Cuba, Sugar, and Spies
Three cousins on the periphery of a revolution
Jay Reid turned 44 years old in the summer of 1959. A married father of four, he was still a couple years away from moving into the painted brick, split-level house in Bethesda, MD, that he would call home for more than 30 years.
Jay’s parents were old, and all indications are that they were bereft of funds. Florence Marguerite, his mother, would die in 1959, followed by Jay Sr. one year later. His parents lived separately at the end of their lives, but I have not found any evidence that they formally divorced.
Jay was likely subsidizing one or both of his parents in their final years, which would have strained his finances.
Up in New Jersey, Jay’s 45-year-old cousin Walter III was consolidating his control over Charms Candy, where he had worked since 1934. His father, who founded Charms, had recently died.
Down in Washington, D.C., their cousin, Karl Harr, 37 years old in 1959, was coordinating covert operations for President Dwight Eisenhower.
Their professional roles, and mutual business interests, are paramount to understanding what happened in Cuba as Fidel Castro rose to power, as well as why the CIA might be so reticent to disclose any information about their relationship with Jay.
Catherine Taaffe and the Cuban sugar companies
The name Catherine Taaffe was most likely a pseudonym, one of many that was used by a single CIA agent across her dealings with various government agencies.
Taaffe was very active during the Cuban revolution of the late 1950s, filing reports to CIA, Air Force Intelligence, FBI, and U.S. Customs. Her reports were at times true and at other times they stretched the facts, but not without reason. Historian Dr. John Newman explains (emphasis added):
At the top of the list of Taaffe’s true benefactors was the Central Intelligence Agency - followed by Air Force Intelligence and U.S. Customs. The latter suggests a possible connection to drug smuggling. Air Force Intelligence suggests a connection to aviation perhaps beyond the sale of aircraft [which was part of Taaffe’s portfolio] - possibly counterintelligence. The CIA angle, however, is the most likely possibility for Taaffe’s ultimate benefactor.
File away “aircraft” and “counterintelligence” in your memory as recurring themes. Additionally, this is not the first time I have seen “drug smuggling” mentioned out on the periphery.
Many documents about Taaffe have been released due to their connection to the JFK assassination.
One area we are going to zoom in on is her dealings with Cuban sugar companies in 1959, as highlighted in Newman’s Where Angels Tread Lightly: The Assassination of President Kennedy, Volume I.
The Cuban sugar industry was but one area of focus as the CIA stepped up its activity in reaction to Castro taking power in Havana. Newman’s book presents tantalizing clues, and since it so well sourced, following the trail of breadcrumbs is easy.
First signs of unrest among sugar companies
In late-January 1959, just weeks after Fidel Castro took power, Catherine Taaffe travelled to Cuba on a mission that was monitored at the highest reaches of the federal government, in part because they hoped she would meet with Castro.
But Taaffe took care to avoid interacting with Castro. As Newman explains:
Perhaps the truth was that Taaffe, and maybe others, did not want Castro to see her. It is not out of the question that Castro or someone in his entourage might have seen her before - in a situation in which she had been using a different name.
On January 21, 1959, J. Edgar Hoover called Christian Herter, who as Undersecretary of State was running the day-to-day operations of the department while John Foster Dulles fought a losing battle with cancer. Hoover shared with Herter the following details:
I thought you would be interested in knowing she [Taaffe} called our New York Office from Havana, Cuba on 19 January 1959 and stated she had spent eight hours at the Sugar Institute and two and one-half hours at the Presidential Palace but had not been in contact with the American Embassy in Havana.1
Taaffe’s relationship with Alberto Fernandez, head of the Sugar Institute, dated to at least to the early 1950s. It was Fernandez who had introduced Taaffe to the FBI’s Wallace Quinn in 1953.
Agrarian reform
Land reform was one of the first concrete signs that Castro intended to turn Cuba into a communist state. Initially, as Castro was gaining political and military strength in 1958, the CIA did not have a clear feel for his intentions.
There were actually pockets of support for Castro early on within the Agency.
That came to an end when expropriating U.S. business holdings was put on the agenda via land reform proposals that were circulating in the spring of 1959.
On 17 May 1959, the Agrarian Reform Law was promulgated where the first one was: in the Sierra Maestra…[the] immediate consequence was a fall in the value of several large corporations traded on the New York Stock Exchange, and of many Cuban stocks as well.
