CubaDebate 63

Corruption: The Danger Which Threatens Us All

By Lázaro Barredo. Cuban journalist. Former director of Granma newspaper and co-author of the book “El Camaján”. He now works as a journalist for Bohemia magazine. 
February 26, 2018

Translated by machine with some hand editing by Walter Lippmann. 
It’s too long to go over manually. You’ll get the idea as you read it.
https://walterlippmann.com/corruption-the-danger-which-threatens-us-all/

Political, judicial and administrative corruption is among the main problems that concern the vast majority of the nations of the planet today. It is the cause of social crises and discrediting of governments and parties, whose economic damage reaches worldwide, only in payments of bribes, the impressive figure of more than one billion dollars annually, according to investigations of specialized international organizations, such as the World Bank.

For Cuba, this scourge concentrates the fundamental aspects of business and administrative management. And, although it does not jeopardize its governance, it is not just an economic loss. Corruption constitutes a potential threat to national security. This is because those who practice it take advantage of, and use for their own benefit, the resources that the State has put in their hands for the development of its functions. It seeks to satisfy individual interests for profit and ostentation. In the degeneration of ethical, moral and political values, their commissars end up alienating themselves from the revolutionary process, even going so far as to prepare conditions for links abroad and to begin the path of treason against the homeland.

Corruption is a process or behavior that manifests itself is closely linked to crime. Their extended actions in the rendering of services provoke serious moral damage to the nation. It seriously undermines the credibility of the Revolution before public opinion and which the counterrevolutionary opposition attacks the desired effect in the maintenance of order, discipline, and institutionality of the country.

It is such a polluting phenomenon that it can generate apathy in many sectors of society. The greatest danger is that both the population and the economic actors do not give these facts with much concern, do not perceive the risk they represent to the nation, live with them and do not act with the necessary firmness.

Without citizen participation, there will be no effective pressure against corrupt actions that can often only be detected based on the living standard of those involved (hence the importance of transparency) because a large part of the resources resulting from criminal acts they market in the State’s own establishments, where they are introduced by those involved, who thus involve more people, and simulate the legality of sales, making it difficult to face them.

The honest citizen who goes out into the streets today in his efforts, does not always have a way of feeling defended as a consumer neither in the prices nor in the peace of mind that he will find solutions in the State entities themselves. Just go to a store to realize the kind of business that exists to prevent people from directly accessing state sales and are forced to careen in the “outsider” that is at the door of the same mall and offers you the human and the divine, many times out of the store’s own stores. Worse still is the process before administrative entities in which there are people who abuse their public function to those who must be given money “by the left” to be able to find solutions at the right time.

Novel ways of acting unlawfully
Since before the special period, we have been confronted in certain service areas with this degeneration, which has become increasingly acute due to the lack of administrative demands, and the intentional or negligent non-compliance of the control function by those responsible at different levels, which is the true source of causes and conditions that make it possible to divert resources, bribes and abuse of positions.

The measures in progress to update the Cuban economic model, essentially the new forms of non-state management of property, have generated pressure on the entities and their managers due to the demand for resources and services (in the absence of a wholesale market for raw materials to develop their activity), coupled with the dissatisfaction of essential needs, which undoubtedly affects the permissibility and acceptance of these facts.

Likewise, the increase in the prices of basic necessities, and the decrease in the purchasing power of salaries, are objective factors that impact on the actions of unscrupulous people, who justify their loss of values with what they have called “luchando” {literrally, “struggling”, but here meaning on the black market] Hence, the economic crimes associated with corruption maintain their negative impact on the sectors of the economy related to the production, distribution, marketing and the sale of food and other products in great demand. These range from criminal chains that involve managers, workers and security and protection forces, the self-employed and disengaged people who want to maintain a high standard of living with this “trapicheo” [slang term for illegality] The violation of functions, ethical norms, besides weak internal control and the apathy in the action within some workgroups, today constitutes the fundamental source of supplies to the illegal market.

