Post-Marambio Era

A week ago Max Marambio, alias El Guatón – The Fatso – was due to come to this Island, appear before a court, explain certain matters. The owner of the joint-venture company Río Zaza, however, has preferred the protection of his Chilean homeland, as he is an expert – like no one else – in the unpredictable results of putting oneself in the hands of Cuban justice. Accused of bribery, embezzlement, forgery of bank documents and fraud, he who was once the favored protégé of the Maximum Leader just received – instead of pats on the back – a warrant for his arrest.

I miss Marambio even without having known him, because with his departure the number of families on this Island who can drink a glass of milk whenever they like has been greatly reduced. The informal market that supplied itself from his warehouses collapsed as soon as he left, and the underground networks that diverted his products either dried up or doubled their prices. When the lieutenant colonel turned manager escaped to Santiago de Chile, we realized the role that this man – forged at the right hand of power – played in what we put on our tables. He didn’t do it for altruism, clearly, but at least he diversified the boring local production and managed to make a tetrapack something that was not a collector’s item.

Marambio’s fortune was amassed where Cubans cannot invest a single centavo: in those joint venture companies opened to those with foreign passports but not to those with national ones. His personal history was a preview of what we will see, a prediction of how ranking military will transform themselves – dressed in suits and ties – into ideology-free entrepreneurs. Despite his agility with yesterday’s weapons – a Kalashnikov, slogans, Marxist dogma – we remember him for other strategies: bank accounts, trading favors, investments. His former comrades in the struggle will show him no clemency when judging him in court, because the paunchy Chilean ended up turning himself into a commercial competitor, not to mention that he knows too many stories – secret ones – about them.


14 thoughts on “Post-Marambio Era

  1. Cato @ Liberty:Great New Blog in English by Cubans in Cuba-Posted by Ian Vasquez

    During the past several years, the growth of the Cuban dissident blogger movement has become a major irritant to the Cuban regime. Some bloggers, such as Yoani Sanchez, are becoming well known around the world. Her blog has even been available in English for a few years. I’ve written about her here and Cato published a recent paper by her.

    The Cuban blogosphere is vibrant and diverse, but has been available almost exclusively in Spanish. Now, a new English blog site, Translating Cuba, is posting the thoughts of leading Cuban bloggers in Cuba, including Sanchez and recent hunger striker Guillermo Fariñas. Contributors to the site don’t share identical points of view, but they hope that “the voices on this site will mirror the free, open and plural society we all know that Cuba is ultimately destined to be.”

  2. REUTERS U.K. : “Mules” stretch limits of U.S. trade embargo on Cuba-
    By Esteban Israel-Aug 11, 2010

    It all starts with a description given over a mobile phone: “Look for a woman with long blonde hair, blue jeans, silver heels and a black T-shirt arriving on the next flight from Miami.”
    When the woman emerges from Havana’s international airport pushing a cart loaded with bulky black duffel bags, she is greeted effusively by a man she has never seen before.

    “They hug as if they had known each other all their lives. Once in the parking lot, the woman hands over the bags and says goodbye,” says Yanet, a Miami resident.

    She is describing the tactics of growing numbers of human “mules” who regularly travel between the United States and Cuba carrying in their bags loads of clothes, food, consumer goods, electrical appliances and millions of U.S. dollars to the communist-ruled Caribbean island. They deliver the goods for a fee or free ticket, often to complete strangers.

    “The system works beautifully,” said Yanet, making her second trip as a “mule” to Havana in less than a month.

    “But you have to stage a little show because you never know who may be watching,” she added.

    This burgeoning informal commerce between two neighbors whose governments have maintained a Cold War-era enmity for half a century belies the 48-year-old U.S. trade embargo against Cuba — but also reflects recent relaxations of it.

    Since 1962, the U.S. embargo’s intended aim has been to force the Cuban government to abandon its communist rule.

    But informal trafficking of cash and goods to Cuba has boomed since President Barack Obama last year lifted restrictions on Cuban Americans traveling to their homeland and significantly increased the amount of money they could take.

