The Cuban military conglomerate known as GAESA has moved from the shadows to the center of geopolitical confrontation in a matter of weeks. As U.S. sanctions tighten and foreign hotel chains exit the island, competing narratives have hardened into something resembling a propaganda war. The Financial Times, the New York Times, the Miami Herald, and a leaked trove of internal financial documents have all added texture to the story — but so has Havana’s own June 2 public defense of the conglomerate, one of the most expansive statements the Cuban government has ever made about it. And then there is the case of Alejandro Gil — former economy minister, once Díaz-Canel’s closest economic adviser, now serving life in prison — whose prosecution, tried entirely behind closed doors, may tell us more about GAESA’s true nature than any sanctions package or government press release. Here is what the evidence actually shows, and where it runs out.
What Is GAESA, and Where Did It Come From?
The origin story is largely uncontested across sources. GAESA was born out of desperation following the collapse of the Soviet Union in 1991, though its roots trace to the 1980s, when Raúl Castro, then defense minister, convinced his brother Fidel to allow him to reshape the military’s business interests. When the USSR fell, Cuba lost its largest trade partner and financial patron; the military struggled to pay its own troops. Fidel allowed the armed forces to take over state-run sectors of the economy — principally tourism — in a bid to save the country.
At first the experiment worked. The military proved a more efficient business manager than other arms of the state, and by the late 1990s the economy had recovered, with the conglomerate reinvesting profits into hospitals, education, and food rations. GAESA’s full name is Grupo de Administración Empresarial S.A. Its portfolio has since grown to span hotels, the Mariel port, Banco Financiero Internacional, supermarkets, gas stations, remittance businesses, logistics, foreign trade, and construction — broadly, wherever foreign currency flows in Cuba, GAESA is involved.
This origin — a pragmatic emergency measure, not a premeditated power grab — is important context that gets lost in the current political framing. The Cuban government’s own June 2 statement echoes it without contradicting it: the regime acknowledges GAESA was created deliberately to generate hard currency under embargo conditions, and that its secrecy was a feature, not a bug. What that statement does not address is how a wartime instrument of economic survival became something structurally indistinguishable from the institution it was meant to serve.
What the Leaked Documents Reveal: The Most Important New Evidence
The most significant development in understanding GAESA is not the U.S. sanctions rhetoric, but a leaked trove of internal financial documents first published by the Miami Herald and analyzed in depth by Cuban economist Pavel Vidal at Colombia’s Pontificia Javeriana University, writing for Columbia University Law School’s Cuba Capacity Building Project in December 2025. These documents change the evidentiary landscape considerably.
According to analysis based on the leaked balance sheets for 2023 and 2024, GAESA’s gross profits on sales represent close to 37% of Cuba’s GDP — meaning more than one-third of the country’s total value added is generated within the military conglomerate. GAESA’s total revenues are 3.2 times greater than the annual revenues of the Cuban State Budget.
The leaked balance sheets show that GAESA’s foreign-currency reserves have fluctuated between USD 9 billion and USD 14.5 billion, deposited in bank accounts or GAESA’s own financial institutions. Vidal notes that not all of this represents excess retained earnings — a portion is legitimate working capital for a conglomerate running nearly 40% of GDP. But the implications for Cuba’s macroeconomic policy are severe regardless.
GAESA is not subject to audits by the Office of the Comptroller General, nor does it report to the Cuban National Assembly. Its financial operations, profits, and reserves are managed under a framework parallel to that of the rest of the State and the civilian economy.
Most damningly, GAESA does not pay taxes, nor does it transfer dividends to the State Budget. The Government Program presented by Cuban authorities in October 2025 aims to reduce inflation and the fiscal deficit — but does not even mention GAESA, leaving outside the macroeconomic policy framework the conglomerate that concentrates 40% of Cuba’s production, foreign trade, and financial activity.
The financial records indicate that GAESA’s companies pay a very low tax rate and only in Cuban pesos — notably much lower than the heavy tax burden that limits the growth of the private sector on the island, and not nearly enough to cover food rations and public services for the population. The conglomerate pays zero taxes on profits.
