business in Cuba today, you are un-
fairly benefiting from someone else's confiscated property. I believe
that is called trafficking in stolen goods. It is not surprising there-
fore that several foreign investments frequently touted as success
stories by Cuba and its proponents have failed to materialize. And
I have some examples of that if you wish during the question and
answer period.
37
Given the Cuban Government's track record in commercial deal-
ings, it should surprise no one that EuroMoney magazine's 1994
country risk report ranks Cuba behind Somalia as the worst invest-
ment risk in the world. Institutional Investor ranks Cuba 126th
among all nations in financial risk, behind Ethiopia and Iraq. The
Index of Economic Freedom recently published by the Heritage
Foundation ranks Cuba as the second most repressed economy in
the world exceeded only by North Korea.
Cuba does not have the cash to buy foreign goods. The inter-
national lending window has been closed to Cuba, because of its de-
fault in some $8 billion in loans to international creditors not
counting the Soviet Union.
The few highly publicized big money deals in Cuba are struc-
tured to avoid rather than to encourage investment. I will give you
some examples of that if you wish. Some of the Mexican ventures
which have been announced have yet to be implemented including
the Grupo Domos deal that has been discussed here today. And I
doubt frankly if the Mexicans are going to find the deep pockets
necessary to implement that with the current problems.
Mexpetrol, by the way, and the construction firm ICA of Mexico
have both shelved their plan to upgrade the Cienfuegos oil refinery.
And a number of smaller firms have recently suspended their oper-
ations in Cuba.
But frankly, Mr. Chairman, the most compelling case against
commercial involvement in Cuba is not economic but moral. The
Cuban Government has a well documented record of human rights
abuses which directly impact trade and investment activity.
We were talking earlier about the U.N. Human Rights Commis-
sion, which is meeting this week in Geneva. I had the privilege of
being the Deputy United States Ambassador in 1991 and 1992 as
a private citizen to the United Nations. The Human Rights Com-
mission has sanctioned the Castro government with the highest
level of condemnation at its disposal.
Political crimes in Cuba include executions, torture, lengthy im-
prisonment for intellectual dissent, and a range of Orwellian
crimes against the state.
The international labor organizations has condemned Cuba for
the use of forced labor, and for the denial of freedom of association
and the right to organize. Cuban workers have no voice in their
working conditions. They are allocated by the Government as any
other piece of equipment. They are jailed up to 8 years just for try-
ing to organize a labor union.
We also talked earlier about how the Cuban Government — I be-
lieve you, Mr. Torricelli, asked about how they pay the workers.
The Cuban Government charges a foreign company in hard cur-
rency. Let us say they — the foreign company — pays $400 to the
Cuban Government for the use of a hotel worker. The Cuban Grov-
ernment turns around and pays that worker in local currency. We
know that the black market rate fluctuates anywhere from 50 to
80 to 100 pesos to the dollar.
The Cuban worker gets 400 pesos or about $5 a month, while the
Cuban Government pockets the remainder. By the way, 60 percent
of that goes to the Communist Party. And the rest goes to the mili-
tary and the civilian side of the Government.
38
You can understand the atmosphere of resentment and economic
instabihty in Cuba today. And the companies that are doing busi-
ness, I think, should understand that that jeopardizes their long
term access to a democratic market oriented Cuba.
I have a personal example of how some of these foreign compa-
nies can ignore these conditions that I have listed. I had an unfor-
tunate encounter with the head of one of those companies, a Cana-
dian company, Sherrit. I asked the chairman of the company how
he could ignore these conditions. And he simply said that as long
as he is making money, "morality has no place" in his investment
decisions. And that is a direct quotation. His name is Ian Delaney.
You can reach him somewhere in Canada.
Anyway there are practical implications of all of this. During the
August 5, 1994 uprising in HavEuia, protestors vented their frustra-
tion at dollar stores and foreign operated hotels, which are off-lim-
its to Cuban citizens. Cuban exile groups of every political stripe
have warned that joint ventures with the current regime are likely
to be recognized as illegitimate by Castro's successors. How can a
multinational firm, particularly a labor intensive industry, ignore
such unpleasant realities without courting disaster?
Finally, Mr. Chairman, I do not believe that American companies
would want to do business in Cuba under current circumstances.
Responsible companies realize that the best hope for their partici-
pation in the economic recovery of Cuba lies in the restoration of
democracy, respect for human rights, private property, and individ-
ual initiative, which the Cuban Government denies to its citizens
today.
It is my firm belief that the few foreign companies that are doing
business in Cuba today are making a bad business and moral deci-
sion.
Thank you very much. I would be happy to take your questions.
[The statement of Mr. Reich appears in the appendix.]
Mr. Burton. Thank you. I want to apologize for my absence. I
had an amendment on the floor.
Before I yield to Mr. Torricelli, I would like to ask one question
of the three of you. Lee laccoca told the Miami Herald that, "Castro
recognizes the failure of Marxism and is committed to reform."
Do you see any evidence that that is the case?
Ambassador Reich. Well, I just read his adoring interview in
Time magazine, and he does not do any such thing. He is quite em-
phatic about his ideological convictions and his economic theories.
Mr. Burton. That is what we thought.
Are there any other comments?
Ambassador Reich. Well, all I know is that he has said that he
would be the last Marxist-Leninist left on earth, and I think that
he is very close to that already.
Mr. Burton. Let us hope that before too long that there are not
any left.
Ms. GuNN. Excuse me. I have a comment as well.
Mr. Burton. I beg your pardon.
Ms. GuNN. Excuse me. I have a comment as well.
Mr. Burton. Sure.
Ms. Gunn. You asked if Fidel Castro was committed to reform.
He is not committed to political reform in any way whatsoever.
39
However, against his will, he has been forced to carry out economic
reform. I believe that the economic reform he has carried out to
date, particularly the legalization of the holding of United States
dollars, and more recently the establishment of the agricultural
markets are significant reforms which he did not want to under-
take, but which have loosened the hold of the central state of Cuba
over the daily lives of the Cuban people in a very significant way.
It does not necessarily mean a shift to capitalism nor the begin-
ning of the end. But it is a very interesting chink in the armor.
There is now pressure within the Cuban Communist Party for ad-
ditional economic reforms, again not because they want to, but be-
cause they think that it is necessary for economic survival.
One of the things under consideration is exactly what is being
discussed here today, the possibility of permitting Cuban individ-
uals to set up small businesses, which I personally think would be
extremely wise.
My feeling is that Castro will do enough economic reform to be
able to stay just ahead of the reaper, just ahead of the point where
economic conditions become so bad that the country collapses. How-
ever, I do not feel that we are going to see significant political re-
form at any time in the near future.
Mr. Burton. That is precisely why it is important that we help
eliminate that regime from this hemisphere. We just got back from
Guantanamo, and I can tell you that he is literally forcing some
people who are professionals, who want freedom, and democracy,
and human rights, into unseaworthy boats and out of the country
so that he can maintain his hold on power. We want to change
that.
Ms. GUNN. That may well be the case. I just commented on eco-
nomic reform.
Mr. Burton. I understand.
I would be happy to yield to my colleague, Mr. Torricelli.
Mr. Torricelli. Thank you, Mr. Chairman, very much.
Ms. Gunn, you used the word reform and change as if they were
interchangeable. The use of dollars is certainly change. I do not
know how that constitutes a reform. It appears to me that a coun-
try accepting a foreign currency is a loss of sovereignty, and a lack
of confidence in its own currency. It establishes economic tiers
within the country, those with access to foreign corporations and
tourists, and those who do not. It is certainly change. I do not see
how a positive word like reform would come to be used in the same
context.
Ms. Gunn. If you would like to call it change rather than reform,
that is fine with me.
Mr. Torricelli. Well, I was not trying to be argumentative. But
rather, I take it that you are not citing something positive about
using dollars either, are you? I do not see where there is anything
positive about it.
Ms. Gunn. I am not trying to present it as either positive or neg-
ative. I am simply saying that there have been changes, if you
would prefer to call it that, very different from the system that ex-
isted in the late 1980's. The Cuba of 1995 is extremely different
from the Cuba of 1989.
Mr. Torricelli. That I recognize.
40
Ms. GUNN. And the economic changes of the legalization of dol-
lars and the introduction of the free farmers markets, the agricul-
tural markets, are the two most important changes that have loos-
ened the control of the central state. That does not necessarily
mean good things are going to arise out of this, but they are impor-
tant changes.
Mr. TORRICELLI. Let me ask. There is much being said now about
this foreign investment.
Could anybody quantify in 1994 how much hard currency and
foreign investment you think actually went into Cuba even in a
broad range, hard currency?
Ambassador Reich. In preparing for the testimony, Mr. Chair-
man, we were trying to find that figure, and it is difficult to pin
down. Believe it or not, we have seen as little as $5 million, that
is a U.N. figure, and as high as $50 million.
Mr. TORRICELLI. But that is the only range you have seen?
Ambassador Reich. Pardon.
Mr. TORRICELLI. That is the only range you have seen, $5 million
to $50 million?
Ambassador Reich. This is 1992, by the way, 1994 is much too
recent. You know the Grovemment of Cuba does not release any
economic information to speak of, Eind certainly nothing like this.
Mr. TORRICELLI. But even anecdotally from looking at different
deals, you could not venture another number?
Ambassador Reich. You hear, for example, about the Grupo
Domos figure that was mentioned here earlier — $1.5 billion for 49
percent of the Cuban telephone company. This is a large enough
figure that has attracted quite a few sleuths. And they have looked
at this, and found that the real figure that the Domos group would
possibly invest, which they have not, if they had access to the in-
puts that are also not present yet, would be somewhere between
$40 and $80 million, not $1.5 billion or anything.
Mr. TORRICELLI. But it has not in fact happened.
Ambassador Reich. But they have not done it. The actual fig-
ures. For example, the Center for Strategic and International Stud-
ies, Ambassador Ernie Preeg did a study in 1992, I think he com-
pleted it in 1993, where he came up with a figure of $50 million
of foreign investment. However, the Cuban Cxovemment would not
let him go into Cuba to actually verify this. He did it using outside
sources.
Most of the contracts, as I mentioned in my testimony, most of
the so-called investment is in the form of service or management
contracts where the Cuban Grovemment turns over property.
Mr. TORRICELLI. Let me ask then, the next point on this being
how much foreign exchange do you think that Castro is holding or
dealing with at any course in the year?
Ambassador Reich. I do not want to dominate.
Mr. TORRICELLI. Either in dollar amounts or in days of holding?
Ambassador Reich. Let me just give you one figure. As Ms.
Gunn mentioned, the difference between 1989 and 1995. In 1989,
Cuba's import bill was $8.2 billion. And this is an indirect way of
getting at your figure on foreign exchange. So Cuba imported $8.2
billion. People are now sajdng that those were the golden years.
41
Cuba had declined consistently over the previous 29 years of Com-
munist rule, just like all of the other Communist countries had.
But since 1989, they have declined from $8.2 billion to $1.7 bil-
lion in imports, an 80 percent drop. If Castro had more foreign ex-
change than that, he would certainly use it to buy oil or other im-
ports.
Mr. TORRICELLI. Finally, Mr. Chairman, if I could.
Could somebody estimate what they think the sugar crop is like-
ly to be this year, what people are forecasting?
Ms. GUNN. I think that everyone is in agreement that it is going
to be under 4 million tons. And that is catastrophic.
Mr. TORRICELLI. Are they therefore in default under their barter
and sales agreements for last year on sugar?
Ms. GUNN. They are not yet, because they have been able to do
some arrangements by which things are rolled over. But there is
a danger that they could be.
Mr. TORRICELLI. Thank you.
And thank you, Mr. Chairman.
Mr. Burton. One of the things that was in that Time article that
was pointed out by Ms. Ileana Ros-Lehtinen was that executives
from such companies as Hyatt, Marriott, Merck, and Eli Lilly have
been seen around Havana, and that there was a possibility that
they might be investing or contemplating investing.
Do you have any evidence that American companies are about to
invest or have invested recently in Cuba?
Ms. GuNN. The fact that one is seen in Havana does not mean
that one is either about to invest nor that one has violated the em-
bargo. As you are aware, since the beginning of the embargo. Unit-
ed States corporate executives have been allowed to go to Cuba on
a fully hosted basis. The embargo applies to the spending of United
States funds in Cuba. It does not apply to the physical location of
one's body.
My understanding is that the executives of at least some of these
companies, I am not familiar with the cases of all, but some of
them have been in Cuba on a fully hosted basis. Therefore, while
the members of the committee might disagree with the moral im-
plications of that visit, the legal implications are not problematic.
If it is fully hosted, it is legal under the embargo.
Mr. Burton. I was not asking whether or not it was legal or ille-
gal. I was merely asking whether or not there is any indication
that these American companies that are mentioned or others have
contemplated investing or have invested in Cuba?
Ambassador Reich. Mr. Chairman, as you see from the introduc-
tion and from the list of witnesses, I am president of a nonprofit
association of U.S. companies. This is not my full-time job, but
something that I have taken on on a part-time basis. An associa-
tion of United States companies, major companies, I will be happy
to give you a list of the companies, that are very interested in
doing business with a free and democratic Cuba, once that is not
only allowed by United States policy but also when all of the condi-
tions exist.
Some of the companies, they are mostly Fortune 500 companies.
The American International Group, Ameritech, Annheuser-Busch,
Bacardi, Barnett Banks, Bristol-Myers, Chiquita Brands, Chrysler,
42
General Motors, Ford, Coca-Cola, et cetera, et cetera, Colgate-
Palmolive. These are large companies.
I can tell you that they are companies that are familiar with the
potential of the Cuban market. But they have signed on to a mis-
sion statement that very clearly says that they support current
U.S. policy designed to bring out a democratic change with guaran-
tees for freedom and human rights under the law.
I would imagine that most companies, almost all companies, in
the United States, would abide by those principles. It could be that
some people may not be aware of the law, or are sending people
to Cuba to look around, since they are aware of all of the things
that we have discussed here today, and the fact that the Cuban
Grovemment simply cannot remain the way that it is for much
longer. And they expect that at some point it is going to be open
for business. It is not now.
Mr. BuRTON.Was Hyatt-Marriott, Merck, or Eli Lilly on your list?
Ambassador Reich. No, sir.
Mr. Burton. Not on that.
Ambassador REICH. No.
Mr. Burton. Thank you.
Mr. Falcoff. I think that this is all speculative. But it occurs
to me that what could be going on is that the Cuban Grovemment
expectations of these visits, and indeed the way that it is being
treated in the American media, and the actual motivations of the
businessmen could be quite different. The businessmen or business-
women might be going there thinking, **Well, the regime is not
going to last very long, it is on its way out, let us go take a look.
Once it is all over with, the embargo will be lifted, and this will
be interesting."
While the Cuban Government officials who are hosting them are
I suppose hoping that they can convince them the other way. I read
the Cuban media quite carefully. And lately, for example, I just
read that our former chief of the section in Havana, Wayne Smith,
was in Cuba again explaining to the Cubans that he did not think
that it would be very long before the embargo would be lifted re-
gardless of President Clinton and regardless of the Congress. That
like the first year, there would be $7 billion worth of business for
the United States.
I am sure that this repeats what he has been told by Cuban Grov-
emment officials, and presumably they tell this to the business-
men. It seems to me that this is what is going on.
Mr. Burton. Let me just tell you that this Congress ain't going
to let that happen.
Ms. Ros-Lehtinen.
Ms. Ros-Lehtinen. Mr. Chairman, in the interest of time since
we have a vote, I just wanted to point out, especially since this is
being broadcast on Radio and TV Marti, what a sweet interruption
it is to have votes, and it is part of our democratic process. And
it is very interesting that the people of Cuba who are listening
right now understand that democracy works, that the bipartisan
spirit is alive and well certainly on this subcommittee as it relates
to United States-Cuba policy.
And I just wanted to have a word of encouragement to Ambas-
sador Reich. I know how tough it is in this time when we hear all
43
of these reports from the liberal press; and we are trying to entice
U.S. business to fight this embargo and telling them that they are
missing out on a lucrative market, a market which does not exist,
how tough it must be to fight against that liberal tide which so
strongly seeks to lift the embargo.
And I want him to know that there are many of us, not only this
subcommittee, but in the U.S. Congress who truly understand the
value of the embargo, and will work with him in making sure that
our United States companies understand that it is not only the
morally correct thing to do, but economically sound for them to
wait until there is a free and democratic Cuba.
Ambassador Reich. Thank you. If I may add something to that.
I was contacted by Time. I have talked to Time magazine cor-
respondents— not for this particular article, but one of the cor-
respondents who did the story — and USA Today, which are two of
the publications that have recently had articles along the lines that
we have been talking about here, about why are American compa-
nies losing out on this.
Neither publication mentioned the fact that they had talked to
us, or mentioned the fact that there is an association of companies
that are interested in doing business with a free, democratic, and
free market Cuba. I just wondered what ever happened to journal-
istic objectivity.
Mr. Burton. That is the liberal bias.
Mr. Menendez, who is a valuable member of this committee and
who has worked very hard, and who just got back from Guanta-
namo with us.
Mr. Menendez. Thank you, Mr. Chairman.
I want to commend all of the panel, who put a lot of time into
their testimony. And I often read, although I do not often agree,
but I often read of the different reports that you have all issued,
and articles and whatnot.
I would like to ask Ms. Gunn. You know, you made some very
interesting statements, statements that I have made. That Fidel
Castro has done this "against his will" was your quote. Not because
they want to, but because of economic survival.
Does that not argue in favor then that creating necessity is what
creates change in Cuba?
Ms. Gunn. Your argument is partially correct. Absolutely. If
there were not the collapse of the Soviet Union, if the subsidies had
not been removed, then Fidel Castro would not have adopted any
of these changes. So you are absolutely correct. Economic pressure
is an essential ingredient to bring out economic change, which I be-
lieve is an essential prerequisite to move hand in hand with even-
tual political change.
However, in the Cuban case, there would be massive economic
pressure on Fidel Castro to change, whether the embargo were in
effect or not. The Cuban economy has ground down to such a level,
that even if the embargo were lifted tomorrow, Castro would have
to continue with major economic reforms in order to attract suffi-
cient investment to pull the country back together.
Furthermore, I and many like me do not call for a unilateral lift-
ing of the embargo. What we called for is a policy, call it construc-
tive engagement, I call it communication, which is to continue with
44
a policy of vigorous pressure on human rights, maintaining most of
the embargo, while one held out the promise of relaxation of cer-
tain aspects of the embargo in return for certain changes in behav-
ior on the part of the Cuban Government.
Mr. Menendez. Let me ask you, on what basis do you conclude
that unless the United States pursues what I would describe as a
conciliatory policy toward the Castro dictatorship that a bloody con-
flict would ensue if only Fidel Castro has the arms and hands, who
would make it bloody?
