U.S. says contractor case hinders Cuba dialogue moves

MIAMI Tue Sep 14, 2010 3:28pm EDT

MIAMI (Reuters) - Cuba's continued detention of a U.S. contractor held since December on suspicion of espionage and subversion is impeding moves by Washington to improve ties with the communist-ruled island, a senior U.S. official said on Tuesday.

U.S. Assistant Secretary of State for the Western Hemisphere Arturo Valenzuela repeated a call for Cuba to free Alan Gross, 60, who worked for a Washington-area company contracted under a U.S.-funded program to promote democracy in Cuba. He was arrested at Havana airport in early December.

Cuban officials say Gross committed "serious crimes" by attempting to aid U.S. efforts to destabilize Cuba's government by giving restricted satellite communications equipment to local dissidents. U.S. officials say he was providing Internet access to Jewish groups after entering Cuba on a tourist visa.

"The detention of Alan Gross is an impediment to being able to move ahead with certain kinds of measures that we would take with regard to Cuba," Valenzuela told reporters after addressing an Americas Conference in Miami organized by the World Bank and the Miami Herald.

"It is an obstacle for attempting to move ahead on what might be more of a dialogue between the two countries," the U.S. official added, saying Washington had made this clear to Cuban authorities.

U.S. congressional sources said last month the Obama administration had been preparing to relax travel restrictions to Cuba for some Americans to be able to visit the island as part of academic, cultural or religious exchanges.

But Valenzuela's remarks suggested progress in this kind of move, which would slightly ease aspects of the 48-year-old U.S. trade embargo on Cuba, was being hampered by Gross' continued detention.

U.S. WATCHING ECONOMIC REFORMS

"This is a person who has been detained without charges made against him ... up to now, we've seen no advances (in his case)," Valenzuela said. Any new initiatives toward Cuba would be taken on the basis of U.S. national interests, he added.

Gross has been held at Villa Marista state security headquarters in Havana. Cuban officials say he has been assured defense counsel, has received consular assistance from U.S. diplomats and has been able to communicate with his family.

Some analysts have speculated that Cuba may want to use Gross as a bargaining chip to try to secure the release of five convicted Cuban intelligence agents serving long U.S. sentences for espionage. But Washington has ruled out such a swap.

Valenzuela said however that despite the impasse over the Gross case, Washington had advanced in some areas of dialogue with Havana, for example in discussing cooperation to help Haiti following the devastating January 12 earthquake there.

He said the U.S. government was also taking note of ongoing economic reforms being undertaken by Cuban President Raul Castro's government.

The Cuban Workers Federation said on Monday the government would lay off more than 500,000 state employees by March and expand private sector employment.

"We welcome any measure that empowers the private sector in Cuba, which allows Cubans to establish their own companies, that sort of thing," Valenzuela said.

He said these kind of reforms by Havana "demonstrates a recognition by the Cuban authorities of the failure of the (Cuban) economic model."

Valenzuela said the U.S. government had "taken seriously" a recent reported statement by former Cuban President Fidel Castro, in which he was cited by a U.S. journalist who interviewed him as saying: "The Cuban model doesn't even work for us anymore."

Fidel Castro subsequently criticized the journalist, Jeffrey Goldberg, saying he had misunderstood him. Goldberg said he had quoted the former Cuban president correctly.

(Editing by Eric Beech)