Corrupción – Cuba – Corruption
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Opening for Business

Opening for Business
A former Marielito positions himself as an entrepreneur in the new Cuba.
BY JON LEE ANDERSON

One night not long ago, in a new restaurant in Havana called VIPs, the
owner, a white-haired Catalan named Jordi, was speculating about what
life might be like in Cuba after a reconciliation with the United
States. “Come, let me show you,” he said confidingly, leading the way to
a large outdoor space between the neighboring building and his own, an
eighteenth-century villa built for a Spanish marqués. Gesturing with his
hands, Jordi indicated where he was building an open-air bar and eatery,
a wine cellar, a “chill-out area.” “It will be a club for friends,”
Jordi said. “Friends with money.”

Inside, Hugo Cancio, one of Jordi’s friends in the new transnational
élite, sat at a corner table. A Cuban-American businessman, Cancio lives
in Miami but shuttles to Havana so often that the VIPs menu has named
his favorite dish for him: the Don Hugo Paella. Cancio is fifty-one,
tall, with an athlete’s shoulders and a limber gait. He was accompanied
by his daughter Christy, who had recently finished college in the U.S.
Their table looked out on a square bar, a dozen tables full of smartly
dressed people, and a huge screen, with Chaplin’s “Modern Times” on a
continuous loop. On his iPhone 6, Cancio showed me a selfie that he and
Christy had taken earlier that day with Conan O’Brien, who was in Havana
taping his show. O’Brien had invited them to join him at El Aljibe, an
open-air restaurant that is popular with diplomats and Cuba’s senior
nomenclatura. “What do you think?” Cancio asked me, smiling. “Cuba’s
changing, man.”

Last December, after five decades of Cold War enmity and eighteen months
of secret talks, the United States and Cuba announced that they had
agreed to normalize relations. It was a rapprochement so long in coming
that younger generations, without much memory of invasions, embargoes,
and the threat of nuclear obliteration, barely knew why the bad feeling
was so ingrained in the politics of both countries. Cancio is a
casualty, like many others, of all that preceded this tentative
settlement. He left Cuba in the Mariel boatlift of 1980, in which as
many as a hundred and twenty thousand Cubans made a traumatic exodus to
the United States. Thirty-five years later, as the C.E.O. of a holding
company called Fuego Enterprises, he moves freely between Cuba and the
U.S. After spending years cultivating connections in both countries, he
has become an intermediary sought after by the increasing numbers of
Americans—investors, politicians, celebrities—who are going to Cuba. He
is pleased to tell you about his private meeting with Sting, or with
Paris Hilton. When Google visited Havana recently, a delegation came to
his office to discuss the local situation. In February, Cancio spoke to
a gathering of political conservatives in Washington, D.C., and in April
he addressed an audience in New York at a conference about Cuba
organized by the Wharton School of Business.

Cancio is recognizably Cuban, but he is also a man of earnest American
discipline. He meditates and does a hundred pushups each morning. His
bedtime reading lately is Hillary Clinton’s “Hard Choices” and a volume
by Deepak Chopra. In 2012, he launched OnCuba, a bimonthly magazine
stocked with ads, profiles of artists and musicians, and articles on
tourist destinations. In the past year, he has added a quarterly art
magazine, aimed at collectors and investors, and a real-estate
supplement. Cancio has ambitious plans to expand Fuego Enterprises. In
2010, after Raúl Castro announced sweeping reforms to open up the
island’s economy, allowing more Cubans to own their own businesses—known
as cuentapropismo—and to buy and sell property, Cancio assembled a team
to assess investment possibilities. He and his partners decided to focus
on media and entertainment, and then move into real estate, tourism, and
telecommunications. “Our goal was to position ourselves quickly, so when
the market opened we would be among the first to be established,” he said.

For now, Fuego is distinguished more by its potential than by its
assets. “If you look at the financials of the company, it’s a very
speculative investment and not a lot to get excited about,” Thomas
Herzfeld, who manages the Herzfeld Caribbean Basin Fund, one of Fuego’s
largest investors, said. “But if you look at Hugo there’s everything to
get excited about. He’s a leading expert on Cuba, he’s well respected
there, he cares about Cuba and its people.”

