WSJ: When Helping ‘the Cuban People’ Means Bankrolling the Castros

Wednesday, June 24, 2015
By Mauricio Claver-Carone in The Wall Street Journal:

When Helping ‘the Cuban People’ Means Bankrolling the Castros

U.S. legislation to ease sanctions will instead primarily benefit Havana’s state-owned monopolies.

Three bills full of lofty but disingenuous rhetoric about “supporting the Cuban people” were recently filed in the U.S. Senate to ease sanctions. To have an honest debate about sanctions on Cuba, it’s important to understand how that totalitarian regime conducts business. The bills primarily benefit three monopolies in Cuba, all owned and operated by the Cuban government: Etecsa, Alimport and Gaesa.

Let’s look at each piece of legislation:

The Cuba Digital and Telecommunications Advancement Act. This bill’s purpose is to provide millions of U.S. dollars to develop telecom infrastructure for the Empresa de Telecomunicaciones de Cuba, S.A. (Etecsa), owned by the Cuban government. The company works with the secret police of Cuba’s President Raúl Castro, tapping phone lines, monitoring conversations, censoring the Internet and persecuting Cubans discovered with homemade satellite dishes.

Etecsa is very good at what it does, according to a recent report by Freedom House, a nongovernmental organization based in Washington, D.C., that ranks Cuba, China, Iran and Syria as the world’s most Internet-repressive governments.

The cosponsors of the Cuba Digital and Telecommunications Advancement Act, including New Mexico Democratic Sen. Tom Udall and Arizona Republican Sen. Jeff Flake, argue that foreign investment in Etecsa will lead to greater Internet connectivity for the Cuban people. Apparently they are unaware that Telecom Italia owned a 27% stake in Etecsa from 1995-2011. Or that America’s Sprint Corporation provided Etecsa with its first Internet connection in 1996, and that France’s Alcatel-Lucent laid new fiber optic cable for Etecsa in 2012.

None of those “foreign investments” improved connectivity for the Cuban people. What the investments did was improve the Cuban government’s ability to control its people.

Etecsa already provides Internet service in Cuba. The problem is that the Cuban government only allows foreigners and its own apparatchiks to access the Internet. So this Senate bill purports to solve a problem that doesn’t exist and offers nothing to change the real problem.

The Agricultural Export Expansion Act. This bill seeks to provide lines of credit to the Empresa Cubana Importadora de Alimentos, S.A. (Alimport), the Castro brothers’ import monopoly. This government organ is already well supplied by U.S. taxpayers. Since Congress passed the 2000 Trade Sanctions Reform and Export Enhancement Act, nearly $4 billion in U.S. agricultural products have been sold to Cuba. The only buyer was Alimport. As the U.S. Agriculture Department reports: “The key difference in exporting to Cuba, compared with other countries in the region, is that all U.S. agricultural exports must be channeled through one Cuban government agency, ALIMPORT.”

One result is that little of the food and medicine that Cuba imports from the U.S. ever makes it to stores where Cubans shop. It isn’t available on ration cards either. Instead, agricultural imports from the U.S. end up on the tables of Cuban government-owned tourist resorts and in government-owned stores that accept only “hard currencies,” such as dollars or euros.

Experience demonstrates that exporting to Cuba is not about assisting small and midsize farmers on the island, as the bill’s cosponsors, including Sens. Heidi Heitkamp, a North Dakota Democrat, and John Boozman, an Arizona Republican, would like their legislative colleagues to believe. It’s about financing the monopoly run by the Castros.

The Freedom to Travel to Cuba Act is a billion-dollar windfall for Grupo de Administracion Empresarial, S.A.—the most notorious and vile of the Cuban-government monopolies.

Gaesa is the holding company of Cuba’s Ministry of the Revolutionary Armed Forces, Cuba’s military. It is the dominant driving force of the island’s economy. Established in the 1990s by Raúl Castro, who succeeded his brother Fidel as Cuba’s leader, it controls tourism companies, ranging from the very profitable Gaviota S.A., which runs Cuba’s hotels, restaurants, car rentals and nightclubs, to TRD Caribe S.A., which runs the island’s retail stores. Gaesa controls virtually all economic transactions in Cuba and is run by Raúl Castro’s son-in-law, Gen. Luis Alberto Rodríguez López-Callejas.

Arizona Sen. Jeff Flake, one of the cosponsors of the Gaesa bill along with Vermont Sen. Patrick Leahy and others, says that it allows Americans to travel to Cuba. But that is misleading. Any American today can travel to Cuba under one of the 12 broad categories of purposeful travel. What Mr. Flake proposes to lift are restrictions imposed in 2000—Trade Sanctions Reform and Export Enhancement Act—on tourism-related transactions with Gaesa. Those restrictions are there because tourism is to Cuba’s military and security forces what oil is to Iran’s military.

Spending by Canadian, European and Latin American tourists enjoying Cuba’s all-inclusive beach resorts sustains the government’s military and security services. It finances the government’s operations to share intelligence with terrorist groups and rogue regimes and promote violence to subvert democracy in Venezuela—and finances a government that has been caught twice in the past two years smuggling heavy weaponry to the world’s worst violators, including North Korea. Nonetheless, Mr. Flake’s bill effectually earmarks millions in U.S. tourist dollars for Gaesa.

U.S. support for Cuba’s government monopolies can only strength that brutal regime’s totalitarian grip. The Cuban people know it, and U.S. senators ought to be able to figure it out.

Mr. Claver-Carone, an attorney, is a director of the U.S.-Cuba Democracy PAC and host of the foreign-policy show “From Washington al Mundo” on SiriusXM’s Channel 153.