    His calibrated measures, part of a process of promoting “people-to-people” contacts Washington believes can foster political change in Cuba, also increased the type of consumer items that could be included in gift parcels for Cuba.

    Also authorized under a telecoms initiative was the export or re-export to Cuba by visitors of donated personal telecoms devices, such as mobile phones, computers and software.

    Travelers to Havana were already able to bring parcels of food and medicines, and the embargo has for some years allowed the export of U.S. farm products to the island.


    On the U.S. side, from where daily two-way charter flights ferry more and more Cuban Americans to Cuba on family visits, there is significant tolerance for passengers to load up with consumer goods.

    But the mules also need to outsmart tight Cuban customs restrictions, where taxes are levied for baggage over certain limits and luggage contents are frequently inspected.

    Chronic scarcity and the high prices of the narrow range of imported goods that are sold in Cuba’s state-run dollar stores have prompted thousands of Cubans to use the human “mules” to import everything from clothing to toiletries, electronics and money.

    John Kavulich, who monitors commerce between the two nations at the New York-based U.S.-Cuba Trade and Economic Council, says it is impossible to accurately quantify this informal trade.

    “But more travelers means more money and more expenditure in Cuba,” he said.

    Manuel Orozco, a remittances expert with the Inter-American Dialogue think-tank in Washington, says Cuban exiles in the United States sent to the island some $636 million in 2008 and probably slightly less in 2009 due to the economic downturn.

    “About 60 percent of that money is sent through informal channels or mules. That is quite a lot,” he said.

    Bureaucratic requirements in the United States, a lack of competition for services and a charge on foreign exchange charge levied by Cuba on transferred dollars make formal money transfers through financial agencies like Western Union costly.


    Formal transfers cost 17 percent of the money sent, whereas mules cost around 13 percent, says Orozco, adding they deliver the money much faster.

    The mules are part of an emerging underground industry of financial services offering credit and installment payments otherwise unthinkable in Cuba’s state-run economy.

    There are no figures available for the size of the informal trade in goods, but it has become quite organized. There are even privately run places in Havana where Cubans can shop from catalogues sent by email. They pick an item, make a 50 percent down payment and 15 days later they get their order. All for a 25 percent commission.

    Most of these informal businesses are family-run. A Havana resident, for example, sends a list of products to a relative in Miami, who then finds a Cuban American willing to transport them as a mule in exchange for a free ticket.

    Cubans are crazy for big brands, says Diana, who sends items from Miami to Havana. “They ask me for instance to send sunglasses that say Dolce & Gabbana or Gucci. They’re cheap replicas, of course, but they sell very well because of the brands. Cubans love that,” she explained.

    Profit margins are striking when it comes to high-end electronics. A flat screen TV bought in Miami for $700 can be sold in Cuba for up to $2,000. Such a television would likely cost $2,500 in a state store, if it were available.

    The informal trade also feeds an endless network of informal vendors who receive small commissions.

    But the “mule” business is not without risks.

    “You need to be careful and make sure you don’t bring too many of the same products, because Cuban customs officers are not stupid and if they realize it is for sale they will take it away on the spot,” said Yanet.

    (Editing by Pascal Fletcher and Frances Kerry)


  4. The recent appearance of grand-scale corruption among high-ranking political elite is not very different from what was observed in most former communist countries. The level of corruption depends on the degree of monopoly exercised by the regime over the supply of goods and services, the degree of discretion enjoyed by government agencies in making resource-allocation decisions, and the degree of accountability. The regime ownership of productive facilities results in a lack of identifiable ownership and widespread misuse and theft of state resources.

  5. HUFFINGTON POST: Lobster, Shrimp and Beef: Will Cuban Laws Against Their Possession Change? -Yoani Sanche-August 9, 2010

    In his private restaurant, Humberto serves more than a dozen dishes on the sly. Few know that on those tables with their shining white tablecloths patrons are offered lobster, shrimp and beef. These three products are of greatest interest to the police; under Cuban law their possession, without the proper papers, can lead to long prison terms. Thus, the menu does not reflect such controversial recipes, but if some guest with a trustworthy face asks, he may hear about the forbidden delicacies waiting in the kitchen, out of sight of the inspectors.

