On
Sept. 10, 2011, Cy Tokmakjian was in Havana, about to hop into his car.
He had a quick chat with his son Raffi, who had arrived in Cuba a week
earlier with a delegation of young company presidents to encourage them
to invest in the island, which appeared to be opening up for foreign
businesses. While Raffi was talking up Cuba’s virtues, the Tokmakjians’
import/export company, the Tokmakjian Group, was being audited by the
country’s Communist regime. “My father said: ‘They’re doing an audit, it
shouldn’t be a problem. It should be over in a couple of days. I’m
driving myself to the investigators to try and get this done.’”
That was the last time Cy spoke to his son as a free man. “This is a
tricky situation,” says Raffi. Cy, 74, the Tokmakjian Group’s founder
and owner, has been a prisoner in Cuba since that day, imprisoned
without charges and then accused of bribery and “economic crimes” that
the family and many others insist are false and which appear to be part
of a political struggle.
Headquartered in Vaughan, Ont., the Tokmakjian Group is a
transportation and import company that has done business in Cuba for two
decades. It was the largest private business in Cuba. As the exclusive
distributor for Hyundai product, it had approximately $80 million in
total annual revenues. “Obviously, it’s a struggle for us,” Raffi says.
“Our father, the grandfather of our kids, has been gone for three years.
We’ve had illnesses in the family that we’ve kept hidden from him, so
as not to upset him. We’ve gone through everything that comes with
having a family member locked up.”
Cy was on good terms with Fidel Castro, who was Cuba’s president from
1959 to 2008. Things went sour for the Tokmakjian Group — and other
Canadian and international businesses — when Raúl Castro, Fidel’s
brother, became president. The Raúlistas profess to be open to foreign
investment and new business. They have been easing relations with
long-time enemy the United States and passing a package of tax cuts, tax
breaks and investment security guarantees in the Cuban National
Assembly this year. Symbolically, at Nelson Mandela’s funeral in
December 2013, Raúl Castro shook hands with American President Barack
Obama, though their two countries have not had diplomatic relations
since January 1961.
Yet Cy was held for nearly two and a half years before even being
charged, and his top managers, fellow Canadians Claudio Vetere and Marco
Puche, were also arrested. “I’ll just tell you that he has been thrown
in prison for a large part of his stay there,” says Raffi, his
37-year-old son and now president of the Tokmakjian Group. “That’s what
happens to convicted criminals [not people who face charges and await
trial]. He was in a cell with 48 other people.”
Cy has spent much of his time languishing in La Condesa, a prison for
foreigners in the middle of a sugar cane plantation. “It’s better than
an ordinary prison, but it’s still jail and it’s dangerous,” says Lee
Hacker, spokesperson for the family and vice-president of finance of
Tokmakjian Ltd. La Condesa may be better than a domestic jail in Cuba,
but that’s not saying much, explains Raffi. “There are four small
complexes there,” he says, estimating the inside of each 48-prisoner
building to be about 20 feet by 80 feet.
Going by his memory of a drawing shown to him by a former prisoner,
Raffi says, “There are two rows of 12 bunk beds, separated by a walkway.
There’s a substandard-level kitchen facility, and they share doorless
toilets.”The prisoners have a common dirt field for exercise.
“Apparently the mosquitoes, flies and other insects are horrendous, and
in the summer months the heat is overwhelming — they don’t put in any
air conditioning,” Raffi says.
The prisoners in La Condesa are all foreigners, but that’s small
comfort, he adds. “There are other Canadians, South Americans,
Europeans.” Some are business people accused of “economic crimes” like
his father, but others range from “drug smugglers, contract killers to
pedophiles.” It’s not pleasant. “He’s in a military hospital right now,”
Hacker adds. “He had some health issues; he was bitten by a scorpion at
one point. But he sounds OK when I speak with him on the phone.”If Cy
is indeed “OK,” it speaks to his resilience and determination to weather
an ordeal that has already cost him years of freedom and could cost
more, including the fortune he and his company built doing business with
Cuba since 1996.
His family and friends hope that, even if he is convicted this
summer, he will be expelled, free to go to Canada. Then the Tokmakjian
Group can pursue recovery of the millions seized by the Cubans in court.
While waiting for an outcome from the Cuban justice system, the
Tokmakjian Group has launched its own proceedings in the Ontario
Superior Court and in the Barbados, where it also does business, as well
as at the International Chamber of Commerce in Paris, seeking more than
$250 million from the Cubans in restitution and damages.
“Cy is a very personable man and he gets along with people very well.
He had no reason to see why he would be targeted,” Hacker says. “We’ve
been very upfront. We tell them [the Cubans]: we’re taking you to
international court and you’re going to lose. But it’s like talking to a
ghost.” After waiting since 2011 to find out what they might face from
the Cuban justice system, Cy and his co-managers were put on trial from
June 9 to 21. A verdict is expected any day.
The Cubans have already seized more than $91 million in personal and
company assets. If convicted, Cy could be sentenced to up to 15 years in
prison, and his managers for up to eight to 12 years. As well, 10 Cuban
officials of the company face imprisonment. Cuba’s Communist Party
daily, Granma, said that Cy and the others accused “were afforded all
rights associated with their defence, and their lawyers presented
evidence and arguments which they considered necessary.”
Nonsense, says Hacker. “We use the word ‘infirmities.’ The process is
really embarrassing,” he says. “You have Cuban lawyers that represent
you. They’re generally pretty good, but you know they can’t do
everything they might want to do.” The Cuban defence lawyers were
restricted in the evidence they could call that might exonerate Cy and
the other defendants, Hacker says. “The charges were trumped up and the
trial was a farce,” says Peter Kent, Member of Parliament for Thornhill,
the Tokmakjians’ home, and a former minister of state for foreign
affairs (Americas).
