Chairman Menendez to Panama: Cuba's Participation Would Undermine Summit

Wednesday, October 1, 2014
Chairman Menendez Writes Panamanian President to Express Dismay Over Intent to Invite Cuba to 2015 Summit of the Americas

U.S. Senator Robert Menendez (D-NJ), Chairman of the Senate Foreign Relations Committee, sent the following letter to Panamanian President Juan Carlos Varela regarding his intent to invite Cuba to the April 2015 Summit of the Americas.

The Honorable Juan Carlos Varela
Palacio de las Garzas
Eloy Alfaro Avenue
Panama City, Panama

Dear Mr. President:

Please allow me to express my congratulations on your election as the President of the Republic of Panama. As Chairman of the Senate Foreign Relations Committee, I look forward to working with you and your administration to advance the historic relationship shared by our countries.

Your presidency comes at a moment of great opportunity for Panama, one marked by important economic growth and the opening of the long-awaited expansion of the Panama Canal. In this context, I wish you the utmost success as you set forth an agenda of inclusive development that promotes the security, prosperity, and social well-being of all Panamanians.

I also must take this opportunity to express my dismay over your administration’s intent to invite the Government of Cuba to attend the Seventh Summit of the Americas in Panama in the upcoming year. Cuba’s participation would undermine the spirit and authority of the Summit of the Americas as a space to reaffirm the principles enshrined on the Charter of the United Nations, the Charter of the Organization of American States, and the Inter-American Democratic Charter, as well as commitments made at past Summits.

At the Third Summit of the Americas in 2001, the democratically-elected leaders assembled in Quebec, Canada stated that “the maintenance and strengthening of the rule of law and strict respect for the democratic system are […] an essential condition of our presence at this and future Summits. Consequently, any unconstitutional alteration or interruption of the democratic order in a state of the Hemisphere constitutes an insurmountable obstacle to the participation of that state's government in the Summit of the Americas process.”

The Government of Cuba remains this hemisphere’s must enduring dictatorship, having deprived the people of Cuba of democratic rule for more than a half century. To this day, the Cuban Government continues to deny its citizens their most fundamental political and human rights, and criminalizes all forms of free expression, free association, and dissent in the country. The Government of Cuba fails to meet even the most minimal standard of democratic governance required for its participation at the Summit of the Americas.

I am particularly surprised by the intention to extend an invitation to the Government of Cuba, just one year after the Governments of North Korea and Cuba colluded in an attempt to smuggle arms and military equipment through the Panama Canal. That incident constituted the single largest violation of U.N. Security Council Resolution 1718 since its adoption in 2006.

In closing, I remain committed to strengthening the partnership between the U.S. and Panama. However, I am gravely concerned that inviting the Government of Cuba to the next Summit of the Americas sends the wrong message about the consolidation of democracy in the Americas, will dramatically weaken the democratic credentials of the premier meeting of heads of state in the hemisphere, and ultimately will undermine the validity of the Summits’ declarations.

Sincerely,

U.S. Sen. Robert Menendez

Canadian Taxpayers Flip the Bill for Business (Confiscations) With Cuba's Regime

By now, we're all familiar with the 15-year prison term the Cuban regime recently handed to Canadian businessman, Cy Tokmakjian, who was one of Castro's biggest business partners.

Moreover, that the Castro regime confiscated over $100 million worth of the company's assets in Cuba.

And finally, that Cuba's military generals asked for an additional $55 million ransom to release Tokmakjian.

Today's news, which should come as no surprise, is that all of Tokmakjian's business in Cuba was financed and guaranteed by the Canadian government -- to the tune of nearly $400 million.

And now, Canada's taxpayers are stuck with the hefty bill.

Note: Canada's credit agency provided the financing directly to Castro's regime.

That's quite a deal -- for Castro.

From Reuters:

Canada agency financed C$418 million in Cuba deals for Tokmakjian firm

A little-known Canadian federal agency helped put in place a total of $418 million ($373 million) worth of Cuban deals for a firm headed by Cy Tokmakjian, the businessman jailed for corruption in Havana last week.

The Canadian Commercial Corporation (CCC) acts as Canada's international contracting and procurement agency, helping Canadian firms bid for procurement contracts with foreign governments.

When acting as a prime contractor the CCC helps mitigate risks by signing a contract with a foreign government and then a separate contract with a Canadian supplier. This ensures that a company does not need to worry about being paid as long as it fulfills the term of the contract.

