|

|

|

|

Citizen cane

In the years before Castro's revolution, `Sugar King' Julio Lobo was Cuba’s richest man. 

Might his vigorous brand of capitalism yet return to this Communist island:

Lobo, the arch-capitalist, was a dapper dresser who once filled a pool with perfume for a movie starlet to swim in

Cuba is so somnolent and crumbling that it can take a leap of faith to imagine the days when the country had a "richest man". And yet, as my Cuban mother used to tell me, there have been many rich Cubans since Christopher Columbus first introduced sugar cane to the Americas in 1492. And of those multimillionaires, none matched the wealth of Julio Lobo — in his day the “Sugar King Havana” and, indeed the world.
Fidel Castro’s revolution long since did away with such men - though it cannot vanquish their memory. To this day in Havana, Croesus-like wealth is referred to as ser rico combo un Julio Lobo: to be as rich as a Julio Lobo. It is remarkable that this phrase should have survived almost 50 years of communism on the island. But much of Lobo's life was remarkable, and his past still illuminates the present.
While researching my new biography of Lobo, I discovered how, on the evening of October 11 1960, Ernesto "Che" Guevara summoned Cuba's richest man to his office at the central bank in downtown Havana to ask for his help. Short and stern-faced, Lobo, then 62, was the most important force in the world sugar market. Known as an authoritarian empire builder, he handled about half of the six million tonnes that Cuba, then the world's largest sugar exporter, produced each year. A financier of genius, his personal fortune was estimated at more than $200m ($5bn today).
There was more to Lobo than money, though. He was a cultured man, famed for his private collection of art and the largest holding of Napoleonic memorabilia outside France - including a vast library with five staff, and artefacts such as the emperor's death mask and one of his back teeth. Politically, Lobo was an enigma too. By marriage, he was linked to the Condesa de Merlin, a memoirist who wed one of Napoleon's generals and whose uncle introduced the first steam-powered sugar mill to Cuba. With a due sense of dynasty, Lobo even christened his eldest grandchild - with cane juice, of course - in the same font Napoleon had used to baptise his own son.
Yet despite such imperial trappings, Lobo fiercely opposed the corrupt government of President Fulgencio Batista. "We didn't care who overthrew Batista, so long as somebody did," he once said. A receipt among his papers shows he had financed Castro's rebels to the tune of $25,000.
On that October night, as Lobo drove from his home in the west of the city to the central bank in old Havana, less than two years had passed since Batista had fled the island on New Year's eve, 1958. Since then, much of Lobo's land - although not yet his sugar mills - had been confiscated by the rebel leader he had once helped. Yet Lobo refused to leave the island. Nor had he lent his voice to the growing anti-Castro protest. That night, Che Guevara was going to put Cuba's King of Sugar to the test.
Cuba has a more nuanced history than most accounts suggest. Indeed, it is the contradictions embodied in Lobo's and Guevara’s midnight interview in a stuffy office in downtown Havana that — to my mind — makes it so very Cuban. It overturns many received wisdoms about what Cube was, is — and may yet be.
The vexed curiosity I have always felt about such questions is a natural consequence of my mother’s exile. She left the island three years before Castro’s ascend to power, for reasons of love, not politics — a distinction that can temper my family’s otherwise black and white, “for” or “against” take on the revolution. 
In the 1970s London of my childhood, the double-decker bus I took to school each day passed a clothes shop on Kensington High Street called Red or Dead. Letter, it became Che Guevara, and when that shop finally closed down a restaurant opened opposite — called Bar Cuba. Not only was that distant island ruled by one of the world’s longest serving heads of state, whose accomplishments in health and education I was quit to recognize, but everybody seemed to revere him. It was embarrassing.
