Settling with Alan Gross, DAI Changes Its Tune, If Not Its Talking Points

On Thursday, Development Alternatives, Inc. (DAI) agreed to make a secret financial payment to Alan and Judy Gross to settle the lawsuit the couple filed against it last year.

DAI lured Alan Gross with a lucrative contract to smuggle banned satellite communications equipment into Cuba on a mission that left him serving a 15-year prison sentence.

The settlement applies to the Beltway contractor and not its codefendant, the United States.  This agreement – Tracey Eaton makes the text available here – is sealed and confidential.  But, the lawsuit has already yielded significant disclosures about U.S. regime change programs in Cuba and the settlement marks a new phase for DAI.

DAI’s profile was raised a few weeks after the arrest, when James Boomgard, its chief executive, insisted in an interview that Alan Gross had done nothing wrong.

“It’s such an innocuous, innocent thing.  I’m not a Cuba expert,” he said, “but other people who understand the politics of this are puzzled as well.”  He went on to say that Gross never met with dissidents and that “there are no satellite phones involved.”

This was a curious, call it Freudian, assertion, which Boomgard should have known to be untrue.

As Desmond Butler wrote in his groundbreaking piece USAID contractor work in Cuba detailed, Alan Gross was bringing in satellite consoles known as BGANS, satellite phones, and other forms of equipment to Cuba, that was the point of this long-standing DAI project, and as he said in a trip report filed before his last trip and capture, it would be “problematic if exposed.”

Problematic indeed.  Unlike the ten spies rolled up and exchanged for spies in Russian prison in 2010, or Raymond Davis, the CIA contractor in Pakistan, freed from prison by payments of “bereavement money” after he murdered two motorists in the street, Mr. Gross has been left sitting in prison for more than three years as some Members of Congress cautioned U.S. officials not to negotiate for his release.

Late last year, the Gross family filed a $60 million law suit against DAI and the United States and accused the defendants of negligence, gross negligence, and the willful disregard of their rights.

In the case of DAI, the family argued when they sent him to Cuba with satellite network communications gear, they didn’t warn him of the risks, protect him from the risks, educate or train him to reduce the risks, and they didn’t stop him from returning to Cuba when they knew he was in danger, because it would have cost DAI a lot of money under their rich regime change contract.

For Mr. Boomgard, who once cooed, “helping people is all that Alan has done in Cuba and elsewhere,” this must have been more than he could bear.  $60 million is a lot of money.

So, DAI, rather aggressively went into court demanding the suit be dismissed because, frankly, Alan Gross wasn’t their problem.  DAI argued it had no duty to protect Alan Gross from the injury he suffered due to his confinement.

DAI claimed it enjoyed “sovereign immunity,” and like the federal government, it could not be sued. Without such immunity, contractors like them could never find pawns like Alan Gross to do their risky business in Cuba.  Ruling against DAI would put the court in a position of undermining the foreign policy of the United States.

This is what they said in January.  By May, they changed their tune; except, of course, so far as Jim Boomgard is concerned.

“We have been clear from day one that Alan’s safe return to his family is our first priority,” he said Thursday in a joint statement with Judy Gross.  “Settling this litigation allows us to work together on that overriding goal.”

Although the settlement includes a non-disclosure agreement between the Gross family and DAI, Peter Kornbluh of the National Security Archive is hopeful that more information could come out.

“Alan Gross himself deserves credit for indirectly admitting, through this lawsuit to the extensive illicit operations he was involved in and exposing the false representations of the Obama Administration about what he, DAI and USAID were doing.  If the State Department doesn’t settle, perhaps Gross’s lawyers can force the release of even more damning information about this controversial U.S. effort to roll back the Cuban revolution.”

That said, we may never know what really made DAI decide to settle.  But here’s a clue.

Two years ago, the company was named a “Top Innovator” in a global poll of international development professionals.

Accepting the award, Dr. James Boomgard effused, “it’s an honor to be recognized for the fresh thinking and resourcefulness we try to bring to the world’s development challenges.  As employee-owners, we have a very personal stake in the ideas, products, and services we are bringing to the marketplace in service of that mission.”

It’s always about the Benjamins.  The settlement undoubtedly saved DAI lots of money, but they won’t tell you how much.  It’s a secret.