In Cuba, the CCC helped Canadian businessmen like Tokmakjian by providing trade financing to Cuban government buyers.

Must-Read: Risky Business in Cuba

Tuesday, September 30, 2014
Column by Peter Foster in Canada's Financial Post:

Risky business in Cuba

After forty years of ‘constructive engagement’ with Cuba, government-backed Canadian investment has effectively propped up the regime

The Canadian government has for three years asked the Cuban authorities either to lay charges against Canadian businessman Cy Tokmakjian or release him. Unfortunately they got their wish last week, when the 74-year old was tried and sentenced behind closed doors to fifteen years in jail.

The conviction appears outrageous, as does the sentencing for shorter periods of two of his executives, Claudio Vetere and Marco Puche. But the affair raises many questions. Did Mr. Tokmakjian not realize he was operating in a corrupt system that could turn on him at any time? Did he see himself as an agent of change? Was he naïve? To what degree were his Cuban operations financed by the Canadian government? Is such financing defensible?

Businessmen should be allowed to risk their capital wherever they want. Investment in Cuba, as in China and Russia, is also often presented as a subtle way of undermining repressive regimes, but it is clear now, after forty years of “constructive engagement” that government-backed Canadian investment has effectively propped up the regime.

The days have long gone when the Cuban regime can blame the U.S. embargo for the endlessly dismal state of its economy, but the loosening of the U.S. embargo has resulted in as little reform as has investment from other countries.

Tokmakjian Group is a classic story of Canadian immigrant success. Starting with servicing diesel engines, Mr. Tokmakjian, an Armenian immigrant, moved into transit and shuttle bus services both in Canada and abroad. In Cuba, where he set up shop more than 20 years ago, his company distributed Hyundai vehicles and equipment, along with other types of mining equipment.

Mr. Tokmakjian was swept up in a move against “corruption” when Raul Castro took over from his ailing brother Fidel in 2011.

Earlier this year, another Canadian businessman, Sarkis Yacoubian, who was arrested before Mr. Tokmakjian, was expelled from Cuba one year into a nine year sentence. The circumstances are unclear but Mr. Yacoubian reportedly “cooperated” with the Cuban authorities, and may not only have played a part in fingering Mr. Tokmakjian, but in unleashing the whole anti-corruption campaign.

We assume that there is lots of quiet diplomacy taking place on Mr. Tokmakjian’s behalf. According to government spokesman John Babcock, “We continue to follow this case closely and remain actively engaged at senior levels. Consular officials continue to provide assistance to Mr. Tokmakjian and his family.” Somewhat bland, but grandstanding can be dangerous when one of your nationals is in jail under a barbaric regime. That makes it all the more puzzling why Canada remains one of that barbaric regime’s major aid donors and trading partners.

Some still naively – or self-interestedly – claim that Canadians have an “advantage” in Cuba because they are not American. That apparently includes Marc Whittingham, the head of the Canadian Commercial Corp., a shadowy Crown Corporation that specializes in state-to-state deals in areas such as armaments, and which may have provided finance to Tokmakjian Group. He reportedly told a Cuban audience that Canada had also been invaded by the U.S., in 1812, and had responded by burning down the White House. In other words, “We’re all anti-American here.”

The section on Cuba on the website of the Department of Foreign Affairs, Trade and Development is a masterpiece of pussyfooting. It notes that “The Government of Cuba has acknowledged that its centralized political structure poses a barrier to economic productivity.” I guess “centralized political structure” is more diplomatic than “corrupt dictatorship.”

According to the document, “Cuba needs assistance in developing modern business practices and increasing accountability and transparency of public institutions.” In fact, Havana has zero interest in increasing accountability and transparency, and modern business practices require the rule of law. The Tokmakjian Group’s mission statement stresses “respect, honesty and integrity,” three virtues that could not be more antithetical to a regime whose only priority is to maintain power.

It is almost sickening to read the Canadian government congratulate the island Gulag for meeting targets on “universal primary education; promoting gender equality and empowering women; and reducing child mortality.” Even worse is the declaration that “The country is on track to meet the targets for eradicating extreme poverty and hunger” when it is the Castro regime that has created extreme poverty and hunger in the first place.

The most obvious explanation for arresting Mr. Tokmakjian was simply to seize his business. Communist regimes have never needed lessons in theft, but in this case Vladimir Putin’s expropriation of Yukos might have been a model, since “Putinismo” is seen in Cuba as a possible transition from the disaster of Communism to crony statism. Clearly the fact that an international arbitration court ordered Russia to pay former Yukos shareholders $50 billion didn’t deter Cuba. Nevertheless, Tokmakjian Group has launched a $200 million lawsuit against the Cuban regime.

