Bacardi and the Long Fight for Cuba

by Gjelten, Tom

  Chapter 11

  Cuba Corrupted

  Charles “Lucky” Luciano, the Mafia’s Boss of Bosses, visited Havana in 1946 and felt immediately at home: Here was a city with gambling casinos, racetracks, brothels, cocaine parlors, and—best of all—palm trees. “When I got to the hotel room the bellhop opened up the curtains on them big windows, and I looked out,” he said later. “Every place you looked there was palm trees, and it made me feel like I was back in Miami. I realized for the first time in over ten years that there was no handcuffs on me, and nobody was breathing over my shoulder.”

  Luciano had been arrested more than a decade earlier in New York on pandering charges and deported early in 1946 to his native Sicily. From there he quietly made his way to Cuba, a country whose government did not interfere with criminal business interests. His longtime associate Meyer Lansky, the legendary Mafia financier, had been involved in gambling operations in Havana since 1938, thanks to deals he cut with Fulgencio Batista. The gambling business slowed during the war years, but by 1946 U.S. tourists were again flocking to the island, the casinos and racetracks were producing huge profits, and the authorities looked the other way when organized crime bosses came to town. Havana was an ideal place for the Mafia leaders to assemble for one of their rare summits. There was much for them to discuss. The burgeoning Caribbean drug trade, the gambling business, and the emergent Las Vegas empire all raised questions about how territory and interests should be divided among the big crime families. Luciano still considered himself the supreme leader of the U.S. Mafia and was looking for ways to reassert his control. He sent word to Meyer Lansky to organize a gathering of the chieftains in the Cuban capital.

  The meeting was held in December 1946 at the Hotel Nacional, a grand and luxurious property set majestically on a bluff overlooking Havana harbor. The hotel entrance was at the end of a long, palm-lined driveway ideal for Mafia captains fond of ostentatious arrivals. Lansky’s friends in the Cuban government made all the necessary arrangements for maximum convenience and security. National Airlines, the U.S. air carrier, was authorized by the government to begin direct daily service to Havana from Newark, New Jersey, and the flights coincidentally began the week before the meeting was held. Virtually every top mafioso in the United States showed up, including Vito Genovese, Joe “Bananas” Bonanno, Frank Costello, Santo Trafficante Jr., and dozens more. The “delegates” took over the top four floors of the Nacional and the hotel mezzanine, while other guests, police, and Cuban government officials were kept away. For five days, the capos feasted on Cuban specialties, including roast breast of flamingo, black beans, marinated pork, tortoise stew, oysters, and grilled swordfish, washing it down with Bacardi rum and Hatuey beer and relaxing afterward with top-quality Cuban cigars. Frank Sinatra was flown in for entertainment. The impunity with which the group was able to assemble in Havana was illustrated by the fact that not a single Cuban newspaper dared take note of the gathering.

  The Cuban president whose administration hosted the unprecedented meeting was none other than Ramón Grau San Martín, the former university professor who just thirteen years earlier had symbolized the hopes of a generation of idealistic young Cuban revolutionaries. Grau, the founder of the “Authentic” Cuban Revolutionary Party, had defeated Carlos Saladrigas, Batista’s officially designated successor, in the 1944 election. In his campaign, Grau had nostalgically recalled the reformist promise represented by the administration over which he had presided for four months in 1933, and voters swept him into office with high expectations of honest government under conditions of peace and prosperity. His inauguration was celebrated across the country with ringing church bells and artillery salvos echoing through the hills.