Under these conditions, new forms of unlawful acts are repeated or have arisen through fraud, tax evasion, money laundering, falsification, obtaining illicit profits during commercial transactions or in the exercise of asset management, among others, with negative impact on the state economy, where officials and state employees are linked by their complicity.

Also in this context, authorities of the Office of the Prosecutor indicate the detection of a growing link with the exterior in the occurrence of criminal offenses. These are sometimes due to the use of new technologies and financial availability of some criminals, including emigrants, returnees and foreigners. Several of them  have been linked to forms of non-state management, with a marked corrupting character towards managers and officials of state entities.

The most affected sectors are departments of local People’s Power entities, Commerce and Gastronomy, Agriculture, Transport, Food Industry, Housing System and Physical Planning, national importing companies and the activity of foreign trade and foreign branches in the country. This is where, In general, directors, economic and productive deputy directors, heads of basic business units, heads of legal departments and specialists are involved. 

Now, in addition, a new nuance appears. Sometimes managers are not always the organizers of the illicit business, but in their place employees, drivers or other non-labor related debating as organizers of the events, using the financial power they possess.  By exception, there have been cases of managers in agencies and the most unfortunate thing is that almost all are sold for trifles to benefit the corrupters. 

The Office of the Comptroller General of the Republic has indicated that the reiteration of causes and conditions reveals the flaws in the internal control systems. There are also irregularities in economic planning and in the execution and liquidation of the budget, as well as the insufficient definition and non-compliance with the general regulatory mechanisms of the economy.

In addition, vulnerabilities are added to key activities, such as investments, negotiation processes and national and international contracting, which are violated in different ways, as well as cracks in social and labor discipline, and the loss of the value of work as the main way to make a living.

According to the last report by the General Prosecutor’s Office of the Republic and the Supreme People’s Court to the National Assembly, it was reiterated that there is still little response from agencies, companies and the rest of the administration in detecting the facts. This implies that the external control actions carried out by the specialized entities of the Ministry of the Interior, the General Prosecutor’s Office and the General Comptroller are carried out when the event occurred and the affectation to the state patrimony was generated.

The main modus operandi identified as 1) falsification of documents to justify the diversion of products and goods during their subsequent commercialization in state markets, stores and the illegal market; 2) adulteration of documents to legalize the adjudication of real estate or land, in exchange for cash or other personal benefits; 3) realization by cashiers of foreign exchange operations through Cadeca, without accounting them for carrying them out with particular cash; 4) payments to self-employed workers for work results that are not real; 5) Acceptance of benefits granted by executives of foreign firms during the process of negotiating and concluding contracts, consisting mainly of the acceptance of commissions, payments of trips abroad, dinners, gifts, among others; 6) illegal collection of medical services; 7) obtain benefits to delay or breach the execution of judgments of the courts and 8) organize and maintain particular illegal businesses parallel to the commercial activity of Cuban entities abroad.

When a person is corrupted, they can cause severe damage to the economy, not only to steal one or another resource, but to commit crimes that promote subversive activity and put the execution of strategic projects at risk.

Specialization in confronting corruption
Army General Raul Castro Ruz warned in July 2013 before the National Assembly of Popular Power: “The gradual implementation of new measures in the economic field that include forms of non-state management, experiments of different types and other decisions, will condition the manifestation of crimes and illegalities with different methods of organization, aimed at violating the accounting and administrative and legal criminal confrontation systems, such as investments by Cubans living abroad or through their families, and the use of of illicitly obtained capital, which becomes a variant of money laundering or money laundering “.

Talking about these issues in the Attorney General’s Office with Pedro Pablo Cutiño Diéguez, prosecutor-Chief of the Directorate for the Fight against Corruption and Illegalities, and with Alina Montesinos Lee, the chief prosecutor of the Information and Analysis Department, went out to It should be noted that in the Cuban legal system tools have been foreseen to prevent the occurrence of corruption.