For even as a schoolboy I wondered if Cuba’s failings could have been so exceptional as to nurture a revolution that had brought the world to the brink of nuclear war — and which dispersed my mother’s family and so many others around the globe. Castro’s epic righting of perceived pre-revolutionary wrongs was at odds with the stories my relatives told me (even though I recognised them as tales of a privileged life).
My mother, Margarita Sanchez, was born in Havana in 1934 and raised into a conventional upper-class Cuban world. Her father owned a department store in the centre of town; her grande dame mother presided over the home; and her haute bourgeoisie parents mingled in the same world as Lobo's. Like most well-to-do Cubans, my mother didn't ride on public transport. She didn't play in public parks, or bathe at public beaches. When she felt hot, she was advised to "close her pores". If she went on a date, she was accompanied by a chaperone. It was a shimmering, closeted and sometimes claustrophobic life - and it came to an end several years before the revolution when the Havana cardinal visited her house on the eve of her wedding to explain why her match with an American divorcé had to be broken off.
She didn't marry the American but she did go to live in New York. She revelled in the anonymity of a big city, found a job as a buyer for the store Bergdorf Goodman, and met my father, an Englishman. They returned to Cuba to get engaged just before the revolution, marrying in Havana on September 3 1960, five weeks before Lobo's meeting with Guevara.
In many ways, my mother was typical of her generation, which included Julio Lobo’s younger daughter Maria Luisa-one of her closest friends. Like most Cubans, both families viewed the revolution with excitement. In early 1959, during a trip to the island from New York, my mother had turned out, dressed in revolutionary red and black, to watch Castro's victorious army enter the city. "Havana was buzzing, there was excitement and hope in the air," she wrote in her diary. "The whole country seemed to be behind Fidel. Cuba was free of Batista and all that he represented; we were on our way to true democracy . . . It was a spectacle that I shall never forget. He and his young bearded men all dressed in battle gear, walking beside their army vehicles, being kissed and hugged by the multitude, red carnations strewn in their path . . . We were jubilant."
In the following days, she watched the televised show trials, led by Guevara, of Batista's henchmen and succumbed to the hypnotic chant of "¡Paredon! ¡Paredon!", "Against the wall! Against the wall!" She felt that since the outcome would be the same there was little difference between a mock trial and a real one.
My grandfather, on the other hand, viewed the proceedings and subsequent firing-squad executions with distaste, arguing that they marked the beginning of the end.
He was right. Much had changed when my mother married my father in Havana 18 months later, and their wedding was a strange occasion, a melancholy mingling of Cuban ways old and new.
The ceremony was held in the family home, the drawing room was converted into a chapel, the arrangements completed with the help of Milagros - Miracles - the company that traditionally handled high society weddings in Havana. My mother's nieces acted as flower girls and her nephews walked in front of them dressed in white drill suits, hair slicked into neat partings, carrying lit candles. Just a handful of people attended. Outside, the militia was drilling.
A few weeks later, Castro nationalised my grandfather's department store in central Havana. Shortly after, my mother's family - her mother, her father, her sister and brother with their spouses and seven children - packed a suitcase each, took their photo albums filled with memories of a way of life that had ended, and boarded a scheduled flight for the United States.

