Prospects lor Organized Crime in Post-Castro Cuba!
A Conference Report
On Fridayhe DCs Office of Asian Pacific and latin American Analystshe DCI Crime and Narcotics Centernd the State Department's Bureau of Intelligence and Research jointlyonference on the prospects lor the emergence of organized crime in post-Castro Cuba. Approximatelycademic experts, policymakers, and intelligence community analysts attended. The findings from the session will be factored Into APLA and CNC research on corruption and organized crime in Cuba
kicked off the
proceedings with an overview of corruption as the foundation oncrimethat the decline of the US
mafia in recent years could be attributed to the increased integrity and accountability of local officials. The mob, he said, had been cut offource of 'controllable" public officials (includinge also said that while corruption is the norm amongthat only Northern Europe, Singapore, and North America lack systematicprofessionatlzation. overlapping authorities among government organs at all levels, and transfer of power from local to federal authorities has helped reduce corruption He added that CQTLg:iO" ir Jnpd" 3r* Korea has been assoc atedRMl
with an assessment of the different types of
corruption, characterizing it as an alternative mechanism for allocating public resources. He added that some types of corruption are more
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Ihansystemic corruption is moresocielies than low-level individual corruption.
Idefined organized en me. noting that researchers and law
enforcement tend to Wok at the stability o( organizations, theirareas of specialization to determine how muchhreat theythe state. To help conference participants understand theof criminalto the various
Colombian cocaine distributors:
The Medellin Cartellear example of organized criminal activity as it relied on systemic corruption and violence, threatened the state directly, and was involved in multiple activities.
Cali Cartel's activities were more specialized, makingess clear-cut example of organized crime.
Current mid-level distributors are even harder to define because they are highly specialized and operate anonymously. [
iscussion of the rote of organized crime in
transiieplaces the state in basic protective fund cmsin pieces where civil society is weak, there has been aon repression, and the state lacks moral authority.
noted that the structures of abusabte authority and the strong control mechanisms that exist in planned economies offer incentives for corruption. He added that not all transition governments experience high and sustained corruption:
Countries introng civil societytable democracytakeexample, the Czech Republic, Hungary,the emergence of debilitating organized crime.
Corrosive corruptioniven in countries that are authoritarian,dictatorship,eakas Uzbekistan
After this introductoryanel of three experts on the emergence of organized crime in the former Soviet Bloc looked al its prerequisites, forms, and functions in that part of the world-I
key features of East
European organized crime In Pie eariy post-Cornmunisl period to establish Indicators of possible emerging organized crime In post-Castro Cuba. He pointed out that ineffective law enforcement.
changing regulation of economic activity, incomplete reforms,social norms caused crime rates to rise dramatically inafter communism collapsed.
Those higher crime rates accounted for increased corruption as wellorganized crime, accordingHe defined
he noted comes from the same root asthe rules of correctoting that it permeatedbureaucracies and appeared to have facilitatedHe described two kinds ofthat the differenceatter of "stealing fromvs. "stealing for thee said the two typesin some part of post-Communist Europe.
Corruption becomes liketyomjptibte agent controls access toopportunity but has no legitimate authority over it andHeormula for corruption: monopolyminus accountability. He said these conditionsin the Communist era and that transitionIn the short run but reduces it in the long run. Tocorruption during transitions as a
'leapingeight during 'lie process that isthroughout.that certain features of
increasing numoerof economic agents andfacilitate corruption by Increasing governmentover economic opportunity.
The shadow economy also contributes to corruption because it iseconomic activity conducted away from public scrutiny. Highregulations, and the prohibition of private economiccontribute to growth of the shadow economy. The shadowsocial norms that sanction lawbreaking. It promotes theorganized crime because it fosters production of illegalrackets, and predation by
Factors that will impact the possible emergence of organized crime in post-Castro Cuba include:
urge in crime accompanies transition. ;KfyfLevel of government accountability.
National norms concerning corruption.
'
Partial liberalization of the economic system.
LeaOership attitudes to private economichether they protect it from predation by organized crime.
corruption equation (corruptioniscretionnd notedeak rule of law. the absenceree press, and the prevalencehug-like security apparatus are examples of current conditions in Cuba that will play into this formula. He speculated mat organized crime and corruption would flourish in post-Castro Cuba for several reasons:
istory of organized criminal activity.
The current totalitarian/authoritarian government has allowed low-level criminal activity to flourish.
criminal enterprises will be attracted lo Cuba because of its location between the US and Latin America.