Cancio told me that it will likely take three to five years to see real
change in Cuba. In the meantime, the island, like any other country
undergoing a radical transformation, is a confounding place to do
business. In recent decades, businesses from Europe and Canada have
invested in Cuba, with uneven results; many deals dissolve, with
investors disappointed by returns or frustrated by the exigencies of
working with Castro’s government. In a few cases, foreign businessmen
have been abruptly jailed, on vague charges of corruption, and their
businesses seized. Cancio’s partner Ariel Machado, also a Cuban, jokes
about nightmares in which a shadowy rival reaches out to chop off his
hand with a machete.

Cancio puts a sunny face on all this complexity. He claims that he
“loves uncertainty,” and has faith in the leadership of both countries:
“I admire President Obama. And I’ve always admired Fidel Castro. I use
him as an example when I am invaded by discouragement—which doesn’t
happen much—because this is a man who had an idea and persuaded eighty
other people to face an army of fifty thousand, and to cross an ocean to
do it. So when people told me you can’t open a media space in Cuba I
say, well, Fidel did his revolution.”

To a visitor, Havana appears much the same as it has for decades––people
at loose ends, distressed buildings—but there has been an explosion of
small private enterprises and, with them, pockets of encouraging
prosperity. For the first time since the sixties, when Castro declared a
“revolutionary offensive” to “eliminate all manifestations of private
trade,” Cubans are being allowed to take charge of their material lives.
People are better dressed; there are more cars on the road; and
everywhere there are new restaurants and bars and hostels, where Cubans
rent rooms to foreign visitors. In early April, Airbnb announced the
launch of Cuban operations; by month’s end, Governor Andrew Cuomo had
flown in with a planeload of New York business executives for a trade
summit, and an N.B.A. good-will delegation had set up training camps for
Cuban athletes. On May 5th, the U.S. Treasury Department lifted
restrictions on ferry services from Florida; the same day, Jet Blue said
that it planned to begin flying between Havana and New York.

Tourism has surged nearly twenty per cent this year, and hotel lobbies
in Havana are noisy with troubadours singing “Guantanamera” and odes to
Che Guevara; buses and luridly painted old Chevys trundle sightseers
around the city. There are Europeans, Canadians, Brazilians; one
morning, I saw a group of elderly Chinese visitors dressed in safari
clothing exploring the grounds of La Finca Vigía, Hemingway’s home.

Increasingly, there are also Americans, mostly sixty-somethings on
“cultural tours” but also college students and hipsters from New York
and Los Angeles. People in Havana joke that the latest accessory for an
evening out is an American friend. The city’s harbor is being
refurbished to accommodate U.S. cruise ships. Cancio’s new travel arm,
OnCuba Travel, offers guided tours to Americans with the slogan “Be the
first to witness the rise of free enterprise in Cuba.”

Havana’s night life, once moribund, is alive again. In a former
peanut-oil factory, La Fábrica de Arte Cubano hosts dancers, filmmakers,
painters, photographers, and musicians. Across town, the Las Vegas
Cabaret features a transvestite show. Havana, long a Soviet-style
culinary wasteland, is now a fine place to go out for Spanish, Italian,
Iranian, Turkish, Swedish, or Chinese, in restaurants frequented by
foreigners but also by newly moneyed Cubans—what one of Cancio’s young
writers, Carlos Manuel Álvarez, describes as “specimens at the midway
gallop between Cuba’s iron socialist morality and a certain
post-realignment Havana consumerism.”

One day this spring, as I rode through the city in a taxi, a glossy
black BMW raced past, and a policeman at the next intersection gave the
driver a deferential salute. Until recently, the only known wealthy
Cubans were a handful of musicians and athletes who, in a special
government dispensation meant to dissuade them from leaving, were
permitted to keep their foreign earnings. Even so, few were
ostentatious, and, if they bought cars, they drove Peugeots or Hyundais.
My taxi-driver explained that the car’s owner was probably an
“entertainer.” Another Cuban musician, he told me wistfully, owned a
Ferrari.

Officially, Cuba’s changes are intended to bring about “more socialism,”
but few Cubans seem to believe that. “We’re not only making peace with
the Americans,” one senior Cuban official told me. “We’re changing
everything. But not even those of us involved in the process know what
that means yet.” Cuba seems bound on a course not unlike that of Vietnam
and China: hybrid Communist states in which citizens enjoy few political
liberties but significant economic freedom.

