Wednesday, October 19, 2011

A British fund that planned a luxury golf resort is shut down

Posted on Tuesday, 10.18.11

A British fund that planned a luxury golf resort is shut down
By Juan O. Tamayo

Cuban corruption investigators have shuttered the Havana offices of a
British fund, which planned $1 billion in investments, and detained a
deputy minister of sugar, according to news reports.

Several government employees in eastern Santiago de Cuba also were
sanctioned for mishandling the construction of a water treatment plant
so badly that one installation had to be torn down and rebuilt.

Cuban ruler Raúl Castro has faced a growing number of corruption cases
since he succeeded his brother Fidel in 2006, although it has not been
clear if corruption is spreading or the government is finding more cases.

With many state enterprises in the hands of active or retired officers
of the military and Interior Ministry, there have been increasing
grumblings about what some Cubans are calling the "Olive Green Mafia."

The Havana offices of the Coral Capital Group have been shut down and
its chief executive, Amado Fakhre, a British citizen, has been detained,
according to a report Monday from Havana by the Reuters news agency.

Vice Minister for Sugar Nelson Labrada was arrested last month,
apparently as part of an investigation linking Coral Capital with the
Canada-based Tokmakjian Group and Tri-Star Caribbean, Reuters added.

Cuba's government-controlled news media has not reported on any of the
corruption cases.

Coral Capital claims to have projects in Cuba worth more than $1
billion, including the Bellomonte golf and beach resort on 628 acres
east of Havana. With two 18-hole courses and a 160-room hotel, the
project also calls for 323,000 square feet of commercial space.

The fund, registered in the British Virgin Islands, already has invested
an estimated $75 million in a joint venture for Havana's tourist
Saratoga Hotel and a resort on Cayo Coco, a sandy key off Cuba's
northern coast.

Coral Capital may have run afoul of corruption investigators because it
also financed Cuban trade deals, including imports of heavy equipment
and other goods for government ministries, Reuters reported.

Tokmakjian and Tri-Star are believed to be under investigation for
paying bribes to win contracts for state equipment purchases. Labrada
signed off on deals with the Canadian firms, Reuters quoted a source as
saying. The sugar ministry eliminated last month and turned into a state

The long string of mayor corruption scandals uncovered in Cuba in just
the past couple of years have hit virtually every sector of the Cuban
economy and in one case close to Castro's own family.

Julio Cesar Díaz Garrandés, boyfriend of his youngest daughter, was
jailed for at least three months this year in a corruption case,
according to news reports in September. It's unclear if he remained in
custody Monday.

Other scandals have hit the island's telecommunications, aviation,
nickel, cigar and other industries, and have led to the arrests and
dismissals of scores of top government officials.

Castro created a Comptroller General's Office to crack down on
corruption and tasked his son Alejandro, a senior officer in the
Interior Ministry, with overall responsibility for his anti-corruption

Yet, the phenomenon remains widespread, partly through bribes to senior
government officials who sign off on large deals, and partly through
petty thievery of state goods such as construction materials.

Cuba's Prensa Latina news agency Monday reported one such case involving
a trial of officials involved in one of the government's priority
projects — an aqueduct for Santiago de Cuba, the island's second largest

The vaguely worded report did not detail the number of defendants, the
sentences or the charges against them, other than failing to meet "the
norms and regulations for the remodeling of a water treatment plant."

Two other trials are still under way against construction, financial and
technical officials on charges of "failing to meet obligations in
economic entities" involved in the aqueduct, Prensa Latina added.

There were so many "violations" in the construction of the La Ketty
pumping station, on the outskirts of Santiago, that it was torn down and
rebuilt, the report noted, without explaining the violations.

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