60 Minutes - Sunday, January 1, 2017

Episode Date: January 2, 2017

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Limited time only at participating Wendy's Taxes Extra. In the six days we were in Chicago, 55 people were shot, 16 were killed. We were struck by just how routine it felt. We were also struck by what we learned about police activity. With murders going up, police activity is down dramatically. When you have activity falling off the way it is and crime skyrocketing, that's a huge problem. Some people looking at the Chicago Police Department have said it's in crisis. Crisis is a good word. When people are dying, yes, there's crisis. No two ways about it. Looking for a change of scenery, or maybe a change of country, a new life, or perhaps a new identity. In this era of globalization, citizenship and passports for Caribbean islands like this one

have become just another commodity to be bought and sold. How much does it cost to get a citizenship? $100,000. You have to come and live in Dominica? No, no. You don't even have to come to Dominica to get the citizenship. You pay the money from wherever you are. Sort of mail-order citizenship? Sort of. Something like that.

The relationship between Cuba and the United States has been changing at a dizzying pace. And while there has been a thaw, one Cold War battle continues. Over rum. We went to Cuba to try to understand more about the rum war and found out it's complicated. And you need to pull up a seat and make yourself comfortable to try and figure it out. Welcome to Play It, a new podcast network featuring radio and TV personalities talking business, sports, tech, entertainment, and more. Play it at play.it.

The number of casualties in Chicago since last New Year's Day has surged to a level more in line with a war zone than one of America's great cities. More than 700 people were murdered, over 4,000 shot. That's more than Los Angeles and New York combined. Gangs, guns, and drugs have caused chaos in Chicago for years. But something new caught our attention. There has been a drop in the kind of police work that law enforcement says is critical to preventing crime. Usually stops and arrests go up when violence is rising. So we went to Chicago to look for an explanation.

What we found was a police department on its heels as the city suffered its worst bloodshed in 18 years. In the six days we were in Chicago, 55 people were shot, 16 were killed. We were struck by just how routine it all felt. The dead and wounded were removed with grim efficiency, right down to the hazmat crews that cleaned away the blood. Murder seemed almost normal. And now we are the poster boy of violence in America. Michael Flager is pastor of St. Sabina Church on Chicago's South Side. His congregation started summer weekends by praying for a low body count. I had three families, three different families call on one day asking to do the funeral of their child who was killed in the last week. I've never had that in 41 years here, three families in one day. Fifty-nine gangs are at war over territory and drugs on Chicago's west and south sides.

But the makeshift memorials we saw also marked places where people were killed in gang initiations or over petty insults. This gang member was taunting a rival on his phone live on the Internet when he was shot. Watch, and you'll see the gunmen. What's it like around here on a typical Saturday night these days? I've never seen there to be a combination of anger, distrust, and a feeling like communities have been abandoned. Shame on us that our children are afraid to go out of their house of being shot and killed. When is the tipping point? Do we all say enough? But we were astonished by data we obtained from inside the police department.

It revealed that as killings rose, police activity fell. In August of 2015, cops stopped and questioned 49,257 people. A year later, those stops dropped to 8,859, down 80%. At the same time, arrests were off by a third, from just over 10,000 to 6,900. You talk to cops every day. We do. What's the morale? Lowest it's ever been. Brian Warner is a former Chicago cop. He was shot in 2011. Now, Warner counsels officers suffering from extreme stress. He explained what a dozen beat cops told us off camera. They had stepped back. You have a 911 call, you go to your 911 call. But if you're one of the aggressive patrol, when you're out looking for people, breaking the law, that's not happening as much as it was.

But you say they're not being as proactive. No, they're not. And how could you ask them to be, And why would you expect them to be? Because it's their job. They signed on to do that. It's my job to go to work and listen to your 911 calls and respond to my 911. That's the basic ability of my job. So if you want me to do the basics, that's what I'm doing now. The police activity is horrific, honestly. And there's not an excuse that could be made in my book. We showed the stop and arrest data that we got to Gary McCarthy. He was superintendent of the Chicago Police Department until just a year ago. When you have activity falling off the way it is and crime skyrocketing, that's a huge problem.

Some people looking at the Chicago Police Department have said it's in crisis. Crisis is a good word. When people are dying, yes, there's crisis. No two ways about it. This crisis inside the police department began in 2014 with the shooting of Laquan McDonald. He was 17 years old. Police reported McDonald was breaking into vehicles and ignored their commands when they said he lunged at one of them with a knife. But dashboard video appears to show McDonald was moving away when he was shot 16 times by a white officer. When did you first see the video? I saw the video, I believe it was the day after. What would you think?

I said that there's a problem and the officer's going to be accountable for explaining his actions. Gary McCarthy immediately gave the case to the independent city agency that reviews shootings. But City Hall refused to make the video public even after it paid McDonald's family a $5 million settlement. When a judge finally ordered the video released a year later, it sparked outrage.

