Canadian jailed in Havana corruption scandal speaks out

Posted on Wednesday, 05.15.13

Canadian jailed in Havana corruption scandal speaks out
By Julian Sher of The Toronto Star And Juan O. Tamayo
jtamayo@elnuevoherald.com

Speaking over a scratchy telephone line from inside a Cuban prison,
Sarkis Yacoubian's voice goes suddenly silent. He's crying.

"I was so depressed at times, I wanted to commit suicide," says the
53-year-old entrepreneur.

In exclusive interviews from the La Condesa prison, Yacoubian provides
an insider's view of a sweeping anti-corruption campaign by the
government of Raúl Castro that has seen several foreign businessmen —
including himself and another Toronto-area businessman — jailed.

A joint investigation by The Toronto Star and El Nuevo Herald has found
that in a corruption-plagued country described in secret U.S. government
cables as "a state on the take," the two jailed Canadians are embroiled
in a high-stakes diplomatic and legal stand-off between Havana and
Ottawa, potentially jeopardizing millions in taxpayer dollars that
underwrite Canada's trade with Cuba.

Arrested in July 2011 and detained for nearly two years without charges,
Yacoubian, who ran a transport and trading company, was finally handed a
63-page indictment last month accusing him of bribery, tax evasion and
"activities damaging to the economy."

A suspect who says he quickly pointed the finger at widespread
wrongdoing by other Canadian and foreign businesses, Yacoubian now faces
up to 12 years in prison after he pleads guilty at his trial set to
begin next Thursday. The charges were filed in a special Havana court
for Crimes against the Security of the State, which can effectively hold
trials in secret.

"They found out this was an epidemic going all over the place and I was
the fall guy," says Yacoubian. "They want to give an example to the rest
of the businessmen. They want to scare them to death."

The second Canadian — 73-year-old Cy Tokmakjian who runs a global
transportation firm called the Tokmakjian Group — was picked up by Cuban
authorities in September 2011 and remains in jail with no specific
charges filed against him.

"We're as worried as anyone would be if their father is in a place where
they shouldn't be," said his son and company president Raffi Tokmakjian
in an interview at their corporate headquarters in Concord, Ontario.

Raffi and his two sisters say they are in daily phone contact with their
father. "He worries more about us. He says: 'You guys stay strong, I'm
okay,'" said Anni Tokmakjian, the company's director of sales. "We're
just focusing on getting him home, that's all we really care about."

But that might not be easy. The two entrepreneurs of Armenian origin,
one-time business associates turned bitter rivals, ran multi-million
dollar trading companies that sold heavy equipment, vehicles and
supplies to Cuban state companies in the transport, construction, nickel
and other industries.

Today, their Havana offices are shuttered, their fortunes frozen and
their future in limbo.

Cuban authorities in Havana and at the country's embassy in Ottawa
declined to be interviewed for this story.

Complicating matters is that millions in Canadian taxpayer dollars
funded by the Canadian Commercial Corporation (CCC) — a kind of broker
that underwrites contracts between the Cuban government and select
Canadian firms — may be at stake.

In 2011 and 2012, the CCC signed 38 contracts in Cuba worth more than
$68.4 million, the latest in its $650-million business with Cuba since
1991. Much of that financial support — for privacy reasons, the agency
won't disclose its client list — went to back deals made with the
Tokmakjian Group.

Now that Tokmakjian is in prison and the Cuban government has officially
revoked his company's license to operate, there are questions about what
the Cubans will do if their courts rule that Tokmakjian contracts backed
by the CCC were tainted by corruption.

The Tokmakjian Group is reported to be the second largest Canadian
operation in Cuba, with at least $80 million in annual sales in the country.

Raffi Tokmakjian says his father "fell in love with the place" when he
began investing in Cuba in the 1960s.

Yacoubian, too, had big dreams when he first came to Cuba in 1993. He
quickly became fluent in Spanish and, after working briefly for
Tokmakjian, he built his company, Tri-Star Caribbean, into a flourishing
$30-million-a-year enterprise.

It all came crashing down when plainclothes security officers swept into
his offices in Havana in July 2011.

Whisked away to a "safe house" for questioning and allowed outside for
only one hour a day, Yacoubian says he slipped into desperation and
depression. "I had lost my mind," he says. "I was talking to myself,
banging my head."