Ms. GUNN. The prospect of civil conflict in Cuba is very serious.
Yes, the Cuban Army does have arms under its control. However,
we saw by the riots that occurred in Cuba last year that violence
and bloodshed can occur quickly and easily under this atmosphere
of high tension.
I can imagine that if there were riots of the level of last August
repeated elsewhere on a larger basis and not able to be brought
under swift control, that by one way or the another individuals op-
posed
Mr. Menendez. Get what under control?
Ms. GuNN. Excuse me, may I finish? Individuals opposed to the
Cuban Government.
Mr. Menendez. In what fashion?
Ms. GUNN. Individuals opposed to the Cuban Grovemment would
find a way to fight back. The danger that I then see
Mr. Menendez. Ms. Gunn, let me^ just interrupt you for a mo-
ment.
Brought under control by what fashion? You said that if they
could not be brought under control. By what fashion?
Ms. GUNN. You are asking me how violence would occur. I am
sa3dng that violence would occur if you have riots breaking out, and
they are not brought under control the way that they were last Au-
gust.
Mr. Menendez. Can you and I agree on one thing, or two things.
Let us see if we can agree on two things. That Fidel Castro wants
to stay in power?
Ms. Gunn. Absolutely.
Mr. Menendez. And that he has the guns in Cuba?
Ms. Gunn. He has the guns in Cuba. But they would not nec-
essarily remain solely in his hands.
Mr. Menendez. Let me ask Dr. Falcoff. Ms. Gunn and others
have raised the questions of change or reform, however you want
to phrase it, about the farmers markets and the agriculture.
Have we not seen this before?
Mr. Falcoff. We have seen it before under rather different cir-
cumstances, where the Soviet-Cuban arrangement was still in
force. But Castro nonetheless tried this, and he became disturbed
by the pockets of private wealth that were growing in the society.
I believe that this was in the mid-1980's or early mid-1980's. I have
forgotten the exact date. And he yanked it.
Ideologically, I think we all agree, ideologically this is repugnant
to Castro. So he would not do it, if he did not have to. And he has
reversed himself on this issue before.
Now whether in the current environment he could do that, I real-
ly do not know. My understanding oddly enough is that Raul Cas-
45
tro, his brother, forced this reform upon him, which given my per-
ception of Raul Castro almost but not quite makes him less aiieaw
^tMn Fidel. -^
Mr. Menendez. I know that we have to go for a vote, but does
it not again argue for the question that necessity creates change?
Mr. Falcoff. Well, let me go a little further, Congressman
Menendez. I know you have to go. But it seems to me that the
model, and this has been told to me even by Cuban Government
officials, is not something that I just dreamed up. The model is
China. The idea is that the United States would normalize rela-
tions and disengage from the political side, and allow the Govern-
ment whatever mix of economic factors it needed in order to stay
m power.
Mr. Menendez. But there is no necessity, if you have that rela-
tionship then; if you create that relationship, you do not create ne-
cessity?
Mr. Falcoff. It is a pin prick compared to the China market.
Mr. Menendez. As I was saying, there is a dramatic difference.
If you in fact do that in Cuba, you no longer create necessity, you
no longer create change. And you do not create the economic forces
that I think we can agree could create political change.
If Fidel Castro, we agree, wants to remain in power, it is amaz-
ing to me, and if lifting the embargo as some suggest, and I know
you do not totally, is in fact the best course for the United States,
why does he make it his No. 1 foreign policy objective?
Ambassador Reich. That is the question that I ask. I think that
It should be said by the way, and I agree totally with Ms. Gunn's
characterization of what the European and U.N. response to the
Helms-Burton bill would be. All you have to do is look at the re-
sponse to the Cuban Democracy Act. So that has to be weighed in
the balance.
Frankly, the Europeans and the Latin Americans have not been
very sympathetic to our position on this. I doubt they are going to
be. So that has to be put in the balance. The Cuban Democracy
Act, which I know you also opposed, was likewise rejected by them.
Now I gather, Ms. Gunn, that you have a somewhat more favor-
able view of CDA, because we have moved to a harder position.
Ms. Gunn. No. My view of the CDA has not changed. I have al-
ways opposed certain portions of it, and supported others. I took
that position at the time, and I take it now. I would also say that
I believe that the extraterritoriality involved in the CDA was quite
minor compared to the extraterritoriality in the Helms-Burton
bills. Therefore, we should expect to see a much more vigorous re-
action this time.
Mr. Burton. I thank the panel very much for their comments.
I thank Congressman Menendez and Congresswoman Ros-Lehtinen
for staying until the very end. We really appreciate your comments.
We will take this all under consideration. And this meeting stands
adjourned.
[Whereupon, at 4:52 p.m., the subcommittee was adjourned to re-
convene at the call of the Chair.]
APPENDIX
PREPARED STATEMENT OF DR. CONSTANTINE MENGES,
GEORGE WASHINGTON UNIVERSITY
Cuba; a strategy for peaceful transition to democracY
By Dr. Constant ine Menges ^
Since 1959, the people of Cuba have endured the repression,
economic failure, and militarization forced upon them by the
Castro regime. The unravelling of similar communist
dictatorships in Eastern Europe in 1989 seemed to occur suddenly
but in fact was the result both of a long struggle by courageous
men and women in those countries for political liberalization,
and of the positive example set by the successful Western
democracies of the modern era.
Castro is determined to retain power not only for his
regime, but also for the Marxist-Leninist system he has
institutionalized in Cuba. Many believe that the collapse of the
Castro dictatorship will come spontaneously. Others think that
only massive military action by one or more foreign states could
bring an end to the current regime. This discussion will offer a
third view and suggest a ten step plan to bring about the
peaceful establishment of democratic institutions in Cuba.
To put the situation of communist Cuba in perspective, it is
important to note that events have shown that the end of
^The author. Dr. Constant ine Menges, is Research Professor of
International Relations, Director of the Program on Transitions to
Democracy at George Washington University, and Editor of the
journal. Problems of Post-Communism. His latest book is.
Transitions from Communism in Russia and Eastern Europe.
(47)
48
communist rule can lead to four very different patterns of
political development which can be conceptualized as follows:
A definitive process of transitions to democracy and market
oriented institutions, as in Poland, Hungary, and the Czech
Republic -- where free and fair elections have resulted in a new
parliament, executive and constitution.
Cogovernance of reform and anti-reform groups with each
controlling different domains of public policy in an unstable
process of continuing competition, as in Russia, the Baltics, and
Armenia.
Market authoritarian regimes as in Romania and nuclear armed
Ukraine, Belarus, and Kazakhstan as well as in seven other former
Soviet republics. In all nine former Soviet states the republic
level communist authorities declared themselves to be the
nationalists in 1991 and despite some openness, the genuinely
pro-democratic groups are restricted or repressed. These regimes
seem to emulate the Chinese example of maintaining a one party
state while making some market oriented reforms and seeking to
derive significant economic benefits from the West.
The restoration of full communist rule as in Tajikistan
where the communist hardliners have used violence to take power
again while persecuting, imprisoning, and executing pro-
democratic and Islamic fundamentalist leaders.
This pattern of post-communist political development
observed in Europe makes it clear that the unravelling of a
communist regime is only the beginning of a process that may or
49
may not lead to political democracy and a market oriented
economy. History shows that transitions from dictatorship are
inherently fragile and reversible, and that the manner of
transition often has a significant effect on the ultimate
outcome. That is one of the most important reasons why it is
necessary to define and implement a peaceful strategy seeking to
encourage the transition to democracy.
In 199 5, it is reasonable to expect that sometime in the
next few years, a transition to democracy in Cuba might be
possible. This was not how the world looked ten years ago, and
we should recall some of the people who have helped make these
historic changes possible: President Reagan, President Bush,
members of the Reagan foreign policy leadership team such as
Judge Clark, Secretary of Defense Weinberger, Ambassador Jeane
Kirkpatrick, the late William Casey, Director of the CIA, and
members of Congress who supported President Reagan's foreign
policy. It is these individuals, and many others inside and
outside the government, who are among those who helped to stem
the communist tide and who have helped establish the conditions
which permitted the courageous people in the communist countries
of Europe to liberate themselves.
This brings me to a fundamental assumption of this ten step
plan. I believe that the people of Cuba can and will liberate
themselves. I believe it is important for the Cuban people to
realize that they will have to liberate themselves, as did the
East Europeans. The process of liberation and transition must be
50
a peaceful one, for humane reasons and for the reasons of
democratic reconstruction. It is highly unlikely that the armed
forces of the United States or of any other major democracy will
participate in the process of transition. The transition, if it
is to occur, will have to be accomplished by the people of Cuba
with peaceful support from the people, governments, and the
democratic institutions of the world who want to see it happen.
It is important to understand that the way in which those
pro-democratic Cuban exiles living in the U.S. and other
democracies behave now will be part of the beginning of the
process of democratic transition. That is, the political means
used by Cuban exiles, which I believe should include tolerance,
civil dialogue and non-violence among all groups, will set the
stage for the beginning of a process of self-government . Cubans
abroad can set an example for those brave people in the
democratic opposition within Cuba by showing how an elected Cuban
government might behave.
With these thoughts in mind, the following are ten steps
which I believe can encourage a peaceful democratic transition in
Cuba.
1. Information. It is important to continue to speak
honestly and often about the nature of the Castro regime and the
victims of its internal repression and international aggression.
As long as Castro continues the process of aggression through
armed subversion, support for terrorists, training of terrorists,
and the like, it is important to keep these actions in the public
51
eye. The broadcast facilities financed by the U.S. government
such as Radio Marti, T.V. Marti, and the Voice of America have an
important role to play. The international community must be
careful net to lose sight of the true nature of the Castro
regime, especially its continuing violations of human rights.
2. It is essential to continue the political, economic, and
military isolation of the Castro regime. Those democratic
countries that adhere to strict guidelines designed to continue
Castro's isolation should seek to persuade other democratic
countries which do not. This does not mean necessarily the
termination of discussions; there are times when dialogue can be
useful in opening up a dictatorship. What it does mean, is that
any act which gives the Castro regime tangible, material
assistance, should be stopped. There may continue to be
disagreement over this policy with allies, but it is the correct
approach for the United States.
It is important to remember that in 1968 when the United
States began discussions with the Castro regime for the
normalization of relations, there were no Cuban military forces
abroad. When President Carter terminated "normalization" in 1979
there were more than 60,000 Cuban combat forces abroad. Quite
clearly, appeasing Castro through normalization of relations did
not work.
Castro's actions over the decades since 1959 show his
determination and cunning. I believe that as his regime unravels
Castro may well become extraordinarily dangerous and might use
52
any and all available weapons against either the people of Cuba
or the against the southeastern United States. As an example of
his readiness to use violence in situations of crisis, we now
know that in the 1962 Cuban missile crisis, Castro urged the
Soviet Union to launch nuclear weapons against the United States.
Fortunately, this possibility may not occur because of what
I have called the paradox of dictatorship: many long lasting
regimes perceived as stable and enduring collapse suddenly when a
certain level of popular pressure causes panic among the top
echelons of the dictatorship.
3. While isolating the Castro regime it is essential that we
find ways to provide material assistance and encouragement to
those pro-democratic forces inside the country opposing the
regime and working for a peaceful transition. This is permitted
under the terms of the U.S. embargo. Humanitarian assistance of
various kinds is needed, as is political assistance.
Organizations such as Radio Marti, TV Marti, the Cuban American
National Foundation, and the radio programs of Cuba Independiente
^ Democratica have played an important role and should continue
to operate on a larger scale. Assistance should be provided not
only on U.S. initiative, but on a systematic multinational level
as well.
4. It is time for all the major exile groups of Cuba to
convene themselves as a parliament in exile. Selected
representatives should meet every six months for several days to
debate the issues of Cuban governance, to vote on key questions,
53
and to synthesize the majority decisions and minority dissents,
so that there is a written record of the debate on the key
issues-political democratization, social policy, the new market-
oriented economy, the country's direction in foreign affairs, and
policy toward the leaders of the old regime.
5. It is important for the democratic Cuban exile community
to candidly discuss and reach decisions on the question of how
leaders of the former communist regime will be treated. My
suggestion is for a policy that I have called the three "Rs" of
peaceful democratic transition: reconciliation, reconstruction,
revelation. First, there should be reconciliation and amnesty
for everyone including Fidel Castro who - in return for
permitting a peaceful end to his regime— should be given a place
of exile, a lifetime pension, and guarantee of no retribution.
That would be a small price to pay for a peaceful transition.
In my work on Spain's transition to democracy in the late
1970s, I observed the positive effects of this policy of amnesty,
and during the 1980s as a member of the Reagan administration, I
urged that it be applied in Latin America, including Grenada.
Perhaps these examples of what I termed the humane
deinstitutionalization of dictatorships helped set the stage for
a similar process in Eastern Europe. Second, the reconstruction
of civil society means the reestablishment of independent
institutions in all areas of life. Third, an objective
commission should undertake to fully reveal what the Castro
regime did to its own people and what it has done abroad. Those
54
events have to be talked about openly to commemorate the victims
and to lessen the chances of a recurrence.
6. At some point, the time will come for the establishment
of a provisional free government of Cuba in exile by all the
major exile organizations. Voting procedures perhaps using
modern technologies could be established so that a representative
selection of people could be chosen for participation under a
rotating executive formed by the different exile groups. This
government in exile would respond to the parliament in exile as
the visible expression of the will of the people of Cuba. This
would serve two important purposes: it would provide practice in
the process of government; and, it would establish an
alternative, international identity for Cuba. From the outset,
though, it must be made clear that this transitional governing
structure would be temporary and that groups representing the
people within Cuba would join at the first practical opportunity.
7. After this free Cuban government in exile begins to
function, the major democracies should begin a campaign designed
to give it credence and legitimacy, by seeking to grant it
observer status at the OAS and the United Nations as is presently
enjoyed by other organizations that are not states.
8. There should be an international campaign led by the U.S.
and the major democracies to withdraw diplomatic recognition from
the Castro regime and to remove it from the U.N. and other
international organizations. The time for this would come when
the situation in Cuba shows that the Castro regime is weakening
and the people need signs of international support.
9. There will come an appropriate time for the leading
democracies to confer formal diplomatic recognition on the free
Cuban government in exile. These countries should conduct a
55
campaign of political persuasion to obtain recognition from large
numbers of additional governments throughout the world.
10. Once a majority of members had recognized the free Cuban
government in exile, it should receive formal diplomatic
recognition by the Organization of American States and the United
Nations as the Free Cuban Government in Exile. These last two
steps should be taken in full understanding that they would, in
essence, constitute acts of international endorsement for a
transitional government representing the internal and external
:u^:^groups that would pledge to conduct free and fair
elections.
I believe the people of Cuba seek freedom and a peaceful
political process to achieve it; they do not want a new
dictatorship of the right or the left. Actions along the lines
of these ten steps can help the leaders of the Cuban exile
community set the positive example which will gain the support of
the Cuban people and of democratic governments. There can be a
free and democratic Cuba in the not too distant future.
56
PREPARED STATEMENT OF JORGE MAS CANOSA, CHAIRMAN, THE CUBAN
AMERICAN NATIONAL FOUNDATION
Mr. Chairman, distinguished members of this subcommittee, I would like to thank
you for the opportunity to appear before you today to talk about Cuba and U.S. policy
towards that enslaved island. Before I begin, however, I would like to especially
congratulate you, Mr. Chairman, for your assuming the chairmanship of this subcommittee,
one that has become so critical and important - largely through the efforts of your
predecessor, Mr. Robert Torricelli -- to the cause of freedom and democracy for the Cuban
people.
If the democratic process of our great country calls for a change in the leadership of
this Congress, then the Cuban American community could not have expected a dearer friend
or someone more devoted to securing Cuba's freedom to assume the chairmanship of this
subcommittee than you, Mr. Chairman. ! truly believe that, and I also believe, without a
doubt, that Fidel Castro is going to soon find out that he is no match for the combined
leadership of you, Mr. Chairman, and the ranking member of this subcommittee, Mr.
Torricelli, as we pursue our long-sought goal of returning freedom and democracy to our
beloved homeland.
We have convened here today to discuss the current situation on the island, as well
as U.S. policy, and how best to further our aforementioned goals. As for conditions in
Cuba, it is very difficult to convey the deprivation and the destitution that Fidel Castro has
inflicted on that island. He has taken that once beautiful and prosperous island and turned
into an unimaginable purgatory, bereft of soul and spirit, bereft of community, bereft of
material possessions, bereft of life -- all so he can maniacally pursue "History's" absolution.
Mr. Chairman, it is by now clear to all but the most devoted sycophants that Fidel
Castro's obsession with absolute power precludes him from ever introducing the
fundamental economic and political reforms that the Cuban people cry out for. TTie tepid
and lukewarm efforts to slightly liberalize his Stalinist command economy have not been
undertaken to improve the lot of the Cuban people but only to sustain his decrepit and
outdated dictatorship. Let us please once and for all dispense with all this nonsense about
"Reform," "Moving toward free markets," "Mixed economies," and "Cuba: Open for business."
As for U.S. policy, the embargo is working, although enforcement procedures need
improvement. Why else would its unilateral lifting become the number one foreign policy
priority of the Castro regime? Our unwillingness to grant Castro the credits and loans he
so desperately needs is forcing Castro down a road he does not want to travel. Slowly, ever
so slowly, he is relinquishing total economic control of the island. Yet I quickly want to add
that so far of what we seen is tinkering on the economic margins and not what Cuba needs:
and that is political reform.
57
As I said, Cuban officials themselves - with their incessant statements -- more than
attest to the effectiveness of the embargo as a point of leverage over the Castro regime.
Our message to Castro is clear: respect the human rights of the Cuban people, allow them
self-determination, and then you can enjoy the benefits of normal diplomatic and economic
relations with the United States.
I also wanted to address two last issues, arguments that many are using as to why we
need to change our policy towards Cuba. The first is that U.S. trade and travel will succeed
where, the say, current policy has failed -- in undermining the Castro regime. They say this
is how we won the Cold War; this is how we can defeat Castro.
To be quite blunt about it, I find it to be a scandalous revision of Cold War history
for anyone to claim that Western trade and travel somehow brought down communism in
the East Bloc. In fact, I challenge anyone to provide one specific example of where that
occurred.
Was it Poland? No. Trade, loans, and credit to that communist regime saddled that
country with an astronomical debt Polish democrats are still trying to recover from.
Was it Romania? Hardly. The Ceasescu regime enjoyed Most Favored Nation status
for 20 years -- and isn't it ironic that the one violent revolution in Eastern Europe occurred
in that country.
What about the former Soviet Union? It might be pointed that the height of U.S.
trade and travel to the Soviet Union was 1980, the same year Red Army tanks rolled into
Afghanistan. A more sober analysis is provided by Russian officials themselves: the
recognition that they could not match another arms race with the United States led by
Ronald Reagan.