“It’s a warning that any investor today is at risk of running into
the same, unacceptable fate as Cy Tokmakjian,” says the Conservative MP,
who has followed the case closely, visited Tokmakjian in Cuba and
offered his support. The Canadian government, which maintains diplomatic
relations with Cuba, has also been supportive, and both the current and
former Canadian ambassadors to Cuba attended the 12-day trial.
Nevertheless, Raffi (who was advised by the Canadian government not
to attend because of security concerns), says the outcome seems
preordained: “What I can say is that we expect them to find him guilty.
Not because he’s guilty but because that’s the way they do things down
there.”It’s hard for outsiders to understand why the Cubans, who are
desperate for investment and economic growth, would send a shivering
signal to investors around the world by arresting and trying someone
like Cy Tokmakjian. He is by no means the first foreign businessman to
suffer such a fate in Cuba. In February, another Canadian businessman,
Sarkis Yacoubian, was suddenly expelled from Cuba where he had first
been held without charges like Cy and then sentenced to nine years at La
Condesa. Yacoubian, who operated a $30-million transport company called
Tri-Star Caribbean, was arrested in July 2011, two months before Cy,
yet was only charged in April 2013, accused of bribery, tax evasion and
“activities damaging to the economy.”
Yacoubian was convicted and sentenced even though he agreed to
cooperate with Cuban authorities. French national Jean-Louis Autret and
British businessman Stephen Purvis were also jailed, and later freed,
with their assets being seized by the Cuban interior ministry.
“Their stories, like Cy’s, have created a climate of uncertainty and
concern among foreign companies that remain invested in Cuba,” says
Kent. Last year, Purvis, who was freed after 15 months in jail, wrote to
the British magazine The Economist saying that he met other foreigners
in Cuba who faced charges of “sabotage, damage to the economy, tax
avoidance and illegal economic activity.”
The widespread crackdown seems to have cast a chill on other
businesses. While 50 per cent of Cuba’s tourists are still Canadians
desperate to escape the harsh winter, other Canadian companies who once
worked happily in Cuba are escaping the island.
“We are no longer doing business with Cuba and don’t have any
comments,” says Domenic Primucci, president of the popular Pizza Nova
chain, once prominent in Cuba. Pizza Nova had expanded to six
restaurants since 1994, but pulled out abruptly in 2011. (The company’s
departure coincided with the regime’s moves against foreign businesses,
though Primucci has said the decision was unrelated to the Tokmakjian
case.)
Raffi says none of the accusations levelled against his father should
apply. “Everything we did was according to the jurisdictions we dealt
with. Everything was kosher.” What seems to be happening is that certain
foreign businesses are being targeted by Raúl Castro’s regime to send a
message to other would-be investors, says John Kirk, professor of Latin
American Studies at Dalhousie University in Halifax.
“My interpretation is that he [Raúl Castro] wants to set down a
marker that business has got to be done with great transparency,” he
says. “Strategically it seems to me to be the wrong way to encourage
foreign investment,” Kirk adds. But the one-party regime may have its
own internal reasons for picking on foreigners.
The regime believes that a number of its own senior officials have
been taking kickbacks from foreign companies, and the government wants
to send a message that there is only one way to do business in Cuba —
the government’s way.
This would explain why only some businesses and executives seem to
face jail — and, maybe later on, charges — under the Cuban justice
system. Brazil, for example, has invested with impunity, putting some
$10 billion into new harbour facilities at Mariel, just west of Havana,
Kirk says. Hacker suggests that another reason for the harsh treatment
of Cy and other executives might be a power struggle within the regime.
“All the Fidelistas are out and all the Raúlistas are in,” he says.
But Kirk says this is likely overblown; the regime is fairly
consistent, even if its principles are hard for outsiders to understand
or condone. “Cuba at the moment is in the midst of massive social
change,” Kirk adds. The Cuban government now allows people to sell those
exotic vintage American cars from the 1950s that were lovingly held
together by ingenious mechanics since the United States embargo banned
imported American vehicles more than 50 years ago. “They’re opening
economically to a mixed economy, but they also want you to play by their
rules of the game,” Kirk says.Indeed, in a 25-minute televised speech
in July, Raúl Castro signalled that the regime will continue to be
cautious — and maybe continue to be harsh — when it comes to economic
reforms.
Reforms are advancing “but have great complexity,” Castro said. “The
process, to be successful, must be conducted with the appropriate
gradualness and be accompanied by the permanent control of different
party and government structures at all levels. “Gradualness is not a
whim, much less a desire to delay the changes that we must make,” he
added. “On the contrary, it is about a need to ensure order and avoid
gaps that would lead us directly to mistakes that distort the proposed
objectives.”
Reading between the lines, it might seem that the regime is not about
to remove its firm grip on the way business is done in Cuba. Hacker
concedes that Cy has been outspoken and candid with his Cuban
colleagues, but both he and Raffi say that’s partly because he has
always considered himself among friends.
“One of the things [Cy] kept on saying in court is ‘I’ve done more to
help people than your own government has.’ That’s something they hate
to hear,” Raffi says.
If he sees his father again, Raffi says, “I guess I would just hug him,
say good for you, that I’m proud that he stuck by his morals and that he
didn’t give up.” Raffi can’t see how businesses can continue to operate
in Cuba when people can be thrown in jail without charges as his father
was. Yet Hacker says that Cy might think differently.
“Cy’s been there for 22 years, he loves the country, he loves the
people. For them to do this to them, it’s really hurting him in his
heart.”
As of printing this article, Cy Tokmakjian is still being held in Cuba, waiting for the final verdict of his case.
,
which noted that a government study concluded that about 25 percent of
the 700 fianceé visas issued each year to Cubans in Havana were based on
scams.
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