Cubans like Cancio have deduced that expressions of resentment will get
them nowhere. One day, a pop-up protest blocked a road tunnel at the end
of the Malecón, Havana’s seaside corniche. Several dozen of the Damas de
Blanco—the Ladies in White, relatives of imprisoned dissidents—had
gathered to hold up flowers and pictures of their loved ones and to
shout, “Down with the dictatorship!” Within ten minutes, police had
herded the Damas onto buses and driven them away. All that was left was
a mysterious group of civilians, shouting loyalist chants, and a few
watchful policemen.

All around the city, even as los cambios—the changes—take root, there is
a world-weary acceptance of the revolution’s persistence and of its
mistakes. When I asked Cancio what it meant to be a Marielito, he quoted
a speech that Castro gave during the crisis, in which he repudiated the
Cubans who had chosen to leave the country: “We don’t want them and we
don’t need them.” Cancio shrugged, smiled, and said, “Well, here I am.”

Hugo Cancio’s base in Havana— his office and his apartment—occupies the
ninth floor of a fifties-era high-rise that overlooks the Malecón. The
building has a quasi-official atmosphere, a remnant of the years in
which every Cuban enterprise was run by the government. It once housed
the operations room for Fidel’s Battle of Ideas, a campaign to rekindle
revolutionary fervor that has been superseded by Raúl’s Changes. In the
lobby, a pair of brusque concierges keep watch, and an elevator
attendant sits all day, mutely pushing buttons.

The OnCuba office has a sleek lounge, whose gray-and-white walls are
decorated with lyrics by the Cuban musician Silvio Rodríguez. One of
them reads, “I prefer to talk of impossible things, because of the
possible too much is already known.” In three workrooms, a half-dozen
young Cubans sit intently at white benches with new large-screen Apple
computers.

Although the offices are in Havana, OnCuba is not officially distributed
there; Cancio is accredited by Cuba’s Foreign Ministry as a
representative of the foreign press. OnCuba is printed in the U.S.,
distributed on charter flights that fly between Florida and Cuba, and
sold at American supermarkets, bookstores, and newsstands. There are
stories about rickshaw drivers, skaters, ballerinas, and this summer’s
Art Biennial. The magazine avoids politics, but it reports,
boosterishly, on the burgeoning U.S.-Cuba relationship. Last year, Joe
Garcia, a Cuban-American congressman from Florida, caused controversy
when he signalled that he might be in favor of ending the trade embargo
against Cuba. Cancio put him on the cover.

Cubans have always shown great initiative in finding alternatives to the
anodyne government-sponsored news. For years, moonlighting engineers
installed satellite dishes in homes, to bring in forbidden television
shows. La bola, Cuba’s bush telegraph, transmits news around the island
long before it is covered by state media. The latest innovation is el
paquete (the package), an electronic bundle of weekly news and
entertainment, packed onto a USB stick and delivered by couriers on
motorbikes. A few months ago, Cancio assigned a story on the subject,
and the reporters found that el paquete was effectively the island’s
largest private business: it employs forty-five thousand Cubans, brings
in one and a half million dollars a week, and reaches five million
people—nearly half of Cuba’s population. After the report, Cancio
negotiated with the head of el paquete to have OnCuba included.

The magazine’s Web site also reaches many Cubans, as well as government
minders, and that is where it occasionally runs into trouble. To lead
the investigative reporting team, Cancio hired an Uruguayan journalist
named Fernando Ravsberg, who worked for the BBC in Cuba for two decades.
Last summer, his reporters began covering places around the city where
authorities were not regularly collecting garbage. At a disposal site on
the outskirts, the journalists discovered a fetid encampment, where
scavengers raked through garbage for items to sell. In Cuba, where the
government has long boasted of its social-welfare system, such sights
are shocking. “We did the garbage story,” Ravsberg said, “and afterward,
lo and behold, the state television came along and reported on it.”

OnCuba reports on social ills as a crusading local paper might in the
United States—enough to rile the authorities but not enough to be seen
as subversive. Ravsberg cautioned his reporters not to overemphasize the
scavengers’ miserable lives. “They are young and were naturally affected
by that, so I had to make them understand that it had to be put into the
proper context,” he explained. “Which Latin-American country does not
have people living in garbage?”