Mr. Putin may have thoughts about reestablishing the links with Cuba that were severed when the Soviet empire collapsed. Venezuela’s Hugo Chavez, for whom Fidel was a role model, eventually took up the slack of subsidizing the Cuban economy with cheap oil, but Venezuela too is now a basket case, so the return of Russia may be timely if the Castros are to continue their geriatric chokehold.

None of this is good news for foreign investors, for whom Mr. Tokmakjian’s experience is a warning. Let’s hope quiet diplomacy works soon in his case, but let’s also stop taxpayer backing for Cuban trade and investment. And let’s hope all those Canadian tourists who flock to Cuba every year give a passing thought to what their dollars are supporting.

Quote of the Day: We Want to be Free, Not Slaves #UmbrellaRevolution

It's high time that we really showed that we want to be free and not to be slaves ... we must unite together.
-- Cardinal Joseph Zen, 82, former Catholic Bishop of Hong Kong, who joined this week's protests against China's authoritarian rule, Reuters, 9/30/14.

Standing With Hong Kong's #UmbrellaRevolution

Our thoughts, prayers, admiration and solidarity are with the courageous democracy activists of Hong Kong's Umbrella Revolution.

Cuba's Military Generals at Center of Business Shakedown

Cuba's military generals control the island's economy.

The militarization of Cuba's economy began in the 1990's under then-Defense Minister, General Raul Castro.

That's Raul's real "reform".

The latest shakedown of foreign businessmen in Cuba is simply a further distribution of the "piñata" among Raul's family, friends and loyalists.

These are the military monopolists that some want the U.S. to illogically lift sanctions and do business with -- in the hope of some miraculous "trickle-down" effect (at best).

Yet, by definition and practice, these military monopolists are the very antithesis of "trickle-down".

If the U.S. were to lift sanctions, it'd simply be handing Raul and his military cohorts the biggest pie in the world to divvy up among themselves.

Something akin to the Russian mafia -- just 90 miles away.

From Canada's National Post:

Canadian businessman’s imprisonment in Cuba ‘very sinister,’ lawyer says

When lawyers for a Canadian businessman imprisoned in Cuba on charges of economic crimes against the state, taxation and bribery went to Havana to meet with tax officials over the allegations, they were taken to a state security office and told to meet with military generals instead, a company official said.

“They were pretty well intimidated and told we’re taking all of your assets and in addition you’re going have to send another $55-million down before Cy [Tokmakjian] would be released,” said Lee Hacker, a vice-president of the successful transportation company that Mr. Tokmakjian founded.

“There is something very sinister going on in Cuba,” he said.

Castro Sought $55 Million Ransom for Release of Canadian Businessman

Sadly, some terrorist tactics never die.

From Reuters:

Cuba asked for $55 mln, assets to release Canadian CEO

Cuba offered to free jailed Canadian executive Cy Tokmakjian in return for $55 million and company assets, his company said on Monday, but the deal fell through because the firm didn't have the money and the businessman wanted to clear his name.

Tokmakjian, 74, founder and chief executive of transportation firm Tokmakjian Group, was sentenced to 15 years in prison on Friday after being convicted of bribery and other economic charges in a case that lawyers and diplomats called a chilling development for potential foreign investors.

After Tokmakjian was detained in 2011, company lawyers met with Cuban officials about the case, said Lee Hacker, the Tokmakjian Group's vice-president for finance.

"They were... told 'We're taking all your assets and in addition you're going to have to send another $55 million down before Cy will be released,'" Hacker said.

It was the first time the company had revealed the Cuban demand, which could not be immediately confirmed with authorities in Havana. Tokmakjian's case has been shrouded in secrecy - he was held for two and a half years before being charged.

Hacker said he was told by the company's lawyers that there was no basis for the $55 million figure. "It was just a number that was thrown out," he told Reuters.

Cuba seized about $100 million worth of the firm's assets on the island and also sent two Tokmakjian aides to prison.

Quote of the Day: A Dangerous Condition for Doing Business in Cuba

'Do as I say, but not as I do.' That seems to be the message being sent by these generals and lieutenant colonels turned professional business men. Not having a military rank is a dangerous condition for doing business on the island.
-- Ignacio Varona, Cuban independent journalist, on the case of imprisoned Canadian businessman Cy Tokmajkian, 14ymedio, 9/30/14