  To Cuba’s lasting misfortune, however, Grau failed his nation miserably. His most prominent followers, the student “revolutionaries” of 1933, had been on the political sidelines for more than a decade, but instead of seeing a chance finally to put their country on the road to stability and good government, many took their return to power as an opportunity to settle old scores and grab their own share of the public wealth, emulating the worst practices of those they had opposed a decade earlier. The government payroll soon doubled in size, presenting new opportunities for selling jobs. Underpaid government officials and judges demanded payoffs in return for their public “services.” Public works contracts were often given to the builders offering the biggest kickbacks, while criminals with high political connections or pockets full of bribe money were free to act with impunity. Grau’s accommodation of the 1946 Mafia summit was just one example of how he deepened Cuba’s corruption. For Meyer Lansky and other Mafia figures on the island, the transition from Batista to Grau had gone so smoothly as to suggest that Batista had secretly favored Grau. “Lansky and Batista had him strictly in their pockets,” Luciano himself said of Grau many years later.

  The Bacardi Rum Company could not stay out of the reach of crooked public officials in the Grau administration any more than it could avoid batistiano labor leaders in the preceding years. Government auditors, health inspectors, and tax collectors routinely visited factories around the country, and generally they found something to criticize or condemn—unless some private accommodation could be made. Finance Ministry inspectors showed up at the Bacardi plant in Santiago one day in 1947 carrying the old, yellowed files on the company’s calculation of distillate losses to evaporation, the same papers the Gerardo Machado administration had produced nearly two decades earlier in an effort to pry more taxes out of the Bacardi firm. To the company’s astonishment, the inspectors were threatening to revive the challenge against the company’s loss claim.

  Pepín Bosch was furious. While some businessmen would simply have bribed the inspectors to drop the challenge (which was what they expected), Bosch fought it. The government was in the hands of his former auténtico comrades, and now they were demanding payoffs from old friends. Still recovering from his boat accident and burdened with bills from the fire that had damaged Bacardi facilities earlier that year, Bosch flew to Havana to confront the Grau administration. He went to see the Grau cabinet member he knew best, Prime Minister Carlos Prío, with whom he had once collaborated in anti-Machado activities. Prío was one of the student leaders closest to Grau during the events of 1933, and he and Bosch were both good friends of the longtime auténtico activist Carlos Hevia, one of Bosch’s chief coconspirators in the Gibara uprising. Prío apologized to Bosch for the finance inspectors’ actions and arranged to have the matter dropped, though not without advising Bosch that he was doing him a favor and that he might some day ask that it be returned.

  Cuba was becoming a criminal state. For decades, political conflict on the island had been associated with violence, and during the Grau presidency the pattern became even more deadly. Struggles for power and influence within the Cuban Congress or the trade union movement were routinely resolved through gun battles or even duels. Nowhere was the violence more pronounced than at the University of Havana. The campus was by tradition off-limits to police and soldiers, and as a result it had long been a haven for antigovernment militants. Weapons and ammunitions could be freely stockpiled there, and student leadership positions often went to those individuals with the best-armed and most intimidating supporters.

  Among the activists seeking to establish a university power base during this period was a brash young law student named Fidel Castro. He had grown up on a farm in the countryside of eastern Cuba and lacked the cultural sophistication of fellow students from Havana’s upper class; some of his close friends teased him by calling him guajiro (country boy). Though he had plenty of money thanks to his father, a wealthy landowner, Castro’s clothes were poorly matched and not always well laundered. He showed little interest in parties, did not dance or listen to music, and appeared to be incapable of flirting with girls. But his bold nature showed in the self-important way he carried himself on campus, dressed in a pinstriped jacket and gaudy tie, an eager student politico ready at a
ny moment to pontificate on some subject and persuade others of the correctness of his position. Tall and solidly built, with a long, sloping nose and high forehead, the nineteen-year-old Castro projected self-confidence and authority. His fellow students were either drawn to him as a natural leader or put off by his know-it-all attitude and his tendency to monopolize conversations.

  Far from being deterred by the thuggish aspect of the campus political scene, Castro sensed it was a world in which his physical courage and leadership abilities would stand out. Within weeks of arriving on campus, he was campaigning for election to the Federación Estudiantil Universitaria (FEU), the University Student Federation. What he stood for politically at the time is a mystery. “I arrived at the university as a political illiterate,” Castro himself told an interviewer many years later. It was an important acknowledgment, hinting that his legendary activism originated less in his political ideas than in some need for a stage on which to perform. “I never went to classes,” he boasted later. “Where I hung out was in the park—there were some benches there—talking to people. Various people gathered around me, and I explained things to them.” He made his big public speaking debut at a rally in November 1946, in the fall of his second year at law school, urging his fellow students to rise up against the Grau administration.

