Bacardi and the Long Fight for Cuba

by Gjelten, Tom

  Noah Torno had come to Cuba as a personal representative of Seagram patriarch Sam Bronfman, the brilliant but ruthless liquor baron who had become rich during Prohibition selling whiskey through Meyer Lansky’s syndicate. Bronfman sent Torno to meet with Pepín Bosch because he knew a successful business operation when he saw one, and he wanted a piece of it.

  Before long, so did Fidel Castro.

  Chapter 16

  The Year Cuba Changed

  In March 1960, about fifteen months after Fidel Castro took command of Cuba, Pepín Bosch brought Bacardi rum distributors and their wives together for a three-day convention at a resort on the Isle of Pines, the former pirate hideout said to have been the inspiration for Robert Louis Stevenson’s Treasure Island. A week later, Bosch and his wife Enriqueta hosted Hatuey beer distributors at a beachfront hotel in Cienfuegos, on Cuba’s southern coast. Both events were lavish affairs. The salesmen gamely met each day to work out marketing strategies for the coming months, but the conventions were meant more for relaxation and recreation than for serious work. At lunchtime, Bosch circulated cheerfully among his guests, a glass of beer in hand, dressed casually in a short-sleeved sport shirt, offering congratulations for notable sales achievements. At sixty-two, he had barely any hair left and his waist had thickened considerably, but he still carried himself with great confidence, and he was determined to project good humor and optimism. He arranged boat rides and fishing excursions for the sales agents and their wives, and at evening banquets he applauded as couples rose to dance the cha-cha-chá before a live orchestra.

  They were vintage Bacardi gatherings, celebrating the good life and the carefree Cuban spirit with which the company had long been associated. But the prevailing mood was one of nostalgia. The new Cuba was a more austere place. Fidel Castro and his comrade Che Guevara were promoting a new revolutionary morality, and drinking and dancing were frowned upon. The Isles of Pines resort where the Bacardi sales agents gathered was just a few miles from a prison where a famous dissident comandante named Huber Matos was being held in a dark and dirty cell.

  On the night before the Hatuey convention opened in Cienfuegos, government agents took over the CMQ television network. The network owner, Abel Mestre, had gone on air that afternoon and denounced Fidel Castro for his dictatorial rule. Pepín Bosch had known Mestre, a fellow santiaguero, for years and helped him buy his broadcasting operation, and the government’s confiscation of Mestre’s network hung heavily over Bosch as he gathered with his Hatuey distributors in Cienfuegos. At the conclusion of the convention, his wife Enriqueta insisted that an impromptu Mass be held in one of the hotel meeting rooms, presided over by a local priest. The meeting ended on a quiet note. Given the hostility the revolutionary authorities were showing toward all “bourgeois” activity in Cuba, no one knew whether there would be any more such company celebrations.

  The term “revolution” was tossed around freely in Cuba. In the previous hundred years, there were at least three or four, and almost every major political party in Cuba from the time of José Martí onward found a way to call itself revolucionario, whether of the “authentic” or “orthodox” variety. In January 1959, most Cubans assumed that Fidel Castro’s “revolution” was the one he had just led against Batista. But that was only the start. “The revolution is beginning now,” Fidel said on that New Year night when he addressed the people of Santiago from the town hall balcony. The words might have been lost in the euphoria of the moment, but Castro meant just what he said. The real Cuban Revolution—a social, political, and economic refashioning of the country into a rigid socialist state—came only in 1959 and 1960. Castro advised Cubans at the outset that it would be “a harsh ... undertaking, particularly in the initial phases,” and indeed it was. It required the dismantling of a capitalist economic system, the uprooting and displacement of an entire social class, and the replacement of “bourgeois” political institutions and free media with a new structure of state control and one-party rule.

  Castro needed time to set the revolution in motion, which was one reason for his installation of respected moderates in the first post-Batista government. What only a tiny number of Cubans realized at the time was that key policy decisions during those early months were not being made inside the government at all but by a parallel task force meeting secretly in a beach house a half hour’s drive from downtown Havana. In addition to Fidel Castro, the group consisted of his brother Raúl, Che Guevara, Vilma Espín, and a handful of others, most of them committed Marxist-Leninists. The group allowed the appointed cabinet ministers to proceed with their moderate reform program, unaware that more radical plans were afoot. Finance Minister Rufo López-Fresquet, in his book My Fourteen Months with Castro, recalled being so overjoyed when Fidel signed the tax reform law in May 1959 that he spontaneously hugged him, only to notice that Fidel was laughing. “Maybe when the time comes to apply the law,” Castro said with a grin, “there won’t be any taxpayers.”

