More exiles maneuvering for business with Cuba

March 5, 2000 - Miami Herald - Juan O. Tamayo

The arrest of alleged spy Mariano Faget has cast a spotlight on a small but growing phenomenon -- Cuban Americans who are quietly seeking or doing business with a Communist government they publicly abhor.

So many Miami exiles are said to have bought apartments in one neighborhood of Cuba's Varadero beach resort, in violation of the U.S. trade embargo, that the area is now jokingly called "Hialeah Heights."

Cuban Americans have boasted of selling hotel supplies, food, clothes and computers to Havana. Others are said to be brokering oil deals for Havana and trying to establish ice cream and shoe factories in Cuba.

FBI reports show that Faget and New York businessman Pedro Font, both Cuban-born sons of pre-Castro army officers, were partners in a Florida firm, America-Cuba, established with the intention of doing business in Cuba.

Even in Miami's Little Havana, occasional meetings between Cuban diplomats and exiles interested in doing business on the island have drawn up to 80 participants at a time, witnesses say.

As the U.S. Cuban community has grown younger and less driven by anti-Castro politics, such contacts reflect the rising interest among Cuban Americans in positioning themselves to do business with Cuba -- certainly after the embargo and President Fidel Castro are gone, but often even before.

"In the past three years, I have seen a steady increase in [Cuban Americans] ... visiting Cuba to discuss commercial transactions," said John Kavulich, director of the New York-based U.S.-Cuba Trade and Economic Council.

Such contacts and deals remainsecret, partly because many are illegal and partly because of fears among the business people that other exiles will brand them as collaborators with Castro's Communist government.

"Put my name in the newspaper today and I'll get death threats tomorrow," said one Cuban-born businessman in Miami, even though his contacts with Havana are legal, licensed by the U.S. Treasury Department.


But the ties are clearly growing because they appeal to both the Cuban government and Cuban Americans for different reasons, according to several knowledgeable U.S. and Cuban government officials and business people.

Cuban diplomats in the United States regularly try to cultivate Cuban-American investors in hopes of boosting the credibility of the U.S. anti-embargo lobby and driving a wedge between moderate and hard-line exiles.

"Whenever Cuban officials go anywhere in the United States, they always hold special meetings with Cuban-American businessmen -- and it doesn't matter to them whether U.S. laws are violated," one U.S. official said.

The FBI arrested Faget, a 54-year-old official of the U.S. Immigration and Naturalization Service, on spying charges and revealed that he had met with two Cuban diplomats and joined Font in exploring business opportunities in Cuba. Font has denied that America-Cuba did any illegal business. And Cuban officials said those meetings were part of normal contacts they have with interested U.S. citizens.

"That relationship is like the relationship we have with thousands of Cuban Americans, which have been expanding over the last years," said Fernando Remirez de Estenoz, head of the Cuban Interests Section in Washington, D.C., in effect the Cuban embassy.


Cuban-American business people, especially the young, believe for their part that they are uniquely qualified by language, family ties and culture to take advantage of Havana's tentative opening to private enterprise.

"Those who grew up in the United States don't have the same deep-down passions that their parents had. That leads to tolerance, and that leads to business," said Keith Prager, a retired U.S. Customs official who headed the Miami unit that investigates embargo violations.

Just how many Cuban Americans are doing business with Cuba is uncertain, partly because most are doing so in violation of the trade embargo, and partly because of exaggerations by both sides.

"There are thousands of Cuban exiles -- you see them everywhere in Havana -- looking for ways to do business," said one Miami Beach real estate agent who has been involved in several Varadero deals.

About 10 to 20 exile families have paid $75,000 to $125,000 through relatives living in Cuba to buy apartments in a Varadero neighborhood that contains about 100 one- and two-story homes, he said. Like all the other exiles who have had business contacts with Cuba and were contacted by The Herald for this report, he asked for anonymity.


Havana has never released any figures on Cuban Americans doing business in Cuba, but a 1994 foreign investment law specifically allows Cubans living abroad to take part in joint ventures with the government.

Hinting at the level of Cuban Americans' interest in their homeland, Cubans living abroad send an estimated $400 million to $700 million a year in remittances to their relatives on the island.

But experts on U.S. business contacts with Cuba believe that the reports on the number of Cuban Americans dealing with Cuba are exaggerated and say that the actual numbers are modest.

Prager, who now works for AMSEC, a Miami security firm, said he had heard dozens of stories in his years at U.S. Customs but could not remember a single prosecution of a Cuban American for violating the embargo.

"It's important to point out that there's always been more discussion of transactions than implementation of transactions," said Kavulich, whose trade council acts as a clearinghouse for information on Cuba's business climate.


"My guess is that it's not large," Miami consultant Teo Babun added. "Most of what goes on is communications back and forth, with people trying to create friendships and alliances to learn about possible deals."

Babun said most of the real transactions he's aware of involve "wildcat-type businessmen" -- small-time entrepreneurs willing to bend or break embargo regulations for a shot at a quick deal and big profits.

Most try to hide their contacts from U.S. authorities by running them through companies in third countries such as the Dominican Republic, Panama, Mexico or Spain. Some have received U.S. licenses for legal contacts, such as exploring the possibility of doing business in a post-embargo Cuba, and then have gone far beyond that by negotiating real deals.

A U.S. businessman with broad contacts in Cuba said he knows of only half a dozen Cuban Americans with established ventures on the island, both legal and illegal, and none worth more than $1 million.

Exaggerations abound because both the Cuban government and the Cuban-American business people appear to have strong reasons for embellishing the number of their contacts.


The Cuban Interests Section in Washington is under intense pressure from Havana to expand its contacts with Cuban Americans who might be tempted to oppose the embargo or do business with the island, one U.S. official said.

"So when a Cuban American approaches one of them, they try to sign him up with BS tales of the hundreds of others already reaping big profits, and the word spreads, said the official, who has monitored such contacts.

And as the exile community has grown less strident in its opposition to Castro, the small sector of left-of-center Cubans in South Florida has become increasingly willing to publicly display its contacts with Cuban officials.

"You even see them in Versailles," said Babun, referring to the popular Cuban restaurant on Calle Ocho. "There are a ton of people making themselves 'big' here because they know [Cuban diplomat] Remirez. But it's all talk."

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