So-called "kindness" didn't kill communism - it fell of its own weight after the West
refused to provide those decrepit regimes with any more financial bailouts - the kind some
are now advocating for Cuba.
Cuba is free to trade with every other country in the world and receives thousands
of tourists from Western democracies -- neither have had any discernible impact on
changing the nature of that regime. What is so magical about U.S. trade and American
tourists that will somehow turn Fidel Castro into a Jeffersonian democrat?
Let's look at what is happening in China, Mr. Chairman. The State Department has
just released its human rights report and it shows that human rights in China haven't
improved since they received Most Favored Nation Status, they've gotten worse!
The Chinese government continues to abuse and jail dissidents, brutally suppress
Tibet, use slave labor to produce goods for export, and has been of absolutely no help in
58
our efforts to deal with the North Korea problem. And the only time this administration
moves to punish the thugs in Beijing? Only when they pirate U.S. CDs and video tapes.
I'm sorry, Mr. Chairman, but that is not my vision for a future Cuba - where the
human rights of the Cuban people are considered not important enough to merit tough
reprisals by the United States, but the commercial rights of the U.S. entertainment industry
are.
A second argument by opponents of our current policy is the idea that it is in the
U.S. national interest for Fidel Castro to remain in power in order to lead a peaceful
transition in C\iba -- that in effect we need Castro to help us avoid a possible outbreak of
violence in Cuba. YES - that we need Castro to avoid violence in Cuba.
Ladies and gentlemen, this is regime that has been perpetrating violence against the
Cuban people from the very day it seized power - and this is to say nothing of its violent
exploits abroad. Last July, this regime's patrol boats rammed and sank a tugboat packed
with Cuban refugees -- men, women, and children - off Cuba's coast, sending some 40
people to their death. 20 children placed in the hold of the ship to shelter them from water
cannons blasting the tugboat drowned -- a mother watched her 10 year old son slip away
from her grasp and disappear into a whirlpool created by Castro's patrol boats
systematically circling the refugee vessel.
We could fill a room ten times this size with men and women who could testify --
giving names, dates and places -- to the torture, beatings, and other atrocities inflicted upon
them by Castro's security forces in the Cuban gulag. Freedom House recently published an
irrefutable study on psychiatric torture in Cuba's political prisons.
We could fill a cemetery the size of Arlington's with every Cuban man, women, and
child, who has died at the hands of this regime. Whether by firing squad, alone in a dank,
dark cell, by emotional distress brought on by the death of a loved one or a separated
family, or in the Florida Straits, in a desperate attempt to escape Fidel's Socialist Paradise.
This, Mr. Chairman, is a regime that is going to lead a peaceful transition
in Cuba?? This is a regime we need to stay in place to ensure a peaceful
transition in Cuba??
Not unless Fidel Castro undergoes a conversion comparable to Paul's on the road to
Damascus. And I don't expect that to happen -- nor should we expect -- for the sake of the
Cuban people -- that to happen.
Fidel Castro -- and all his friends and supporters that remain in this country -- need
to once and for all recognize that he and only he is the obstacle to positive, fundamental
change on the island -- and nothing else. U.S. policy is correct in not granting him a
reprieve. The only thing we need to discuss with Castro is the terms of his departure --
59
when, how, and where.
Before I conclude, Mr. Chairman, I wanted to address one last topic: this myth --
helped along by the national media - that somehow Cuba is open for business and that U.S.
corporations are allegedly being "left out." This is nothing but a thinly disguised attempt to
recruit U.S. corporations - by Castro himself and many of his friends here in this country -
- to actively lobby against our trade embargo of Cuba, hoping they can replicate the process
whereby the embargo of Vietnam was lifted.
What I would like to know is what is so attractive economically about an island ruled
by a totalitarian despot who maintains the authority to seize property at will? Where there
exist no property rights for the average citizen? Where that citizen earns the average of $5
a month? Where no Cuban is allowed to own or organize any private economic
organizations?
Actually, I will tell you what makes Cuba so attractive to those international
profiteers who have invested in Cuba and conduct business as usual with its dictator: forced
and slave labor; no independent labor unions; no right to strike; you get to deal with a
regime that can make you any offer - no matter how desperate -- because it has no
accountability to its people; the local population will not be a nuisance because they have
no civil rights, no legal rights, no rights whatsoever.
Their interest can be summed up in one word, Mr. Chairman: exploitation.
I really find it ironic, Mr. Chairman, to see how all these activists and public
personalities who have built careers denouncing capitalist exploitation in the so-called
developing world have been so deafeningly silent on what is going on in Cuba.
I would like to introduce for the record just this one newspaper article that pretty
well sums up what is going on there. It originally appeared in the London Observer and the
title says it all: "Cuba: A Paradise, but not for Cubans; Communist island lures dollar
bearing tourists to hotels off limits to local residents; vacationers find trips to sandy beaches
are cheap, amenities expensive, except for sex." It goes on to label Cuba the "Bangkok of
the Caribbean" for its promotion of sex and virgin Cuban women willing to spend a night
with a tourist in order to buy the next day's meal.
Recently, a former American ambassador told me of conversation he had in Canada
with a Canadian who was investing heavily in Cuba. The ambassador asked him how he
could justify morally his extensive business dealings with the Castro dictatorship. The
Canadian's answer? "Morality has nothing to do with my business decisions."
Where is the outrage, Mr. Chairman? Canadian raping the island of its mineral
resources and polluting its delicate environment; Spaniards embracing tourism apartheid,
while tourists -- when they are not defiling Cuban women - are ferried about in Japanese
60
cars denied the Cuban people, who are sold bicycles by the dictator; Mexicans also shipping
their pollution-laden oil refining business to Cuba; every single one of them profiting off the
poor, isolated Cuban citizen.
Well, the outrage is right here, Mr. Chairman. Cubans on the island may be
powerless to oppose these deals, but free Cubans aren't. We are committed to doing all in
our power to disrupt this profiteering on the misery of the Cuban people. I would like to
submit for the record what we call "Cuba's Hall of Shame" -- a list of companies from
Canada to the United Kingdom to Latin America that are investing in Cuba or conducting
business as usual with the Cuban tyrants.
These are blood deals, Mr. Chairman. These contracts are inked in the blood of
every Cuban man, woman, and child who has died at the hands of this despotic regime since
1959. They are contemptuous of the pain and sacrifice endured by 11 million Cubans, both
on the island and in exile. And I will promise to you today, Mr. Chairman, that as long as
I live, as long as the Cuban American National Foundation exists, we will work -- we will
work -- to see, to ensure, that when the dawn of democracy finally arrives in Cuba, each one
of these deals will be rendered null and void by a new, democratic Cuban leadership -- and
those profiteers will be run out of town one step behind the torturers and executioners of
the Cuban people.
That is my promise. And I encourage the U.S. Congress, Mr. Chairman, to join us
in our effort to expose and punish any company with the blood of the Cuban people on its
hands.
In conclusion, Mr. Chairman, I would like to thank you for convening this hearing.
I would like to thank you, and your predecessor, Mr. Torricelli, for providing these forums
that have given a voice to the voiceless, the people of Cuba, that have given them a measure
of respect and dignity that has been denied them by Fidel Castro for more than three
decades. Your contributions to a free and democratic Cuba are known to them through
Radio Marti and the radio station of the Cuban American National Foundation, and I have
no doubt will be known to their children and to generations of Cubans who will surely be
living as free men and women.
Thank you very much.
61
PREPARED STATEMENT OF MARK FALCOFF, RESffiENT SCHOLAR, AMERICAN
ENTERPRISE INSTITUTE
Mr. Chairman, distinguished members of the Subcommittee on the
Western Hemisphere:
I am honored to respond to your invitation to share some of my
thoughts with you this afternoon on the Castro regime in Cuba as it
enters its thirty-sixth year. The survival of Communism on the
island, long after it has disappeared in the Soviet Union and
Eastern Europe, is a matter of concern to all of friends of
freedom, not just those of us in the United States. But given the
island's geographical location, Cuba's internal problems and
prospects are of greater relevance to this country than to any
other.
For in spite of elaborate claims made on behalf of Cuba's
quest for sovereignty and independence, almost everybody- -from the
long-suffering Cuban people themselves, to Cuba's neighbors in the
circum-Caribbean and beyond- -expects the United States to shoulder
the lion's share of the costs and responsibilities issuing from the
eventual collapse or implosion of the Castro regime. The United
States therefore has a legitimate concern and possibly also a
genuine responsibility to think through the consequences of end-
game, which- -given the unassailable facts of human biology- -is
bound to come sooner or later.
Let me begin by emphasizing two points.
First, the longevity of the Castro regime should not dazzle
us. It is neither unique nor- -given regional standards- -all that
impressive. It in no way establishes either the regime's legitimacy
or its prospects for perpetuation beyond the life of the dictator.
Actually, many authoritarian regimes in twentieth-century Latin
America have endured well into three decades- -that of Generalissxma
Rafael_Trujj_Llo-4n the Dominican Republic, that of Generai~Mf redo
Stfbessner in Paraguay, and in a dynastic sense, "EHaE of the
Somozas TAnastasio Sr., Luis and Anastasio Jr.] in Nicaragua. None
have survived their progenitors.
There are, of course, some differences. Castro possesses an
ideology- -although of late it has shifted somewhat in content.
Until recently he had a powerful international patron willing not
only to protect him militarily but to subsidize him economically.
And unlike Trujillo or Stroessner or Somoza, Fidel Castro exercises
a peculiar fascination over intellectuals, journalists, and
academics- -people who normally think of themselves as enlightened
and liberal, and who would find this sort of regime in some other
part of the world worthy of censure rather than extenuating
apologetics.
90-346 0-95-3
62
Prepared Statement of Mark Falcoff-
Stripped of its ideological and cultural trimmings, however,
the Castro regime is a typical, or rather, archtypical version of
the traditional Latin American dictatorship- - in the sense that it
remains a one-man show. One man still makes all the crucial
decisions, and determines who lives and who dies, who is jailed and
who goes free, who eats, and who does not. Moreover, in spite of
all the talk of generational renewal, after thirty-five years the
revolution is still not institutionalized. There is no clear order
of succession. While the dictator's brother Raul, commander in
chief of the Cuban armed forces, is widely regarded as his heir-
apparent, not many people think that he possesses the qualities
necessary to hold together an increasingly disf unctional
revolutionary "family".
Second, Castro seem peculiarly uninterested in validing his
continuing rule by testing it in a plebiscite such as the one
convoked by General Pinochet in Chile some seven years ago. One
cannot help wondering why. After all, if --as we are so often told--
Fidel Castro is still the best, last hope for Cubans, he should
have no trouble winning such a contest, particularly since (unlike
Chile) there would be no obvious and immediate alternative, and
(again, unlike Chile) his government possesses a total monopoly of
the print media and (excluding Radio and TV Marti) a monopoly of
the electronic media, controls the distribution of all essential
articles of daily consumption, and (once more, in contrast to
Chile) is in command of the only organized political force on the
ground .
To win a plebiscite- -even one whose ground rules were
predetermined and organized to Castro's own convenience- -would be
a devastating blow to the United States and to the enemies,
domestic and foreign, of what he likes to call the Cuban
revolution. Why, I ask again, does he hold back? Perhaps he knows
something we do not.
The only thing Chilean which seems to interest Castro these
days are the tactical skills which have permitted General Pinochet
to survive beyond the writ of his own regime; he spent the better
part of a night going over this point not long ago with a friend of
mine, a conservative Chilean congressman who was visiting the
island with his wife and son. This is of a piece with his
fascination with Spain's Generalissimo Francisco Franco, who more
than any other Latin leader, is Castro's current model. As Paul
Preston has explained at great length in his recent masterly
biography of the Spanish dictator, Franco's survival for nearly
forty years was based on a combination of ruthlessness,
dissimulation, capacity to continually divide his followers as well
as his opponents, and above all, great skill at manipulating
63
Prepared Statement of Mark Falcoff-
foreign sources of weaponry and financial assistance. -
Like Franco, too, Castro's number one priority these days- -the
one to which all others are subordinated- -is his desire (and in a
certain sense, even, his need) to rule his country until his death.
What happens to Cuba after he is gone is of no great concern to
him. The imperatives of survival in power do have the capacity,
however, to focus his mind wonderfully. They have also led to some
new and unexpected tactical ploys. Lately he has become willing to
compromise on many marginal issues, as I am sure you will hear
today from other witnesses. But his overarching purpose remains
firm, central, unwielding. How does he propose to achieve it?
First, by getting the United States to lift its economic
embargo. The importance of this can hardly be exaggerated, since at
this point Castro has virtually exhausted his credit with the
Western Europeans, the Japanese, even the Latin Americans, and. has
nowhere else to turn.
With the embargo gone, Castro would gain access to a whole new
universe of credits from American private banks. It would also make
him eligible for a range of soft loans to finance the purchase of
U. S. agricultural products, presumably guaranteed by the U. S.
taxpayer (much as Saddam Hussein was able to do in the runup to the
Gulf War) . It would allow him access to loans from the multilateral
banks and membership in the International Monetary Fund. Such
"constructive engagement" has prolonged the life of more than one
Communist regime- -witness the role of Western banks in bailing out
the Polish dictatorship in the late 'seventies and early 'eighties.
Indeed, Cuban officials themselves often make reference to China or
Vietnam, two Communist regimes which have lately found ways to
exploit the apparently limitless gullibility of Western financial
elites.
To be sure, over the longer term, Castro's Cuba would not be
a particularly good credit risk. But it would be some years before
it have to declare default, and once it did, there would be no real
recourse. In the meanwhile, Castro could postpone political reform-
-and meaningful economic reform- -indefinitely .
Second, once the embargo is lifted and U. S. businesses begin
to operate in Cuba, Castro could anticipate the emergence of a new
constituency here in Washington to line up behind the regime
whenever it is embarrassed by its human rights violations, and also
to explain away its lack of progress towards political democracy.
Castro can offer cheap labor, a reasonably educated work force, and
no independent unions; in exchange, he hopes to obtain some of this
city's best (and most expensive) forensic talent representing some
^Paul Preston, Franco, A Biography (New York: Basic Books,
1994) .
64
Prepared Statement of Mark Falcoff-
of our larger multinationals to argue his case before Congress and
whatever administration happens to be in power.
A word here about the debt -equity swaps and other deals which
the Cubans are now offering the Mexicans, Canadians, Spaniards and
others. No doubt many businessmen in these countries imagine that
they are getting in on the ground floor of a bonanza, since
presumably they will be in place when the embargo is lifted, having
bested their American competitors by slipping in beforehand.
Leaving aside the question of whether a post -Castro government will
validate these contracts- -a very big question indeed- -it is obvious
that until and unless the embargo is lifted, these investments are
not likely to be profitable. Castro's major purpose in opening
these industries to non-U. S. investors would seem to be less
economic reactivation than to convince the American business
community that it is missing out on the fire sale of the century,
and goad it to pressure our government to lift the embargo. So far
this tactic has not proven particularly successful, although to
judge by the latest issue of Time magazine, our journalists are
already beginning to pick up the theme to advance it.^
Third, by expanding the range of contact with foreign
businesses, Castro hopes to buy the continued loyalty of his armed
forces by cutting them into the new joint ventures. Presumably,
this would insulate the Cuban military from the consequences of the
island's economic decline, and therefore neutralize it politically.
Whether this is really possible in the absence of a U. S. component
remains to be seen, but at any rate, the strategy is quite clear.
One might well ask why it is that Castro is so certain that
lifting the embargo will strengthen his hold, rather than undermine
it? After all, the United States was always an enormous pole of
attraction for ordinary Cubans, and presumably would remain so. Can
Castro survive thousands of American tourists, and the impact of
renewed U. S. -Cuban trade? The answer, I submit, is that Castro
intends to manage the new relationship in such a way as to minimize
the ripple-effect of increased contact. Even today, ordinary Cubans
have little or no contact with (far less potentially subversive)
tourists and businessmen from Mexico, Canada, Spain and elsewhere.
Many tourist centers in Cuba are isolated along the island's
periphery, and the access roads to them forbidden to ordinary
Cubans, even on bicycle.
Normalization of relations with the United States does not
mean a return to the pre-1959 status quo. Cuba can never again
occupy a quarter of our market for imported sugar, since its quota
has been divided up among many other countries. American investment
can never be as central in a command economy. Above all, given the
'See particularly J. F. 0. McAllister, "Will a Tighter Embargo
Really Bring Down Castro?", February 20, 1995.
65
Prepared Statement of Mark Falcoff-
overriding political objectives of the regime, the wider imcact of
economic liberalization will be extremely^imiteS -because i^must
be^ TO assume that it would acquire its own momentum, o^erruUnq
and engulfing the regime, is to descend into a kind of cridi
economic determinism of which Castro himself--to wtom I do the
honor of taking seriously as a Marxist- -would never be guilty It
Castro believes that he can survive and flourish in a polt-embar^o
environment the question we ought to be asking ourselves whf?hlt
IS, and what policies ought to follow from it
questions'" ^°'' ^°'' ^°'''' attention. I look forward to your
MARK FALCOFF is resident scholar at the American Enterprise
^^,1ih^''^^ ^^"^ "'^•^^^'^ .''°^^^y Research in Washington, D. C S Jas
^S?esT andT.'cf'K''^"" °' Illinois, Oregon and California (Los
Angeles), and has been a visiting fellow at both the Hoover
Institution and the Council on Foreign Relations. He was
professional staff member (with responsibility for Latin American
policy) on the Senate Foreign Relations Committee in the 99?h
Congress. His books include Small Countries. Lara^ id,. mJ!^^
g - 'rA'I".'J'"'^ .l.^l'.^^r^^^^^^'- ^"^ A'TaleV-^gyfAiTgflf^
Mlnet'tf.^Verch^;^ g; llZr""' .Tunt^^^SZ^ and (with Richard
66
Testimony of Gillian Gunn
Director of the Cuba Project
Georgetown University, Washington D.C,
February 23, 1995
House Conmittee on International Relations
Subconvnittee on Western Hemisphere
The policy shifts advocated in the Helms and Burton bills will
damage U.S. interests regarding Cuba whether they contribute to
Castro's overthrow or not. Equally se'riously, the bills will hurt
relations with important allies, may well trigger a coordinated
European campaign against U.S. Cuba policy, and will erode U.S.
ability to influence Russia's nuclear policy. Furthermore, the
bills will isolate the United States at the United Nations and
restrict Washington's ability to consolidate a more amenable Cuban
government should political change come to Havana in the future.
Finally, unlike the Torricelli bill which tightened the embargo on
Cuba in 1992, the Helms and Burton bills have no "track two"
provision to relieve the suffering of the Cuban population or
enhance their ability to communicate with the American people. This
makes it easy for the Castro government to present the U.S. as
acting with callous disregard for the welfare of the Cuban
populous .
