Cuba defends military-run GAESA as US sanctions prompt hotel exodus

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HAVANA, June 2 - Cuba on Tuesday defended a military-run conglomerate long the target of U.S. sanctions, saying the group of businesses known as GAESA has contributed to the nation's economic and social development despite a recently ramped-up U.S. pressure campaign.

The administration of U.S. President Donald Trump accuses GAESA of secretly hoarding profits from the country's most valuable industries and using them for the benefit of the military and the Cuban elite.

Those accusations come amid a broader effort by the Trump administration to use an oil blockade and tightened sanctions to strangle the island of resources and force a change in its government.

Cuba on Tuesday denied corruption claims in a statement on GAESA, accusing the U.S. government of seeking to confuse "our people and international public opinion."

"(GAESA) is not an opaque structure, nor parallel to the Cuban State; on the contrary, it has been a carefully crafted response of proven efficiency against the economic blockade that has historically tried to suffocate the Cuban Revolution."

Cuba's leadership rarely talks publicly about GAESA, saying such secrecy is necessary to circumvent U.S. sanctions.

There is no public information about how much of Cuba's economy is controlled by GAESA.

Outside estimates range from 40% to 70%, including many of the island's five-star hotels along white-sand beaches and in prime locations in Havana.

HOTEL EXODUS

Several hotel companies that operate on the Caribbean's largest island have discreetly distanced themselves from GAESA amid U.S. sanctions and threats.

Reuters viewed brief statements provided to tour operators serving Cuba by top hoteliers Blue Diamond Resorts of Canada and Iberostar of Spain, severing ties with GAESA-linked and sanctioned hotels.

The top hotel chains' decisions follow a Trump executive order on May 1 that vastly broadened U.S. ...

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