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Posted December 16, 2003 by publisher in Business In Cuba

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By Vanessa Bauzá | HAVANA BUREAU

HAVANA · Cuba’s Tourism Ministry on Monday confirmed that the head of its largest corporation was fired for “grave management errors,” but denied news reports that he embezzled millions of dollars and was under house arrest.

Cubanacán president, Juan Jose Vega, and three other company officials were fired last month.

“At no time did they participate in theft or embezzlement, but they did commit grave management errors associated with a lack of rigor and control, discipline and other violations,” the Tourism Ministry said in its first official response to reports that surfaced last week.

Tourism is Cuba’s top money generator, providing an estimated $2 billion this year.

As the oldest tourism company on the island, Cubanacán handles 40 percent of Cuba’s tourists and owns 51 hotels along with a bus company, travel agency, restaurants and shops. Last year it saw profits of more than $100 million.

The company is no stranger to shake-ups. Vega, the son of a well-known jurist, was assigned to his post in the mid-1990’s to replace former corporation President Abraham Maciques, who was also removed after reports that he failed to keep proper oversight of the company. Maciques now heads Cuba’s convention center.

Vega was expelled from the Communist Party but it is unlikely the case will go to court, a retired Cuban official said on condition of anonymity.

In Havana, a veil of secrecy surrounded the Cubanacán investigation. Cubanacán and Tourism Ministry officials could not be reached for comment. There was no additional information into Vega’s actions.

Widespread theft from government-run companies fuels a vibrant black market in Cuba, experts said. Two years ago the government created a Ministry of Accounting and Oversight to seek out corruption.

Consultants who study Cuban tourism and investment said the lack of open government records, coupled with the government’s dire financial straits, can lead to poor oversight.

“In every society you find corruption,” said Sergio Diaz-Briquets, an international consultant in Virginia. “In the [United] States you have Enron. Given the situation in Cuba, I don’t think this is any surprise. In fact there have been allegations of corruption for a long time. The joint ventures offer a great way for corruption to creep into the Cuban economy for people who are looking to the future to position themselves to make money.”

A foreign hotelier who runs a Cuban-owned hotel outside the Cubanacán chain said it was too early to speculate on whether the charges would affect his business practices.

“It’s worrisome, but it’s something that happens,” said the manager, who declined to be named.

Philip Agee, a former CIA agent who runs an online travel agency in Havana, said he is not concerned that the investigation will have any effect on his business.

“We have a contract with Cubanacán for their hotels, but a change at the top is not going to change the type of service we get,” Agee said.

The Tourism Ministry’s statement on Monday said Cubanacán was being run by Tourism Minister Ibrahim Ferradaz.

“What happened proves again the serious and sustained efforts being made in our country to reach higher levels of efficiency and control,” the government statement said.

Reuters contributed to this report. Vanessa Bauzá can be reached at .(JavaScript must be enabled to view this email address)

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