“The reason you are forced to survive 22 hours a day without electricity is not due to an oil ‘blockade’ by the U.S.,” Rubio said. “As you know, better than anyone, you have been suffering from blackouts for years. The real reason you don’t have electricity, fuel, or food is because those who control your country have plundered billions of dollars, but nothing has been used to help the people.

“Today, Cuba is not controlled by any ‘revolution.’ Cuba is controlled by GAESA, a ‘state within the state’ that is accountable to no one and hoards the profits from its businesses for the benefit of a small elite. And the only role played by the so-called ‘government’ is to demand that you continue making ‘sacrifices’ and repressing anyone who dares to complain.”

The U.S. wanted a relationship with the Cuban people, not GAESA, Rubio said. The implication was clear: Any deal to save Cuba from collapse would necessitate the destruction of GAESA.

Rubio elaborated on his position vis-a-vis Havana before the Senate Foreign Relations Committee on Tuesday, saying he did not believe the government was capable of reform “unless new people take over or a new mindset takes hold.”

Cuba was quick to hit back against the depiction of GAESA, saying Rubio’s comments were intended 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,” Cuban officials said.

GAESA was founded in 1995 by Raul Castro, but its opaque nature has allowed it to dodge international attention. Havana has argued that this secrecy is necessary to get around U.S. sanctions.

An economic octopus

Christopher Hernandez-Roy, acting director of the Center for Strategic and International Studies Americas Program, described GAESA to the Washington Examiner as a “monolithic economic conglomerate” controlled by the Cuban armed forces. The lack of public information about it forces some guesswork, but open-source intelligence suggests it controls anywhere from 40% to 70% of the Cuban economy.

In terms of structure, it’s controlled on a strategic level by the recently indicted Castro, while his grandson, Raul Guillermo Rodriguez Castro, serves as the “gatekeeper.” Cuban generals run each of the conglomerate’s arms. The exact number is up for debate.

Hernandez-Roy likened the conglomerate to an octopus, albeit one that was missing two or three limbs.

“It’s like an octopus, it’s got five or six arms,” he said. “Imagine an octopus with five or six arms, and that each one of those arms then controls a whole bunch of smaller subsidiaries.”

One of the largest and most important arms is Gaviota, GAESA’s tourism arm, which controls most of the Caribbean island’s hotels, resorts, touring companies, and airlines. Cuba’s reliance on tourism makes Gaviota one of the country’s most important economic operators.

CIMEX is the primary retail and commercial arm, controlling gas stations, large retail stores, supermarkets, and related businesses.

Grupo Empresarial Palco covers real estate, restaurants, and some retail outlets.

FINCIMEX is the financial arm, controlling much of the island’s banking, foreign currency, and, crucially, the management of remittances from the Cuban diaspora.

Gaviota has played an outsize role, as tourism serves as the cornerstone of Cuba’s economy. It has taken the top spot in terms of revenue-earners after the decline of its medical mission program, in which countries would pay the Cuban government for some of its surplus doctors or medical professionals. The doctors themselves would get a tiny cut of the money, while Havana got the lion’s share.

While its full financial situation cannot be known, the evisceration of Cuba’s tourism industry has undoubtedly served as a hammer blow to GAESA. The U.S. oil blockade has made travel to the island unviable, and new secondary sanctions have just caused an exodus of foreign hotel and tourist companies from the island.

Civil-military fusion

Hernandez-Roy said Rubio’s depiction of GAESA as a corrupt body siphoning money out of Cuba for the benefit of a small elite is “absolutely” accurate. However, he clarified that he would not describe the island nation as a kleptocracy, something that he would apply to Venezuela.

“Cuba, while of course there’s corruption, GAESA runs enterprises, and they generate money from their enterprises,” he said, “and of course, there’s got to be corruption in there, but it is a business that is basically taking money from tourists and from the Cuban population by selling them goods and services.”

While the Marxist ideology of Havana is not as strong as it was in previous decades, Hernandez-Roy said, the revolutionary ideology remains “deeply ingrained” among the elite and armed forces.

“There’s still very much a feeling that they are defending the revolution against the evil Yankees,” he said. “That is still common currency.”

The military elite justifies its hold on the economy through part of its unique interpretation of Marxist ideology, mainly the idea of “civil-military fusion.” The armed forces’ main task is to preserve the revolution, so revenue generated by economic activity ultimately benefits the revolution.

“They’ve developed this stranglehold on the economy, so there’s still clearly an armed force, but they’re just as much in the economic sphere as they are in the military sphere,” Hernandez-Roy said. “They’re kind of inseparable.”

Economic malaise from GAESA

The economy, largely run by a military elite, has generated its own host of problems that have further damaged an economy already isolated and reeling from sanctions. The primary problem, Hernandez-Roy argued, was the fact that the state is generating money that does not go toward the state.

GAESA “is a legitimate source of revenue in the sense that they are doing real business, but that business then benefits a certain cadre of the military, and that money does not make its way into government coffers,” Hernandez-Roy said. “It’s not part of the state budget, that it doesn’t get reinvested in the Cuban military.”

“You have this whole economic enterprise that is run by the military, hence the state, but isn’t benefiting the state,” Hernandez-Roy added.

Profits are largely shipped out to offshore bank accounts, preventing the economy from reaping the benefits. Any reinvestments are for the benefit of GAESA, rather than for the Cuban people.

“If [GAESA] builds a hotel and then the hotel has Cubans working there, then great,” Hernandez-Roy said. “Except a lot of times, they build the hotel and then a foreign hotel operator comes in and puts people there, so I’m assuming there’s some benefit to Cubans, but it is not as one would expect, something that is then reinvested for the benefit of the state and the people. It’s reinvested for the benefit of those who run GAESA.”

The Washington Examiner reached out to the Cuban Embassy for comment.

CUBA’S RECKONING: THE ANATOMY OF A REGIME IN COLLAPSE

The new sanctions explicitly targeting GAESA have already begun dealing a critical blow to the island, as foreign companies pull their investments over fears of being hit with secondary financial penalties. Whether it will be the final blow to topple the government remains to be seen.

“The Cuban state has spent 70 years organizing itself to resist pressure, whether economic or military, from the U.S.,” Hernandez-Roy said. “Whether they can weather this storm, time will tell, but what is certain is that the amount of pressure that’s being brought to bear against the Cuban regime now is more than we’ve seen, certainly in recent years.”