These include from the elementary rules of accounting, internal control, auditing, the realization of fiscal verifications, all of these of eminently prophylactic and preventive character, up to those that allow the confrontation to the concrete fact detected, that go from the typical crimes, provided for and sanctioned in the Penal Code, up to the application of confiscatory administrative procedures of the goods obtained in an improper manner.

The crimes that are manifested in general and that concentrate acts of corruption are the following:

1) embezzlement; 2) bribe; 3) influence peddling; 4) tax evasion; 5) prevarication; 6) money laundering; 7) act to the detriment of the economic activity or contracting; 8) scam; 9) illicit negotiations; 10) disclosure of administrative secrets of production or services; 11) abuse in the exercise of position or employment in an economic entity; 12) disclosure of tests for teacher evaluation; 13) abuse of authority; 14 ) hiding or omitting data; 15) misappropriation and 16) illicit enrichment.

In our opinion, it may be unavoidable to accelerate the thinking about the need to work for an anti-corruption law in Cuba. This would strengthen the codification into a single legal norm of the principles, the relations between the institutional factors involved in combating and establishing norms basic actions of obligatory observance by all, which would increase the institutionality of the confrontation.

For the time being, the aforementioned tools are of vital importance in the adoption of the corresponding measures with the immediacy required to demand direct and collateral responsibility.

In the evaluation of the years 2016 and 2017, several dozen criminal proceedings have been conducted for acts of corruption. The main perpetrators were punished with severe prison sentences. The courts imposed the accessory penalty of the prohibition of the exercise of a profession, office or occupation, confiscation or confiscation of the acquired patrimony, as well as the requirement of civil liability derived from the crime, which was quantified in millions in total currency.

In carrying out the punishments, the location of the defendants in the prisons is monitored to ensure rigor in the fulfillment of the sentences.

Likewise, the Attorney General carried out control actions through investigations and verifications. These were mainly directed at activities related to Agriculture, Domestic Trade, Transportation, Food Industry, local bodies of People’s Power and non-state sectors (non-agricultural cooperatives and self-employment) in which violations of legality were detected, and for which disciplinary pronouncements were made against offenders and accomplices.

Also, between the end of 2015 and 2017, 23 confiscatory procedures were carried out under the Decree-Law 149 of 1994 for a total net worth of 135 million pesos, in the provinces of Pinar del Río, Mayabeque, La Habana, Matanzas, Cienfuegos, Sancti Spíritus, Las Tunas, Granma and Santiago de Cuba, where 25 people were recorded, among them several officials, and another 126 as third beneficiaries (some who acted as figureheads).

Among the main illegalities in which the expedited and their third-party beneficiaries intervened, are the falsification of notarized documents to evade tax obligations (mainly in the acquisition of vehicles and homes); subtraction of electricity for private businesses, granting of gifts to inspectors and other public officials, in order to gain the benefit and impunity of their actions.

In this period, there was an increase in popular participation the exercise of the constitutional right to address complaints and denunciations to state bodies and entities and the obligation of these bodies to offer the corresponding response.

In 2016, the Office of the Attorney General of the Republic received 196 complaints about corrupt phenomena through the different alternative means of communication established in that institution. This was part of the improvement of attention to citizens, both in personalized contacts, by telephone, mail, personal delivery, and website.

But the confrontation with the participation of citizens could be greater. There is confraternity before certain facts that are very difficult to face because there are no complaints or they are scarce. For example, it is evident that inefficiency reduces the quality of the entities that provide services to the public. Therefore, this encourages the client to offer money in exchange for receiving them. However, there are people to whom it is proposed to hand over gifts to public officials to resolve a management problem or a procedure, and they do not denounce it, so it is not possible to act. These facts are the ones that most demoralize and question the honesty of the country and the morality of most of its officials.