This is not a U.S. government claim. It is the finding of an independent Cuban economist, using leaked internal documents, published through a Columbia University academic platform. It represents the most credible independent evidence available on GAESA’s fiscal relationship to the Cuban state.
A Genuinely Parallel Structure: The Institutional Evidence
GAESA operated under the exclusive supervision of the V Department of the FAR, a secret unit whose existence was revealed only by the leaks of 2025. It had its own parallel tax office — the OATFAR (Tax Administration Office of the FAR) — that managed its taxes outside the national system. In other words, GAESA did not even pay taxes through the same channels as the rest of the country.
The crown jewel of the structure was Gaviota S.A.: 121 hotels, 20 marinas, the airline Aerogaviota, the rental company Transgaviota, the agency Gaviota Tours, and the supplier AT Comercial. In the first quarter of 2024, Gaviota accounted for 72% of GAESA’s total revenues, with a net profit margin of 42% — almost four times the global average for the sector. That margin requires explanation. It was achieved by paying Cuban hotel workers eleven dollars a month.
When Pavel Vidal worked at Cuba’s Central Bank as an analyst, staffers in charge of developing monetary policy and accounting for the country’s monetary assets did not have access to documents from financial institutions that are part of GAESA, such as Banco Financiero Internacional. Cuba’s own monetary authorities were conducting policy in the dark about the institution managing the majority of the country’s foreign reserves. The Central Bank cannot meet the objectives of monetary and exchange-rate policy or contribute to macroeconomic stabilization as long as the country’s foreign currency is retained by a business conglomerate for purposes that remain unknown.
The Financial Times described GAESA as a “parallel state” controlling the most profitable sectors of Cuba’s economy while operating with little to no public accountability — a framing now substantially corroborated by the leaked financial evidence and Vidal’s analysis. The label is no longer merely rhetorical.
What Is Corroborated
The scale, even by conservative estimates, is enormous. Economists place GAESA’s share of the Cuban economy at 40% to 70%, and the leaked documents allow for more precise quantification: GAESA’s gross profits are equivalent to around 40% of Cuba’s official GDP figure, and its total revenues are 3.2 times greater than the annual revenues of the Cuban State Budget.
The opacity is documented fact, not a U.S. accusation. When Cuba’s own comptroller general admitted in a 2024 interview that she could not audit GAESA because it was not under her purview, she was fired after fourteen years of service. GAESA’s books are such a state secret that when Gladys Bejerano, at the time the island’s general comptroller, told the Spanish news agency EFE that she could not audit GAESA because it was not under her supervision, she was dismissed.
The investment record is damaging to GAESA’s defenders regardless of how one weighs the role of U.S. sanctions. As Cuba’s broader economy deteriorated — through blackouts, shortages, inflation, currency collapse, and default on external debt — GAESA remained profitable, continued channeling resources into hotel construction, and accumulated foreign-currency reserves that never reached the economic system that needed them. The question of where the money actually went has a documented answer, and it is not a flattering one.
The most concrete destination is hotel construction. No embargo forced GAESA to invest $24.2 billion in hotels and $1.75 billion in healthcare. That ratio — roughly 14 to 1 in favor of empty luxury hotels over medical infrastructure — is not the result of U.S. sanctions policy. It is an investment choice, made internally, with no public oversight and no accountability to the Cuban National Assembly or any auditing body. The conglomerate generated $2.1 billion in net profits in just the first quarter of 2024. CIMEX, the group’s largest holding handling retail, banking, and international trade, reported $3.4 billion in revenue and $1.2 billion in earnings as of March of that year. A portion of those profits was recycled into further capital investment within GAESA’s own portfolio — the self-reinforcing logic of a conglomerate that answers to no one.
A significant share went offshore. Of GAESA’s approximately $18 billion in current assets as of March 2024, $14.5 billion sat in undisclosed overseas bank accounts, even as Cuba’s broader economy collapsed. GAESA operates with subsidiaries incorporated in Panama, Cyprus, and Liberia to bypass U.S. sanctions restrictions — jurisdictions that also provide the opacity needed to insulate assets from any future Cuban government that might seek to reclaim them.