Then Yacoubian made a fateful choice: He blew the whistle. "Maybe in my
conscience I wanted my company to be brought down so that I could tell
once for all things that are going on," he says. "It was just eating me
alive."

He told his interrogators that he had little choice but to hand over
money to bureaucrats or officials to secure contracts or even to ensure
they were honored after winning a bid.

"If I didn't pay, at the end of the day they would just create problems
for me," he says. Prosecutors allege in their court filing that
Yacoubian or his employees bribed at least a dozen state officials with
everything from nice dinners and prepaid phone cards to cash — $300 for
a tip on a deal, $50,000 for a 2008 contract on earth movers.

Yacoubian disputes many of the details in the charges. But he says what
bothered him was that some of the foreign businessmen were "bigger
crooks" than the Cubans, profiting unduly from shady business dealings —
often, he says, with support or subsidies from Western governments.

Yacoubian says he spent the next few months turning what could have been
a police grilling of him into a kind of Corruption 101 class for his
interrogators.

"I tried to explain to them systematically how things could be done," he
says. "I gave them drawings, designs. I gave them names, people, how
they do it, why, when, where, what."

Yacoubian did not know that his tell-all tale would become fodder for a
campaign against corruption led by Raul Castro.

The Reuters news agency reported in February 2012 that Yacoubian's
videotaped confession was the centerpiece in a video titled "Metastasis"
that describes payoffs and bribes "spreading like cancer" into high
levels of the Cuban government.

In the video, shown only to top government and Communist Party
officials, "Yacoubian confesses he passed packets of money to Cuban
officials," Reuters reported.

Tokmakjian is also featured and accused of corruption. His children say
he firmly denies any wrongdoing, insisting there have been yearly audits
of their business partnerships with the Cubans with "no issues."

Tokmakjian and Yacoubian were eventually transferred to La Condesa, a
prison reserved for foreigners and disgraced government officials —
although the Canadians are kept apart in separate barracks.

The families of both men say they have received support from the
Canadian embassy in Havana and assurances that Foreign Minister John
Baird and Minister of State of Foreign Affairs Diane Ablonzy have pushed
the Cubans "at the highest levels" to provide justice for the jailed
Canadians "in a more timely matter."

Close observers of Canadian business and political affairs in Havana say
Ottawa and the CCC have to be concerned when a major player like
Tokmakjian, backed by federal money, runs afoul of the Castro regime.
Canada is one of Cuba's largest trading partners and its single largest
source of tourism revenue

One long-time Canadian investor with many years of experience in Havana,
who asked to remain anonymous because of the uncertain political climate
there, said "a lot of people" were frustrated that CCC was an exclusive
club, most of its money being "eaten up by a handful of companies,"
including the Tokmakjian Group.

For now, the CCC says it is not worried.

"The Corporation has consistently been paid by the Government of Cuba on
time regardless of the external environment," said Joanne Lostracco, the
CCC's manager of Government Relations.

Asked about the perils of a Canadian corporation operating in a Cuban
economy tainted by corruption, Lostracco said the CCC has a "strong due
diligence process" that imposes "full financial disclosure" on Canadian
companies and allows the CCC to withdraw from any contract "obtained
through illicit means."

The Tokmakjian children remain optimistic their father will be home
soon, taking heart from the fact that 10 other foreign employees of
their company who were detained by Cuban authorities have been released
in the past four months.

For his part, Yacoubian says he hopes to get a reduced sentence after he
pleads guilty at his trial next week "because I collaborated closely" —
a collaboration acknowledged by Cuban authorities in his indictment.

Yacoubian takes anti-depressants during the day and sleeping pills at
night, but he says the poor ventilation in the stifling heat and the
lack of chairs for his bad back are taking a toll.

Reflecting on the role he has played in unraveling Cuba's corruption
scandals, he has mixed emotions.

"It's a victory because now, how things were done (in the past) has been
unwrapped," he says. But he also recalls the lyrics from a rock song
that was popular when he and his family lived through the difficult
years of civil war in Lebanon:

"Don't be a hero," Yacoubian says. "Heroes are so sad."

http://www.miamiherald.com/2013/05/15/v-fullstory/3399755/canadian-jailed-in-havana-corruption.html