One day in the office, I found Cancio talking with an editor about a
photograph that he wanted removed from the Web site. Cancio told me that
the photograph depicted a poet who had once been censured by the Party.
“The person in that photo isn’t even mentioned in the article. I don’t
think they even knew who the poet was. So my question was: ‘What is the
purpose of the photo, what does it contribute?’ ” When I asked Cancio
about his role as house censor, he gave a tortuous explanation: “The
purpose of our project is not to hurt anyone’s feelings. It is to unite,
find common points of exchange, educate, change hearts and minds. We
want to be faithful to the truth and to a new and dignified journalism
for the country, but, if we can avoid hurting sensitivities
unnecessarily, we should.” But, he added, he had hired youngsters who
were “not contaminated with paradigms and ideologies that can lead to
incomprehension. I want to surround myself with people who love their
country unconditionally but who are not bound to old and obsolete ideas.”

Cancio was born in 1964—five years after Fidel Castro seized power—into
a family of entertainers. His father, Miguel Cancio, founded the popular
sixties band Los Zafiros, along with one of his mother’s seven siblings,
most of whom were also singers and musicians. Los Zafiros were inspired
by the harmonious doo-wop of the Platters, but also incorporated
influences from Cuban music and bossa nova. (The band’s hit “I Have
Come” was revived in “Breaking Bad,” playing winsomely as Walter White’s
R.V.-cum-meth lab is destroyed by a bulldozer.)

With his parents often away on tour, Cancio was looked after by his
grandmother, and though he showed talent as a percussionist, he was
dismayed by his family’s bohemianism. He recalls waking up before school
to find the living room full of drunk musicians and coming home in the
afternoon to find some of them still there, sleeping. “I decided then
and there I didn’t want to be a musician,” he said.

Cancio wanted instead to be a doctor, like his grandfather, and he
managed good enough grades to attend a boarding school in the province
of Matanzas. Then, one night, when he was sixteen, he was caught telling
a forbidden joke to other students in their dormitory bunks. Cancio
recalls that it was one of the Pepito jokes, based on a beloved Cuban
character, a smart-ass boy who pokes fun at everyone: “One day, Fidel
asks his bodyguards to bring Pepito to tell him jokes; he wanted to
laugh. So his bodyguards go to Pepito’s house. Pepito was just waking up
and didn’t want to come, because he hadn’t yet had his breakfast, but he
finally went. When he got to Fidel’s house, Fidel told Pepito he could
have whatever he wanted. So Pepito asks for a hearty breakfast. When he
is done eating, Fidel tells him, ‘Pepito, I want you to know that soon
all the children of Cuba will be eating a breakfast like the one you’ve
had today.’ Pepito says to Fidel, ‘Did you bring me here to tell tales,
or for you to tell them to me?’ ”

Cancio and his friends were hauled in by the school authorities, forced
to recant in front of their peers, and told that they were being
expelled. “They said we had betrayed the trust of the revolution,”
Cancio recalled. “From that moment on, I basically no longer had a
future in the country, and my mother said we were going to have to go.”

In those days, there was virtually no legal way to leave Cuba. Then, in
April, 1980, the Peruvian Embassy grounds in Havana were overrun by
thousands of Cubans seeking asylum. After an acrimonious standoff,
Castro announced that all those who wished to leave could do so from the
nearby port of Mariel—as long as they had a boat to take them. As
Cuban-Americans scrambled to Mariel in yachts to evacuate relatives,
Fidel saw an opportunity to get rid of Cuba’s unwanted: State Security
agents brought thousands of criminals from Cuba’s jails and inmates from
mental asylums and loaded them onto boats.

Mariel offered an unexpected way out for Cancio, along with his mother
and his younger sister. Cancio recalled, “My mother told me that, to be
able to go, I’d have to appear before a panel and say I was a
homosexual. So I did that. I remember one of the panel members asked me,
‘Are you a passive or an active homosexual?’ ” Laughing, Cancio told me,
“I didn’t know what that meant, so I said, ‘Both things.’ ”

Cancio was taken to a holding facility in Havana, then to one near
Mariel, a camp for unaccompanied males, where prospective émigrés waited
along with newly released criminals. He was frightened, and worried
about his mother and sister, from whom he had been forcibly separated.
After a few weeks, he was put on a luxurious American cabin cruiser. As
the boat left Mariel harbor, Cancio panicked and tried to dive overboard
and swim ashore, but the American captain calmed him.