During one of the sessions of the National Assembly that analyzed the confrontation with crime, Commander-in-Chief Fidel Castro Ruz pointed out: “… the question of the struggle for legality, for discipline and against those who commit crimes against the State property, it has to be very firm and very consistent … if not, it turns out that we will have defeated imperialism and the thieves will almost defeat us … “.

Confiscatory processes

In a case prosecuted in Havana for money laundering, forgery of public documents and tax evasion, an administrative confiscatory procedure of five houses and one farm, 23 cars, was applied to the main defendant. This was in accord with Decree Law No. 149/94. and multiple effects such as household appliances, furniture and other sumptuous objects for a capital valued at 25 million CUP. 

The former warehouse manager of the Habana Bucanero SA branch, for crimes committed with the sale of beer, had confiscated an illegitimate patrimony valued at over five million 487,000 CUP, which included three highly comfortable buildings, a car and more than one million CUP in cash. 

Part of the property confiscated, due to serious economic crimes, belonged to the ex-manager of the Habana Bucanero SA branch and her husband. He was a former sales manager of the Habana Bucanero branch. They were estimated an illegitimate patrimony valued at more than five million CUP, which included two buildings, modern cars and movables valued at more than two million 138,000 CUP. In this image, we can see the facade and general space of the floor and ceiling of the entire living room.

The alienation to which the profit and ostentation lead led the ex-manager of the Habana Bucanero SA branch and her husband, former sales manager of the Habana Bucanero branch, to give her son this Hyundai car purchased at 77,000 CUC, when he turned 18 years and enrolled in the University of Havana. The young man’s room had the following announcement on the door: “This room will not be a hotel, but it has everything included.”

Cases tried

We present to the readers some cases judged and punished with firm sentences. These have been published in bulletins on the website of the Supreme People’s Court (www.tsp.gob.cu).

The Court handed down judgment against nine officials of Etecsa, the integral construction company of Guantanamo and an intermediary of a foreign entity for the crimes of acts in detriment to economic activity or contracting, breach of duty to preserve the assets of economic entities, misappropriation and illicit economic activities, imposing punishments of deprivation of liberty between nine and four years, and a case with one year of deprivation of liberty subsidized by correctional work without internment. All the accessory measures of the case were also applied to all of them. 

In the process, it was proven that the defendants, who worked as director of the East Territorial Directorate and head of logistics, respectively, in a dependency of the Cuban Telecommunications Company, in Havana (by its acronym, Etecsa), knew that the contract should not be done. It contained ambiguous clauses about the functions that each entity had to fulfill, because it defined the executor of the contract (the business unit of base Brigade No. 1, belonging to the Integral Construction Company of Guantánamo) as a supplier of materials, when, in fact, they knew that it was the foreign entity Jaba-Balear SL, which played that role.

In addition, the process of negotiating and concluding the contract was not accompanied by all the documents required by current legislation. This was because, had it been done so, the foreign representation could not have agreed to business, as it had no registration in the Chamber of Commerce nor did it contain any reference in the archives of the Ministry of Foreign Trade for its operation in the national territory, and that lack, which was known to all the signatories, invalidated its existence.

On the other hand, the general director of the Integral Construction Company of Guantánamo made models of request of purchases of foreign currency, together with another defendant, even though in that institution there was no copy of the contract with Etecsa and, in addition, he knew that this payment it had not been approved by the Currency Committee, of which they were the most responsible. 

However, they encouraged payments to be made to Jaba-Balear SL that did not have documentary or accounting support, which is why this lack cannot be understood as an act of no importance or significance because those responsible were aware of its content and cooperated effectively with your result

Other defendants also had full knowledge of the illegality of the negotiation when the liquidation process of the construction company took place and, nevertheless, they continued with it and consented to accounting procedures regarding offers, invoices and advance payments that caused economic damage to the company.

The continuation of works execution by an extinct brigade resulted in the issuance of work certifications for a contract that was not audited and did not have financial backing.