  By the end of 1959, twelve of the twenty-one cabinet ministers Castro had chosen in January were gone, having resigned or been forced out. At the central bank, Pepín Bosch’s friend Felipe Pazos had been replaced by Che Guevara, who knew nothing about economics and looked to the Soviet bloc for political inspiration. There could have been no more dramatic or symbolic ministerial shift. Guevara seemed to take delight in ridiculing the business leaders with whom he met. When asked on one occasion about the future role of private enterprise in Cuba, Guevara said there were plenty of sidewalk curbs that needed to be painted. The government, he predicted, would control the “important” industries, but private manufacturers would still be allowed to make such items as women’s handbags. Cuban businessmen weren’t sure of Guevara’s seriousness or whether he spoke for Castro, but a sign of the government’s intentions came in December 1959, with the confiscation of Textilera Ariguanabo, the big textile manufacturing firm owned by the Hedges family of New York. The Bacardi Rum Company was left as the largest industrial firm still in private hands.

  Desperate to shield their enterprises from government intervention, the Cuban National Association of Manufacturers came up with a plan to impress the authorities. They would back a law that would set aside a share of company profits in Cuba to establish a fund to support the country’s industrial development. In early 1960, a delegation went to see Finance Minister Rufo López-Fresquet with their idea. By then convinced that Fidel Castro and Che Guevara had no interest in protecting private Cuban companies, López-Fresquet told the businessmen not to waste their time.

  A turning point in the perception of Castro’s plans for Cuba had come the previous autumn, when he ordered the arrest of Huber Matos, a rebel army commander serving as military governor of Camagüey province. Matos had summoned up the courage to complain personally to Castro about growing Communist influence; after Castro ignored his protest, Matos resigned, saying he feared he would become “an obstacle to the revolution” if he remained in his position of command. At the time, Castro and his allies were still consolidating their power, and he knew that any allegation that his government was turning toward Communism could do serious damage. He promptly ordered Matos arrested, denouncing him as an agent of reactionary forces and accusing him of trying to ingratiate himself with the United States. At another of his massive outdoor rallies a few days later, Castro made a series of unsubstantiated allegations against Matos and then turned to the crowd and asked what should be done with him. “¡Al paredón!” the crowd answered. “To the wall!” Put on trial two months later, Matos was allowed to call no witnesses in his own defense. Raúl Castro suggested he should “die on his knees.”

  Matos calmly denied each charge presented against him but refused to ask for mercy and insisted he remained loyal to the revolution for which he had fought. “If this court believes that in order for the revolution to triumph and Cuba to progress, you must condemn me to the firing squad, I shall accept that decision,” he said. “And if you do, I invite the judges to witness my ex
ecution to show you that a commander from the Sierra Maestra knows how to die, shouting with his last breath: ‘Long live the Cuban revolution!’”

  Matos was not executed, but Castro had him sentenced to twenty years in the same Isle of Pines prison where he had been sent after his own Moncada conviction. Whereas Castro had been held in a comfortable room with books and cooking facilities, however, Matos was confined to a tiny, unlit cell, beaten, denied medical attention, and forced to sleep in his underwear on a stone floor. Castro had been released after only twenty-two months, but he kept Huber Matos in prison for every minute of his sentence, not releasing him until October 21, 1979, twenty years to the day after his arrest. Central bank president Felipe Pazos left the Castro government in response to the Matos affair, as did Manolo Ray, the public works minister (and codirector with Pepín Bosch of the Hanabanilla hydroelectric project).