  He was soon going everywhere with a loaded pistol stuck in his belt, just like other young aspiring politicians at the university. At the time, political activities on the campus were dominated by two armed gangs, the Movimiento Socialista Revolucionario (MSR), the Revolutionary Socialist Movement, and its archrival, the Unión Insurreccional Revolucionaria (UIR), the Revolutionary Insurrec tional Union. In his first year, Castro largely steered clear of the gangs, but according to several friends, he soon decided it was in his interest to find a place for himself in their world, and he began acting like a typical campus gangster, primarily but not exclusively in UIR circles. Castro later claimed he armed himself only after a pro-Grau hit man warned him to abandon his activism or face the consequences. “That was when my own armed struggle began,” Castro said. “A friend got me a fifteen-shot Browning. I decided if I was to give up my life, it would be at a cost.”

  Several of his university colleagues later claimed that Castro himself attempted to assassinate a fellow student activist named Lionel Gómez, seeing him as a rival and hoping to impress a gangster figure whose political support Castro wanted. According to an eyewitness, Castro spotted Gómez walking near the university sports stadium one day in December 1946, around the time the Mafia capos were meeting at the Hotel Nacional, a few blocks away. The eyewitness, who was with him at the time, said Castro hid behind a stone wall and shot Gómez in the back without warning, seriously injuring him. Gómez eventually recovered, and Castro was never charged with the shooting, but the incident left him with the reputation of being a campus pistolero.

  As an activist, Castro focused on grand issues, such as imperialism, rather than on student rights or other immediate concerns. He was active in a campus committee to support the independence movement in Puerto Rico, and he headed the local Dominican Pro-Democracy Committee, which worked for the overthrow of Rafael Trujillo, the dictator of the Dominican Republic. Quiet political work, such as community organizing, held little interest for Castro; he preferred leading rallies and demonstrations and making fiery speeches in front of big crowds. He enjoyed getting in the middle of melees and was unafraid of physical confrontation, even at the risk of getting killed.

  In 1947 Castro joined an expedition to the Dominican Republic to lead an anti-Trujillo uprising, only to see the Cuban authorities, urged by the U.S. government, intervene to end it. A year later, he helped organize an “anti-imperialist” students’ congress in Colombia to coincide with a meeting of Western Hemisphere foreign ministers. While he was in Bogotá, a popular Colombian politician, Jorge Eliécer Gaitán, was assassinated, and the capital erupted in riots. Castro jumped eagerly into the action, grabbing a gun from a police arsenal, stealing a uniform to give him cover, and then engaging in a gun battle while leading an effort to take over a police station. He was soon arrested, but Cuban diplomats were able to get him out of the country. The experience in Bogotá stayed with Castro, however. He had seen and felt what it was like to be a revolutionary, if only for a few days, and he would never forget the thrill.

  Cubans were growing weary of the secret deal making and gangsterism that characterized political life in their country. In 1947, progressive elements within Grau’s Auténtico party, led by his former student follower Eduardo Chibás Jr. of Santiago, broke away to form the Partido del Pueblo Cubano (Ortodoxo), the Party of the Cuban People. Chibás added “Ortodoxo” to the party name in order to emphasize its “orthodox” adherence to the original Cuban revolution and the principles of José Martí, just as Grau had added “Auténtico” to his own party label. In his weekly Sunday evening radio broadcast, “Eddy” Chibás attacked his old allies in the Grau administration and preached constantly of the need to guard against graft. In the 1948 presidential elections, he ran against Auténtico candidate Carlos Prío, Grau’s former prime minister. Using a broom as his campaign symbol, Chibás promised to sweep house and end corruption. The ortodoxos were especially popular among the university students, and Fidel Castro—recognizing a promising politician when he saw one—soon emerged as Chibás’s leader on campus, appearing at his side whenever possible.