Several punished workers had working links with Cuban companies, where they had to ensure the material and financial resources that made up the patrimony of these entities, and in the exercise of their functions, they failed to the integrity of their positions because they took pride in their performance indifference, harmful conduct and reprehensible.

One defendant, who worked as an accountant, had among her obligations to verify the relevance of the anticipated payments from the fulfillment of the contracts that were made in her entity. However, when issuing a check requested by another of the recipients, he did not review the documents that protected it. Thus it worked, in a deliberate way, in spite of that, in previous occasions, they had returned others to him not to be pertinent.

One of the defendants was also severely punished for other illicit acts that damaged the monetary funds of several Cuban entities. Personal greed and the purpose of benefiting the foreigner for whom he worked, caused losses of vital resources for the economic development of the country.

For the crime of bribery, two customs officers were sanctioned in Havana with eight and six years of deprivation of liberty, respectively, to whom the corresponding accessory measures were also applied, for having acted in concert in the demand for money, violating its functions, to obtain economic advantages.
Both defendants asked for money to pass the items of certain travelers in the place of review, evading the surveillance cameras, and required the tickets to deposit them inside the passports. With this behavior that violated the law, they attacked the probity, honesty and transparency of the institution and the country.

Another case filed by the Court some time ago occurred in Mayabeque, where a group of people developed a sequence of events with the common goal of seizing an important amount of money simulating a fictitious agricultural production. In that way towards the crime they elaborated false documents to obtain the capital disbursement in each operation.
For this reason, six officials and employees with deprivation of liberty between 15 and five years were punished, and the corresponding accessory measures were imposed for the crimes of embezzlement, forgery of banking and commercial documents of a continuing nature, breach of duty to preserve property. in economic entities, falsification of continuous public documents, reception, and illegal possession and possession of weapons or explosives.

In this case, a quality control technician of a company was discretionally appointed to make purchases of garlic and became the central axis of the criminal activities that took place: had the idea, nucleated the participants, looked for mechanisms to organize a fruitful business for all those involved.

The implicated committed the head of balance of the Base Business Unit so that, in common agreement with the other defendants, he participated in the defalco. The contribution of this official was a precedent so that the illicit business could be executed. The same was done with the head of establishment of Batabanó, who processed the invoices of garlic not produced, bought, balanced and signed the fictitious purchases with the active complicity of other operators or controllers, who in turn falsified the reception reports to originate the financial reimbursements.

As part of the political-criminal evaluation of the case, it was also proven that the main responsible person carried out other actions such as committing the head of operations of a basic business unit in Batabanó, subject to the electricity company, to deliver three transformers and 1,500 meters of wire, which was recorded in official documents as having been placed in the irrigation system in agriculture. In addition, he ordered a driver to take them to his home, an act that in itself was a crime.

The Court declared the facts against a civil servant of the municipal directorate of Housing in Artemis accused of the crimes of bribery, fraud and falsification of documents, and imposed the sanction of 10 years of deprivation of liberty, with the accessory of the case.
This official demanded gifts to perform acts inherent to their functions of interviewing and taking statements, measuring boundaries and investigating procedures and litigation, as well as preparing conclusive reports of the investigation. All this work is the basis of the draft resolutions and decisions that are adopted in the municipal direction of Housing. In the process, it was demonstrated that in this criminal offense the civil servant demanded remuneration for her benefit and then, in the procedures and documents, “legalized” the illegalities committed by certain citizens.

Two persons in charge of an entity in Santiago de Cuba were sanctioned for the crimes of embezzlement and falsification of bank and commercial documents, and deprived of liberty with 12 and eight years, respectively, with the accessory measures of the case, after the execution of unlawful acts to profit with the appropriation of certain sums of money.
They used their functions and work content to falsify the payroll of their work center when making the payment of the money extracted from the banking agency for wages and vacations of the workers. In this case, it was about salaries of doctors left to earn.

