British fund executives go on trial in Cuba
By Marc Frank
From Reuters
HAVANA – Dozens of Cuban officials and businessmen have reportedly been arrested, tried and sentenced in the anti-corruption sweep.
A number of other foreigners and Cubans who worked for the three foreign companies remain free but cannot leave the island because they are considered witnesses in the cases.
Cuban officials and lawyers for the defendants could not be reached for comment.
Cuba’s state-run media has not yet reported the trials, nor mentioned the arrests and crackdown on foreign trade.
A systemic problem
“If the Cuban government intends that such penalties serve as effective deterrents to corruption, and not as deterrents to legitimate foreign investment, it should clarify the precise nature of the alleged infractions and make the entire legal process more transparent,” said Richard Feinberg, a non-resident senior fellow of the Washington-based Brookings Institution and author of a number of studies on Cuba’s economy.
The arrests were unprecedented for Cuba, where foreign businessmen suspected of corruption are usually deported, and are viewed as a measure of President Castro’s determination to clean up a vice he views as a threat to Cuba’s socialist system.
But repression alone will do little, many observers believe.
“Real change would mean not only pursuing enforcement actions but also coming up with meaningful internal controls for Cuban officials with discretion in procurement and the licensing of business activity,” said Jose Gabilondo, associate professor of law at Florida International University in Miami.
“These officials are paid little and face enormous temptation to cut corners for the sake of themselves and their families,” he said.
Coral Capital, registered in the British Virgin Islands in 1999, was best known in Cuba as the joint venture partner in Havana’s upscale Saratoga Hotel and another hotel complex on the resort key of Cayo Coco. It had plans to build golf courses and related real estate developments near Havana, for which it had begun raising equity capital.
The fund diversified into trade financing and importing heavy equipment and other merchandise and this, rather than its real estate ventures, may have led to its problems, foreign business sources said.
The company represented various international brands in Cuba, among them Liebherr Earth Moving, Yamaha Motor Corporation and Peugeot Motorcycles, according to its now defunct Internet site.
The site said Coral Capital had invested some $75 million in Cuba, with more than $1 billion of projects in the works.
