GAESA: From Serving The Few To Serving The Many

A Framework for GAESA in Cuba’s Democratic Transition

EXECUTIVE SUMMARY

For decades, Cuba’s military-controlled conglomerate, Grupo de Administración Empresarial, S.A. (GAESA), has accumulated extraordinary economic power while ordinary Cubans have struggled with shortages of food, medicine, electricity and other basic necessities.

The contrast between the two is striking: there is widespread poverty and hardship among the Cuban people while there are billions of dollars in assets and financial resources accumulated and controlled by GAESA and the Cuban regime.

Secretary of State Marco Rubio recently described the extraordinary concentration of economic power within GAESA, stating that the military-controlled holding company “controls 40 percent of their GDP,” while its revenues do not go toward Cuba’s schools, roads, energy grid or feeding its population.

GAESA must stop serving the few and start serving the many.

The objective of a democratic transition should therefore not simply be to destroy and eliminate GAESA. Doing so could unnecessarily destroy functioning companies, jobs, infrastructure and valuable assets vital for a free and democratic Cuba.

Instead, GAESA should be separated from the military and Communist Party, be subjected to a complete and independent forensic audit and accounting and placed under transparent civilian authority during the transition. Its assets should ultimately be used for the benefit of the Cuban people and their future.

This would transform one of the regime’s most powerful instruments of economic control into an important resource for Cuba’s reconstruction.

THE MONEY

GAESA’s economic reach extends across some of Cuba’s most important industries, including tourism, hotels, financial services, retail operations, ports, logistics and other major sectors. The fundamental question is greater than what happens to a military-controlled Cuban conglomerate after a political transition.

Who should ultimately benefit from the billions in wealth and assets siphoned, accumulated and controlled by GAESA and the Cuban regime at the exclusion of the Cuban people?

Today, those resources are concentrated within a military-controlled economic structure while the Cuban people endure profound economic hardship and repression. Tomorrow, those resources should serve the Cuban people and help the nation transition toward a free market economy.

THE UNITED STATES HAS BEGUN TO ACT

The United States has recently taken significant steps against GAESA.

On May 1, 2026, President Donald Trump signed Executive Order 14404, creating expanding the U.S. government’s ability to impose financial sanctions on individuals and entities supporting the Cuban regime and its economic and security apparatus.

Six days later, on May 7, 2026, the Department of State used that authority to designate GAESA for blocking sanctions under Executive Order 1404. The action expanded the potential consequences beyond GAESA itself by exposing foreign persons and financial institutions dealing with GAESA to additional U.S. sanctions risk.

The policy was subsequently extended further to additional GAESA-linked entities and parts of the Cuban government’s financial and security apparatus. These actions represent an important change. The United States is no longer focusing merely at individual Cuban officials. It is increasingly targeting the financial architecture that sustains the regime.

GAESA STRATEGY PRESENTED TO THE U.S. STATE DEPARTMENT

This approach also connects with a broader strategy I previously presented to the U.S. government concerning Cuban government foreign assets, at the request of the U.S. Department of State.

On September 18, 2025, I submitted a memorandum to the U.S. Department of State outlining a strategy to legally confiscate Cuban government foreign assets. Following the activation of CUBATEC, I updated the memorandum on January 30, 2026, further developing the strategy and its potential application to a changing Cuba. According, to State Department officials, the memorandum was distributed up the Department’s chain of command.

The memorandum focused on the enormous disparity between the financial resources accumulated and controlled by Cuba’s ruling structure and the conditions endured by the Cuban people. It noted estimates of more than $9 billion in illicit funds held abroad by members of Cuba’s ruling hierarchy and cited leaked GAESA financial information indicating foreign-currency reserves fluctuating between approximately $9 billion and $14.5 billion, including working capital.

The memorandum proposed using existing American and international legal mechanisms to pursue Cuban government foreign assets and contemplated an important ultimate purpose for recovered funds: helping the Cuban people after the regime is gone.

Its recommended outcome stated that confiscated Cuban foreign assets could ultimately support counter-terrorism efforts and/or provide direct humanitarian assistance to the Cuban people in a post-regime Cuba.

A NEW U.S. STRATEGY: TARGET THE NETWORK, NOT JUST THE REGIME

The strategy outlined in the January 30 memorandum anticipated an approach that differs in important respects from the traditional Cold War model for confronting communist regimes. Rather than focusing principally on political isolation, it proposed using the existing American and international legal mechanisms already employed against transnational terrorist organizations and drug-trafficking organizations to identify, freeze and potentially confiscate Cuban government foreign assets.

