The Miami Herald
Fri, Sep. 09, 2005

U.S.-Cuba trade advocate tells of disappointment

John Kavulich, former head of an organization advocating U.S.-Cuba trade, explained how he became disillusioned.


CHEEKTOWAGA, New York - John Kavulich's voice dripped with sarcasm as he summarized his decade as a top U.S. expert on the Cuban economy.

''I went from being the anointed one to the disappointed one,'' said the former president of a group whose members included huge U.S. companies interested in trade with Cuba.

Since the mid-1990s, Kavulich was the virtual poster boy for those who argued that U.S. commerce with Cuba could pry open its communist system. He had done just that in the former Soviet Union and figured he could do the same in Havana.

But earlier this year he resigned as head of the U.S.-Cuba Trade and Economic Council, bitterly complaining about U.S. and Cuban officials who put politics before profits, sleazy business practices and naive media reporting.

His recollections in an interview with the Herald touched on some of the dynamics within the Cuban government that could affect its post-Castro policies, and his belief that Havana's economic reports are not always truthful.


Kavulich's idea for spearheading a trade invasion of Cuba emerged from his experience in the perestroika-era Soviet Union in the 1980s, when he first represented U.S. companies that wanted to do business with Moscow and the worked as a marketing consultant for the Soviet government until 1991.

He first traveled to Cuba in 1992 to check on openings for American businesses -- the trade embargo on Cuba does not ban U.S. exports of medicine and medical supplies -- and launched the U.S.-Cuba trade council after a U.S. client asked for marketing data on Cuba.

''Basically, there was none,'' said Kavulich during an interview in this small town near Buffalo N.Y.. Born and raised in Buffalo, Kavulich, now 43, earned a business degree from George Washington University.

The council was founded as a New York-based nonprofit to merely monitor trade opportunities with Cuba on behalf of members such as Archer Daniels Midland, the world's largest grain processor; General Motors; Riceland Foods Inc. of Arkansas; Wal-Mart Stores, and The Sherwin-Williams Co.

But some of its members openly pushed for throwing the doors wide open. And the Cuban economic data that Kavulich gathered from about 30 contacts on the island and disseminated through a newsletter, the Economic Eye on Cuba, was long considered to be more reliable than Havana government figures.

Kavulich also kept up with U.S. laws and regulations on Cuba, and at times even offered friendly advise to Havana on how to sell the image of a pro-business Cuba.

For one of the council's first executive luncheons in New York City, Cuba's then-Foreign Minister Roberto Robaina turned up for a preliminary meeting wearing a sports jacket with rolled-up sleeves, loafers with no socks and a T-shirt with a tie printed on it.

''I said to him, `With all due respect, I humbly suggest that you can't wear this,'' Kavulich said he told Robaina. The foreign minister arrived at the luncheon in a three-piece suit and delivered a 40-minute speech, not once mentioning Cuban leader Fidel Castro and instead insisting that Cuba was ready for business.


''This is what everybody wanted to hear, that it isn't all Castro-centric, that the whole country isn't about one man,'' Kavulich recalled

By 1995, Kavulich had a reputation as a dapper entrepreneur with a sharp mind who had access to the highest levels of the Cuban government. He was sought after by U.S. executives, policy makers, politicians and journalists.

But as his success grew, so did his problems.

U.S. competitors began complaining to Cuban officials that the trade council should be actively lobbying to ease U.S. sanctions on the island, Kavulich said, declining to identify them. And some Cuban officials began trying to block his efforts.

''There were people in both the Foreign Ministry and the Ministry of Foreign Trade who knew that the more change that came to Cuba, the less power, influence and job security they would have,'' he added.

By 1998 Kavulich had made up to 70 trips to Cuba. But he was clearly wearing out his welcome.


He was denied a Cuban visa for Pope John Paul II's visit in 1998, even though members of the trade council donated $100,000 for some of the activities.

In 1999, he was excluded from meetings between U.S. businessmen and Cuban officials in New York and Washington. And in 2000, he was denied a visa to attend a Havana exhibition of U.S. healthcare products that he had helped to organize.

''My biggest frustration from the standpoint of [the trade council] . . . was that U.S. companies were restricted by U.S. law and regulation,'' he said. ``But from a personal standpoint, the vast majority of my difficulties were manifested in Cuba.''

To win permission for the healthcare exhibition, Kavulich said, he went directly to Castro's then-personal assistant, Jesús Montané Oropesa. But foreign ministry officials accused him of going behind their backs, he added.

The trade council chief nevertheless seemed to be achieving his dream of vibrant U.S.-Cuba trade.

In 2000, the U.S. Congress approved a law allowing for the sale of American food and agricultural products to Cuba. And after Hurricane Michelle in 2001 destroyed much of Cuba's crops, Havana began importing American products. U.S. trade with the island has since averaged $300 million a year.


In 2002 Kavulich made his final trip to Cuba, for the U.S. Food & Agribusiness Exhibition, an unprecedented event that attracted 293 exhibitors from 32 American states. Sales contracts worth about $93 million were signed at the week-long event.

But as Cuban imports of U.S. goods increased, Kavulich began going public with controversial issues. The trade council's newsletter was first to report that Havana was buying goods from specific U.S. states in order to push their congressional representatives to vote for easing U.S. sanctions on Cuba.

It also first reported in 2003 that Havana was requiring U.S. firms and some U.S. politicians to sign ''advocacy agreements'' -- promising they would lobby Congress to ease the sanctions -- before Cuba would buy their goods.

''These agreements are a corruption of the commercial process,'' Kavulich complained at the time. ``Once you include an advocacy clause, they're no longer commercial agreements; they're political documents.''

Kavulich also began alleging that Havana was manipulating its economic statistics -- and that too many U.S. journalists were using those figures without questioning them.

Cuban officials in retaliation began to suggest to trade council members that they should drop out and instead join more aggressive ease-the-sanctions groups, he said.

His interest in Cuba dwindled and his frustrations grew. So he quit the trade council.

''I am frustrated with the government of the United States, the government of the Republic of Cuba, members of the United States Congress and their staffs, representatives of organizations, state and local officials and with journalists,'' he wrote in a scathing resignation letter.

``I am witnessing an increasing lack of ethics . . . both in the United States and in Cuba.''

In Moscow, he told The Herald, ``there was far more . . . honesty, far less ideology, far more pragmatism. But with Cuba, and it's not just in Cuba, it's with people in Washington and the organizations involved with the Cuba issue, it gets so personal and it gets so mean spirited and it gets so childish that I don't miss it at all.''