    When self-employment was authorized in 1994, the country filled with places where you could eat a beef steak or a Neapolitan pizza. The strict straitjacket that had stifled creativity from the so-called Revolutionary Offensive at the end of the seventies, started to loosen up. Caught between surprise and laughter, we Havanans saw how our city filled with timbiriches — tiny little businesses — and houses converted into restaurants, which the popular fantasy dubbed Paladares, or “palates.” The euphoria, however, was short-lived, as between the high taxes, the restrictions on hiring any employees outside the family, and the long list of forbidden products, many of the sites eventually closed.

    A few days ago Raul Castro announced in Parliament that a new impetus is going to be given to the self-employed. Humberto breathed a sigh of relief because in recent months he had been thinking of surrendering his license and trading in his frying pan for an illegal taxi. Now the president’s words have given him hope that he won’t have to marry his daughter off to the cook, so the latter can work in the family business. Who knows if the new liberalizations will also allow them to offer the banned products that are hidden in their kitchen.


    Can you provide a substantiated argument that justify Castro’s ANTICUBAN policies?

    The violent and brutal policy of intolerance towards those who criticize their ineptitude as a government.

    The RACIST AND SEGREGATIONIST policy of tourist APARTHEID imposed to Cubans, and implemented through a double monetary policy that rejects the Cuban pesos as a form of payments in tourist zones, while demanding a payment in CUC., an artificial currency valued at an unjust exchange rate against the Cuban peso, that does not reflect the acquisition power of the Cuban people and it was created and imposed to disguised this policy of segregation to Cubans.

    The “foreign investment act”, a DISCRIMINATORY policy that promotes the economic growth of foreign investor, while forbidding Cubans the same opportunities of economic development.

  7. BLOOMBERG: Obama May Ease U.S. Travel to Cuba Even If Congress Won’t Act-By Jens Erik Gould and Nicole Gaouette – Aug 8,

    A move by President Barack Obama to ease travel restrictions to Cuba would allow the administration to change U.S. policy toward the island even if legislation to repeal a wider travel ban isn’t approved by Congress this year.
    Obama may change rules to allow more Americans to visit the island on educational and cultural trips, a U.S. official, who declined to be named because he isn’t authorized to speak on the subject, said Aug. 6. The official didn’t give additional details on what the changes would be.

    “Lifting the congressional travel ban was always going to be difficult,” said Christopher Sabatini, policy director of the Council of the Americas business group, in a phone interview from New York. “This is an effort to move the policy forward in some way, but in a way that will be much more palatable to the embargo’s supporters.”

    U.S. lawmakers have said since last year that they expected to pass legislation ending the 47-year ban that forbids most Americans from visiting the Caribbean island. Representative Sam Farr, a California Democrat, said in September that legislation would pass in 2009. Congressman Collin Peterson, a Minnesota Democrat, said in March of this year that a bill might pass the House in April.

    “We’re confident we can get it passed,” Senator Byron Dorgan, a North Dakota Democrat, said on Aug. 6. “Restricting the right of Americans to travel to Cuba means you are punishing the American people for transgressions of the Cuban government. That just doesn’t make sense to me.”

    Still, legislation in the House and Senate has yet to reach the floor. The House Agriculture Committee approved a bill in June that would end the travel ban and simplify rules governing cash transactions with Cuba.

    Ban Supporters

    Supporters of the travel ban in Congress including Senator Robert Menendez, a New Jersey Democrat, and Representative Connie Mack, a Florida Republican, who both said they opposed the possible easing of Cuba travel restrictions by Obama.

    “This is not time to ease the pressure on the Castro regime,” Menendez said in an e-mailed statement. “Promoting travel and wide-spread remittances will give the regime a much- needed infusion of dollars that will only allow the Castro brothers to extend their reign of oppression and human rights violations.”

    Easing restrictions would be a show of “weakness” by Obama, Mack added in phone interview from Washington.

    Looser Rules

    Obama doesn’t need congressional approval for changes in existing regulations. He first loosened travel rules on Cuba last year, making it easier for Cuban-Americans to visit and send money to relatives on the Caribbean island in a bid to help “promote the freer flow of information,” according to a White House statement.

