The recent revelations about the vast financial reserves held by GAESA have reignited discussions about the lack of transparency in Cuba's economy. In a fresh analysis, economist Pedro Monreal sheds light on the legal framework that facilitates such opacity: the General Comptroller's Office of the Republic is legally barred from auditing the military conglomerate that controls the majority of the island's foreign currency. This isn't a loophole, but rather a custom-designed shield for those in power.
The Legal "Trap"
Monreal highlights that while most countries reserve legal exceptions for national defense or security matters, in Cuba, just being part of the military structure exempts an entity from public auditing. The crux of the issue lies in the Comptroller Law 158/2022, which replaced the 2009 regulation, removing any reference to "audits" concerning the armed institutions. What was once subject to review by the Comptroller—albeit under "internal norms"—is now exclusively overseen by the President, who receives an annual report and arbitrarily decides on any preventive or control measures.
Despite 10 days passing since the Miami Herald uncovered these financial secrets, neither Miguel Díaz-Canel—who by law should address the issue—nor any ministers or high-ranking officials have commented on this alleged corruption scandal within Cuba's ruling elite. The 2022 legal arrangement effectively ensures GAESA is not accountable to either the National Assembly or the General Comptroller, the theoretically top oversight bodies in the country.
A Step Back in Oversight
A comparison between the two laws reveals a significant shift. The 2009 Law 107 mandated that the results of internal audits of armed institutions be reported to the General Comptroller, with the President of the Council of State then able to order audit and control actions. The 2022 law further limits oversight by removing the audit provision and diminishing the Comptroller's role in relation to the National Assembly. What was once its "primary mission"—assisting Parliament in the highest oversight—is now merely one of its functions.
GAESA's Protective Layer
This distinction is no accident. Monreal describes it as a "tailor-made suit," specifically designed to separate GAESA's civil activities—like selling imported chicken, managing supermarkets, and operating empty hotels—from parliamentary scrutiny. For instance, while the Ministry of Food Industry must account for its efficiency and fiscal contribution, GAESA spends billions on luxury hotels that remain largely vacant, without ever having to justify the investment or its contribution to the national budget.
In practice, a political opacity has been institutionalized, masquerading as legal norm, placing the military conglomerate beyond any form of public accountability. The formula is simple: leverage the "armed institution" status to avoid any form of public scrutiny.
The Political Issue at Hand
This is not just an accounting problem. The absence of state audits on GAESA means that the conglomerate, which controls most of the country's foreign currency income, is not subject to any democratic oversight. The National Assembly, reduced to a formal body without supervisory power, cannot inquire into the use of these funds or demand explanations for failed investments or economic priorities.
According to Monreal, this reflects a deliberate political choice: to keep GAESA shielded from public scrutiny. By removing "audit" from the 2022 law and restricting information to the President, an opaque system is created that consolidates the power of the military-business elite while sidelining citizens.
"Those who made the law crafted the trap," the economist summarizes. The trap is to protect the regime's economic core under the guise of being an "armed institution," even though its real business isn't tanks or planes, but supermarkets, hotels, and currency exchanges.
Beyond Economics
The case of GAESA illustrates that the transparency crisis in Cuba runs deeper than official accounts suggest. It's not just about whether there are $18 billion hidden in bank accounts, but about acknowledging that the political system has created legal mechanisms to prevent any genuine oversight.
Ultimately, GAESA's shield is no accident; it's a state policy. A policy that elevates the military conglomerate above accountability, parliamentary oversight, and citizen control, clearly showing who truly governs Cuba and why opacity isn't a flaw in the system but its very essence.
Understanding GAESA's Impact on Cuba's Economy
What is GAESA and why is it significant in Cuba?
GAESA, or Grupo de Administración Empresarial S.A., is a military-controlled conglomerate that oversees a substantial portion of Cuba's foreign currency and economic activities, making it a crucial player in the country's economy.
Why can't GAESA be audited by the Cuban Comptroller?
The Cuban Comptroller is prohibited from auditing GAESA due to a legal framework that classifies it under military jurisdiction, thereby exempting it from public scrutiny and accountability.
How does the 2022 law affect transparency in Cuba?
The 2022 law limits the scope of oversight by removing audit provisions for armed institutions, reducing the role of the General Comptroller, and restricting information to the President, thus fostering a lack of transparency.