The new law would prevent sugar companies from running plantations “unless the shares in the companies were registered to and owned by Cubans.”
At this point, Charms was still ok. Its Cuban partner, Arechabala S.A., was fully owned by the Arechabala family. However, markets were on the verge of going haywire.
U.S. corporations with large investments in Cuba appeared headed for disaster. Wall Street unmercifully hammered the stock values of these corporations. In this manner, the pain broadened to include the vast numbers of shareholders in these companies…The nature of land-holding in Cuba meant that the storm against the new law would be as intense in New York as it was in Cuba.
Around this time, Castro told the American ambassador that while Cuba was planning to compensate American landowners for their soon-to-be confiscated holdings, the country did not have the money to do so at the time.
A letter from the Havana Legat to FBI headquarters on May 22, 1959, reported that if sugar magnates “did not receive relief from the effects of the new agrarian reform program they would subsidize a counter revolutionary movement to protect their interests.”2
CIA begins to act against Castro
Taaffe reported to the FBI in late April that she would soon be making another trip to Cuba. The trip would be paid for by Alberto Fernandez, head of the Sugar Institute, out of his own personal funds.
In CIA cable traffic, Fernandez went by the cryptonym AMDENIM-1. He had collected tribute from the sugar companies on Castro’s behalf when the latter was still in the Sierra Maestra, before the turn to communism. Later, as an exile and boat dealer based out of Miami, he would assist the CIA in infiltrations and exfiltrations.3
Taaffe’s trip was aimed at identifying communists within the Cuban government, the senior ranks of which were being filled with people loyal to Castro.
A letter dated July 20, 1959, from J. Edgar Hoover to Allen Dulles, copying Richard Bissell, the Deputy Director of Plans (covert operations), provided an update on Taaffe’s Cuban activities. Taaffe, who had previously been reporting to the New York field office, apparently dictated this report to the Washington D.C. office.
The information came from Sam Papich, an FBI liaison to the Agency, and was intended for Jane Roman, who worked under James Angleton in counterintelligence.
We see in the letter that by late July the CIA had infiltrated the Sugar Institute at the rank-and-file level and that Fernandez, who was no longer leading the Institute, was now leading a counterrevolutionary movement.
On July 29, CIA officer David Atlee Phillips met in Havana with two American sugar executives whose firms had operations in Cuba. They reported having met with their Cuban counterparts, who were interested in “doing something” to stop the agrarian reform.
The hope among the Cubans was that the American executives, along with other aligned interests, would be willing to pool funds to prepare an action plan.
The idea was to have Phillips, a psychological warrior par excellence, craft the ensuing propaganda campaign.4
One of the richest Cuban sugar magnates was Julio Lobo, whose cryptonym was AMEMBER-1. He provided financial backing for several anti-Castro groups.
Connection to Jay Reid
While this all may read as six degrees of Kevin Bacon, it is important context for a number of high-level discussions that were ongoing in the United States.
Jay and his cousins had varying degrees of financial incentive - Walter a lot, Jay some, and Karl indeterminant - to ensure the continued flow of sugar from Cuba to the U.S.
The Charms Company depended on Arechabala S.A. for a significant amount of the sugar used to make its candies. Even if that singular entity were to survive the revolution, any significant disruption to the flow of sugar out of Cuba would drive up prices globally, which would hurt Charms’ bottom line.
In 1959, the three cousins were in positions to act in defense of their interests, each with a unique power lever to pull:
Jay - monetary
Walter - financial
Karl - covert operations
Remember, the CIA denied the request for Jay’s file partly on the grounds that even acknowledging such a file exists would have national security implications.
Machinations around Castro and Cuba at the end of Eisenhower’s presidency would certainly qualify for such a moniker.
Newman, John. Where Angels Fear to Trend: The Assassination of President Kennedy, Volume 1. CreateSpace Independent Publishing Platform. North Charleston, South Carolina, 2017. Pg. 77-79, including Letter, from Hoover to Herter, FBI HQS 109 File Vol. 10, p. 58..
Newman, John. Where Angels Fear to Trend: The Assassination of President Kennedy, Volume 1. Pg. 171-196.
Newman, John. Where Angels Fear to Trend: The Assassination of President Kennedy, Volume 1. Pg. 321.
Newman, John. Where Angels Fear to Trend: The Assassination of President Kennedy, Volume 1. Pg. 222-223.