Perhaps the most damaging finding for Havana’s own narrative is that the relationship between GAESA and the Cuban state budget does not run in the direction the government implies. It runs in reverse. According to GAESA’s balance for August 2024, the conglomerate received 9,260 million Cuban pesos from the state, while it only paid 920 million in taxes in national currency. In dollars, its tax contribution was zero. The Cuban state was subsidizing a military structure with public funds — the same public funds that were supposed to cover food rations, hospital supplies, and the electricity grid. Cubans are not shareholders, do not have representation on its board, do not receive dividends, and cannot even audit its books. They are, in practice, the exploited workers of a private corporation whose profits go to a military caste.
The corporate exodus is real and accelerating. On May 1, Trump signed an executive order imposing secondary sanctions targeting companies doing business with GAESA. Several firms originating from Canada, Spain, Panama, and Mexico either pulled out of Cuba or are expected to. “We’ve never seen this kind of pressure,” said Max Heizlish, an ex-Treasury official who specialized in Cuba sanctions. Iberostar severed ties with Gaviota on June 1; Blue Diamond Resorts pulled out of Cuba altogether. In the first four months of 2026, a record low number of tourists arrived in Cuba — almost 56% fewer compared to the same period last year.
Castro family influence has been structurally preserved through leadership succession. GAESA was created by Raúl Castro, led for 26 years by his son-in-law, and is currently overseen by his grandson. Flight records show that Raúl Guillermo Rodríguez Castro and GAESA president Ania Guillermina Lastres flew together on a private jet to Panama in 2024, where GAESA has registered multiple companies to operate outside U.S. sanctions reach.
What Is Disputed or Unverified
The $18 billion figure is real but requires careful interpretation. A leak published by the Miami Herald established that GAESA held approximately $18 billion in current assets as of March 2024 — but not all of this amount is excess cash reserve; rather, it reflects the size of GAESA’s enterprises and their strong presence in key sectors such as tourism, trade, and finance. Rubio’s framing — that this represents a hidden slush fund stolen from the Cuban people — is rhetorically effective but analytically imprecise. Cuba’s embassy in the UK called the figure inflated by 24 times, which is also demonstrably wrong given the leaked data. Both sides are misrepresenting the same underlying numbers.
The “not a penny to the people” claim overstates the case. The Cuban government’s June 2 statement lists concrete social investments — over 10,000 homes constructed, investment in the Felton thermoelectric plant, hydraulic infrastructure, clinic and school repairs. These are specific, checkable claims that no independent reporting has directly refuted. What is undisputed is that GAESA’s full financial relationship to the Cuban state budget is opaque — though as the leaked documents reveal, opacity understates the problem. The conglomerate was not merely withholding transfers from the state; it was receiving them.
Whether GAESA operates “against” the state or simply “parallel” to it is more ambiguous than either side admits. Vidal’s analysis suggests the more accurate framing: the Government Program’s silence on GAESA reflects not only a technical problem, but also a political choice. Incorporating the conglomerate into a stabilization program would imply redefining the structure of economic and military power — something those who designed the Government Program know they cannot touch. That is a description of dangerous institutional capture, not a rogue actor operating independently of the state. GAESA did not seize Cuba from the outside. It grew inside the revolutionary project until it became larger than the project itself.
The Geostrategic Dimension: “Accelerationism”
One underreported element reframes the entire debate. According to Axios, the Trump administration is bracing for the potential collapse of Cuba’s totalitarian government as early as this summer and is preparing military response plans in case they are needed to establish peace on the island. A senior administration official described the strategy explicitly: “The best way to describe it is ‘accelerationism.’ We don’t want to kill off the regime just yet. There’s a method to this. It’s in stages.”