In Miami, Cancio was reunited with his mother and sister, who had come
on another boat, and they spent several days in the Orange Bowl, where
refugees were kept until their relatives or social services could
provide housing. Cancio recalls that he viewed his new surroundings as
“a world of infinite possibilities”—a phrase that he still repeats, like
a slogan. After a few months, the Cancios were given permanent
accommodations in South Miami Beach, in a run-down Deco apartment
building at Fourth and Collins.

Because of the criminals in their midst, the Marielitos quickly acquired
a fearsome reputation in the United States. In Brian De Palma’s 1983
remake of “Scarface,” the vicious drug dealer Tony Montana is a
Marielito. Not long after Cancio and his family moved to Miami, another
Marielito pulled a gun on him and his sister outside their building.
Cancio’s mother, terrified of the crime in their neighborhood, forbade
her daughter to go out on her own.

Cancio graduated from Miami Beach High and went to work, as a busboy in
a kosher restaurant, then as a security guard, then hawking clothes at a
flea market. He got a break selling cars at a Mitsubishi dealership, and
within six months he’d become the sales manager. He moved on to a BMW
dealership, and from there to pioneer Hyundai’s sales operation in South
Florida. One night, he met a young woman, Marian, of Puerto Rican
extraction. They began living together, and they had a daughter, Cherie,
and then Christy. By his mid-twenties, he said, “I had bought my first
home, with a pool, and lived there with my family.”

One day, during a trip to the Cayman Islands, he met a visiting Cuban
tourism official who confided that Cuba and the U.S. were about to
authorize “family reunification trips.” Cancio returned to Miami and
opened a travel agency offering “Viajes a Cuba.” He also got an OFAC
license—a waiver from the U.S. Treasury Department to do business with
Cuba. When the family visits were duly authorized, Cancio says, his
business was “all ready to go.”

Despite his success in the United States, Cancio was overwhelmed by
nostalgia for Cuba. In December, 1993, he and his sister returned to
spend Christmas with family in Varadero. Cancio teared up as he recalled
knocking on relatives’ doors to surprise them. At the family house,
boyhood friends came over to say hello, except for one, who had joined
Cuban State Security. “I went to his house, a couple of streets away,
and I shouted at him,” Cancio said. “But he didn’t come out.”

In April, 1994, with the Cuban economy suffering from the loss of Soviet
subsidies, the Castro government held a conference to promote
reconciliation with the exile community in Florida. It was a major
about-face. Castro had repudiated the Cubans who left as
gusanos—worms—and forbidden them to return home; he referred to
Florida’s Cuban exile community as la Mafia de Miami. Cancio, who
describes himself as “naïve and politically out of the loop at the
time,” nevertheless found himself on the list of Cuban-Americans who
were invited to the conference. He made a number of connections there,
including several well-placed officials who have remained his friends.

On the last day, the attendees stood in line, and one by one they were
introduced to Fidel Castro for a quick handshake and a photograph. As
Cancio waited, he told me, “I thought about all the people who wanted to
kill him, and then worried that his bodyguards could read my mind. But I
didn’t feel any hatred or animosity toward him. There he was: tall,
pinkish, long hands and long nails. I saw him calling people by name.
When it was my turn, he asked how my father was. He had seen a
documentary about Los Zafiros.”

Cancio watched the documentary—a portrayal of the decline of Los
Zafiros, whose members had mostly succumbed to alcoholism—and decided to
make his own film, focussing on the band’s “height of success, rather
than on their disintegration.” He raised money, got permission to shoot
in Cuba, and persuaded his father to be his chief consultant on
location. “The film threw me into the entertainment world—the world of
my family—but as a producer, not as a performer,” Cancio said. “Zafiros,
Blue Madness” had its première in 1997 at the Cine Payret, in Old
Havana, and won the People’s Choice Award at the Havana Film Festival
that year.