67
A) If Castro Survives
If the bills are passed, they will probably not lead to the
overthrow of Fidel Castro. Academic fieldwork conducted on the
island suggests that Cuba's repressive apparatus is still efficient
and loyal, and the ruling group remains unified. Should economic
conditions on the island deteriorate significantly, as the bills'
sponsors apparently wish, the most likely result will be a lowering
of the standard of living. In light of the intense repression
facing the regime's opponents, the population will probably not
respond by organizing res'olt, but by seeking to flee. This would
lead to a new wave of rafters trying to reach the United States in
unseaworthy vessels.
Fidel Castro will also use the bills to revitalize his
"scapegoat strategy," through which he blames Cuba's economic woes
on U.S. policy. This argument had been wearing thin with the Cuban
people in the early 1990s, and they increasingly held the Castro
government responsible for the nation's troubles. Should these new
bills pass the scapegoat argument would appear far more credible to
the ill-informed Cuban people.
An increase in out migration pressure associated with a further
fall in the stamdard of living would have serious consequences for
the United States. If Castro concludes he cannot control the flow
without regime-destabilizing loss of life, he could well relax
border vigilance as he did in August 1994. U.S. government sources
estimate about 2 million Cubans wish to leave the island. If even
a fraction of these seek to enter the U.S. by raft, the strain
68
placed on government resources will be horrendous, and the problems
at Guantanamo Naval base will be severely exacerbated.
B) Guantanamo Base
The current situation at Guantanamo is already bad enough. As
of 14 February 1995 there were 24,283 detainees at the base, and an
additional 2,089 awaiting return to Guantanamo from Panama by March
6. Maintaining these detainees is costing the U.S. tcixpayer
approximately $200 million per year.
Each of the policy options available to solve the Guantanamo
crisis has severe negative side effects, both in terms of human
rights and U.S. interests. If the numbers of detainees increase
following another surge in boat people, the magnitude of the
difficultly will grow.
One option is to admit the detainees into the United States on
a humanitarian basis. This would entail significant economic costs
in social services and resettlement arrangements. Such a policy
could also exact a domestic political price. Ant i- immigrant
sentiment is growing in Florida, as reflected in the state
legislature's consideration of a bill similar to California's
Proposition 187. The support for Senator Simpson's proposal to
repeal the Cuban Adjustment Act of 1966 underlines this anti-
immigrant mood in the country at large. Political leaders who admit
large numbers of Cuban refugees could well find themselves paying
for that act of generosity at the ballot box.
Even more seriously, a decision to admit the Guantanamo
69
detainees would "re -magnetize" the U.S. Many Cubans would assume
the U.S. had returned to the pre-August 1994 rules, when asylum was
provided to virtually all Cuban refugees. Cubans would either
attempt to make it to the U.S. on rafts, or try to directly enter
the U.S. base at Guantanamo. The base is ringed with land mines and
guarded by armed U.S. and Cuban soldiers. An effort to crash the
gates would present a major safety problem both for U.S. personnel
and for the refugees themselves.
A second option is to send the Guantanamo detainees back to
Cuba, and have them apply for visas via the new system estedjlished
as part of the accord that ended the 1994 migration crisis. (Under
the accord Washington only accepts visa applications at the U.S.
Interests Section located in Havana.) However, the vast majority of
the current Guantanamo detainees do not have the requisite family
ties to qualify for visas in the normal way. They would therefore
be competing for one of the 6,000 slots per year distributed on the
basis of a lottery. Over 200,000 Cubans have already applied for
the current year's quota of lottery slots. Therefore the likelihood
that the Guantanamo detainees would get to the U.S. via this route
is minimal.
There is also the thorny matter of convincing the detainees to
return to the country from which they fled. While some might return
if their welfare were monitored by a trusted group, such as the
Catholic Church, some are so fearful of retribution they would
physically resist repatriation. The distasteful moral inplications
of such a policy, and the negative response it would elicit from
70
important sectors of the U.S. electorate, also have to be
considered.
One variation on this policy is the suggestion that the U.S.
Interests Section establish an office just outside the Guantanamo
base in Cuban territory. The detainees could be temporarily
transported to the office, submit their applications and then
return to the base. This would resolve the problem of forced
repatriation, but in light of the large numbers of visa
applications already registered with the Section, only a very small
portion of the detainees, if any at all, would be able to enter the
U.S. via this route.
Another option is to simply leave the detainees in Guantanamo
indefinitely, only admitting children and their families, elderly
people and the ill. Indeed, this seems to be the policy adopted to
date. This policy has serious security and human rights flaws.
First, there is the danger of riots. The December 1994 riots at
the Panama facilities illustrated that these detainees are capable
of inflicting considerable damage. Since children, accompanying
family members and the elderly have been admitted to the U.S., the
population in Guantanamo is now primarily unaccompanied males
between the ages of 25 and 45. This is a self -selected group
composed of individuals with sufficient courage and audacity to
brave dangerous seas in 1994. Clearly, these are conditions
conducive to riots. Since the U.S. forces received serious injuries
at the hands of rioting Cubans in Panama, security at Guantanamo
has been increased. Should a disturbance occur now, it is likely
71
that detainees, rather than U.S. soldiers, would be hurt.
Second, there is the human rights difficulty. By what right
does the U.S. hold citizens of a foreign country in an offshore
naval base? What portion of those detainees have a genuine fear of
persecution should they return to Cuba, and therefore should be
eligible for political asylum? And in the domestic political
sphere, how long will these detainees' U.S. resident relatives
accept what they term "concentration camp conditions"?
A final option frequently discussed is third country refuge.
This would entail convincing other countries to accept the
Guantanamo refugees either for permanent resettlement, or for
detention in canps. Though the Clinton administration has tried
valiantly to convince other countries to accept refugees since
August last year, only a handful have been resettled. The December
riots in Panama have virtually guaranteed that no other state will
wish to host detention facilities on its soil.
Clearly, a serious policy dilemma is presented by current
conditions at Guantanamo. If the U.S. Congress tightens the noose
on the Cuban economy via the Helms and Burton bills, and out-
migration pressure grows, the difficulties associated with
Guantanamo will increase proportionately.
C) If Castro Is Overthrown
If the Helms and Burton bills do contribute to the overthrow of
Fidel Castro, U.S. interests would still be in jeopardy. A
sufficient portion of the Cuban military is likely to remain loyal.
72
if only because it fears retribution at the hands of a successor
regime, while Castro's support has radically declined over the last
five years, at least 10% of the population is willing to defend the
regime. Castro has made elaborate contingency plans for such an
event, and will not go without a fight. The violence associated
with such a civil conflict would increase cut-migration pressure by
an order of magnitude, destabilizing not only the state of Florida,
but also other nations in the Caribbean. It is entirely plausible
that Cuban Americans with U.S. citizenship would go to the island
to assist the rebels. If one or more were killed, pressure would
build on the President to authorize U.S. military intervention.
Long standing objections to U.S. Cuba policy in the international
community would make it nearly impossible to build multilateral
support for such a measure. The tenacity, training and equipment of
the pro-Castro faction would make it very hard to stabilize the
situation. The inevitable loss of U.S. soldiers' lives would
quickly erode U.S. popular support for the intervention, and
Washington would be stuck with a domestically unsustainable foreign
initiative.
The legacy of internecine acrimony and nationalistic resentment
associated with such civil conflict and U.S. intervention would not
create a context conducive to the building of a stable, democratic
Cuba. As illustrated elsewhere, political change brought about by
violence usually begets still more violence and polarization,
rather than the spirit of tolerance and mutual understanding
necessary to build a pluralistic society.
73
So even if the framers of the Helms and Burton bills "won",
U.S. interests would suffer. To best protect U.S. interests and
avoid massive out-migration pressure, the U.S. needs to facilitate
a "soft landing" in Cuba, with precautions taken to avoid violence
and instability. Nothing in the pending legislation is likely to
achieve such a peaceful end to the Castro era.
D) Damage to Relations with Western Trading Partners
Apart from the pending legislation's negative impact on U.S.
interests regarding Cuba, the bills would also seriously injure
U.S. relations with important Western trading partners.
The legislation denies entry to the United States of any alien
deemed to have trafficked in Cuba properties previously confiscated
from U.S. owners. This includes corporate officers, principals and
shareholders of the companies involved, as well as their family
members. The bills also make the U.S. property of such individuals
subject to civil suit by the original U.S. owner, and prohibit
loans or credit facilities to those who have invested in
confiscated properties. Finally, the legislation bans importation
into the U.S. of sugar, syrups or molasses that are the product of
a country which has inserted such items from Cuba.
These measures are eliciting a strong negative reaction from
important U.S. trade partners. They are considered extra-
territorial and a violation of sovereignty. Some trading partners
believe the provisions violate both NAFTA and GATT, and may well
use the mechanisms in those trade agreements to lodge complaints
74
against the U.S.
Furthermore, the bills could galvanize Europe into unified
opposition to the U.S. policy regarding Cuba. According to European
sources, for some time the European Community (EC) has considered
establishing a formal cooperation agreement with Cuba. A few
European countries had been reluctant to support the idea, both out
of concern over human rights violations in Cuba, and due to respect
for U.S. views on the matter. If the bills were to pass, European
sources say these countries may well become so angry they put these
concerns aside and support the cooperation agreement. A number of
European groups have already made representations to their own
governments, to Washington and to the EC.
Canada is also concerned. On February 10, the day after the
Helms Bill was presented to the press, Canada sought formal
consultations with the U.S. under the NAFTA agreement on a related
matter. "We have concerns with a number of measures taken by the
United States which have reduced Canada's access to the U.S. market
for sugar and sugar- containing products," Agriculture Minister
Ralph Goodale said in a news release. The representation involves
a trade dispute pre-dating the introduction of the Helms bill, but
the Cuba- related provisions are now likely to be included.
According to the latest statistics available, which cover 1993,
fourteen countries both purchase sugar from Cuba and sell sugar to
the U.S. They are Belgium, Canada, China, Denmark, Finland, France,
Germany, Italy, Japan, Netherlands, Portugal, Spain, Sweden and the
United Kingdom. In 1993 they collectively bought $187.7 million
75
worth of sugar from Cuba, and sold $352.9 million worth of sugar to
the U.S. If the U.S. cancelled orders from these countries, and had
to go elsewhere for supplies, the cost of sugar could well go up
somewhat, inadvertently aiding Cuba. Furthermore, some of these
countries might retaliate by refusing to purchase sugar from the
U.S. after Washington cut purchases from them. One country
boycotted by the U.S. could purchase sugar from another country
boycotted by the U.S., helping each other solve the problems
presented by the Helms bill and punishing the U.S. for perceived
extra-territoriality. All but two of the countries involved
imported sugar from the U.S. in 1993, their total purchases
amounting to $257.1 million. The biggest buyers were Canada ($172.1
million), Japan ($45 million) and the United Kingdom ($15.1
million) . Any significant decline in purchases of U.S. sugar would
hurt the U.S. sugar industry.
Another unintended consequence of the legislation could be
plant closures in the United States. A foreign firm deemed to be
investing in a confiscated U.S. property in Cuba could find itself
unable to maintain a U.S. facility under the twin pressures of
civil suits and lack of credit facilities. Closure of such
enterprises could lead to unemployment in certain areas, clearly
not the intent of the bill .
E) Erosion of U.S. Ability to Influence Russia's Nuclear Policy
The pending legislation requires the President to deduct an
amount from U.S. assistance to Russia equal to the funds Russia
76
pays to Cuba for use of the intelligence facility at Lourdes, Cuba.
The payment is estimated at $200 million. Since the current U.S.
aid to Russia is $379 million, this would cut U.S. aid to Russia by
more than half. Moscow says it needs the Lourdes facility to
monitor U.S. compliance with nuclear accords, and claims it is
equivalent to U.S. listening posts located in Turkey and other
states close to Russia.
Apart from the damage caused to Russia's economic stabilization
efforts, the aid cut would also diminish U.S. leverage with Moscow
at the very time when concern is rising about Russia's nuclear
collaboration with countries unfriendly toward the United States .
The latest report of possible nuclear cooperation with Iran is
particularly alarming. It seems unwise to curtail influence with a
country possessing advanced nuclear technology in order to pressure
a small state that is no longer threatening the U.S. militarily.
F) Isolation of the U.S. at United Nations
The bills call for the President to instruct the U.S. Permanent
Representative to the United Nations to seek, in the Security
Council, an international embargo against Cuba similar to that
imposed on Haiti under Cedras. Such a move would embarrass and
isolate the United States. When the General Assembly voted on the
Cuban embargo last year the U.S. policy received the lowest level
of support recorded to date, and only Israel voted with Washington.
It is virtually certain that the Security Council would
energetically reject any effort to make the embargo a multilateral
77
measure .
In fact, Buch a campaign could actually backfire and generate
additional support for Cuba's U.N. resolutions against the embargo.
In the past, U.S. allies have tended to abstain from such votes. If
the Helms and Burton bills pass, anger about the extra-territorial
provisions could well shift abstainers into the "yes" column. In
addition, Cuba would have a heaven-sent opportunity to play on the
sympathies of small countries fearful of the power of large states,
garnering still more votes for its anti-embargo resolutions.
Instead of widening support for U.S. policy regarding Cuba, the
provisions of the Helms and Burton bills would publicize
Washington's isolation, and hand a propaganda victory to Castro.
They would be a metaphorical "own goal, " the equivalent of a soccer
player inadvertently kicking the ball through his own team's goal
posts, handing the other side a free point.
G) Restriction of U.S. Ability to Consolidate A Transition
Government
The bills lay out such precise criteria for an acceptable
transition government they restrict Washington's ability to
facilitate peaceful change in Cuba.
The bills describe steps a transition government must take to
be eligible for U.S. assistance. Though many of the criteria are
entirely reasonable, such as release of all political prisoners,
others are problematic. For example, the bills require such a
government to make a commitment to reinstate the citizenship of
78
Cuban bom nationals returning to Cuba and to establish a currency
that is fully convertible domestically and internationally. Both
are sensitive measures which an otherwise well-intentioned
transition government might well be reluctant to adopt, or which
might threaten the cohesion of a delicately-balanced coalition.
Seldom has the sort of ideal democratic system described in the
bills emerged direct from dictatorship elsewhere in the world.
Usually there is a messy period of compromise and coalition
building. By setting such high standards, Washington may be
prevented from consolidating an imperfect transition mechanism
which nonetheless is the most democratic option likely to emerge
from the political circumstances of the day. Failure to stabilize
the imperfect transition government could then permit a less
attractive option to emerge victorious from the race for power. The
old aphorism, "The perfect is the enemy of the good, " certainly
applies to this portion of the Helms and Burton bills.
H) Why No Track Two?
Unlike the Torricelli bill, the Helms and Burton bills have no
provisions to increase communication with or relieve the suffering
of the Cuban people, also known as "track two." This is a serious
flaw. Inclusion of a track two in the Torricelli bill, specifically
the authorization of direct phone service and endorsement of
certain types of humanitarian assistance to Cuban NGOs, made it
harder for Castro to claim that the bill was intended to hurt the
Cuban people.
79
The Helms and Burton bills would be enhanced by addition of a
comparable track two. The most logical option would be to build on
the groundwork already established in the Torricelli bill,
particularly in the area of NGO assistance. As detailed in the
attached essay, there are a small number of genuine NGOs in Cuba,
and a larger number of groups which have links to government but
have also displayed a degree of independence. These are termed
semi-NGOs for ease of reference. There are also NGOs which function
purely as fronts for government ministries .
Fieldwork described in the attached essay has illustrated that
in some cases outside assistance has strengthened the ability of
semi-NGOs to act independently from the state. On the other hand,
outside aid has been used by other NGO's simply to strengthen the
government's hand. A coalition of European NGOs has adopted a new
strategy to cope with this problem. They intend to distribute a
small amount of funds to many NGOs, including those which appear to
be government fronts. The outside funders will then return a year
later and evaluate how the recipients have used the funds. Those
which used the donation to become more independent will be given
additional resources, and those which did not will be denied
additional financing.
When asked about this strategy in an interview last year, the
Catholic Bishop of Santiago said, "It is important that a space be
created in Cuba, a no man's land where one can do things without
having to declare oneself for or against the state. The more the no
man's land grows, the better. This strategy would expand that
80
space." Cuban dissident Gustavo Arcos was similarly questioned
about the approach. He remarked, "It is worth running the risk of
aiding false NGOs . It would be an investment in Cuba's future civil
society, and in any investment there is risk." More detailed
information both about Cuban NGOs and this donation strategy is
contained in the attached essay.
If the Helms and Burton bills were to add language facilitating
U.S. donations to Cuban NGOs, either along the lines of the above
strategy or in some other manner, three goals would be achieved.
First, the space available for civil society would be somewhat
enlarged. Second, contact between the U.S. and Cuban people would
expand. Third, the bills would demonstrate that the U.S. Congress
opposes only the government of Cuba, and is attempting to
ameliorate the suffering of the Cuban people through humanitarian
assistance.
Biographical Information: Since January 1992 Gillian Gunn has been
the Director of the Georgetown University Cuba Project, located in
Washington D.C. She previously worked on Cuba at the Carnegie
Endowment for International Peace, and as a Senior Fellow in the
AfVican Studies department of the Center for Strategic and
International Studies, both Washington D.C. -based institutions. Her
most recent publication is "Cuba's New NGOs: Government Puppets or
Seeds of Civil Society?", published by the Georgetown University
Cuba Briefing Paper Series in February 1995. Among her other work
on Cuba is the 1993 book Cuba in Transition - Options tOX U.S..
Policy, published by the 20th Century Fund.
81
TESTIMONY OF THE HONORABLE OTTO J. REICH
PRESIDENT, US-CUBA BUSINESS COUNCIL
HOUSE COMMITTEE ON INTERNATIONAL RELATIONS
WESTERN HEMISPHERE SUB-COMxVUTTEE
FEBRUARY 23, 1995
CUBA: COMMERCIAL, LEGAL AND POLITICAL RISK
Recent press stories speculate that Cuba is "Open for Business." Canadian,
Mexican and European businessmen are allegedly rushing in. Fidel Castro says that
foreign firms are gobbling up so many sweetheart deals that soon "there won't be a
grain of sand left for [US companies]."
Lest uninformed US companies be seduced by such false claims, they need to
know that such commercial anxiety attacks are unwarranted. When a stable,
democratic and market-oriented Cuba opens the door to genuine economic
development and commercial opportunity, US companies will be second to none in
gaining access to a market of II million people only 90 miles from our shores eager to
obtain familiar US-brand goods and services. However, until that happens any firm
participating in Castro's firesale of assets is building on economic and political
quicksand.
Cuba's gross national product has declined by more than 60 percent since 1989.