This matters enormously for evaluating the sanctions debate. The executive order and the GAESA targeting are not, primarily, anti-corruption measures — they are instruments of regime change, applied at a moment of maximum Cuban vulnerability following the loss of Venezuelan oil subsidies after Nicolás Maduro’s capture. Understanding GAESA as the target of a deliberately staged pressure campaign changes how one reads both Washington’s rhetoric and Havana’s response.
The U.S.’s relative prudence toward Cuba is also connected to the current situation in the Middle East: sanctions are supposed to buy time for Trump, for whom the main concern right now is ending the war with Iran. Cuba is a subsidiary theater, which explains the calibrated escalation rather than direct action. Washington is using a real institutional dysfunction to pursue an undisguised goal of regime change — which does not make the dysfunction less real, but means the anti-corruption framing should be read with appropriate skepticism.
The Gil Affair: The Question That Won’t Resolve
It is in this context — an institution so powerful that Cuba’s own monetary authorities could not see its balance sheets, so entrenched that a government stabilization program dare not name it, simultaneously receiving subsidies from the state it was supposedly enriching, and now so threatened that foreign companies are fleeing on a two-week deadline — that the case of Alejandro Gil Fernández becomes impossible to set aside.
Gil served as economy minister from 2018 to 2024 and as deputy prime minister from 2019. He was, in effect, Cuba’s chief economic policy officer for six years and one of Díaz-Canel’s closest confidants. He was the public face of Cuba’s most ambitious post-Soviet economic reform: the 2021 currency unification, which eliminated the dual-currency system and set a unified official exchange rate. The reforms were largely seen as disastrous for the already troubled economy, leading to soaring inflation, a plunging national currency, and more trouble for a number of state-owned enterprises. Gil was removed from office in February 2024. He disappeared from public view entirely. Then, in December 2025, Cuba’s Supreme Popular Tribunal sentenced him to life in prison for espionage in one of the country’s highest-profile corruption cases in decades, additionally finding him guilty of bribery, falsification of public documents, influence peddling, and tax evasion.
The court offered almost no public explanation. No names of other officials implicated in the espionage or financial crimes were mentioned, and it remains to be seen whether Gil took the fall for all of them. The most serious charge — espionage — was left entirely without detail: no named foreign intelligence service, no description of what classified information was transferred, no named accomplices.
That opacity is where the GAESA connection enters, as an allegation rather than established fact. Gil’s sister, María Victoria Gil, a lawyer who claims to have had access to documents related to the prosecution’s case, argues that the life sentence for espionage is politically motivated and that he should be considered a political prisoner. She believes his downfall is tied to sensitive information he uncovered about GAESA.
This cannot be treated as proven. But it is not random noise either — because the structural logic is compelling. Gil’s job as economy minister required him to engage with the very problem that GAESA makes structurally insoluble: monetary policy conducted without access to the country’s actual foreign currency reserves. The 2021 reform he led was precisely the kind of intervention that would have forced a reckoning with GAESA’s parallel monetary operations. GAESA exploits exchange-rate gaps to expand its commercial margins to an extraordinary degree — most of its personnel are paid salaries in national currency, while business revenues largely come from sales denominated in dollars or MLC. The currency unification was a direct structural threat to that arrangement.
And yet the reform failed catastrophically. When the Central Bank set the unified official exchange rate at 24 pesos per dollar in January 2021, the dollar was already trading at 40 on the informal market — and within a year, at more than 70 pesos per dollar. A key structural reason for that failure was that the Central Bank lacked access to the country’s real dollar reserves, which sat inside GAESA. When Vidal worked at Cuba’s Central Bank, staffers developing monetary policy did not have access to documents from financial institutions that are part of GAESA, such as Banco Financiero Internacional. Gil would have been designing a monetary reform while flying blind on the most important variable in the Cuban economy.
If he tried to change that — if he sought access to GAESA’s books, or attempted to bring the conglomerate within the scope of the reform — that would have put him on a collision course with the most powerful institution in Cuba. And if, in the course of that collision, he gathered or transmitted information about GAESA’s finances to parties the regime considers enemies, a closed-door espionage trial becomes the instrument of choice.