As he drove to meet Guevara, Lobo would have known many such stories. Indeed, he had made plans for his own family to emigrate. His car pulled up outside the central bank, a columned building on Lamparillo Street. It lay three blocks west of Lobo's sugar trading house, Galban Lobo, the nerve centre of his global operation, which included offices in New York, London and Manila.
Lobo got out of the car and headed into the building. He walked with a limp after a murder attempt 14 years earlier, in 1946. A 4in chunk had been blown out of his skull after he supposedly refused to pay $50,000 to a gang of Cuban mobsters. The machine gun bullets had also shattered his right leg and left knee. One bullet had lodged near his spine.
Guevara had been central bank president for only a few weeks, but inside the building it was already a mess, with papers all over the floor. None of this boded well for Lobo. But Guevara greeted him politely in the doorway of his office. "Senor Lobo, it is good of you to come. Apologies that we bothered you at this late hour." They shook hands. Guevara invited Lobo to take a seat.
The two men could not have looked more different. Guevara, the ardent revolutionary, was dressed in battle fatigues, a revolver slung across the glass desk. This was the man who later explained to Cubans that the reason visiting Russians were so poorly dressed and smelt of sweat was that soap was superfluous in a genuine revolution.
By contrast Lobo, the arch-capitalist, was a dapper dresser who used eau de cologne Imperiale de Guerlain, and gave literary parties at his favourite sugar mill, Tinguaro, which he called the Cliveden of Cuba after the mansion in England once owned by Nancy Astor. While Guevara was the face of Cuba's "New Man", Stakhanovite in his labour and fervent in his belief that individualism should disappear, Lobo was supposed to have filled one of his estate's swimming pools with perfume so that Esther Williams, Hollywood starlet of Bathing Beauty, could practise her swimming routines when she visited. Such are the legends from which revolutions are made and subsequently justified.
Opposites in so many ways, Lobo and Guevara had much in common. Both were deeply rational men, Guevara looking to the various intellectual constructs of international communism, Lobo hewing to earlier enlightenment ideals.
Both men were loners. Guevara's terrible asthma attacks often kept him apart from others, while his mordant Argentine humour didn't always gel with the more flippant Cubans. As for Lobo, he used to say that Napoleon was a lonely character - and so was he.
Both men were candid to the point of brutality. Both engendered fierce loyalty. Lobo was well regarded by his employees. He visited his plantations often and, after the revolution, his workers sent delegates to Havana to ask that his mills not be nationalised.
Like Guevara, Lobo was scrupulously honest. Indeed, that night Lobo believed that Guevara had sent for him to talk about money owed in connection with the construction of the Riviera and Capri - two of the glitziest casino-hotels to have opened in Havana in the 1950s; Lobo had helped finance them. In fact, Guevara explained to Lobo, his aides had examined Lobo's accounts closely and found no irregularities. For that reason, he had been "left till the last".
Guevara's aim that night was simple. Cuba and sugar had been joined at the hip since the British captured Havana in 1762 and threw the island open to the slave trade. Sugar, the wealth it generated and the labour its plantations required, had set the country's course ever since. Sin azucar no hay país - without sugar there is no country - is the famous, damning phrase that defined the island.
Castro was going to seize Lobo's 14 sugar mills, but Guevara wanted to convince Lobo to stay in Cuba. He wanted Lobo's business talent, which was in no doubt. A few months earlier, the sugar market had tumbled after US refiners refused to buy Cuban in the hope of weakening the revolutionary government. Lobo had found himself stuck with a large cargo on board the Japanise freighter Kimikawa Maru.
Lobo then executed an almost insanely audacious move: he reserved all the available cargo space on sugar freighters, essentially cutting off the US’s international sugar supplies. As the market rose, Lobo rammed his prices down the American refiners’ throats. A few days before Lobo’s blockade began, Pepsi Cola had refused to trade at 5.30 cents a pound. After a few days of Lobo’s tactics, US buyers meekly accepted a price half as high again. To Guevara, Lobo’s business daring chimed with the military heroism of the revolution’s own rebels.
Guevara leaned forward in his chair, still polite, he told Lobo that the time had come for him to make a decision. The revolution was communist, and Lobo, as a capitalist, could not remain as he was. He could either stay and be a part of it, or go.
It is impossible for us to permit you, who represent ‘the very idea’ of capitalism in Cuba, to remain as you are,” Guevara said. Lobo pointed out that Soviet leader Nikita Khrushchev believed in peaceful coexistence of the two system of production. Guevara replied that that was all very well between nations, but not within one. Stymied, Lobo asked how he could integrate himself. Guevara laid out his terms: Lobo would become general manager of the Cuban sugar industry. He would lose all his properties but would be allowed to keep the income from Tinguaro, his favourite mill.