    Current rules allow Americans to travel to Cuba on educational and cultural trips if they are students or employees at qualifying universities and meet a set of additional requirements, such as doing research toward a graduate degree. All Cuba travel must be approved by the Treasury Department’s Office of Foreign Assets Control.

    Asked if the administration is considering easing the travel rules, Michael Hammer, a spokesman for the White House National Security Council, said in an Aug. 6 e-mail: “We will continue to pursue policies that advance the U.S. national interest and support the Cuban people’s desire to freely determine their country’s future.”

    Political Prisoners

    A change in policy toward the communist government would follow President Raul Castro’s decision last month, in a deal brokered by the Roman Catholic Church, to release 52 political prisoners who were imprisoned in 2003 during a crackdown on dissidents. Raul, 79, succeeded his 83-year-old brother Fidel in 2008.

    Travel and trade restrictions on Cuba have been adjusted by nearly every U.S. administration since then-President Dwight D. Eisenhower established trade limits in 1960, following Fidel’s revolution against the U.S.-backed Batista regime. Former President George W. Bush banned some educational exchanges not directly related to academic coursework in 2003, according to a report by the Congressional Research Service.

    The U.S. exported $532 million worth of goods to Cuba last year, most of it wheat, corn, meat and other farm goods. That total could be higher if rules governing cash payments were made simpler, U.S. farm groups say.

    Groups such as the United States Tour Operators Association and the National Foreign Trade Council, a Washington-based organization of companies and trade associations, have called for a repeal of the ban, which is designed to isolate the Castro regime and keep hard currency out of the country.

    Cuban Tourism Minister Manuel Marrero said in a March 25 interview that 1 million U.S. tourists may visit the island annually if the ban on travel is ended.

    Dorgan and Enzi’s bill on the travel ban is S. 428.

  8. THE WASHINGTON POST; Can Raul Castro modernize and stabilize Cuba?- By Jackson Diehl-August 9, 2010

    Ortega and other church leaders had sent many such letters to Raúl Castro and his brother Fidel over the years. What was different about this one, the cardinal says, is that he got an answer. Within a week, Raúl let him know that the Ladies in White would be allowed to continue their marches unmolested. Within a month, Ortega was at his first meeting with Raúl Castro, who began by telling him that he intended to release all of Cuba’s political prisoners.
    Since then the 73-year-old cardinal has met three more times with the 79-year-old president to talk about the prisoner releases and the possibility of change in Cuba. Not “reform,” mind you, and certainly not “democracy” — Raúl Castro does not like those words. Ortega has nevertheless come away convinced that “this is something new,” as he put it to me in an interview. Castro’s prisoner releases, he contends, “open possibilities.”

    What is possible? That has become an important question as Raúl Castro’s not-reform creeps forward and as Congress considers legislation that would shred what remains of the U.S. trade “embargo” by lifting all restrictions on travel to Cuba and further liberalizing food exports. So far, two dozen imprisoned dissidents have been released into exile in Spain, the United States and Chile; the regime has publicly committed to free 28 others of the more than 100 who remain. On Aug. 1 Raúl Castro announced that the government would allow more private businesses and self-employment activity, in part as a way to occupy the 1 million workers — 20 percent of the state labor force — whom the government plans to lay off.

    One view is that this is a replay of the standard Castro strategy for extracting the regime from a bind. The Cuban economy is even worse off than usual: Food production fell 7.5 percent in the first half of the year, and the last sugar harvest was the worst in a century. The last time the island faced such a severe economic crisis, in the early 1990s, Fidel Castro also loosened controls on private enterprise. As soon as the economy recovered, he shut down many of the businesses he had allowed. Releases of political prisoners are also not new: Fidel Castro did it in 1969, 1979 and 1998.

    Still, some in and out of Cuba argue that Raúl Castro is up to something different. He understands, they say, that the Stalinist regime cannot survive in its present form, and he wants to modernize and stabilize it before he and his brother pass away. He faces stiff resistance from Fidel Castro — who, after a four-year absence, began popping up in public within days of the first prisoner release. But Raúl, it is said, is nevertheless determined to methodically press forward with a program of change that will extend for years, rather than months.