When he showed the movie in Miami, though, members of the anti-Castro
exile community staged an angry demonstration, and a woman spat in
Cancio’s face. “It turned me into an activist to exercise my right in
favor of cultural exchange,” he said. He began to bring a different
Cuban band to the United States every month, and formed a company to
produce music videos. It was a sensible gambit: for decades, music had
been among Cuba’s most popular legal exports. Cancio mostly lost money
on the bands’ tours, however, and his dealings with the regime
infuriated Miami Cubans; he received threats, and a bomb was set off at
a night club where one of his bands was booked. But the Cuban connection
was lucrative in other ways. He brokered a deal between Cayman Airways
and Cuba’s official travel agency, opening up a way for Cuban-Americans
to bypass the U.S. travel ban. Then, in February, 1996, two small
airplanes piloted by anti-Castro exiles planning to drop propaganda
leaflets over Havana were shot down, killing four Cuban-Americans.
President Clinton signed a stringent new sanctions package—which, for
Cancio, provided an opportunity. While most of the other Cuba-focussed
travel agencies “scrambled to reinvent themselves,” Cancio took his
customers and put them on planes to Cuba via the Cayman Islands. “I made
a bundle of cash,” he said.

During the Bush years, things became difficult again: in 2003, in a
crackdown timed to coincide with the U.S. invasion of Iraq, Castro
arrested seventy-five dissidents, human-rights activists, and
journalists, ushering in a period known as the Black Spring. After
Cancio wrote an article condemning the repression, he was not allowed
back into Cuba for a year. Angry, he stayed away for four more. He
concentrated on producing music and investing in Florida real estate; he
also set up a lobbying group, Cambio Cubano, to advocate against the
U.S. embargo.

After Barack Obama took office, and tensions between Cuba and the U.S.
subsided, the Cuban Interests Section in Washington contacted Cancio,
asking him for a copy of “Zafiros.” It was an overture. When a half
sister in Cuba fell ill, Cancio was granted an emergency humanitarian
visa to see her. During his visit, Cancio says, he was summoned for a
meeting with members of the Central Committee of the Communist Party.
“They told me that they wanted me to resume my cultural activities on
behalf of Cuba, and they apologized” for not allowing him to return.
Cancio said that he would criticize Castro again if it seemed warranted.
“At the same time, I told them I would never do anything against my
country.” For the government, Cancio was an appealing figure: a
Cuban-American capitalist who was also a patriot, and not averse to
working within the Party’s limitations—especially if his business got a
boost.

After returning to Miami, Cancio began signing up big-ticket Cuban
groups for concerts in the U.S.: Los Van Van, NG La Banda, Pablo
Milanés. He booked Silvio Rodríguez for his first U.S. tour, including a
sold-out concert at Carnegie Hall. “We sold 1.8 million dollars’ worth
of tickets,” he told me.

In 2011, the Cuban cardinal, Jaime Ortega, told Cancio that he had
spoken with Raúl and become convinced that a transformation was coming.
“I realized that my country was changing enormously,” Cancio said. “I
decided to get a lot more involved in the United States in helping look
for a change of policy toward Cuba.” He also met with Cuban officials,
and told them that they “needed to be more open to Miami Cubans, too,
and not treat us like fucking immigrants.” In 2012, Cuba passed a new
immigration law that lifted long-standing travel restrictions; it also
permitted Cubans living in Miami to visit without overt stigma or
sanction. “The rhetoric changed,” Cancio said. “You no longer hear us
referred to as la Mafia de Miami. We began to feel more at home in our
country.” He added, “They know that most of the new businesses opening
up in Cuba are being done with Miami money.”

Much of the investment coming into “the new Cuba” is opaque, but in
Havana it is easy to see the signs of American money: glitzy new bars
and restaurants, financed by investors in Miami and elsewhere. Since
2009, Obama has been raising the limits on remittances, and at least two
billion dollars a year is now flowing into the country. Many of the
homes being bought and restored in Cuba are also financed with Miami
money, either with loans from Cuban-Americans to their relatives or with
outright investments. The new property law allows only Cuban citizens to
buy and sell real estate, so there is a booming business for front
people, called testaferros. Cuban-Americans have an advantage, being
required only to legally reacquire their Cuban nationality. Many are
apparently doing so, and hanging on to their U.S. citizenship as well.
In Havana, I met a successful Miami night-club owner who is converting
his family’s old home into a boutique hotel. He flies back to Miami
every couple of months to bring cash from his U.S. bank in order to pay
for the work.