The corruption charges, Gil’s sister notes, stem from alleged financial misconduct dating back to the 1990s — to his management of a company called Caudal, involving an alleged sum of 4,000 CUC. The contrast between the severity of the punishment and the apparent triviality of the underlying corruption allegation is stark. A life sentence is the most extreme non-capital punishment in the Cuban legal system. If the corruption charge reduces to a few thousand pesos’ worth of irregularity from thirty years ago, the secret espionage charge is doing nearly all the juridical work — and it has been kept entirely secret.
The most instructive precedent is the 1989 case of General Arnaldo Ochoa. Ochoa, a hero of Fidel Castro’s revolution, was tried and executed by firing squad for drug smuggling — a case many historians now read as a political elimination of a popular figure who had accumulated dangerous autonomous authority, with the criminal charges serving as a vehicle for an essentially political outcome. The parallel is not exact. But the pattern of a closed trial, opaque charges, and the targeting of a figure who had operated at the intersection of economic and institutional power is recognizable in Cuban history.
Taken together, the Gil affair and the GAESA revelations illuminate the same institutional reality from opposite directions. The leaked financial documents show, from the outside, an entity generating revenues three times the national budget while paying no taxes, receiving state subsidies in return, and parking $14.5 billion offshore. The Gil prosecution shows, from the inside, what apparently happens to officials who get too close to that entity’s secrets. If even a minister of the economy — a close presidential confidant with formal authority over Cuba’s macroeconomic policy — could not engage with the space where GAESA’s finances intersect with the national economy without ending up in prison for life, the “parallel state” is not merely a metaphor. For those inside Cuba’s government who have tried to look directly at it, it has had very concrete consequences.
What This Means
GAESA is real, massive, and operating with essentially no public accountability — including, crucially, no accountability to Cuba’s own institutions. The leaked financial documents, independently analyzed by a credible Cuban economist through Columbia University, establish this not as a matter of U.S. government assertion but of documentary record. Its revenues dwarf the Cuban state budget; it controls the country’s foreign reserves outside the Central Bank; it pays no meaningful taxes; it has its own parallel tax authority; and — in perhaps the most perverse finding of all — it draws subsidies from the very public budget it was supposedly created to supplement. The “parallel state” framing advanced by the Financial Times — and since adopted by Rubio for his own political purposes — is more accurate than Havana’s counter-narrative of a transparent revolutionary instrument.
At the same time, the sanctions campaign is not what it presents itself as. It is a staged pressure strategy aimed at collapsing the Cuban government — and GAESA is the lever, not the stated rationale. Washington is using a real institutional dysfunction to pursue an undisguised goal of regime change, which does not make the dysfunction less real, but does mean that the anti-corruption framing should be read with appropriate skepticism.
The Cuban government’s June 2 statement — the most extensive public discussion of GAESA in the institution’s thirty-year history, issued after decades during which the top party newspaper mentioned GAESA just seven times — is itself revealing. That the defense came at all, and in this form, signals not transparency but damage control under maximum pressure.
And then there is Gil, serving life in prison for crimes that were never publicly explained, whose sister says he uncovered something about GAESA. He may be guilty. He may be a scapegoat. The Cuban court did not provide enough information to know. What can be said is that his prosecution occurred at precisely the moment when, according to the leaked documents, GAESA’s scale and opacity were becoming impossible to ignore even within Cuba’s own policy apparatus — and that the government’s response to that moment was a secret trial resulting in the harshest possible sentence.
As Vidal concluded, the Government Program’s silence on GAESA reflects not only a technical problem, but also a political choice. Incorporating the conglomerate into a stabilization program would imply redefining the structure of economic and military power — something those who designed the Government Program know they cannot touch. That democratic and fiscal deficit — documented independently, not invented in Washington — is the core truth. The official discourse continues to blame the American embargo for all of Cuba’s ills. The embargo exists and has a real impact. But no embargo forced GAESA to invest $24.2 billion in hotels and $1.75 billion in healthcare. Neither Washington’s anti-corruption theater nor Havana’s revolutionary alibi can hold that reality cleanly. Which is precisely why it matters.