The reason for Cuba's relentless economic decline is simple. Confronted with the
elimination of subsidies from the former Soviet bloc, the Castro regime failed to
provide the most basic freedoms and incentives necessary for domestic enterprises to
grow and people to work.
There is ample evidence to demonstrate that the commercial environment in
Cuba is a chamber of horrors. Basic conditions necessary for successful commercial
activity in Cuba which are rejected by the current Cuban government include:
82
♦ Rule of Law. Contract Sanctity and Due Process. The Cuban constitution
vests in the State exclusive control over all economic activity. The Cuban government
frequently exercises its authority to control all means of production on the island and
consumes any profits from them. Military elites have taken over Cuba's tourism
construction, hotel management, agriculture and other industries while Cuba's 160,000
"self-employed" workers are banned from forming private businesses and face stiff
prison sentences if they are deemed "unduly wealthy" [Decree Law 149] by the Cuban
government. Government penalties against such economic activity are not subject to
judicial review.
* Protection of Property Rights. The Cuban government does not recognize the
concept of private property. Pursuant to Article 14 of Cuba's constitution, the state
controls ownership of all "fundamental means of production." Cuban law defines no
limit on "socialist ownership" and authorizes monopolistic state control over domestic
assets. Cuban law prohibits Cuban citizens from owning or investing in private
property. Foreign firms are effectively precluded from obtaining majority share of
joint venture operations and must secure permission from the Cuban government to
engage in any business fransaction. In practice, the only mechanism for resolving
commercial or contractual disputes available to a foreign entity involves recourse to a
Cuban govermnent forum accountable to the Cuban Communist Party. Thus, under
Cuban statutory and Constitutional law, domestic and foreign investors in Cuba are
unable to secure legal title to assets on the island.
The Cuban government provides no constitutional or statutory protection to
foreign investors against expropriation without due process and just compensation.
Therefore, Cuba presents an unacceptable expropriation risk for investors.
Respect for property rights is a particularly important factor in U.S. -Cuba
relations because of the Cuban govermnent's confiscation of properties owned by some
5,911 companies and individuals valued at $1.8 billion (in 1960 dollars and $5.6
billion including 6 percent simple interest. By comparison US claims against Vietnam
totalled only some $300 million). This action by the Cuban government was a primary
basis for the U.S. government's decision to impose an embargo against Cuba in
February 1962. Recent confiscations of foreign investments by the Cuban government,
(for example, the takeover of the successfiil Havana Club discotheque from Spanish
joint venture partners) and Cuba's failure to meet joint venture commitments for
supplies and infrastructure improvements pose significant economic risks for investors.
The. Cuban government has also failed to inform numerous prospective investors about
joint venture proposals involving stolen properties.
83
♦ Secure Money and Capital Rq)atriation. The Cuban government subjects
foreign investors to severe fmancial losses when converting investments into the
domestic currency. Cuba requires investors to make their investments at the official
peso/dollar exchange rate of 1:1. Given that the market value of the peso equals less
than .02 US$, Cuba presents an expensive investment environment. The Cuban
government also requires payment of taxes and duties in convertible ciurency valued at
the official exchange rate.
Moreover, the Cuban government caimot ensure that it will be willing or able to
convert peso-denominated investment earnings into US dollars a rate of 1:1 at any
future date. On May 2 1994, the Cuban National Assembly authorized the Cuban
govenmient to freeze bank deposits of Cuban residents and mandate conversion into
Cuban government bonds. The Cuban government would define the peso value of the
bonds. The resulting valuation may indirectly constitute a severe devaluation of the
Cuban peso.
Cuba provides no statutory or constitutional guarantee to investors that they will
be allowed to repatriate capital. The Cuban government has confiscated the bank
deposits of numerous domestic and international investors without due process or
compensation.
Cuba's lack of capital markets, equity commercial or foreign banks or access to
official or commercial credit impedes the development of domestic enterprises and
joint ventures and contributes significantly to material and economic risk in Cuba.
Meanwhile, the international lending window has been closed to Cuba due to its
default on some $8 billion in outstanding loans to international creditors (not including
debt to the former Soviet bloc). Institutional Investor's 1994 country credit rating
ranks Cuba 126th among all nations, behind Albania, Ethiopia and Iraq as a credit risk.
Multilateral agency officials and international economists advising the Cuban
government acknowledge that Cuba has not implemented the monetary, fiscal and
institutional reforms necessary to gain access to international lending facilities and
initiate advances toward economic stability.
* Consistent and Uniformlv-appUed Commercial Laws. The current Cuban
Government has frequently revoked economic liberalization measures without notice
involving property ownership, taxation, commercial transactions and foreign investment
policies, and has subjected foreign investors and domestic workers to arbitrary state
actions without legal recourse or financial redress. Upon assuming power in 1959, the
current Cuban government eliminated laws which provided equal protection to
domestic and foreign investors to possess properties and engage in any form of
84
industry or commerce.
This discriminatory practice by the Cuban government precludes domestic
commercial development on the island and severely limits trade and investment
opportunities for foreign investors. Such denial of commercial development and equal
treatment under law materially contributes to the substantial economic and political risk
of trade and investment in Cuba. The Cuban Government does not permit the hiring
of employees by Cuban entrepreneurs, the creation of formal business associations or
other essential elements of a private business sector.
* Basic Labor Rights. Cuba is in violation of International Labor Organization
Conventions against forced labor [Conventions 29 and 105 and the UN Universal
Declaration on Human Rights, Article 23], child labor [Convention 138], prohibitions
against trade unions [ILO Conventions 87 and 98], violations of International Labor
Organization conventions on the use of forced labor [Convention No. 29 and 105], and
employment discrimination [Convention No. 111]. Cuba requires investors to hire
employees through the Cuban Govonmait's national employment agency (Empleadora
Nacional) which dictates labor costs to investors as well as employee wage rates and
job selection.
Accordingly, Cubans paid in pesos at a peso/dollar rate of 1:1 are subjected to
wage confiscation (the market value of the peso is between 80 and 60 to 1 US$) and
labor fees on foreign investors are comparatively expensive. For example, Cuban
government agencies controlling labor inputs, charge foreign hotel operators some
US$400 per month for each Cuban worker while paying Cuban workers less than 400
pesos a month (roughly $5 US dollars).
Recognizing this bleak commercial landscape, Ae Heritage Foundation's
recently published Index of Economic Freedom (which ranks nations based on the
level of economic freedom in such categories as property rights, foreign investment,
taxation, trade and monetary policy) ranks Cuba as the second most repressed economy
in the world, after fellow Cold War holdover North Korea.
Recent "Foreign Investment" Activity. Several "foreign investments"
frequently touted as success stories by Cuba trade proponents have failed to
materialize. Total Petroleum, rather than pursuing oil exploration in Cuba has folded
its operations. Unilever, a British-Dutch concern, backed out of a joint venture with
Cuban soap concern Suchel after being informed by Procter and Gamble that the deal
85
involved Procter and Gamble's stolen property. Given the Cuban government's track
record in commercial dealings it should surprise no one that Euromoney's 1994
country risk report ranks Cuba behind Somalia as the worst investment risk in the
world.
No Cash on Hand. The handful of firms willing to brave the considerable
commercial and political risks in Cuba must also contend with the fact that Cuba does
not have the cash to buy foreign goods. Cuban officials acknowledge that more than
three-fourths of Cuban citizens make under $200 pesos, or, at the real peso-dollar
exchange rate, less than $3 US dollars per month. Cuba's total hard currency reserves
have dwindled to less than $60 miUion and total export earnings last year barely
reached $1.7 billion - right behind Bangladesh and Sri Lanka. Even essential inputs,
such as fertilizer, for Cuba's declining sugar crop are beyond Castro's reach.
Upon closer examination, the few highly publicized "big-money deals" in Cuba
are structured to avoid, rather than encourage, foreign investment. In order to limit
commercial risks, foreign fums considering entry into Cuba have opted for
management contracts devised to avoid actual cash investment in operations on the
island, which, in many cases, involve the illegal use of confiscated US property. In
1992, actual cash investment in Cuba - minus aU the rhetorical fluff about "non-
binding letters of intent" and other promises to consider ftiture deals — totalled less
than $50 miUion, or less than 25 percent of the foreign direct investment total for 1992
in that economic powerhouse Nicaragua.
Similarly, recently announced Mexican ventures, which have yet to be
implemented, such as the telecommunications agreement between the Mexican firm,
Grupo Domos, and the Cuban state telephone company, would use forgiveness of some
$200 million of Cuban debt to Mexico as a substitute for foreign investment. Unless
Mexico finds an investor with deep pockets to provide technology and resources which
Grupo Domos is currently unwilling to commit on its own, this proposed venture will
join a growing list of commercial failures on the island. Plans by Mexpetrol and the
construction fum, ICA, to upgrade Cuba's Cienfuegos oil refmery have been shelved,
and several Mexican ventures operating in Cuba including, a juice-bottling firm Del
Valle. and a packaging firm. La Magdalena, have recently been suspended.
Thus, the sum total of "big money deals" in Cuba envisioned by Cuba trade
proponents involve Mexican attempts to write-off $350 milbon in Cuban debt and a
firesale of Cuban mineral deposits to Canadian and Australian firms.
86
The Moral Case Against Investment in Cuba. The most compelling case
against commercial involvement by these firms in Cuba is not economic but moral.
Putting aside the substantial economic risk of investment in today's Cuba, companies
doing business on the island through the use of confiscated property are, in effect,
trafficking in stolen property. More fimdamentalty, the Cuban government is engaged
in a broad pattern of human rights abuses which directly impact trade and investment
activity. The corresponding atmosphere of resentment and economic instabibty
ensures that companies in Cuba today jeopardize their long-term access to a
democratic, market-oriented Cuba.
Well-documented, systematic human rights abuses by the Cuban government
include: International Labor Organization conventions on the use of forced labor and
right to organize [see "Labor Rights," above]; denial of freedom of speech and press
(Violation of The U.N. Declaration of Human Rights ARTICLE 19). denial of the right
to freely assemble (Violation of the U.N. Declaration of Human Rights ARTICLE 20)
denial basic civil liberties (Violation of the U.N. Declaration of Human Rights
ARTICLE 1 1); Arbitrary Arrest, Detention, and Exile (Violation of the U.N.
Declaration of Human Rights ARTICLE 1 1); denial of equal protection under the law
(Violation of the U.N. Declaration of Human Rights ARTICLES 8, 10, & 11); denial
of freedom of movement (Violation of the U.N. Declaration of Himian Rights
ARTICLES 13, 14, 15); political killings and disappearances (Violation of the U. N.
Declaration of Human Rights ARTICLES 3, 5, 7, 8, 9, 10, and 1 1); torture and cruel
punishment (Violation of the U.N. Declaration of Human Rights ARTICLE 5); illegal
searches and seizures (Violation of the U.N. Declaration of Human Rights ARTICLE
12); religious repression (Violation of the U.N. Declaration of Human Rights
ARTICLES 2 and 8); forced labor (Violation of the U.N. Declaration of Human Rights
ARTICLES 4 and 23); denial of property rights (Violation of the UN. Declaration of
Human Rights ARTICLE 17); denial of democratic principles (Violation of the U.N.
Declaration of Human Rights ARTICLE 21); denial of freedom of education (Violation
of the U.N. Declaration of Human Rights ARTICLE 26); and, denial of freedom of
cultural activity (Violation of the U.N. Declaration of Human Rights ARTICLE 27).
Political and Commercial Risk in Cuba. There are practical implications in
this moral tragedy which foreign firms considering the Cuban market must confront.
Harsh repressive measures by the Cuban government against its citizens and the denial
of domestic access to goods, services and commercial arrangements reserved for
foreign tourists and investors have increased the potential for reprisals by the domestic
population against foreign companies operating in Cuba. During the August 5, 1994
uprising in Havana, protestors vented their friistration at dollar-stores and foreign
operated hotels which are off-limits to Cuban citizens. Similarly, a May 1992 open
87
letter to foreign investors endorsed by eleven Cuban exile groups which "hope to play
a role in creating a new republic in a post-Castro Cuba" asserted that "[foreign]
investments made in Cuba under the present circumstances should not benefit from any
laws passed by a future Cuban government for the protection of private property
We feel that these investments should be considered as state property and disposed of
accordingly."
Could a multinational frnn, particularly a labor-intensive industry, ignore such
unpleasant reahties in Cuba without courting disaster? The answer is no and the
reason is simple - good corporate citizenship is good business for firms seeking long-
term conunercial success in Cuba.
I do not believe that American companies would want to do business in Cuba
under current circumstances. They realize that the best hope for the economic
reconstruction of Cuba lies in the restoration of democracy, respect for human rights,
private property and individual initiative which the current government of Cuba denies
to its citizens. It is my firm belief that the few foreign companies that are doing
business in Cuba today are making a bad business and moral decision.
88
THE CUBAN AMERICAN NATIONAL FOUNDATION
1000 Thomas Jefferson Street, N.W., Suite 601
Washington, D.C. 20007
(202) 265-2822
CUBA'S HALL OF SHAME
Corporations and companies identified in the international press as liax'ing entered into
commercial and business dealings with the Castro regime or were reported to be in business
discussions with Cuban officials.
AUSTRALIA
Western Mining Corp.
AUSTRIA
Rogner Group (Tourism)
BRAZIL
Andrade Gutierrez Perforacao (Oil)
Coco Heavy Equipment Factory (Sugar)
Petrobras SA. (Oil)
CANADA
Advanced Laboratories (Manufacturing)
Anglers Petroleum International
Bow Valley Industries Ltd. (Oil)
Canada Northwest Energy Ltd. (Oil)
Caribgold Resources Inc. (Mining)
Commonwealth Hospitality Ltd. (Tourism)
Delta Hotels (Tourism)
Extel Financial Ltd.
Fermount Resources Inc. (Oil)
Fortuna Petroleum
Fracmaster (Oil)
Globafon
Havana House Cigar and Tobacco Ltd. (Cigars)
Heath and Sherwood (Oil)
Hola Cuba
Holmer Goldmines
Inco Ltd. (Mining)
Joutel Resources (Mining)
LaBatt International Breweries
Marine Atlantic Consultant (Shipping)
MacDonalds Mines Exploration
Metall Mining
Mill City Gold Mining Corp.
Miramar Mining Corp. (Minera Mantua)
Pizza Nova (Tourism)
Realstar Group (Tourism)
Republic Goldfields
Sontres-Caribe (Mining)
Sherril Inc. (Mining)
Talisman Energy Inc.
Teck (Mining)
Toronto Communications
Val d'Or (Mining)
Wings of the World (Tourism)
CHILE
Dolphin Shoes (Clothing)
Ingelco S.A. (Citrus)
Latinexim (Food/Tourism)
New World Fruit
Pole SJi. (Citrus)
Santa Ana (Food/Tourism)
Santa Cruz Real Estate (Tourism)
COLOMBIA
SAM (an Avianca co.)(Tourism)
Intercontinental Airlines
Representadones Agudelo (Sporting Goods)
ECUADOR
Caney Corp. (Export of Cuba rum)
89
CHINA
Neuke (Manufacturing)
Union de Companentcs Indiistriales Cuba-China
DOMICAN REPUBLIC
Import-Export SA (Manufacturing)
Meridiano (Tourism)
FRANCE
Accord (Tourism)
Alcatel (Telecommunications)
Babcock (Machinery)
Bourgoin (Oil)
Compagnie Europeene des Petroles (Oil)
Devexport (Machinery)
Fives Lille (Machinery)
Geopetrol
Geoservice (Oil)
Jetalson (Construction)
Maxims (Cigars- owned by Pierre Cardin)
OFD (Oil)
OM (Tourism)
Pernod Ricard Group (Beverages/Tourism
Industry)
Pierre Cardin
Pompes Guinard (Machinery)
Societe Nationale des Tabacs (Seita) (Tobacco)
Sucres et Donrees (Sugar)
Thompson (Air Transport)
Total (Oil)
Tour Mont Royal (Tourism)
GERMANY
Condor Airlines (charters for Lufthansa)
LTU (LTI in Cuba) (Tourism)
GREECE
Lola Fruits (Citrus)
HOLLAND
Curacao Drydock Company (Shipping)
Golden Tulips (Tourism)
ING (Banking)
Niref (Minerals)
HONDURAS
Facuss Foods
HONG KONG
Pacific Cigar
ISRAEL
GBM (Citrus)
Tropical (Manufacturing)
World Textile Corporation SA.
ITAL\
Benetton (Textiles)
Fratelli Cosulich (Gambling)
Going (Tourism)
Italcable (Telecommunications)
Italturis (Tourism)
Viaggo di Ventaglio (Tourism)
JAMAICA
Caricom Investments Ltd. (Construction)
Caricom Traders (Int'l mrktg of Cuban products)
Intercarib (Tourism)
Superdubs (Tourism)
JAPAN
Mitsubishi (Automobiles/Tourism)
Nissan Motor Co. Ltd (Automobiles)
Nissho Iwai Corp. (Sugar)
Toyota (Automobiles)
Sumitomo Trading Corporation (Automobiles)
Suzuki Motor Corp. (Automobiles)
MEXICO
Aero-Caribc (Subsid. of Mexicana de Aviacion)
Bufete Industrial
Cemex (Construction)
Cubacell Enterprises (Telecommunications)
Del Valle (Manufacturing)
Domeq (Export rum)
DSC Consortium (Tourism)
Grupo Domos (Telecommunications)
Gnipo Industrial Danta (Textiles)
Grupo Infra de Gases
Incorporadon Internacional Comercial (exp beer)
Industrias Unidas de Telefonia de Larga Distanda
La Magdalena Cardboard Company
Mexpetrol (Oil)
Pemex
Bancomex
Mexican Petroleum Institute
90
Prolcxa
Bufctc Industrial
Ingginciros Civilcs Asociados
Equipos Pclrolcos Nacionales
Telccomunicacioncs Inlcrnacionales dc Mexico
Vitro SA (Manufacturing)
PANAMA
Bambi Trading
SOUTH AFRICA
Anglo-American Corporation (Mining)
Arasa (Mining)
De Beers Centenary (Mining)
Minorco (Mining)
Sanachan (Fertilizers)
SPAIN
Caball de Basto S.L.
Camacho (Manufacturing)
Consorcio de Fabricantes Espanoles, Cofesa
Corporacion Interinsular Hispana SA. (Tourism)
Esfera 2000 (Tourism)
Gal (Manufacturing)
Guitart Hoteles SA.
Grupo Hotelero Sol
Hialsa Casamadrid Group
Iberia Travel
Iberoslar SA. (Tourism)
Kawama Caribbean Hotels
K.P. Winter Espanola (Tourism)
Miesa SA. (Energy)
National Engineering and Technology Inc.
Nueva Compania de Indias SA.