Cuba charges foreign businessmen and prepares for trial, anti-corruption campaign continues

Foreign executives in Cuba who have been in custody since 2011, when their businesses were shut down by authorities, have been charged with economic crimes and operating beyond the limits of their business licenses, sources close to the cases informed Reuters.  According to the sources, some have been accused of paying bribes to officials for favorable business opportunities. Cuban law stipulates that trials must begin within a month of charges being filed, and a Western diplomat stated that “There is definitely movement and the trials should begin soon.”  The arrests occurred as part of Cuba’s crackdown on corruption under President Raúl Castro, who has urged his government to be “relentless” in its fight against corrupt practices.

Rodrigo Malmierca, Minister of Foreign Commerce and Investment spoke of “irregularities” in joint ventures at a cabinet meeting last week, reports the Miami Herald.  Adel Yzquierdo, Minister of the Economy, reported corruption and theft in the fuel sector, stating, “The high demand and profits in this illegal business create a permanent siege of employees in this sector by unscrupulous people who later sell the fuel for up to 60 percent less than the official price.”  Yzquierdo suggested that new technology would modernize the measuring, storing, and distribution of fuel and curb theft.

Varadero marina development project underway, expanding; golf course to follow

As part of a billion-dollar effort underway to diversify tourism and create upscale options, Cuba’s government has announced two large-scale development projects, each in Varadero, reports Cuba Standard.  These announcements follow last week’s news that Cuba is now able to offer lodgings to 60,000 tourists.

One project is to expand Marina Gaviota, making it the largest marina in the Caribbean, according to Frank País Oltuski, vice president of state company Grupo Gaviota S.A. Cuba’s own resources will fund the work.  The London-based Esencia Group will initiate construction on the second project, a golf complex, in 2014.  Plans include a 420-acre gated community with 650 apartments and villas, a hotel, a country club, a spa, a yacht club and, of course, a golf course.  According to Manuel Marrero, Cuba’s Minister of Tourism, “at least” eleven such residential golf resorts will be built across the island.

Decreased food production in Cuba for early 2013; wholesale agricultural market established in Boyeros

Cuba’s National Statistics Office (ONE) released a report indicating that agricultural and food production for the first quarter of 2013 has dropped since 2012, reports Café Fuerte.  The report concludes that production of crops outside of the sugar cane sector has decreased by 7.8%, while food production alone has decreased by 20.8%.  The greatest production decreases noted in the report occurred in the potato, banana, and citrus fruits harvests, with a decrease also seen in the production of milk and eggs.  Production of tomatoes, green vegetables, rice, and meat has increased.

At a meeting of the Council of Ministers, Cuba’s Vice President Marino Murillo announced that a wholesale market for agricultural and livestock products has been established in Boyeros, a municipality in Havana, reports Havana Times.  It is the first of several planned wholesale markets for farm products, to be located in the Havana, Artemisa, and Mayabeque provinces.  The market in Boyeros will be accessible to private buyers as well as state entities.  Each wholesale market will operate in one of two ways: under state administration, or under the management of agricultural cooperatives.

Café Fuerte also notes that Cuba’s government announced a new policy regarding the sale of agricultural and livestock products, which will be implemented to centrally regulate the production prices of staple agricultural products including rice, beans, potatoes, and tomatoes.

Cuba holds anti-homophobia parade

Cuba’s sixth annual anti-homophobia parade took place in Havana last weekend, drawing about 500 members and supporters of Cuba’s LGBT community, reports Havana Times.  Mariela Castro, director of the National Center for Sex Education (CENESEX), began Saturday’s march urging a dialogue within Cuba to eliminate prejudice in families, which she stated is one of “the most vulnerable areas in the rights of LGBT people.”  The BBC provides video coverage of the parade.


U.S. shipping insurance company fined for sanctions violations

The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has ordered the American Steamship Owners Mutual Protection and Indemnity Association (also known as the American Club), a New York-based shipping insurance company, to pay a fine of $348,000 for violations of U.S. sanctions against Cuba, Sudan and Iran, reports Cuba Standard.  OFAC has charged the company with 55 violations, but stated in a press release that these violations “constitute a non-egregious case.”  According to OFAC, between 2004 and 2006, the American Club processed three protection and indemnity insurance claims involving Cuba that amounted to $40,584.