The club owner told me that he also does much of his shopping back home.
Despite the new money, in many places consumer goods still aren’t
available; Havana remains a challenging place to buy a Phillips
screwdriver or a pair of Nikes. In Varadero, I met a friend of Cancio’s
who had left with him from Mariel, thirty-five years ago. He explained
that he flew each month to Miami, where he had worked for years as a
waiter and as a taxi-driver, to pick up his Social Security check. He
returned to Havana with a duffelbag stuffed full of consumer items to
hand off to a fence and a few to sell: “Three cell phones, ten Lycras,
ten toothpastes, ten vitamins, ten Omega-8s.” Between goods that he
smuggled into Cuba and rum and cigars that he took back to Miami, he
earned an extra five hundred dollars a month—just enough to live on, he
said.

One afternoon in Miami, Cancio drove me around in his black 7 Series
BMW, passing Fourth and Collins, where the Marielito had pulled a gun on
him and his sister. The neighborhood had changed a lot, he said. At
South Point, which overlooks the waterway from the ocean to Miami
Harbor, he pointed to the tallest apartment tower and informed me that
Tom Herzfeld, his backer at Fuego, owned its triplex penthouse.

Cancio wanted a hamburger, so we drove to Lincoln Road Mall, an upscale
pedestrian shopping strip. Cancio was wearing his usual gear—a designer
polo shirt, fitted jeans, and Gucci loafers. He had on a distinctive
gold watch with Gothic lettering. “It’s a Cuervo y Sobrinos,” he
explained, a defunct Cuban brand that had been revived by a Swiss
watchmaker; he had bought his at the factory, in Lugano. As we waited
for our food, Cancio toyed with his iPhone, monitoring a series of
e-mails, texts, and phone calls. One e-mail was from a prominent
Cuban-American businessman with ties to Google, who wanted to confer
about the employees’ visit. Messages came in steadily, and he announced
each one. As he finished his fries, he indicated a new one, from the
editor of Billboard.

When potential investors visit Cuba, Cancio introduces them to local
residents, as well as to businesspeople. “If you want to do business
here you have to know the people and the culture,” he said. The key
introductions he provides are to government officials, some of whom
wield considerable authority over the economy. As a middleman, Cancio
knows that his success depends on delivering results to both the U.S.
and Cuba, without prejudice. He likes to point out that, with each step
toward restoring diplomatic relations, Fuego’s stock has risen. A large
American P.R. firm recently signed a contract with Cancio to represent
clients who are interested in doing business in Cuba. So far, the most
significant changes in U.S. law are loosened restrictions on travel and
telecommunications, and Fuego is striving to take advantage. It owns
MAScell, a Miami-based phone-card firm that is now operating in Cuba,
and Cancio has also secured exclusive deals with two U.S.
telecommunications firms, which he would identify only as “midsized,
with annual revenues of five to seven hundred million dollars.” He said,
“For them, we’ve been doing a study of the Cuban market for potential
business opportunities.”

Around the time Fuego launched its real-estate magazine, it began
bringing tourists to Cuba, hosting lunch visits at OnCuba’s offices. At
one of those sessions, Cancio spoke to twenty-five Americans of
retirement age. As the tourists—comfortable shoes, bottled water—asked
questions, he gave them what sounded curiously like a political stump
speech. “OnCuba is a way to show that Cuba is changing—a new country,
more tolerant, with defects, yes, but one that is changing,” he said.
The new Cuba he envisioned was “defined not only by the Castro brothers,
or their enemies, or any particular group, but by the whole Cuban family.”

That new Cuba is unlikely to come as fast as Cancio would like. Frank
Mora, the director of the Latin-American studies center at Florida
International University, and a former Deputy Assistant U.S. Secretary
of Defense under Obama, told me that governments on both sides are
slowed by caution and internal resistance. Of Cuba, he said, “The regime
is overwhelmed at the moment, and there’s an element of improvisation—as
always with the Cubans—so they are going to go very slowly.” The model
is Vietnam, not China, he said. “They fear the speed of China’s
transition, and Tiananmen Square is their nightmare.”

