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The Government of Spain paid 1.6 million euros to the Palco Business Group, a Cuban state enterprise linked to the military conglomerate GAESA, to manage part of the staff that handled more than 350,000 applications for Spanish nationality submitted in Cuba under the so-called Grandchildren's Law, according to an investigation published this Sunday by the Spanish newspaper 20minutos.
According to the report, the Spanish Ministry of Foreign Affairs awarded three contracts to Palco, an entity that, under Cuban law, is the only one authorized to supply workers to foreign diplomatic missions on the island. This status made the state-owned company a key player in the process of handling nationality applications.
The largest contract amounted to 1,131,295 euros and allowed for the incorporation of 87 office and service assistants at the Consulate General of Spain in Havana to manage the high volume of requests. A second contract, worth 242,743 euros, covered services for the Spanish Embassy, while a third contract, valued at 228,000 euros, was for the rental of a property intended for the contracted staff. All three agreements will remain in effect until December 2028.
The investigation also claims that the contracting scheme allowed Palco to retain part of the funds paid by Spain. According to 20minutos, the Ministry of Foreign Affairs was paying between 205 and 210 euros monthly for each worker, while the employees received between 133 and 135 euros per month, leaving the remainder in the hands of the state company.
A company integrated into the GAESA framework
Palco is subordinate to the Council of Ministers of Cuba and is part of the business network associated with GAESA, the conglomerate controlled by the Cuban Armed Forces that encompasses a significant portion of the national economy.
On May 1, 2026, the U.S. government sanctioned GAESA through an executive order signed by President Donald Trump, who described the conglomerate as "the heart of the Cuban kleptocratic communist system." Subsequently, on June 23, Washington expanded those sanctions to five additional entities linked to the group.
According to the report, Palco was founded over four decades ago to organize conferences and fairs, although it was formally established as a corporate group on January 15, 2011. On its website, it presents itself as an organization specialized in providing comprehensive services to the Cuban government, its official guests, and the diplomatic corps accredited on the island. Currently, it encompasses ten companies engaged in activities ranging from personnel hiring and real estate leasing to construction, importation, and floristry.
The Grandchildren's Law continues to fuel the political debate
The investigation by 20minutos adds new elements to the controversy surrounding the application of the Democratic Memory Law, popularly known as the Grandchildren's Law.
According to the newspaper, some sectors of the Spanish opposition argue that the high number of new Spanish citizens living abroad could have electoral consequences through overseas voting. Parliamentary sources cited by the outlet estimate that, in certain constituencies, the impact could reach up to twenty seats in future general elections.
The report also notes that Cuba is not a part of the Hague Convention on Apostille, so the authenticity of birth and marriage certificates used in the applications relies on documents issued and validated by the Cuban authorities.
In parallel, 20minutos claims that the U.S. State Department is investigating whether the Spanish regulation could allow individuals linked to organized crime or the Cuban state apparatus to obtain Spanish nationality and, with it, access to U.S. territory.
In this context, the Vox party requested on July 1 the annulment of the instruction that regulates the application of the law and asked the Central Electoral Board for an audit of the census of Spaniards residing abroad, the suspension of new registrations in the registry, and the review of the contracts signed with the Palco Business Group.
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