  The ministers who were pushed aside in 1959—Miró Cardona, Urrutia, Pazos, Ray—were the very ones whose appointments had once given Pepín Bosch confidence in Castro’s government. Bosch was nevertheless careful to avoid making any provocative statements that might aggravate his own relations with the authorities, or those of his company. His New Year’s message to Bacardi workers, executives, and shareholders in January 1960 offered only a poignant hint of uncertainty about the company’s place in Cuba from then on:The ninety-eighth year in the life of this company is now beginning. Long years of joy and sadness have passed by. In all times, members of this organization have contributed their best and most sincere efforts to the Nation, in order that freedom, democracy, and human rights might be a reality in our country. We must always make such sacrifices and take such risks for our country without expecting anything in return.

  No one can predict the future; we will know it only as it unfolds. But with hopes of the best for all, I send you this greeting of happiness and joy.

  By springtime, Bosch suspected that the Castro government was preparing to move against Bacardi Rum. Among the warning signs was a union accusation that the company was engaging in “counterrevolutionary” behavior by investing in Brazil rather than in Cuba. Workers at the Hatuey brewery in Manacas denounced the plant manager, Augusto “Polo” Miranda, as a “capitalist enemy.” Such charges caught Bosch’s attention, because one method the authorities used to take over the management of a firm was to declare it had an “insoluble” problem with its unions, at which point the Ministry of Labor would intervene. A detailed questionnaire arrived from the National Institute of Agrarian Reform (INRA), the government agency that was expropriating farms, businesses, and other private property in Cuba. The INRA wanted to know what products Bacardi made at each of its facilities and in what quantities, plus how many workers were employed and on which shifts. In April 1960, the top Bacardi executive in the United States, Bartolo Estrada, asked his lawyers to determine whether a seizure of the company’s Cuban headquarters would affect the legal standing of its U.S. subsidiary, Bacardi Imports, within the United States. The answer was no.

  A more serious question was the security of the Bacardi trademarks. Pepín Bosch had concluded that the creation of Bacardi International Limited (BIL) in 1957 did not provide adequate protection of the company’s intellectual property. Though BIL now held exclusive rights to sell Bacardi products outside Cuba, the Bacardi trademarks themselves officially remained the property of Compañía Ron Bacardi, S.A., in Santiago. If the Cuban company were nationalized, the trademarks could be in jeopardy. Though it would be a tricky process, the legal ownership of the marks somehow had to be shifted outside the country. As a first step, Bosch needed to get the original certificates out of the country. Fearing they would be seized by airport inspectors if he attempted to carry them out himself, Bosch mailed the certificates to New York, one by one.

  The revolutionary authorities were meanwhile shutting down the remaining semi-independent media in Cuba. After the Diario de la Marina, the oldest of Havana’s newspapers, was “occupied” by workers in May, the courageous Santiago columnist Luis Aguilar dared to criticize the move in his column in Prensa Libre. “Now the time of unanimity is arriving in Cuba,” he wrote, “a solid and impenetrable totalitarian unanimity. ... There will be no disagreeing voices, no possibility of criticism, no public refutations.” Such commentaries often appeared in the newspaper with a critical postscript criticizing the writer, inserted by the printers’ union or by some journalist willing to do the bidding of the revolutionary authorities. In a note appended to Aguilar’s column, an anonymous writer pointed out that for anyone who objected to “totalitarian unanimity,” there was always prison, exile ... or the wall. After its publication, a mob confronted Aguilar in the streets with shouts of “¡Al paredón!” Chastened, he left Cuba with his wife and children.

  The authorities justified the suppression of independent media voices by saying they needed to protect the Cuban revolution from its enemies. They cited the policies and actions of the U.S. government, which had indeed concluded that Fidel Castro’s revolutionary regime had to be brought to an end. In March 1960, President Eisenhower issued a secret presidential order to the CIA to begin recruiting Cuban exiles who would be willing to return to the island and direct a guerrilla campaign against the Castro government. In June, U.S. oil companies announced they would not refine the Soviet crude oil that began arriving that month, prompting a new wave of anti-U.S. sentiment. In retaliation, the Cuban government nationalized $850 million of U.S. oil company assets on the island.

