Desecrating The Art Of The Deal.(John Presland of Caribbean Finance Corp.)(Brief Article)

John Presland moved to Havana in 1996 with hopes of bringing high finance to Fidel Castro's island of anticapitalist hostility. The Briton was hired that year to manage the Caribbean Finance Corp. (CFC). The plan was to help bankroll ventures in partnership with the Cuban state, build CFC into a major player and perhaps eventually sell out to American banks once the U.S. trade embargo against Havana was lifted. "The reception was warm when we went in," recalls Presland, "and all signs pointed to a major change in Cuba."

It seemed plausible enough. In the early 1990s Cuba was still reeling from the collapse of the Soviet Union and the loss of Moscow's $4 billion annual subsidy. And the head of CFC, Peter Scott, a Scottish specialist in Latin markets, thought foreign capital was Castro's only way out. In 1996 Scott had launched Beta Gran Caribe, the world's first investment fund focused on Cuba. Among his initial joint ventures was the $5 million, five-story Paradisio apartment complex in the tony beachside Havana suburb of Miramar. It offered condos to foreigners for prices starting at $130,000. CFC was another Beta Gran Caribe investment project, issuing $60 million in short-term, high-interest loans to a wide array of clients. By 1999 CFC had managed to post a profit of about $250,000. The plan seemed to be working.

But in January 2000 this vision of venture capital in Cuba was cut down by the infighting and paranoia of the Castro regime. The Cuban Central Bank rejected ...