    Cardinal Jaime Ortega’s role as a broker of human rights in Cuba began with the Ladies in White. In April the archbishop of Havana was outraged when, for two successive Sundays, thugs of the Castro regime besieged the weekly march of women protesting on behalf of relatives who are political prisoners. Ortega dispatched a letter to President Raúl Castro saying that “for the church to tolerate this in silence would be an act of cowardice,” he told me last week.

    Cardinal Ortega seems to subscribe to the rosier view. He was in Washington last week to collect an award from the Knights of Columbus; but it was his second visit in two months, and he has been meeting with officials in the Obama administration and Congress. He suggests that a big part of Raúl Castro’s agenda is improving relations with the United States so that Cuba’s economy can be revived by U.S. trade and investment. “He has a desire for an opening with the U.S. government,” Ortega said. “He repeated to me on several occasions that he is ready to talk to the United States government directly, about every issue.”

    Does that include the democratic reforms the Obama administration has demanded as a condition for improved relations? “Everything should be step by step,” Ortega said. “It’s not realistic to begin at the end. This is a process. The most important thing is to take steps in the process.”

    I don’t doubt the cardinal’s sincerity. But I also find it hard to believe that Raúl Castro is Cuba’s Mikhail Gorbachev. If anything, he resembles Yuri Andropov, one of Gorbachev’s aged and ailing predecessors, who knew the Soviet system was unsustainable but lacked the will or the political clout to change it. Ortega may be right that his dialogue with Raúl Castro is something new in Cuba. But the time for real change — and for deeper engagement by the United States — has not yet arrived.

  9. Who remembers fischmann ?
    I guess his brasilian vacation home suits him …

  10. Now is el guaton’s time … what goes around … come around.
    Here is an individual that from Chile goes to Cuba, is accepted in the “special forces” of the rebolution, recipient of the medalla del combatiente internacionalista de primer grado & la medalla veinte aniversario del triunfo de la rebolucion cubana.
    A heroe of the rebolution eh?
    Today … he is accused of bribery & embezzlement & other charges, the man that is rumored to have handled fidel’s finances overseas … the trusted one!
    Perhaps Chile’s elections had a partial influence on el guaton’s fate.
    Since the castros appear to think that he “open the doors” to the first democratic goverment in 50 years w/a right wing inclination.
    Could this new democratic goverment, change & affect the political balances in the region that benefits the castros ?
    Up until a short time ago, el guaton enjoyed the trust of the castros, he is acused now of the same things fidel, raul & their cadre have indulged themselves for the last 50 years.
    But … there are lots of “secrets” stored in Marambio’s head …
    The transition from the military green to the business man, from dictator to “administrator of the future” has started … the rebolutionaries are positioning themselves for the “day after” …

  11. Corruption has been a chronic problem for the Castro brothers’ dictatorship, they institutionalized it. As the political power and control of the economy became increasingly concentrated in the hands of the totalitarian ruling class, consumer-good shortages and inefficiencies in resource allocation led to black-market activities.

    After five decades of tyrannical rule and with the promise of material prosperity vanished by the collapse of the Soviet Union in the early 1990s, corruption became dominant and many Cubans and foreigners became proficient at trading on the black market whatever they could steal from the regime.

  12. For those who are here in support of Castro’s dictatorship!
    Can you provide a substantiated argument that justify Castro’s ANTICUBAN policies?
    The violent and brutal policy of intolerance towards those who criticize their ineptitude as a government.
    The RACIST AND SEGREGATIONIST policy of tourist APARTHEID imposed to Cubans, and implemented through a double monetary policy that rejects the Cuban pesos as a form of payments in tourist zones, while demanding a payment in CUC., an artificial currency valued at an unjust exchange rate against the Cuban peso, that does not reflect the acquisition power of the Cuban people and it was created and imposed to disguised this policy of segregation to Cubans.
    The “foreign investment act”, a DISCRIMINATORY policy that promotes the economic growth of foreign investor, while forbidding Cubans the same opportunities of economic development.