Retired members of Havana’s baseball team Industriales to play in Miami and Tampa

Thirteen veterans of the Industriales, the so-called “Yankees of Cuba,” will travel to Miami and Tampa Bay in July to play a series of friendly games, reports the Miami Herald.  They will face off against Cuban baseball stars living in Florida, including former Industriales players Orlando “El Duque” Hernández and Rey Ordoñez, who recently visited Cuba for the first time in 21 years following changes to Cuba’s immigration laws.  The games will commemorate the 50th anniversary of the founding of the Industriales, and are sponsored as a cultural exchange program by the enterprise Somos Cuba (We Are Cuba).


Haiti’s Prime Minister pays official visit to Cuba

Laurent Lamothe, Haiti’s Prime Minister, visited Cuba this week to meet with Miguel Díaz-Canel, Cuba’s First Vice President, to strengthen relations between the two nations and increase collaboration in education and healthcare, reports AFP.  Upon his arrival, Lamothe thanked “Cuba’s government for its support, collaboration, and solidarity.”  Díaz-Canel recently led Cuba’s delegation to the fifth summit of the Association of Caribbean States, held in Port-au-Prince.

Cuba hosts ALBA meeting

The 4th meeting of the Ministerial Council on Social Issues of ALBA takes place Friday in Havana, reports ACN.  Delegations from the ALBA nations will discuss social programs funded by the Bank of ALBA, including education, literacy programs and medical cooperation, as well as the upcoming 5th ALBA sports games.

Around the Region

Ríos Montt convicted of genocide and crimes against humanity, sentenced 80 years in prison

General Efraín Ríos Montt, ex-dictator of Guatemala and the first former head of state to stand trial for genocide in his home country, was convicted last Friday of genocide and crimes against humanity, and sentenced to 80 years in prison, reports the BBC.  The historic trial, which began on March 19 and encountered delays and controversy after twenty days of trial proceedings, reached its conclusion amid broad shows of support from Guatemala’s Maya populations as well as international human rights organizations including the UN.

Yassmín Barrios, the tribunal’s presiding judge, declared that along with a series of reparations to victims, to be administered by the government, March 23, the date Ríos Montt came to power, is to be Guatemala’s National Day Against Genocide.  Ríos Montt’s attorneys announced almost immediately that they would appeal the ruling, and Guatemala’s Constitutional Court has been reviewing and deliberating over at least four challenges to the trial since Monday.  While Guatemala’s President Otto Pérez Molina, who was implicated in witness testimony as complicit in the massacres of Maya populations carried out in the Ixil region under Ríos Montt’s U.S.-backed,17-month reign in 1982-3, continues to deny that genocide occurred, he confirmed in an official statement that he will respect the court’s ruling.

Jo-Marie Burt of WOLA and George Mason University offers analysis for the Open Society Justice Initiative, and cultural anthropologist Victoria Sanford offers further insight in an op-ed for the New York Times.  Elisabeth Malken of the New York Times examines the U.S.’s role in supporting Ríos Montt’s rule, which went virtually unmentioned in the trial proceedings.  Rep. Jim McGovern (MA-2) has also issued a statement praising the ruling.

Recommended Reading

Special Feature: Along the Malecón: “Satellite dishes don’t look like surf boards”

In Revisiting Operation Surf, investigative journalist Tracey Eaton converses with Robert Guerra, former director of Freedom House’s Internet Freedom Project, about the attempt to smuggle satellite dishes into Cuba by disguising them as boogie boards.

Havana Bay slowly reclaims historic splendor, AFP

AFP reports on the efforts of Havana’s Office of the Historian to restore the historic Havana Bay waterfront, and on a cleanup program for the area begun in 1998.  Pollution in the bay has lessened significantly and fish and birds have returned, as Cuba diversifies its tourism industry and continues development of the Port of Mariel.

Upcoming Events

Five Days for the Cuban Five, May 30-June 5

Five days of events will be held in Washington, D.C. starting on May 30, in support of Fernando González, Gerardo Hernández, Antonio Guerrero, Ramón Labañino, and René González.  The activities will include a press conference, various live music performances, panel discussions, an art exhibition, and a rally in front of the White House.  Speakers and performers will include Angela Davis, Dolores Huerta, and Danny Glover.  A preliminary agenda can be found here.

Human Rights and Accountability in Guatemala, Washington Office on Latin America

On May 21, the Washington Office on Latin America will host an event featuring analysis of the domestic, international, and judicial implications of the trial’s outcome, from experts including Kate Doyle of the National Security Archives, Jo-Marie Burt of WOLA and George Mason University, and Helen Mack of the Myrna Mack Foundation.

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