White privatization will not be of the same scale as it was in the Former Soviet Unionlargest assetistory-p
j that privatization in Cuba will present myriad opportunities for corruption and organized crime. He observed that organized crime would ftourish within the ex-communist bureaucracy and informal networks. He noted that. If Cuba follows the pattern of the FSU. get-rlch-qulck schemes, debt repayment, state licensing scams, exchange rate manipulation and energy sales and distribution would serve as vehicles for organized crime and corruption. He added that low salaries, high-level regulation, and llttle-to-no law enforcement and penalties would serve as sources of corruption.ransition, according to| orruption and organized crime becomes
I more apparent because public awareness changes, censorship
disappears, and the foreign media have greater access to thesuggested that quick
deregulation and adoptionomprehensive legal framework, adequate compensation for bureaucrats and law enforcement officials, and using fines and prosecution to deter bribery would help Cuba avoid some of the problems that plagued the FSU.
focused on the conditions under which lhe
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mafia emerged. he noted that two types of organizedprevalent during theandpotentialimilar pattern in post-castro cuba. he notedmobsters have settled in miami, providing them apoint to spread their activities to cuba once the systemhe alsoexus between russian mobster andcrime groups, noting that cuba before castro served asfor criminal activity and speculated that afler castro it would donoted that the power of organized criminal
en
groups comes directly from the dysfunction of the state, noted that, despite castro's claims, the revolution did not eliminate organized crime it merely pushed it underground. he anticipated exiles and latin american criminal organizations would seek haven in cuba.
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cops, ethnic gangs, and terrorist groups benefited.
winer then laidumber of lessons that policymakers can take away from the eastern europe experience as they took to cuba. first andto| [the civil service should not be dismantled as criminals will step in lo fill any void created by such an exercise. institution building is important as is tax collection. resource extraction to
build up the economy is dangerous and collaboration on border security will be essential to ttiwartlng transnational organized criminal groups from using Cubaub.
frecommended that the intelligence, law enforcement,communities begin now to look into institutionalresponding to the emergence of organized crime in Cuba.thatransition the US governmentto building and interpreting crime data over time,attention to cross border activity throughout theCubans, understand the extent of Cuban exileactivity in the United States, and understand theorganized crime andby noting that
the US would benefit bytake In Cuba" now so that It can have some influence over such developments later.
| presented an
assessment of the current state of corruption and organized crimeHe noted that corruption has long roots in Cubanto the colonial period, with rent seeking and election fraud theforms before the revolution. Fromo thein Cuba has become more pervasive as economicmade daily corruption widespread and necessary. Ashave essentially been socializedontext ofofprevalent in modern Cubagovernment Isosing battle in trying to fight themand moral campaigns. The result Is pervasiveand the campaign to correct this phenomenon is creatingof legitimacy for the Cuban government.
that the worst Is yet to come:
'Social indiscipline" is aggravated by the lack of an independent judiciary, media, and nongovernmental organizations.
'Reforms" have also exacerbated the problem by creating an infrastructure for corruption.
Cuba's expansive informalto compensate for the failings ofeasily translate into mafia-style organizations with the potential to cross Into the exile community In the United States.
After the earlier presenters finishedomparative baseline.
The stale creates organized criminal networks by maintaining the ration system and criminalizing activities that would be legal in more open societies.
Cuba isisk of increasing corruption and criminality by placing military personnel inas involvement in tho Sccmdodoswhere they can be tempted by corruption.
Drawing on his own work and Ihe presentations of the other conference
with
discussion of what to expect in post-castro rjuoa. He notedfor transnational organizations to take over fromnetworks and that criminal activity in the southeastwill impact Cuba. He speculated that an expected collapsestructures in the post-Castro era would attractCuba as the United States' German
Democratic Republic to rebuild noting that Cuba's emergence asfor transnational criminallikely in his viewa source for Cuban criminal gangsSthat US officials
would be well advised to look at how Chinese criminalpushing out the Yakuxa In Japan to understand what Is likelyin post-Castro
The incentives for criminals to conduct business in Cuba will beIncluding the ease of transit and proximity to the
United Statesisorganized commercial sex market linked lo poted several mafor organizations would find Cuba an attractive hub:
Proximityommon language would prompt Mexican drug cartels to try to use Cubaransshipment point and money laundering haven.
Colombians would find it natural to integrate Cuba back into the black market peso exchange system and southern Florida criminal economy
Russian mobsters would seek to reestablish casinos and take control of the sex industry.
The US mafia would have an interest in Cuba for moneyasino industry, internet gambling, prostitution, and as an emergent financial sector to be infiltrated.
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The Sicilian mafia would see Cubaotential offshore financial center.
"Expected anti-Castro organizations in the US to move into crm'nal enterprises
that Cuba is enlargingransnatKonal criminal zone would include:
Real estate purchases, casino development, financial transfers, and unexplained wealth
of key Cuban financial personnel to see if they are dealing wrth known or suspectedor syndicates Travel of organized crime figures and/or meetings of organized criminal syndicates in Cuba.
Turf wars in the sex trade.
Increases in drug interdictions and changes in smuggling patterns.
Increased links to other Caribbean hotspots.
Original document.
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