The memorandum identified three principal mechanisms: federal terrorist-forfeiture laws; international treaties and conventions, including the 1988 United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances; and requests through the U.S. Department of Justice’s Office of International Affairs for foreign governments to freeze or seize assets.

This does not mean that the United States has formally classified the Cuban government as an organized crime syndicate or drug cartel. Rather, the strategic and tactical similarity lies in the method: identify the network, follow the money, target the businesses and financial structures that sustain it, identify facilitators, and pursue assets through domestic and international legal mechanisms.

That approach differs from the traditional framework associated with the democratic transitions of Eastern Europe decades ago, which centered largely on communist governments, dissidents, civil society, democratic institutions and the eventual movement toward free market economies. Cuba presents an additional challenge because military, security and commercial power are deeply intertwined.

GAESA sits at the center of that structure. Its reach across tourism, finance, retail, ports, logistics and other sectors makes it more than simply another state-owned enterprise. It’s the engine at the core of the apparatus that wields total control over the Cuban people. Targeting GAESA and its related entities therefore targets part of the financial architecture that helps sustain the Cuban regime.

Subsequent U.S. actions against GAESA increasingly reflect a similar network-based strategy: move beyond individual officials, identify entities and affiliates, scrutinize financial relationships and counterparties, and increase the consequences for those who continue to support sanctioned parts of the regime.

The strategic logic is increasingly clear: target the network, follow the money, identify the facilitators and isolate the assets.

That approach has direct implications for a future democratic transition. Identifying the Cuban government’s and GAESA’s assets today can help prevent those assets from being hidden, transferred or lost tomorrow. It also strengthens the case for preserving legitimate assets so they can ultimately be placed at the service of the Cuban people.

WHAT HAPPENS TO GAESA AFTER THE REGIME?

A free Cuba should not simply replace one group of people controlling GAESA with another. Nor should GAESA’s assets disappear in the confusion that could accompany political change.

A transitional government should immediately secure GAESA’s records, bank accounts, corporate interests and physical assets and prevent their transfer, concealment or destruction.

GAESA should then be removed from military control and temporarily placed under independent civilian administration.

1. Secure the assets. Prevent the removal or transfer of money, property, corporate interests and records during the transition.
2. Conduct a complete forensic audit. Determine what GAESA owns, where its money is located, how assets were acquired and who ultimately controls them.
3. Separate the military from commerce. Cuba’s armed forces should defend the nation – not control hotels, banks, ports, stores and major commercial enterprises.
4. Resolve legitimate ownership claims. Property rights and valid legal claims must be addressed through an independent judicial process governed by the rule of law.
5. Return economic resources to productive use. Legitimate GAESA enterprises should be evaluated individually for transparent privatization restructuring, restitution where legally appropriate, or temporary public administration.

The objective should not be revenge. It should be reconstruction.

THE PRINCIPLE FOR A NEW CUBA

GAESA represents one of the clearest examples of what went wrong with Cuba’s economic system: enormous economic resources became concentrated in institutions accountable neither to the Cuban people nor to transparent civilian government.

A democratic Cuba should not repeat that mistake.

GAESA’s legitimate businesses, infrastructure and assets should be preserved where doing so benefits the Cuban people – but the system controlling them must fundamentally change.

The military must return to the barracks. Independent institutions must provide oversight. Private enterprises must be allowed to flourish. Property rights must be settled and respected.

The billions accumulated and controlled by GAESA and the Cuban government must ultimately be put to work for the Cuban people.

The U.S. has begun the process of isolating GAESA’s financial power. A democratic transition must go further by transforming that economic power into a resource for national reconstruction and prosperity in a free and democratic Cuba.

GAESA must stop serving the few and start serving the many.

That should be both the objective and the measure of success.

SOURCE NOTES

Kirk Regan Menendez, Esq., Cuba Strategy Update Memorandum, January 30, 2026, describing the September 18, 2025 submission to the U.S. Department of State and proposed strategy concerning GAESA and Cuban government foreign assets.

U.S. Department of State and U.S. Department of the Treasury/OFAC public statements and action concerning GAESA and Executive Order 14404 (2026)