  Among the firms affected by the measure was an oil exploration company named Trans-Cuba, which Pepín Bosch had cofounded a few years earlier with the assistance of some U.S. investors. In the course of investigating Trans-Cuba assets, Cuban officials learned the firm had $1.8 million in a New York bank. They succeeded in getting the Trans-Cuba treasurer to write a check for the balance, payable to the Cuban government, but Bosch had included in the by-laws a requirement that the company president had to cosign all checks. A Cuban navy officer soon showed up at Bosch’s office with the check and a personal message from Fidel. “He praised me for my patriotism and my love of Cuba,” Bosch recalled later, “and then he asked me to sign the check.”

  Until that moment, Bosch had managed to stay out of trouble. Even after he abandoned the Castro delegation in Washington, Bosch said later, Fidel treated him with “utmost respect.” But now Castro had Bosch cornered. If he refused to sign the check, he could be arrested. Bosch told the navy officer he would have to consult with his shareholders before signing the check. Realizing there was no way out of his predicament, he began preparations to leave Cuba, fearing the navy officer would return. When his request for an “exit permit” didn’t receive prompt attention, Bosch went to the Interior Ministry to demand it. Told the minister was not there, Bosch said, “O.K., I’ll wait for him,” and took a seat in the reception area. When the minister, whom Bosch knew, finally arrived four hours later, he had no option but to approve the permit on the spot. Before leaving the country, Bosch stopped to say good-bye to his lawyer and aide Guillermo Mármol at the Bacardi building in downtown Havana. “We’re next,” Bosch warned. “We’ll be right behind the oil companies.” Bosch then headed to the airport with his wife Enriqueta, destined for Miami.

  It had been less than four months since the two of them had entertained Bacardi and Hatuey sales agents at Cuban beach resorts. For the second time in three years, a Cuban dictator had forced Bosch into exile. Like other Cubans who were leaving, he believed the Castro government would not survive and that he could soon return and pick up where he had left off, just as he had done after the collapse of the Batista regime a year and a half earlier. Fidel Castro was not Fulgencio Batista, however, and Pepín Bosch never set foot in Cuba again.

  Some of the Cubans most angered by Fidel Castro’s radical turn were those who, like Pepín Bosch, had once supported him and even defended him against his critics. Feeling personally betrayed, they resolved to work for his overthrow. By the summer of 1960, Manolo
Ray and Rufo López-Fresquet, Castro’s former public works and finance ministers, had both gone underground to conspire against the regime. For López-Fresquet, the last straw had been Castro’s decision to sign a trade pact with the Soviet Union. David Salvador, the head of Cuba’s main trade union organization, had also gone underground. Salvador had been an outspoken fidelista throughout 1959, committing Cuban labor to the revolutionary cause, but he broke with Castro after realizing that he would not allow Cuban workers to be independently represented. The three men formed an underground opposition group, the Movimiento Revolucionario del Pueblo (MRP), the Revolutionary Movement of the People, advocating a continuation of the Cuban revolution and its key reforms but without Castro as its head, fidelismo sin Fidel.

  No anti-Castro resistance effort was making headway, however. Fidel was far more adept at countering his foes than Batista had been—and far more popular. The rent and utility rate reductions, the expansion of health and education opportunities, and his firm nationalist stance earned Castro support among the Cuban people. For all his excesses, he was still calling for Cuba to move dramatically ahead for the benefit of those most in need, and his revolutionary movement still captivated members of the poor and working classes in particular, who did not remember life being so great when the 1940 Constitution was still in effect.

  Cubans were becoming more polarized by the day in their views of Fidel Castro and what he was doing to their country. Tensions were even developing within the Bacardi family. The Bacardi name had been linked to every revolution Cuba had experienced, and some family members felt that to turn against this one would be to betray their heritage. Herminia Cape, who had conspired with her brother-in-law Emilio Bacardi during the 1895 revolution, remained a fervent fidelista. Daniel Bacardi recognized that Castro was becoming a dictator, but he argued that the objectionable actions of the revolutionary government should be seen in a historical context and that its social and economic reforms were producing a more ethical nation. “The tyrant Batista and his rogues left our poor country impoverished,” he wrote to a friend in November 1959. “Thank goodness that the suffering of the people in that infernal time has purified the soul and the ideals of the Cuban, who now is good and wants this country to be for everyone and not just for a few.” Even after moderates began deserting Castro’s government, Daniel struggled to remain loyal, telling other family members that the progressive Bacardi record in Cuba meant the company would not be touched by the revolutionary authorities.