  Prío nevertheless won the election handily (and fairly), after agreeing that corruption was indeed a problem and promising the Cuban people he would implement a reformist program. Just forty-five years old at the time of his election and as charming as he was handsome, Prío would be remembered in Cuba as “el presidente cordial.” He had many flaws, including a love of luxury and an eagerness to get rich, but even his critics regarded him always as a gentleman. As one historian wrote, “It was difficult to dislike Prío and difficult to take him quite seriously.” Once he became president, Prío blamed Cuba’s suffering on his predecessor, Grau, who by then was facing prosecution for embezzlement.

  Prío had not been long in office, however, before he faced serious challenges of his own. The problem of political violence had persisted, even though Prío had attempted to buy off the leading gangsters with jobs for them and their followers. Chibás continued to hammer Prío in radio broadcasts, describing his government as “a scandalous bacchanalia of crimes, robberies and mismanagement.” To divert attention from his problems, Prío wanted to announce a massive new public works program, but he didn’t have the money in the state treasury to carry it out, and Cuba was having trouble getting external loans. His only hope was to recruit a sharp and respected finance minister, and he knew it would have to be someone from outside his immediate political circle.

  Fortunately, he was still on good terms with one of the best-known and most highly regarded business executives in all Cuba: Pepín Bosch of the Bacardi Rum Company. If Prío could persuade Bosch to join his administration, it would signal his presidential commitment to reform, shore up his support with the business community, improve Cuba’s image with external lenders, and link his government with a prestigious private enterprise. In spite of its well-publicized labor troubles and the criticism it had taken from some Communist commentators, Bacardi was still one of Cuba’s most esteemed native companies, and as its chief executive, Bosch was carrying on the tradition of progressive leadership for which the family had long been known. His contribution to the struggle against the Machado dictatorship had demonstrated his patriotism, and his successful management of Bacardi’s international expansion showed his skill as a businessman. President Carlos Prío saw Bosch as the man who could save his administration, and in the fall of 1949 Prío asked him to come to Havana and serve Cuba as his finance minister. As the supervisor of government contracts and the collector of taxes and custom duties, the Finance Ministry had long epitomized the problem of corruption in the Cuban state bureaucracy.

  But Bosch rejected Pr�
�o’s job offer. “I told him I was running Bacardi and had a factory in Puerto Rico and various others to oversee,” he recalled years later. “I told him it was impossible. I said I just couldn’t do it.” Enrique Schueg, though officially still the company president, had drifted into senility, and Bosch’s corporate leadership was indispensable. The company had just two years earlier opened a new Hatuey brewery in El Cotorro, outside Havana. Business in Mexico was booming, with the factory there producing rum for export to Canada as well as for the Mexican market. Work was continuing on new Bacardi facilities in Puerto Rico. With the reports of new gangster attacks in Havana, continuing labor unrest, and the escalating rhetoric of Eddy Chibás and his followers, Bosch considered the offer of a position in President Prío’s cabinet about as appealing as a jail term.

  President Prío was nevertheless persistent, telephoning Bosch repeatedly. Presidents of Cuba were accustomed to being pestered for cabinet positions, not having to do the pestering themselves. Finally, Prío summoned Bosch to his office in the presidential palace. There would be no more pleading. Standing tall behind his desk, he looked down squarely at the balding Bosch, five years his senior. “I am the president of Cuba,” Prío said, “and you are a Cuban, and I am now ordering you to take over the Ministry of Finance.” Bosch finally gave in but told Prío that his Bacardi responsibilities meant he could make only a short-term commitment. His appointment was nonetheless greeted with enthusiasm, with the Havana Post noting that “the naming of the dynamic boss of Bacardi to handle the nation’s purse strings is a sign that the Prío government is going all out to make a good record for itself.”