Stalling Lobo told Guevara he would like a few days to consider his offer, although in fact he had already made up his mind. Lobo boarded a plane for New York two days later, taking nothing but his toothbrush. He left behind his El Greco paintings, his palaces, his vast enterprises, and his lacks of Napoleon hair, The next day the Cuban government nationalised his sugar assets and made itself custodian of his art and artifacts, leaving Lobo with virtually nothing.
He subsequently made another fortune, trading sugar futures on Wall Street. But he lost his millions again. A man who had once been among the world's richest ended his days in exile in Madrid, provided for by his two daughters, his legacy all but obliterated. In many ways, Lobo foresaw all this after his meeting with Guevara. As he got ready to leave the island, he remarked to his secretary, "This is the end." Fifty years later in Cuba, there is new truth in those words.
As the island limps towards the end of the Castro brothers' rule, people often specu
late about what will happen next. A wise friend in Havana once cautioned me to the effect that trying to predict Cuba's future was preposterous because so many people have been proved so wrong. There are too many imponderables.
There is the political intransigence of the revolutionary government. Its release of 52 political prisoners this July, for example, is widely seen as a tactical manoeuvre rather than a real political change of heart. There is also the enduring and controversial pres¬ence of the US embargo, even if this is increasingly more a concept than a fact: cash sales of food and medicine mean the US is Cuba's fifth biggest trading partner.
One thing is certain, however: Cuba's great age of sugar has passed. Two-thirds of the island's mills have closed, and Cuba's rickety sugar industry can no longer compete with efficient producers elsewhere. The 1959 harvest, Lobo's last, was almost 6m tonnes. This year it will struggle to reach 1.2m - the same figure as 1908's. The Sugar Ministry that Guevara asked Lobo to run has also been disbanded.
Eighty years ago, Luis Machado, a promi¬nent Havana businessman, ,reflected on Cuba's epic revolutionary struggle for inde¬pendence (first against Spain, then the US) in words still relevant today. "Three gener¬ations of Cubans have fought and died for the freedom, sovereignty and independence of our people," he said. "Our generation's challenge is economic and social. If our parents forged an independent Cuba, we have to make our country not only wealthy, but Cuban."
Lobo was one of those who heeded Luis Machado's call. He sought to make the country "great through wealth". As his 1960 sugar squeeze showed - and it was not the only time he was audacious in business - Lobo also had an impressive ability to beat foreign might on its own terms.
Does that sound surprising? Even today, Cuba has less a history of victimhood than of home-grown imperialism. After all, few countries - perhaps none - waged three successful African campaigns in the second half of the past century, as Cuba did in Angola, Ethiopia and Mozambique.
One irony is that Cuba's revolutionary government, having spent so many years berating its pre-revolutionary past, now wants to reinvigorate the island along lines that Machado and Lobo themselves might recognise. This April, Raul Castro, who took over in 2006 after Fidel suffered a near fatal intestinal disorder, addressed the communist youth convention. (Fidel, 84, has since reappeared in public after years of seclusion, to pontificate about the Middle East, but his younger brother remains in charge of daily affairs.)
The revolution's main battleground, Raul said, was not politics but economics. Cuba needed a sound and dynamic economy, he insisted. Paternalistic legislation had to go. So did inflated payrolls: there were one million excess workers in state companies. Pay, Raul added, had to be linked to results. It was a radical speech for a 78-year-old communist. Yet Raul had made similar speeches before, and little so far has changed.
The most obvious reason is that unravelling what Cubans call the "internal embargo" (the thicket of bureaucracy and the state's traditional antipathy to individual enterprise) is an ideologically tortuous process - and one that could undermine the revolutionary state itself.
The unravelling may have already begun. In February, human rights activist Orlando Zapata died after an 86-day hunger strike. What is odd is that the government allowed Zapata to die at all. That had never happened before, and the fact it did suggested that the old command-and-control structures are crumbling.
Havana remains one of the Americas' great capitals, a city of cobbled streets, graceful balconies and windows with iron grilles, the names of past sugar barons carved into massive stone lintels above studded wooden doors. A plaque celebrating Lobo's life and fortune was recently mounted on the wall of his former office in the old city. A call to wealth? Perhaps. Yet the sugar industry that once made a small island great has gone. Cuba today, as one north American friend who has lived there for almost 20 years told me ruefully, is more like a listing wooden shack.
"If the last of the US embargo were dropped," he said, "it would be like sending in an army of ants." He paused, envisaging a swarm of tropical termites munching through the regime's already weak foundations, before adding: "Cuba needs more ants." If it is lucky, it will get more Lobos too.

John Paul Rathbone is the FT's Latin America editor

This is an edited extract from `The Sugar King of Havana: The Rise and Fall of Julio Lobo, Cuba's Last Tycoon' (Penguin, $27.95)