Mora suggested that there was no certainty that more capitalism would
lead to more democracy. “I think Obama is making a bet that this will
help make the Cubans the agents of their own change,” he said. “I think
Raúl is making a bet that this will ultimately strengthen the hand of
the Party. There will be people making more money, and some may transfer
that economic power to a desire for political reform. On the other hand,
those same people may help put the brakes on by supporting the regime,
so as to protect their investments.”

Despite the excitement in the United States, American investment in Cuba
is still essentially notional. “The number is zero,” John Kavulich, the
president of the U.S.-Cuba Trade and Economic Council, told me. Although
Obama has introduced a few exceptions to the U.S. embargo, much of it
still stands. And its effect is compounded in Cuba by what Kavulich
described as an “internal embargo.” As Kavulich points out, you can give
a relative in Holguín money to start a hair salon, but he’ll need to ask
the local bureaucracy for a license to import shampoo.

Luis René Fernández Tabío, an economist who does research for the
government, said that Cuba must be wary. “If the free market were
allowed here, there would be nothing left for the Cubans in seventy-two
hours,” he said. “The challenge for us is to make sure the Cuban
population understands that socialism is the way to vouchsafe Cuba’s
national sovereignty. A prosperous and sustainable socialism.” When
Obama and Castro appeared on television to announce the restoration of
relations, Obama stood and talked in detail about the future he hoped to
encourage in Cuba. Raúl Castro, wearing a military uniform, remained in
his seat and spoke in generalities—a display of ambivalence that Cubans
have not failed to interpret. Although his government has entertained
many proposals from U.S. businesses, it has committed to almost none.
The government, which controls three-quarters of the economy, is far
more concerned with policing than with growth. The Cuban-American lawyer
Pedro Freyre, who represents a number of companies interested in doing
business in Cuba, told me, “If the Cubans could run their economy the
way they run State Security, then Cuba will be the next Singapore.” But
as long as the Castros are alive everything will depend on being able to
deal with the government.

When I asked Cancio about the difficulties of negotiating with the
government, he took a long time to answer: “It’s, uh, it’s not a
comfortable place to be.” A few days earlier, he’d been summoned by
officials to discuss a complaint. The meeting had gone on for three
hours. “They came over all flattering, like, ‘We love what you do,’ ” he
said. “ ‘It’s not us, but some guy in the bureaucracy who doesn’t
understand anything. You don’t want to jeopardize everything you’ve done
over one little thing.’ ” Cancio explained that there was a group of
hard-liners within the Department of Revolutionary Orientation who
opposed him. Their channel for attacking him was a small group of Cuban
journalists, who called him “the Americans’ Trojan horse.” But Ravsberg
suggested that Cancio had allies, too: “Cancio is atendido”—meaning,
roughly, protected—“at a very high level, above the Ideological
Department.” Who would that be? “Technically, the next person higher is
Díaz-Canel.” Miguel Díaz-Canel is the Vice-President, picked to succeed
Raúl Castro when he steps down, in 2018. “And then it’s Raúl.”

Over lunch, Cancio said that if he had a guardian angel he didn’t know
who it was. “I have always thought that I don’t have any clout, but that
they are using me,” as a test of how far the cambios can extend without
threatening the Party’s authority. Cancio told me that a well-connected
Cuban friend had recently called to invite him to his house. “He said,
‘I have some guys here who are talking about you.’ I got there, and
there were three officials, and they were drinking Blue Label. I
recognized one of them. He had caused me problems years before. When he
saw me, he exclaimed, ‘This guy, he’s a son of a bitch.’ Then he said,
‘Drink with me.’ And he said to his friends, ‘This son of a bitch has
won a space in Cuba, more even than we have, maybe. He’s a cabrón’ ”—a
clever bastard. What the man said was resentful, but it was also a
grudging recognition of a slow but profound change. “He kept saying,
‘You’re a cabrón, man, and you deserve everything you’ve achieved.’ ”

Source: Entrepreneurs in the New Cuba – The New Yorker –
http://www.newyorker.com/magazine/2015/07/20/opening-for-business

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