P&I Hotels
Raytur Hoteles
Sol Melia (Tourism)
Tabacalera SA. (Tobacco)
Tinias Gyr SA (Ink Manufacturer)
Tryp (Tourism)
Tubos Reunidos Bilbao (Manufacturing)
Vegas de la Reina (Wine Importers)
SWEDEN
Forcss (Paper)
Taurus Petroleum
UNITED KINGDOM
Amersham (Pharmaceuticals)
BETA Funds International
Body Shop International (Toiletries)
British Borneo PLC (Oil)
Cable & Wireless (Telecommunications)
Castrol (Oil)
ED&F Man (Sugar)
Fisons (Pharmaceuticals)
Glaxo (Pharmaceuticals)
Goldcorp Premier Ltd. (Manufacturing)
ICI Export Ltd. (Chemicals)
Ninecastle Overseas Ltd.
Premier Consolidated Oilfields
Rothschild (Investment Bank)
Simon Petroleum Technology
Tate & Lyle (Sugar)
Tour World (Tourism)
Unilever (Soap/Detergent)
Welcomme (Pharmaceuticals)
VENEZUELA
Cervecera Nacional
Covencaucho
Fiveca (Paper)
Fotosilvestre
Gibralter Trading (Steel)
Grupo Corimon
Grupo Quimico
Ibrabal Trading
Interlin
Intesica
Mamploca
Mamusa
Metalnez
MM Intemacional
Pequiven
Plimero del Lago
Proagro
Sidor
Venepal
Venoco
(Sources: International press reports; 'Index of
Foreign Investment in Cuba," Lm Sociedad
Economica (London); Caribbean Update.]
91
Number 7
February 1995
CUBA
BRIEFING
PAPER
Georgetown
University
Cuba's NGOs: Government Puppets
or Seeds of Civil Society?
Why have Cuba's Nop-Govem-
mental Oiganizaticms
(NGOs) experiotced explo-
sive growth since 1989? Do they
merely serve as a mechanism for
channeling hmds to the bankrupt state
sector, or do they represent autoito-
mous citizen groups capable of laying
ttie groundwork for future civil soci-
ety? Most iii:q>ortantly from a geo-
political standpoint, will foreign
assistance to Cuba's NGOs strengthen
their indepeiKient status, or merely
reinforce central state control?
These questions were addressed
during a field study conducted in
Havana and Santi^qgo de Cuba during
the sumnmer of 1994. Representatives
of twenty NGOs were interviewed,
along with academics, foreign diplo-
mats and Cuban government officials
responsible for regulating NGO activ-
ity. Only preliminary conclusions are
]X>ssible, due to the limited data avaU-
able. However, the following state-
ments seem justified.
• Cuba's NGOs grew because the
government deemed them useful
fiixandal intermediaries and because
citizens desired self-help orgaiuzations
capable of resolving local problems tfie
state was unwilling or unable to
address.
• While many NGOs were originally
intended to cftarmel funds to the state
sector, some developed institutional
interests independent from, though not
necessarily in cxmffict with, those of the
state.
• Access to ficHeign exdiange free of
central state control is a necessary, if
insufficient, condition for indepsKlent-
minded NGOs to pursue ttieir own
paths.
These assessments are not intended
to imply that the sc^ legitimate pur-
pose of foreign assistance is to sm-
By Gillian Gunn
power recipient independence. Indeed,
most NGO donations throughout the
world are provided for humanitarian
purposes. However, due to the current
debate in the United States and Western
Europe about the political implications of
NGO donatiorw, this paper focuses on the
indep>endence issue.
WHY NGO GROWTH?
"Qvil society" and 'TMGO" used to be
considered subversive terms in Cuba.
Officials Jirgued that, since the state
inherently reflected the will of the people,
there was no need for independent
organizations to represent citizens.
Cuban bureaucrats clinging to this
Stalinist ideology are now increasingly
challenged by reiformers who claim that
Lenin saw the need to maintain some
independent organizations to "defend
workers agait\st deformations of the
state."
The reformist view has been grudg-
ingly accepted by the Cuban state. Fidel
Castro used the term "dvil society" at the
1994 Ibero- American Summit and Gaceta,
the official journal of the state-controlled
writers' union, recently defended the
expression's legitimacy. The Cuban
institution responsible for registering
NGOs, the Ministry of Justice, reports
explosive growth in their number from
1989 to 1993, and a leveling-off in 1994.
Approximately 2,200 NGOte are now
registered with the government and
many others exist undergroimd. The
rising interest in NGOs has come both
top-down from the government and
bottom-up from tiie population.
The state's new support for NGOs is a
matter of financial necessity. As subsi-
dies from Moscow declined in 1990, the
govenunent sought alternative resources.
Foreign NGO assistance was perceived as
helpir^ solve developmental problems in
other countries where potential funders
ApubBcatmm ^TttCuba Pnjttt.Centirfar Latin Amtriain Studies, Georptown University
92
2 • Cuba Briefing Paper
were uneasy about direct donations to governments
accused of undemocratic practices. The Cuban
authorities therefore permitted a few ministries to
establish parallel "NGOs" and re-labeled as "NGOs"
some existing mass orgaruzations and think tanks
formerly associated with the Central Committee
bureaucracy.
The state's new support for NGOs is a matter
of financial necessity. As subsidies from
Moscow declined in 1990, the government
sought alternative resources.
The re-labelled mass organizations include the
Federacion de Mujeres Cubanas (FMC - Federation of
Cuban Women), the Asocmcion Nadonal de
Agricultores Pequenos (ANAP - National Association
of Small Cultivators), and the Unidn de Escritores y
Artistas de Cuba (UNEAC - Uruon of Writers and
Artists of Cuba). These organizations have histori-
cally been utilized by the government to convey
instructions, report dtizen opinions and rally supf>ort
for government policies. Often their leaders either
simultaneously held high official positions or were
closely linked to those who did. For example, FMC
leader Vilma Espin is the wiie of Defense Minister
Raul Castro, and UNEAC head Abel Prieto is a
member of the PoUtical Bureau of the Communist
Party.
Among the think tanks formerly associated with
the Central Committee and now titled NGOs are the
Centra de Estudios sobre America (CEA - Center for the
Study of America) and the Centra de Estudios Eurapeos
(CEE - Center for European Studies). Both organiza-
tions were established in the 1970s to act as Central
Committee academic research instruments. Though
Central Committee funds are still significant, much
of their budgets now come from external sources.
An example of a Ministry-sponsored NGO is Pro-
Naturaleza, an environmental organization with 5,000
members. Established in April 1993, most of its
leadership is employed at the Ministry of Science,
Technology and En\Tronment, formerly the Academy
of Sciences. Pro-Naturaleza has not received any state
funds, but has been housed rent-free within Ministry
property. Originally it hoped to pay a secretary and
researcher out of its ovinn funds, but to date modest
membership dues have been insufficient to cover the
cost. Therefore, it has asked the Ministry to cover the
salaries, with the request that this donation not be
used to "encroach on the organization's indepen-
dence."
Like the top-dovinn motivation for NGO expansion,
the bottom-up impetus was also related to events in
the Soviet Union. Glasnost f>ennitted a proliferation
of Soviet NGOs, and by 1988 the Moscow press
claimed that some 40,000 clubs and associations had
been established. Close relations between Havana
and Moscow at that time exposed Cuban intellectuals
to n\any of these groups, which advocated themes
such as religious freedom, popular culture, environ-
mental protection and economic and social develop-
ment By 1990, the decline in Soviet subsidies to
Cuba began to curtail the state's ability to deal with a
wide variety of problems, including deforestation,
housing deterioration, food scarcity, medicine short-
ages, and blackouts. Events in the Soviet Union both
provided examples of dtizen self-help and caused
economic conditions which necessitated their imple-
mentati^on.
Churches were among the first to display bottom-
up NGO behavior. The Catholic Church, through its
charity Caritas, obtained permission to receive
humanitarian donations, primarily food and medi-
cine, from abroad. The Protestant churches, via
Cuba's Ecumenical Coimcil, performed the same
role. The Martin Luther King Center, established by
Reverend Raul Suarez, began to organize housing
rehabilitation, development of alternative energy
sources and infrastructure repair. The Asociacion
Cultural Yoruba de Cuba (Yoruba Cultural Assodation
of Cuba) was established in 1991 to promote Afro-
Cuban religious traditions, commonly referred to as
Santeria. Cuba's Christian-oriented Masor\s,
founded in 1859 and driven underground by the
Revolution, resumed activities in 1988 and now have
22330 members.
Non-religious bottom-up organizations also have
developed. The Felix Varela Center, established by
former Central Committee staffer Juan Antonio
Blanco in 1990, has, among other activities, spon-
sored recreation for child cancer patients and orga-
nized a conununity-based paint factory. The Pablo
Milanes Foundation, established in 1990 by the black
Cuban singer of the same name and financed with
proceeds from his musical endeavors, provides
support for young Cuban artists and aids indepen-
dent cultural institutions.
This division of Cuban NGOs into two categories
is drawn for the sake of analytical clarity. In reality,
some top-dov*Ti NGOs, such as Pro-Naturaleza, have
strong grassroots connections, and some bottom-up
groups, such as the Martin Luther King Center, have
dose relations with the state. The state frequently
attempts to convert bottom-up NGOs into govern-
ment instruments, while dtizens occasionally try to
re-shape top-down NGOs into grassroots organiza-
tions. The ideological lines between groups are also
fluid. Bottom-up organizations are not necessarily
anti-state, and top-down organizations are not
necessarily anti-citizen empowerment.
93
Fobniary199S • 3
STATE AMBIVALENCE
The Cuban state is unecisy about NGOs. They are
deemed useful because they capture resources that
otherwise would not enter Cuba and relieve social
tensions by resolving problems the state is unable to
address. NGOs are also viewed with suspidcxv
however, because they represent an indepiendent
resource base for citizens whose desires do not
always coincide with those of the state. Before Soviet
subsidies disappeared, the state would have simply
taken over those NGOs deemed inconveiuent To do
so now would be self-defeating, for if Cuban NGOs
are perceived as state front organizations, foreign
donations will dry up. Therefore the state seeks to
indirectly control NGOs without overtly dominating
them.
The most obvious instrument of state control is the
registration process. This is governed by the 1985
Law Number 54 on "Associations and their Regula-
tion," along with Articles 39, 396 and 397 of the 1985
Qvil Code.
To be accepted for registration an organization
must fulfill the following requirements.
• Provide the names of thirty members, together
with the names, addresses, telephone numbers and
ages of the top leadership.
• Prove that the organization is self-financing.
• Submit a written statement of goals, together with
an explanation of the institution's internal structure.
• Obtain a "negative certificate" from the Ministry of
Justice stating that there is no other registered N(X>
with a similar purpose. If there is a duplicate organi-
zation, the new applicant must associate v*rith the one
already registered.
• Obtain 3ie sponsorship of a "state reference
institution" which affirms that the establishment of
the NGO is in its interest. The reference institution
subsequently has the right to attend the NOG'S board
meetings and inspect its accounts to corxfirm it is
carrying out its stated purpose.
If the NGO is subsequently determined to no
longer be performing its original purpose, the Minis-
try of Justice has the right to dissolve it Further-
more, an organization will not be accepted for regis-
tration if its goals violate the Cuban Constitution or
involve activities, in the words of a Ministry of
Justice representative, "that are properly thie role of
the state." This prevents the registration of political
parties as the Constitution establishes a one-party
system. Human rights organizations have been
denied registration on the groimds that they are
covert political parties.
Many organizations that appear iiuiocuous or even
pro-goverrunent have had difficulty registering. The
Santiago de Cuba-based Asociacwn Cubana de Estudios
del Caribe (ACEC - Cuban Association for Caribbean
Studies) was denied a "r\egative certificate" on the
grounds that another association with the same goals
already existed. The Ministry then refused a request
for a list of registered institutioiis, which the group
needed to plan its re-application. The applicant was
also told that some of its objectives overlapped with
The State frequently attempts to convert bottom-
up NGOs into government instruments, while
citizens occasionally try to re-shape top-down
NGOs into grassroots organizations.
those of existing government institutions, but was
not told which objectives were problematic. Caught
in this Catch-22, the Association took a gamble, re-
drafted its application to emphasize cultural ex-
changes with institutions abroad, and was accepted.
Another NGO, whose leader is socialist but in-
clined to outspoken criticism, had difficulty obtain-
ing a reference institution, and finally prevailed upon
friends in a state institution totally unrelated to the
applicant's field of endeavor. This NGO existed for
over three years before obtaining registration. Inter-
nal Communist Party schisms appear to have played
a major role in the registration problems encountered
by this and at least one other NGO.
The Pablo Milanfe Foundation also existed for
three yejirs before obtaining registration in June 1993.
Milanes wanted the proceeds from his concerts, film
scores and other artistic endeavors to go to the
Foundation, rather than be shared between state
institutions and himself. The government was
extremely reluctant to lose control of these revenues
and events, and resisted. Milanes nonetheless
moved ahead, recruited friends to work for the
Foundation and paid them either out of his owm
pocket or not at all. They soon were organizing
concerts which appealed to young Cubans more than
those run by the state. The authorities were uneasy,
but the singer's pro-Revolution background pre-
vented the Foundation from being shut down.
According to a Foundation spokesperson, the role
of Milanes in the 1992 Natiorul Assembly election
became decisive. A poor, black neighborhood of
Havai\a largely boycotted the election, undermining
its legitimacy by refusing to vote for the individual
selected by the party-ii\fluenced nomination process.
(Only one candidate per seat was on the baOot, for
whom citizens could vote yes or no.) When the
neighborhood's youth said they would vote if
Milanfe were the candidate, the Party asked the
reluctant singer to run. He acquiesced, and received a
94% "yes" vote, one of the highest percentages
recorded. The Foundation's leverage was enhanced.
94
4 • Cuba Briefing Ptpar
and its registration application was accepted within a
few mondis. As of mid-1994 the Foundation owned
both its building and the land beneath it, a rare
curangement in Cuba.
The Asockcidn Cultural Yoruba also encountered
difficulties, surviving precariously for fifteen years
before it was finally able to register. Initially the
Ministry of Justice claimed that it was a "cult" and
said there was no provision for such entities in
Cuban legislation. The Association's leader believes
that the intercession of the Religious Affjiirs Office of
the Central Committee, which is reportedly staffed
by "open minded" individuals, smoothed this and
other difficult interactions with the state bureaucracy.
The Ministry of Culture, to which the NGO was
initially directed, was far less helpful.
All of these NGOs which encountered registration
difficulty were of the bottom-up variety. An indi-
vidual or collection of friends decided to form a
group, and tried to comply with the state's require-
ments. Sometimes, organizers found supporters in
one branch of the state bureaucracy who helped them
contend with opponents in other branches. These
battles are a reflection of the dynamic tension be-
tween those seeking to expand space for dvil society
and those reluctant to lose control.
Curiously, of the NGOs visited, none had ever had
their board meetings attended or their books in-
spected by their state reference institution. In fact,
only one instance of such intervention was known in
the NGO coirununity. When a top Cuban official was
asked if the Law of Association might be changed to
elimirwte the requirement for a state reference insti-
tution, the response was careful. "The inspections
aren't being carried out anyway," he said. "I sup-
pose it is counter productive to have a law which
creates the impression of a higher level of state
control of NGOs than what actually exists." How-
ever, this official then cautioned that a new law
would still need to be designed in a manner which
prevented the registration of organizations which use
human rights activities as a "cover for efforts to
overthrow the government."
NGO CONFERENCES
As the above anecdotes illustrate, many of the
bottom-up NGOs were finally able to register in the
summer of 1993. This was no coincidence. From 5 to
11 September 1993 Cuba hosted the "Encumtro sobre
Cooperacion con Cuba" (Meeting on Cooperation with
Cuba), designed to showcase Cuba's new NGOs to
the international donor community. It was in the
authorities' interest to include Cuban groups which
were somewhat independent.
This was the second such gathering. The first, held
in 1991, was organized by ANAP in collaboration
with two European NGOs. Thirty-six Cuban NGOs
and forty orgaiuzations from Eurof>e and Latin
America participated in the 1991 event. Although
ANAP now has a somewhat more independent
character, at that time it remained largely an ii\stru-
ment for ensuring Cuba's private peasants compLed
with government policies. According to several
participants, the 1991 function was tightly controlled
by the Comite Estatal de Cooperacion Econdmica (CECE -
State Committee for Economic Cooperation), which
limited its success.
CECE had long been the gatekeeper for all foreign
assistance flowing into Cuba. Up until 1990, this
primarily involved agreements with Eastern Europe
Reflecting the influence of pro-state voices, the
1993 conference's final communique stated that
ttie Cuban NGO activities would lall wilhln glot>al
plans with the necessary coordination with
diverse Cuban entities."
and the Soviet Union. As that assistance waned, and
NGO funds grew, CECE sought to control the new
resource as well — a classic case of a bureaucracy
reinventing itself when its Cold War justification
evaporated. CECE's leadership, with attitudes
shaped by decades of interactions with Soviet
bureaucrats, was profoundly uneasy with NGOs
and initially tried to curtail their activities.
By the time the September 1993 meeting occurred,
the Centra de Estudios Europeos (GEE — Center for
European Studies) had emerged as a CECE competi-
tor and, along with the European filliance of NCfos
Grupo Sur, co-sp>onsored the second gathering. The
year before, with government permission, CEE
became a "clearinghouse" for Cuban cooperation
with European NGOs. The CEE's existing scholarly
relations gave it a strategic advantage over other
institutions. CEE now sees itself as a "marriage
bureau" between Cuban and European NGOs. It
helps Cuban NGOs prepare propc«cils, houses a
fledgling NGO reference library, publishes a newslet-
ter on Cuban NGO activities and conducts training
seminars.
The Cuban participants presented 300 proposals
at the 1993 meeting, of which sixty subsequently
received foreign funding. The meeting formally
established "platforms" in eight European countries
to promote cooperation, but so far they are only
functioning in Spain, Belgium, Italy and France.
Reflecting the influence of pro-state voices, the
conference's final commuiuque stated that the Cuban
NGO activities would "fall within global plans with
95
Febfuaiy 1995 • S
the necessary coordination with diverse Cuban
entities." Caritas, which was not a participant, later
rejected the conference commuruque on the grounds
that it did not think Cuban NGOs should be required
to "compliment state plar\s." The foreign NGOs
present also unanimously called for "the end of the
economic blockade... unjusdy, immorally and ille-
gally imposed by the United States on Cuba..."
While the 1993 conference was heavily dominated
by the government, it did further consolidate the
state's acceptance of NGOs. The additional funding
the conference generated may also eventually exacer-
bate underlying tensions between Cuba's NGOs and
the state.
CECE
When asked about the ongoing role of CECE, a
CEE spokesperson politely sciid, "Some of the older
members of the bureaucracy are not used to thinking
of dvil society as part of the solution to problems,
and we need to change this mentality." The Caritas
representative was more outspoken, remarking,
"CECE gives me the most gray hairs." (CECE was
recently renamed the Ministry for Foreign Invest-
ment and International Cooperation. However, since
Cubans still refer to it as CECE, that term will be
used here.)