The Supreme People’s Court heard and ratified the criminal proceedings against 12 citizens, officials and bank employees sanctioned by the People’s Provincial Court of Havana for the crimes of bribery, forgery of bank and commercial documents, embezzlement, illicit economic activities, breach of obligations in economic entities and falsification of private documents. The sentences of deprivation of liberty ranged between 15 and two years, with the accessory of the case.
To achieve its purpose, the main defendant devised the complex criminal phenomenon and achieved the joint participation of individuals with certain levels of organization and distribution of tasks, which is classified within the modern forms of organized criminal association.

In this case, two citizens linked to a foreign firm were the perpetrators of the crime of bribery when they handed over sums of money and other material benefits to officials and employees of Banco Internacional de Comercio SA to facilitate their efforts. This assured them a privileged treatment, the streamlining of information and management in the financial and commercial operations they developed.

A bank business manager in that entity, violating its functions, facilitated the disappearance of funds by means of payment formulas because, without verifying the file and not complying with the most elementary banking rules, it made four different messages with a letter of credit and a single recipient, action that led to the embezzlement of one million 134 278.89 euros.

Then, despite being required by reason of its position to verify that the amounts transferred were debited in favor of the entity accredited in the file at Banco Internacional de Comercio SA, it did not review the pertinent documentation and without previously issuing notice of payment to the Position Department, which was to authorize the movement of funds. He ignored the procedures on the advice of his boss, as he justified.

According to the court, if it were accepted as justification that the subordinates always do what the superiors command, it would not make sense to establish the functions and content of work for the intermediate positions. The truth is that the accused allowed with their actions that the State be embezzled the aforementioned sum of money.

Another defendant, the letter of credit manager of that institution, consciously authorized the final withdrawal of funds from the accounts of Banco Internacional de Comercio SA abroad, after the previous manager had prepared the four payment messages separately, broken down into 300 569.72 euros, 266 569.72 euros, 250 000.00 euros and 317 139.45 euros.

Another manager was sanctioned before the visible violation of the elementary norms of computer security, because, knowing the transcendence of the operations that could be done from his computer, he left it on, abandoned his job and neglected the security measures, which provoked that someone unknown issued a fictitious payment message in the amount of 861 525.25 euros.

Another manager was also sanctioned for the same reason, once leaving his office, leaving the computer on with the open system, and in another, for going to a beauty salon and leaving his access code activated, which led to that people outside your position used your machine to make transfers.

Meanwhile, the main defendant, with the unlawful support of other defendants, knowing the legal prohibitions, created a fictitious company with the objective of financing, handed out photocopies of passports for that purpose and signed a request stating the need to obtain finance for said company.

On January 29, 2008, he went, together with another of the defendants, to the Representative Office of Republic Bank Ltd. in Havana, where they created in favor of B & B Finance Ltd. the bank account number 003111120739, with Amicorp Management Limited as rector that would allow a third defendant to be a signatory and sole shareholder.

The documentary and banking procedure for the creation of false entities was executed with the purpose of acquiring illegitimate capital gains from commercial operations, consisting of financial intermediation actions, loans and discounts of credit documents, in favor of foreign financial companies that operated in Cuba.

As the judgment of the Supreme People’s Court expresses this situation of corruption affects the credit of the banking institution and the officials who represent it. 

The owner of all these belongings was enriched by acts of corruption abroad and upon his return to Cuba incurred in money laundering, tax evasion, forgery of public documents and bribery, so it was processed an administrative confiscation file against him and eight frontmen resident in Baire and Havana, for an illegitimate patrimony calculated in seven million 42,000 CUP, which includes several real estate, auto and other goods, and a warehouse of electrical household appliances.

(Taken from Bohemia )

TRANSLATOR’S NOTE:
In English, a billion is a thousand million: 1,000,000,000
in Spanish, a billion is a million million: 1,000,000,000,000