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  14. Careful betting on love in Cuba
    August 7th, 2010
    Careful betting on love in Cuba
    By JOE WARMINGTON, Toronto Sun
    Last Updated: August 5, 2010 4:48pm
    Nicola Mastrangelo knows what its like to gamble in Cuba and lose.
    He bet on love, a game on the communist island where the house often wins.
    In his case, after betting the farm, he actually lost a house he built for his Queen of Hearts.
    Fidel Castro may have banned Batista’s casinos in 1960 but there is still high risk gambling going on, especially if you decide to put money on any Cuban deal.
    The deck is stacked.
    Cody LeCompte’s family found out the pitfalls of this in renting a car.
    They are $30,000 in debt after officials forced the teen to stay in Cuba while they — nudge, nudge, wink, wink — investigated.
    Unless there is one more Cuban card trick up their sleeve, his nightmare should come to an end tonight as he is set to fly home Friday.
    However Mastrangelo’s nightmare continues.
    “I feel for the kid because I know how it is to get a bad deal in Cuba,” says Mastrangelo, a well known, well-liked, happy-go-lucky Woodbridge coffee truck operator. “They say with that car accident, they were investigating a crime. I wish sometimes they would investigate some of their own people.”
    So far, his wager cost him $40,000 in life savings on a relationship with a now 38-year-old woman named Dagnery Tita Abreu. In Cuba, that could end up as a sucker’s bet.
    “I really fell for her,” he says of a woman he met in the village of Santa Marta, near Veradero, in 2001 and married in 2004. “I wanted her to feel like a queen.”
    He worked hard at that.
    First there was a $6,000 beach wedding, then the purchase of land, the hiring of tradesmen, the hunt for building materials and eventually a state-of-the-art house with a custom kitchen and bathroom.
    The problem is you can’t officially own property in Cuba.
    And you certainly can’t put your name on it if you are not from there.
    But in Cuba anything can be done for a price — the old Havana Hustle.
    In this case, it was the Santa Marta Shuffle.
    “I was given building permits and I was told since she was my wife, it was my house,” says Mastrangelo, who was admittedly naive.
    Divorced 25 years, lonely and enjoying the company of an attractive woman 25 years his junior, he fell into the tropical trap so many others have, hook line and sinker.
    Mastrangelo is a gullible but lovable type, the kind of guy who will do anything for you.
    He did lots for the love of his life.
    He built the house, moved her in and started making plans for her come here.
    Missing her in 2007, Mastrangelo jumped on a plane to surprise her.
    In Cuba, a surprise can often lead to exactly that.
    “I caught her with a Cuban guy,” he says. “I understand I should have known better but I really trusted her.”
    To add insult to injury, the guy was living with Mastrangelo’s wife in the house he built.
    She is certainly able to tell her side of the story if she chooses but Mastrangelo doesn’t hate her as much as he feels violated. “I am over it now but I took it pretty hard at the time,” he says.
    Duped and full of understandable Veradero Vengeance, he set out to change the game and win some of his losses back.
    But the game was rigged.
    He hired local lawyers, sought help from the Canadian consulate and Cuban government authorities. He wanted her out of his house.
    “Sorry, no can do,” was always the answer.
    The house is in her name and she still lives there.
    He divorced her in 2008 and tried to get some of the money out of his house with no luck.
    “I have been offered $300 for the house,” laughs Mastrangelo. “In the end it’s my own fault and a lesson was learned.”
    His buddies tease him.
    “I was thinking with my heart,” he says.
    For Mastrangelo, the issue now is trying to prevent it from happening to someone else.
    Keep your eyes wide open, he says.
    There are many good Cuban people and many solid marriages, but there are many trap doors, too.
    Heck, the Latin-love-two-step is practically an industry down there. They look not only for the naive but the kind.
    And it’s not just men. Women have been duped by Cuban men too and same goes for same-sex relationship-frauds.
    Truth is if you go even the slightest bit off track in Cuba, you could find yourself in a real jackpot.
    As Mastrangelo and Cody experienced, when you’re playing the Cuban shell game, it’s a real risky roll of the dice.….

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