A conversation with a high-ranking CECE official
revealed the root of the problem. He stated that
Cuban law requires government and NGO coof)era-
tion pass through the institution "because we have
priorities provided by the government" and are best
able to direct assistance to "Cuba's development
needs." A Cuban NGO seeking foreign funding
must present its proposal to CECE for approval
because "it is hard in Cuba for any organization to
act outside the state area."
The CECE official made several statements which
could have come from an observer seeking to de-
legitimate Cuba's NGOs. He said these organiza-
tions:
• All end up housed within state agencies;
• Are "intermediaries to channel funds into state
institutions;"
• Are necessary to complete the social sector of the
country "but frankly the state can carry out the
projects better;"
• May have a role within the one party system, and
can help create more "diversified organizations that
can respond to new interests" but should not form
part of a dvil sodety "opp>osed to the Revolution."
He remarked that Cuba cdready has a dvil sod-
ety— a revolutionary dvil sodety made up of orgaru-
zations such as the Committees to Defend the Revo-
lution (CDR). These are neighborhood organizations
viewed by external observers as instruments for
Examples of CECE Interventions
A CECE representative dted several instances
in wfaidi his institution's interveniim had
prevented a "mistake" from being made One
VS. NGO wanted to said vacdnes for children,
but only if its own doctors could adminisfer
them. CECE ruled fliat Cuba has more than
OKJugh doctors for that task, and rejected the
application. A pharmaceutical donation was
rejected on the grounds that it did not comply
vrifh Cuba's laws concerning importation of
blood products, designed to prevent the spread
of AIDS. CECE insisted a wheat donation be
tested before distribution. It had such a high
level of fumigation that addttioi\al tests were
requiied for toxidty. An offer of protein cookies
was rqected when CECE determined that for
the value of the donation far more protein could
be imported. A hospital director obtained an
NGO donation, but the resource was deemed in
shorter supply at another hospital, so CECE re-
directed it^ aid. "NGO assistance is not in-
tended as individual charity, but as a contribu-
tion to the whcAe people," said the CECE offi-
daL
An example of problems which occurred
when CECE was circumvented concerned a
donation of prostheses manufacturing equip-
ment A Catholic organization independentiy
arranged for its donaticm by Germany, but when
it was ddivered the designated health center
had no building to acconunodate it Because the
state had not been informed in advance, a
building had not been set aside in the central
plan.
monitoring and reporting citizens' political attitudes.
The CECE offidal advocated widening the CDRs'
activities and lamented that NGOs lead to decentral-
ized control of foreign currency. NGOs mainly
looking for outside assistance, he conduded, are "not
really part of dvil sodety, but they are a useful
channel for funds."
CECE officials seem to believe they still control
every sispect of Cuban NGO activities. This was
largely the case before 1990, but Cuban and foreign
NGOs have gradually chiseled away at CECE's
monopoly. For example, in 1989 CEA had enormous
difficulty getting an NGO donation approved.
"There was no ideological problem because at that
time we were formally assodated with the Party,"
said a representative. "However, they thought that if
a Cuban intellectual organization received foreign
6 • Cubi Briaflng Paptr
96
funds it would automatically take an equivalent
amount away from an agricultural or industrial
activity. They had a zero sum mentality rooted in the
period of cooperation with socialist countries." Now,
such donations are often executed vrithout CECE's
"We are sure ANAP talks to various state
institutions about the projects, but we see
no evidence of interference, so for now
we consider ANAP to be operating as a
genuine NGO," said the Caritas representative.
knowledge.
Similarly, CECE had wanted Caritas to raise cash,
which the state would then use to purchase medicine
abroad. Caritas refused, and won the right to have
tfie actual medical products donated to Caritas itself.
CECE then insisted it be the sole entity to select
recipients. Caritas demanded a say.
A compromise was reached by ihe establishment
of two Caritas-govemment joint commissions, for
education and health. Each involves three represen-
tatives from Caritas, three from the relevant Ministry
and one from CECE. All dedsioris require a unani-
mous vote. CECE had wanted medicine distribution
to go through five levels of bureaucracy, for example.
Caritas oljjected, convinced the commission members
that this would be inefficient, and defeated CECE.
While uncomfortable with the situation, Caritas
goes along with CECE's insistence that state institu-
tions, mamly hospitals, schools and retirement
homes, be the final distributors of donated products.
Caritas ensures that only intended recipients con-
sume the donated products by designating a "sympa-
thetic individual" at each institution to report end-
use. The charit)' seems satisfied that donations are
generally used for their designated purpose. In fact,
the Caritas monitoring network is acquiring such a
solid reputation that other NGOs have asked it to
evaluate end-use of their donations too. Caritas is
reluctant to take on this responsibility.
Caritas has not only defended itself against CECE,
it has also prodded other NGOs to follow suit.
Caritas wished to provide assistance to Cuba's
private peasants by reconstructing an aqueduct. The
government directed it to do so via ANAP, which
Caritas viewed as an illegitin\ate NGO since its
leadership "is selected by the state." However,
Caritas told ANAP it would accept the p>easant
association as a genuine NGO if it acted like one.
"We are very happy with their evolution," Sciid the
Caritas leader. "ANAP has told CECE to stop inter-
fering, and it has not included any Ministry jjerson-
nel in the project."
Emboldened, ANAP then established a direct link
with an Italian NGO for establishment of a seed
bar\k. Officially, the project should have passed
through CECE and the Ministry of Agriculture, but
ANAP fought for autonomy, and won. "We are sure
ANAP talks to various state institutions alx)ut the
projects, but we see no evidence of interference, so
for now we consider ANAP to be operating as a
genuine NGO," said the Caritas representative.
Uruversities have also fought for greater freedom
of action. Before, if an academic wished to travel
abroad on funds provided by a foreign NGO, the
scholar had to t)e a member of the Communist Party
or the Union of Young Communists. The travel
required approval of the scholar's local CDR, the
Ministry of Education, cuid CECE. Any payment for
services performed abroad went to the state. In 1990,
Cuba's uni\'ersities received permission to make
direct contacts with institutions abroad. Forty per-
cent of any earned fee can now remain in the hands
of the scholar, with forty f)ercent going to the univer-
sity, and twenty percent going to the Ministry of
Education. Even though the Ministry of Education
must be "informed" of the pending travel, and any
proposed scholar with a "strongly marked political
record" may be derued travel documents, CECE has
no official role.
On a practical basis, CECE's role in NGO collabo-
ration has been reduced to the following.
• European NGOs generally request a letter from
While the still powerful CECE can distort
aid flows, a resourceful NGO with friends in ttie
right places can frequently evade its grip.
CECE stating that it has no objection to a proposed
project Once that letter is obtained, the foreign NGO
deals with the Cuban NGO directly.
• A Cuban NGO must pay large customs fees on
imported good unless it has a letter from CECE
stating that their end-use is "writhin the priorities of
the country." Pro-Naturaleza, for example, would
have had to pay a 20,000 peso duty to get a donated
Toyota truck out of customs if it had not been able to
obtain a CECE letter of support for the associated
viind-power project. Similarly, the Cuban Red Cross
needed such a letter to extricate a donated ambulance
from customs.
• Any project which involves direct collaboration
with a state enterprise requires prior CECE approval.
Even these rules can be circumvented, however,
especially if another state institution becomes in-
volved. For example, when the Jewish commimity of
Cuba had difficulty convincing CECE to release from
customs a donation of kosher food supplies, the
97
February 1995 • 7
Religious Atf airs Office of the Central Committee
successfully interceded.
If one accepts CECE's definition of NGO activities,
there is no such thing as a genuine NGO in Cuba.
Reality, however, shows c>n outmoded state institu-
tion being challenged by a broad coalition of NGOs,
both of the top-down and bottom-up variety. While
the still powerful CECE can distort aid flows, a
resourceful NGO with friends in the right places can
frequently evade its grip.
INCIDENTS OF INDEPENDENCE
Resistance to CECE interference is iKrt the only
area in which Cuban NGOs have exhibited indejjen-
dence from the state. Occasionally, an NGO's receipt
of foreign funds has been used to strengthen its
bargaining power with the state.
One of the most striking examples concerns the
Grupo para el Desarollo Integral de la Capital, (Group for
the Integrated Development of the Capital). The
Group has not yet been able to register as an NGO
because it is not fully self -financing, and remains
officially connected with the Havana City govern-
ment However, it acts more like an NGO than many
registered organizations.
The Group focuses on urban development, and as
Cuba's resources have contracted it has emphasized
local community self-reliance. As j>art of this effort,
the Group seeks to rehabilitate existing housing. In
contrast, the government puts an emphasis on new
housing construction. In 1993, the Group was sent a
donation of concrete block-making machines by a
European NGO. They were seized upon their arrived
by the local state construction enterprise, which said
they were badly needed for new housing efforts. The
Group resisted, to no avail, and finally informed the
donor. The donor then told the Cuban government it
intended to reclaim the machines, as they were not
being used for their designated purpose. Faced with
this ultimatum, the state construction firm backed
dovkn, and tiuned the machines back over to the
Group.
This represented a small victory for dvil society.
The foreign NGO donation, and associated leverage,
ensured tfiat the Cuban NGO's objectives were
furthered over those of the state. Of course, the state
was not opposed to housing rehabilitation, but
simply believed new construction to be a greater
priority. If the Cuban NGO had been pursuing goals
diametrically opposed to those of the state, the
concession might not have been made.
Pro-Naturaleza demonstrated independence
through its "citizen complaint" feidlity. In 1993, a
resident of Santa Cruz del Norte, about forty kilome-
ters east of Havcuia, reported that sugar mill workers
were cutting downn trees for firewood. When Ave
complainant saw no action from die local authorities,
Pro-Naturaleza accompanied him to talk to the admin-
istrator of the sugar tnill. The adnunistrator felt he
could rwt order workers to cease cutting trees, the
only fuel source available now that cooking gas was
no longer being distributed. Pro-Naturaleza and the
A Pro-Naturaleza spokesperson remarked,
The citizen in his Individual capacity was unable
to get any attention. When we verified his
complaint, and used our leverage with the
authorities, we were able to get a result"
complainant then went to talk to the local Poder
Popular (Popular Power) legislature. The local gov-
ernment agreed to supply die peasants with kerosene
for cooking, and to replace the cut trees. A Pro-
Naturaleza spokesperson remarked, "The citizen in
his individual capacity was unable to get any atten-
tion. When we verified his complaint, and used our
leverage with the authorities, we were able to get a
result"
While this incident showed the positive effect
NGOs can have, similar results are not always pos-
sible. When a citizen complained to Pro-Naturaleza
about a state slaughterhouse polluting a river with
meat by-products, the NGO was only able to verify
that the problem existed. The state enterprise said no
money was available to purchase new equipment
required to eliminate the pollution, and Pro-
Naturaleza accepted the explarutiori.
The Cub;m Red Cross is another NGO embarking
upon a smaU, but important, step towards indejjen-
dence. It asked the government for f)ennission to
distribute a donation of used clothes in youth deten-
tion centers. It received a positive response, and wdll
be allowed to visit the detention centers as part of the
accord. It hopes that through visits to such institu-
tions "mutual confidence mil grow and we will
eventually be able to conduct inspections of adult
jails." The Red Cross already acts as an intermediary
for medicine sent from abroad to Cuban prisoners,
forwarding it to the family members for final deliv-
ery. All prisoners are permitted to use this mecha-
lusm, without regard to the nature of their crime.
While the Red Cross may not succeed in its effort to
observe conditions in adult jails, its access to donated
humanitarian assistance is at least giving it some
leverage in negotiations with the state.
Cuba's Masons present one of the most interesting
examples of NGO independence. They have a long
history of resisting state interference. Spain shut
them down in 1895 because their members were
fighting for independence. They reopened in 1899,
but in 1959 the Castro government again forced them
98
8 • Cuba Briefing Paper
to close their doors. In 1989, membership interest
revived and the organi2ation began to carefully test
the limits of government tolerance.
The Mtisons now number 22330 members in 314
lodges. They were never forced to register with the
Ministry of Justice because they existed prior to the
"tf Cubans do not learn the rudiments of private
enterprise, and Cuban Americans from Miami are
eventually allowed access to the economy, local
entrepreneurs will be swamped. We want to help
avoid that," said a Caritas representative.
formation of the Cuban state. Howe\er, when they
re-drafted their constitution in 1986 they had to wait
for more than one year for Ministry of Justice ap-
proval. The Masons are a fraternal organiz.ition with
mystical associations. Their self-proclaimed objec-
tives are to "combat ignorance," fight against "vice"
including gambling and prostitution, and "inspire
love for humanity" through opposition to "intoler-
ance." Membership is available to all men who
"believe in God and are moral." Women are barred
from the main organization, but can join "Las Hijas de
la Acacia," which currently has about 1000 members.
An applicant can be a member of the Communist
Party, but membersof Cuba's "Rapid Response
Brigades," civilian groups organized to harass dissi-
dents, are barred because "Masons must be tolerant
people." All members are required to avoid political
debate in lodge meetings and to keep the content of
such proceedings secret. Appbcants who have
committed common crimes are not admitted, though
those convicted of "political crimes" are ebgible. The
Masons include several current and past political
prisoners, though the majority of members are "more
or less integrated in the Revolution."
The Masons used to provide student scholarships
as well as run a university, a retirement home, a
library and a charity for poor children. From 1959
until 1993 only the retirement home functioned. The
state provided over half the budget, mainly in the
form of medicine, and Masons were given priority in
admission.
The Masons now wish to reactivate their social
programs, moving carefully due to state monitoring.
They reopened their library to the general public in
May 1994 after hesitating for fear of provoking a state
takeover of their rare book collection. They received
donations of books and magazines from the German,
Brazilian, Argentine embassies, as well as the U.S.
Interests Section. University students have started to
use the facility partly because for some topics the
Masonic library is the only source in all of Cuba.
The organization is now appealing for medicines,
office supplies, and library equipment from Masons
and other NGOs from abroad. The group is also
contemplating running small conferences on social
issues, in\iting diplomats from the U.S. Interests
Section and ex-sodalist countries.
The Catholic Church is also seeking to develop
sodal programs independent of the state. Caritas
organizes visits to the house-bound elderly and has
established a group to help parents raise Dovvms
Syndrome childrea Its most politically intriguing
initiative, however, concerns private entrepreneur-
ship.
VVTien the government legalized certain types of
family-scale private activity in 1993, (technically
called "work on one's own account"), Caritas sought
to aid furniture and shoe repair artisans. It con-
cluded that because the fledgling entrepreneurs were
not grouped in a dvil association, they were unable
to defend themselves against criticism by those who
resented their growing prosperity. Caritas was also
concerned the new businesses could not get raw
materials and had nowhere to turn for managerial
advice. Many foreign NGOs have offered to provide
assistance with these difficulties via Caritas, and the
organization is contemplating setting up a credit,
material supply and advice program to support this
new sector. "If Cubans do not learn the rudiments of
private enterprise, and Cuban Americans from
Miami are eventually allowed access to the economy,
local entrepreneurs vrill be swamped. We want to
help avoid that," said a Caritas representative.
While these incidents of independence are rela-
tively insignificant, each represents an incremental
strengtiiening of the NGO vis a vis the state.
IMPACT ON CIVIL SOCIETY
Some Cuban NGOs, while not explicitly demon-
strating autonomy, have undertaken activities which
expand dvil society or bring an independent light to
bear on a controversijJ topic.
The artistic activities of the Pablo Milanes Founda-
tion frequently focus on Afro-Cuban cultiire, in
contrast to the state's more European emphasis. The
summer 1994 issue of the Foundation's magazine,
Proposiciones, defended the controversial film Alicia
en el Pueblo de las Maravillas (Alice in Wonderland),
which was removed from Cuban cinemas in 1992
due to official discomfort with its critical stance. The
Foundation has also facilitated administrative decen-
tralization. When it initiated coixstruction of a re-
search center on African culture, it resisted pressure
to go through state institutions and directly con-
tracted a group of construction workers, paying them
in pesos and equipment. The central authorities
opposed the arrangement, but an alliance between
99
February 1995 • 9
tfie Foundation, the workers tfiemselves, and the
local authorities finally prevailed.
Of course, the Foundation is not totally free of
government intrusion. Taxes are graduaJly being
introduced in the Cuban system, and the government
wants to establish a 25% levy on foundations. The
Milanfe Foundation, as the sole representative of this
type of organization, is fitting for a 14% tax.
The Yoruba Cultural Association has also strength-
ened civil society. Practitioners of Yoruba ceremo-
nies have long experienced tense relations with the
state. Though Castro legalized the previously pro-
hibited tradition in 1959, until recently practitioners
were officially denied entry into the Cuban Commu-
nist Party. The Associabon admits dissidents,
though like the Masons they are required not to
"bring political problems into meetings."
The group organized two international confer-
ences on Yonjba culture in 1992 and 1994. It had
difficulty organizing the first, in part because the
Ministry of Culture failed to process visas for 160
foreigners who vtished to attend. This deprived the
Association of revenue from conference fees. The
Central Committee's Office of Religious Affairs
intervened in the 1994 confereiKe, and visas were
issued smoothly. The conference profit went into the
Association's hard currency account, to be used to
construct a museum intended as an c«\going source
of both hard currency and peso revenues.
The 1994 conference touched on some sensitive
topics. One presentation explored the "sodo-cultural
significance of la letra del ano." La letra is a prediction
made at the beginning of every year by interpreting
tossed coconut shells. The Association estimates that
three-quarters of Cuba's population places some
credence in its forecast. Consequently, the Cuban
authorities have long attempted to influerKe the
babalawos (Yoruba priests) who conduct tfie ceremo-
nies, to ensure the prediction is neutral or favorable
to the government. The Association has resisted such
political corruption, and has contested "pliant"
babalawos' attempts to register.
While the .Association would appreciate donations,
especially to its museum project, it was the only
Cuban NGO contacted which expressed concern
about the impact ^f donations upon recipient charac-
ter. "We don't w<.nt too much help because we don't
want to become dependent," said the Association's
president in an interview.
Curiously, some NGOs with structures and prac-
tices which classify them as state-front organizations
have occasionally sponsored projects which
strengthen dvil society. For example, the FMC,
headed by the wife of the Minister of Defense, pex-
mits CECE to "coordinate" activities associated with
donations, and "consults" the Communist Party
concerning selection of delegates to the FMC's
periodic congresses. The FMC, with a United Na-
tions Development Program (UNDP) donation, has
also provided courses for women to leam skills
useful for starting their own family-scale private
enterprises. Women have been trained in bicycle
repair, cosmetics, hair styling, computer science,
electrical repair and plumbing. (The UNDP defined
"All the workers knew the hospital was living
from the donations of the Ecumenical Council,"
said the Council's President in an interview.
"They could not do enough to help us..."
the FMC as an NGO, despite its structiire and prac-
tices.)
If one accepts the argument that small scale private
enterprise builds citizen independence, then the FMC
projects have strengthened dvil sodety. However,
the FMC's offidal connections also mean that
women's expanded employment opportunities
simultaneously enhance the image of the state.
Foreign dorutions have cilso increased the prestige
of non-state organizations in the eyes of the general
population. When the grandson of the President of
Cuba's Ecximerucal Coundl was admitted to a rural
hospital, the staff rearted warmly. "All the workers
knew the hospital was living from the donations of
the Eciunerucal Coundl," said the Council's Presi-
dent in an interview. "They could not do enough to
help us. We now have a positive image at the popu-
lar level. This is quite different from what we would
have encountered five years ago."
ADVOCATED STRATEGIES
What strategy a potential foreign donor adopts
regarding interactions with Cuban NGOs partially
depends upon how the donor defines an NGO.
A diplomat posted at the U.S. Interests Section in
Havana remarked, "If an organization includes
people who tcike a position independent from that of
the government, then the organization should be
considered a legitimate NGO." He characterized
think tanks that were never pcui of the Cuban univer-
sity system, such as CEA and CEE, as illegitimate
NGOs. In contrast he considered the faculties of
history and philosophy at the University of Havana
to be "totally independent."
A leader of Cai Itas said that even if an organiza-
tion is led by an individual selected by the state and
receives much of its funding from the state, if it has
its own independent projects which help build dvil
sodety, it is legitimate. If, however, the organization
simply acts as a bridge to send resources to the state.
100
10 • Cuba Briefing Paper
it is illegitimate. A problem with this definibon is
that in one circumstance a given NGO may channel
hmds to the state, and in another it will act indepen-
dently. Some observers have even argued that the
former act may be the price paid for the latter oppor-
tunity.
The Catholic Bishop of Santiago had a chronologi-
cal criteria, remarking that NGOs formed after 1989
were more likely to be genuine than those formed
before 1989. Cuban dissident Gustavo Arcos felt that
a small portion of state support would not jeopardize
NGO status and argued that a group led by a reli-
gious person "is more likely to be a genuine orgaru-
ration."
Those observers who believed that an organization
could have some stale funds and still be a genuine
NGO tended to support a Cuba donati'^n strategy
currently under consideration by an important
coalition of European NGOs. This coalition is con-
templating providing small amoimts of funds to a
wide variety of Cuban NGOs, including those which
appear to simply be fronts for channeling resources
to the state. TTie coalition would then return a year
later and investigate if the resources had been used
to make the recipient more or less independent of the
state. Those which had become more independent
would receive additional financing.
This strategy has the obvious advantage of empiri-
cally testing the impact of donations upon indepen-
dence. However, it has the disad\antage that during
the experimental stage some "front" NGOs would be
financed. Curiously, the Catholic Bishop of Santiago,
who had been quite skeptical about the legitimacy of
Cuba's NGOs, was favorably disposed. He said, "It is
imp>ortant that a space be created m Cuba, a no man's
land where one can do things without having to
declare oneself for or against the state. The more the
no man's land grows, the better. This strateg)' would
expand that space." Gustavo Arcos also supported
the strateg}', commenting "It is worth running the
risk of aiding false NGOs. It would be an investment
in Cuba's future civil society, and in any investment
there is risk."
CONCLUSION
It is up to the individual reader to evaluate the role
of Cuba's NGOs and the wisdom of foreign dona-
tions. This paper's research suggests that while
foreign assistance Ccin help a Cuban NGO break
away from state dependence, it wiil not necessarily
produce that result. Furthermore, the dividing line
between independent and captive NGOs is not
always clearly visible. An NGO which in one in-
stance simply channels funds to the state may, in
another circumstance, genuinely represent an inde-
pendent citizen group. In addition, a foreign dona-
tion to a semi-independent Cuban NGO can para-
doxically both aid the state by permitting the NGO's
state allies to take partial credit for a problem solved,
and strengthen civil society by demonstrating the
power of organized citizens.
If Cuba continues to implement market-oriented
econonnic reforms, it is likely that the accompanying
decentralization will afford greater space for genuine
NGOs, and the net independence-strengthening
effect of foreign donations will increase. However, as
long as the one-part)' system remains intact, Cuban
NGOs wiil have to strike some compromises with the
state.
Are Cuba's NGOs government puppets or seeds of
dviT society? The answer is ideologically and intellec-
tually unsatisfying. They are both, though the latter
characteristic is very gradually growing.
Gillian Gunn is Director of the Georgetown University
Cuba Project. Her book, Cuba m Transition: Options for
U.S. Policy, was published by the Twentieth Century
Fund in October 1993 Her most recent Briefjr.g Paper,
"Balancing Economic Efficiency, Social Conci.i ns and
Political Control," was published in March 1994.
No. 2 May 1993
Back issues of the Georgetown University Cuba Briefing Paper Series are available free of charge for
subscribers, and at a cost of $1250 per issue to non-subscribers.
No. 1 January 1993 The Sociologies Impact of Rising Foreign Investment," by Gillian Gium
The Collapse of The Soviet Union and The Eastern Bloc: Effecis on Cuban Health Care,"
by Kathleen Barrett
"Latin American Perspectives on The Cuban Transition," by Boris Yopo H.
"Cuba's Armed Forces: From Trramph to Survival," by Richard U Millett
"Balancing Economic Ef6dency, Social Concerns and Political Control," by Gillian Guxm
"Dollars, Darkness and Diploirucy: Three Perspectives on Cuba," by Joan M. Caivano,
Lisa Garda, and Janet Hall
No. 3
July 1993
No. 4
September 1993
No. 5
March 1994
No. 6
July 1994
101
By KEVIN FEOARKO
THE HEMISPHERE'S LAST COMMU-
nist begins his evening with a
martini. As he plucks the
quintessentially American re-
freshment from the tray. Fidel
Castro seems surprisin^y mul-
ed. Or perhaps it is simply the
mark of age: he is still a big man, trim and
barrel -chested, but his 68 years are visible
in the skin of his fece, which is approaching
the translucence of old parchment
Taking his visitors on a slow walking
tour of Havana's labyrinthine Palacio de la
Revolucion, Castro gestures toward an
enormous mosaic of birds, animals and
flowers that dominates the reception hall
and quietly begins a story. The artist, he ex-
plains, cast the ceramic tiles at the same
time the architect was completing the
with a group of Time editors and corre-
spondents, the Cuban leader talked of ev-
erything from the perfidy of his former So-
viet allies to the numerous attempts on his
life by the U.S^ joking that he holds an
"Olympic record" in surviving assassina-
tion plots. But in truth he faces now what
may be his gravest challenge yet.
No matter how vehemently he may
deny it— and he does— the Cuban leader
cannot escape the fact that after 36 years of
wily international gamesmanship, he is
stranded on the wrong side of history. The
Soviet patrons who financed his "socialist
paradise" for three decades have coUapsed.
The communist bedrock upon which he
built his edifice of power has proved itself
bankrupt on virtually every continent of
the gtebe. As his own people clamor for a
better life, Cuba's socialist dream appears
to be fading fast
master, however, is a neat trick indeed:
modifying Cuba's communist system
enough to survive but not so much that he
betrays the revolution.
SINCE THE FALL OF THE COMMUNIST BLOC
in 1989 and the loss of Soviet subsidies in
1992. Cuba has suffered through a period
of plummeting prospenty that is euphe-
mistically known as the "special period."
Imports have dried up. Industry has folded
in on itself. Cuba's No. I money earner, the
sugar crop, amounted to less than 4 million
tons this year— a level not seen for decades.
The island's factories are producing at orJy
30% capacity, giving rise to shortages in ev-
erything from clothes and cosmetics to pots
and pans.
Castro has been loath to respond by re-
nouncing his socialist credo in the fashion
of former communists like Boris Yeltsin.
COVER STORIES
•h f^ri"'" •■' ,.^T-.'ii.
Bereft of patrons, desperate to rescue his econom\',
Fidel tiims to an unusual solution: capitalism marke
buildings intenor Through some misun-
derstanding between the two men, the
ceiling was built too low. When it came
time to install the intricately etched tiles,
the top two rows did not fit. The artist nev-
er forgave the architect whose miscalcula-
tions robbed his mosaic of its crown.
Someone asks what became of the ar-
chitect. Was he fired for his mistake? Con-
templating the missing top rows, Castro
shrugs. "No." he deadpans, testing his lis-
teners' sense of humor "He was shot."
Then Castro roars with laughter at his joke,
a parody of hts image as a bloodthirsty dic-
tator And with that, the evening and the
aging commandant suddenly come alive.
In a dinner conversation two weeks ago
DEFIANT Despite his years, Rdel's
personality Is as forceful as ever
Castro remains firmly in power; despite
an economic crisis that gives him no good
options, he does not face the imminent col-
lapse of his regime. His tactical skills, his
powers of endurance and the affection of
many Cubans are intact. There is no orga-
nized opposition to him inside the country.
His army and security forces are large and
efficient Despite spasms of discontent,
like the riot last August that helped unleash
the rafter exodus, there is nothing like a
Tiananmen brewing. And unlike many
similar leaders, he has surrounded himself
not with cronies and coat holders but with
the best and the brightest his country has to
offer. He may be constrained by a terrible
economy and his enduring faith in the
failed ideology that produced it but Fidel
is not finished yet The trick he is trying to
But to salvage what remains of his econo-
my, he has been forced to adapt impKJsing
some measures that are anathema to his
beliefs. In 1990, for example, Castro began
soliciting foreign investment. Thou^ he
continues to declare that Cuba will never
sell off its state-run companies, he has
opened up strategic areas such as telecom-
munications, oil exploration and mining to
joint ventures. The latest shocker: condo-
miniums for sale to foreigners, with titillat-
ing hints that even land ownership may
soon be possible. Drawn by the promise of
pent-up demand and the conviction that
in the words of a confidential Bntish report
to investors, the reform process is "cohe-
sive, systematic and unstoppable." Canadi-
an, Mexican and European businessmen
are taking the gamble.
TIME. FEBRUARY 20. 1995
51
BOSTON PUBLIC LIBRARY
102
3 9999 05983 799 5
Time, February 20, 1995
By the end of 1994, Cuba had signed
deals for 185 foreign joint ventures. The
Spaniards and Germans were among the
first to invest in tourism, which grew at an
annual rate of 17% between 1991 and 1993;
now interest is rising in Canada and across
Europe. Meanwhile, the Monterrey-based
magnate Javier Carza-Calderon of Mexi-
co's Grupo Domos bought up half the Cu-
ban phone system in a $1.5 billion deal last
year. June saw the arrival of Cuba's first
foreign financial institution, the Dutch
INC Bank. British companies are looking
into oil exploration-even though France's
giant Total has recently pulled out-and
Unilever, the British-Dutch giant, pro-
duces toiletries and detergents for the do-
mestic Cuban market. Italy's Benetton
now boasts five retail stores on the island,
and plans three more by the end of 1996,
while Japanese automakers Mitsubishi and
Nissan are now sold in flavana.
Even Israel, the only counhy to side
with the U.S. in a recent United Nations
vote condemning the American ti^de em-
bargo, does business with Cuba; Israeli
firms are second only to Mexican compa-
nies in textile investinents. These days, the
palm-lined patio at the elegant La Ferminia
restaurant in suburban Flores is jammed
with foreign businessmen power-lunching
with government ministers and discreetly
whispering into their ceDular phones.
All of which has made for a singular
irony; the only people left on the sidelines
are the Americans. According to a White
House source, the Clinton Administration
doesn't feel the changes in Cuba have
been substantial enough to justify a diplo-
matic rapprochement, while the conser-
vative Republicans now in control of the
U.S. Congress-pressured by Miami's
community of Cuban Americans— are
bent on keeping the door to Cuba firmly
closed to U.S. companies. Just last week
Senate Foreign Relations Committee
chairman Jesse Helms introduced legisla-
tion that would tighten the 33-year-old
economic embargo even more.
"Let me be clear," said Helms.
"Whether Castro leaves Cuba in a vertical
or horizontal position is up to him and the
Cuban people. But he must and will leave
Cuba."
NEVERTHELESS, CASTRO HAS ALSO TAKEN A
number of other steps to ensure that this
will not happen any time soon. In the dol-
drums of 1993 he legalized trade in dol-
lars, widened opportunities for self-em-
ployment and turned over state farms to
cooperatives or families. When food short-
ages became critical last fall, farmers were
finally permitted to sell some of their pro-
duce on the open market.
Regardless of how disagreeable Fidel's
apparatchiks may find these measures,
they have produced real change. The trad-
ing ignited by newly legalized dollars has
been fueling the economy for the past 18
months. Despite Clinton's move last Au-
gust to diminish the remittances sent by
Cuban Americans to their families back on
the island, millions manage to get
through. Last year Cubans spent nearly a
billion dollars buying imported consumer
goods in 600 state-run stores across the
island.
Moreover, since the opening of the
farmer's markets last October, there has
been a flurry of economic activity even
within the moribund peso-driven sector of
the economy. One such place is the Maria-
nao farmer's market, in a drab workers'
suburb of Havana, where customers seem
to be complaining about high prices— but
are still buying. A vendor named Jorge is
doing a brisk trade in his homemade mari-
nade of vinegar, garlic, onion, salt and
cumin. "I used to teach language at the
university," he explains. "But I was mak-
ing only 325 pesos a month. Life is very ex-
pensive, so I have become a merchant."
His entrepreneurial eflForts earn him 1,000
pesos a day.
IN GENERAL, CUBANS NOW SENSE THATTHE
country has turned a crucial financial cor-
ner since the black days of 1993, when the
worst effects of the economic collapse
were being felt. "For a while, even among
revolutionaries, there was a depressed
mood," admits National Assembly Presi-
dent Ricardo Alarcon. "Now that's over.
People realize there is a way out."
THE WAY Oirr IS PROVINC A DimcULT
road for Castro's most loyal minions, since
it requires discarding-temporarily, thev
assure themselves-several pillars of Cu-
ba's socialist dogma. The old Central
Planning Board, which piloted the state-
directed economy, has been abolished.
Last year the government claims to have
cut the budget deficit 72% by slashing its
bloated work force, eliminating dozens of
subsidies and imposing price increases on
such things as cigars, alcohol and electinc-
ity. These measures do not sit well with
party stalwarts. "We made these changes
not because we like it, but because we had
to," laments Communist Party official Jose
Arbesii. "The point of no return would be
to put all production in private hands. But
we are not going to do it."
Cuban Americans and conservative
politicians in Washington insist that keep-
103
Time, February 20, 1995
ing the trade embargo firmly in place will
hasten Castro's demise. But this line of
thinking ignores the bedrock of loyalty
that many ordinary Cubans feel for Cas-
tro, whose revolution has provided every
adult citizen with free health care, educa-
tion and a social-welfare net. Castro has
long profited by laying the blame for Cu-
ba's economic troubles on the U.S. Re-
sentment of the embargo— particularly
when U.S. sanctions against Vietnam have
been lifted— only reinforces a fierce pride.
Cubans are nationalists even more than
they are socialists or incipient capitalists,
and pressuring them from the outside
makes even more unlikely the full-scale
rebellion that Cuban Americans would
like to ignite.
The biggest impact of the U.S. eco-
nomic restrictions is the damage they in-
flict on American businesses. For many
foreign firms now attempting to establish
a foothold in Cuba, the embargo repre-
sents a golden opportunity to do business
without U.S. competition. One example is
mining. By the end of last year, the Cubans
had signed joint-venture exploration
deals for nickel, gold, silver, copper, lead
and zinc with a number of Canadian and
Australian companies. "A company of our
ilk would never have the opportunity if we
had to compete with American capital,"
said Frank Smeenk, president of Canada's
MacDonald Mines Exploration Ltd., as he
celebrated the good news on drilling re-
sults with a Cuban minister.
While Smeenk and others make mon-
ey, American businessmen can only sit
back and salivate. American economists
estimate that when the embargo is finally
lifted, U.S. business could total as much as
$1 billion in the first year alone. "The peo-
ple in Miami have the best intentions, but
the time has come to change," says
Dwayne Andreas, head of Archer Daniels
Midland. "The U.S. is missing hundreds of
business opportunities, and well probably
be locked out of Cuba for half a century."
It is a testament to the size of the prize
that, despite the risks, an increasing num-
ber of Americans are sneaking into Havana
with the hope of working out arrangements
uhder the table. According to Cuba's Min-
istry of Foreign Investment and Economic
Cfooperation, representatives of more than
IJOO U.S. corporations have visited the is-
liand in the past year with hopes of doing
business in a postembargo Cuba. At least
26 American firms signed nonbinding let-
ters of intent in tourism, medicine and bio-
technology. "We're upset that we're not
getting a piece of the action," declares a
frustrated investor from Arizona who was
spotted in the Hotel Nacional investigating
opportunities in marinas and real estate.
"Why not us?"
Eager to help pave the way, a handful of
savvy consultants from New York City,
Washington and Miami jet in monthly to
maintain relations with Cuban officials for
American companies shy of openly violat-
ing U.S. law. Other firms simply take the
risk themselves. Executives from such
companies as Hyatt, Marriott, Merck and
Eli LiDy have been seen around Havana.
One Western diplomat in Cuba laughs at
the increasingly flagrant violations, even
by exiles in Miami who have spent 30 years
condemning Castro. The U.S. embargo is
a sieve," he says. "Even Cuban Americans
are coming here to look at business
opportunities."
NO ONE, EXCEPT PERHAPS THOSE IN CAS-
tro's inner circle, knows how far the old rev-
olutionary is prepared to allow economic
changes to go. Insiders say there is a lack of
consensus in the government The guiding
philosophy seems to be to avoid any move
that might threaten the social order and the
poUtical status quo. Castro appears resistant
to any but the most modest concessions, and
while a well-honed instinct for survival may
drive him and his closest associates further
into dalh'ance with ftee enterprise, they
have not shown an intellectual acceptance
of the superiority of market forces. Without
an independent source of income, the Cu-
ban regime will have to continue grudgingly
to open up the economy, but the moves will
be fitful and reverses inevitable.
Yet even as he flirts with capitalism, Cas-
tro continues to insist that communism is
alive and well in Cuba, "fm still a commu-
nisC he declared, w^ien asked if he thou^t
his experiment with Marx had been a fail-
ure. "I am proud to be one. Why do I have to
renege on my principles? I have no choice
but to continue being a communist" It is an
intrepid defense of an idea whose time has
passed. -Rapofttd by Cathy Boolh/HavanM,wlth
otfwrburaaia
ISBN 0-16-047156-7
9'780160"471568
90000
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