Protesters accused the city of a cover-up to protect Mayor Rahm Emanuel's re-election. The mayor denied it, but promised sweeping changes. His first move was to fire Gary McCarthy. The public trust in the leadership of the department has been shaken. Do you think you were made a scapegoat? I don't think it helped the situation. And I think it's a contributory factor to where we are today in Chicago. And if you want to call it scapegoat, that's fine.

The cop who killed Laquan McDonald is awaiting trial for murder, and the U.S. Justice Department is investigating the Chicago PD. We wanted to talk to Mayor Emanuel, but he declined. Within six weeks of the shooting scandal, investigative stops fell by nearly 35,000. That's when the violence began to surge. How can a police officer who has taken a vow to protect and serve defend stepping back from taking proactive action, how can you... Officers are under attack. That's how they feel, right? That's how they feel in this environment. And they're not going to put themselves and their families in jeopardy.

Frustration among cops deepened with a new order to be more selective about who they stopped and write a two-page detailed report for every one. It was the result of a threat by the American Civil Liberties Union to sue the department for racial profiling. It doesn't seem that filling out a two-page report is that onerous. Oh, sure it is. It can take you up to 45 minutes. And one of the things in policing that we've been trying to do is knock back the amount of time that officers spend doing paperwork and get them out doing more proactive things to prevent crime. There are reasons for the scrutiny. Since 2004, the city has paid out more than a half billion

dollars in settlements for police misconduct. A task force appointed by the mayor found evidence of racial bias and reported that nearly 90 percent of police shootings involved minorities. RICHARD WOODIN, Chicago Police Department Officer, Chicago Police Department The Chicago Police Department is not racist, but I do know and do believe that there are racist police officers in the Chicago Police Department. RAY SUAREZ, Chicago Police Department Officer, Chicago Police Department Richard Wooten broke ranks and talked to the mayor's task force about what he saw during

his 23 years as a Chicago cop. They put me in a car with this guy. And my first couple of stops, I saw this guy stop a black guy, you know, several black guys on the street. And they literally almost got strip searched right in the middle of the street. And I'm looking like, wow, is this the way it's supposed to be done? You were called a traitor for speaking up. Oh, yes. At my retirement party, when I got up to speak, a group of white boys in the back, they booed me, called me traitor, snitch. Was the booing the extent of it? No. I went into the restroom, and I was confronted by a couple of the guys in the restroom about, you know, my position and how could I do that after 20-some years of service? But then as I'm looking into the urinal, I see my picture that they've torn out the program in each urinal.

They put your picture. My picture inside the urinals. But I wasn't angry, Bill. You weren't angry. I was not angry because that just told me how dysfunctional we have of officers we have on the police department. The turmoil was not lost on gang members who record their attempts to lure officers into a confrontation. Say hi. This video was posted online by someone claiming to be connected to the Simon City Royal Street Gang. No questions, gentlemen, no questions. The impact was evident during this October arrest.

Officer Veronica Murillo says it was the fear of becoming the next viral video that kept her from pulling her gun as she struggled with this suspect. He knocked her down and bashed her head into the pavement. Let her go! Let her go! She suffered neurological damage that has endangered her career. The noncompliance with the law is becoming legitimized. And the police are on their heels. They're on their heels for a number of reasons. How dangerous is that?

We see the results, don't we? We're reaching a state of lawlessness, right? That's what's happening. Dozens of innocent people have paid the price. I pray every night and every day that no hurt, harm or danger will come to my children. Flora White's prayers went unanswered. She showed us the parking lot where her 26-year-old son, Jonathan, was murdered in July. He played basketball in college and in Europe. He wasn't out here selling drugs. He wasn't out here gangbanging. He wasn't doing any of that.

And yet he ended up dead. Exactly. Jonathan was on his way to practice when he stopped to talk to friends. Investigators say he was shot by a gang member who was angry they were on his turf. By our count, there have been about a dozen shootings just this August, just in the area surrounding the spot where Jonathan was killed. Yet at the same time, stops by police in the neighborhood have dropped by almost 80 percent. What do you think of that? What do I think of that? I think it's a choke of accountability in politics. We went looking for accountability from Chicago's new police superintendent, Eddie Johnson. And this is where the incident just happened. It's right here.

He worked his way up over a 28-year career. If I found someone that intentionally was not doing his job, then I would discipline them. This is a tough job. It's a dangerous job, but it's also a noble job. Johnson insisted the main reasons for the drop in police activity were stricter standards for stops and the forms triggered by the ACLU. But he admitted his cops have become more careful. They are cautious about doing their jobs. You're calling it caution. They're telling us that it's backing down. You know, I still go out in the field, and I talk to officers, too,

and they take offense to people referring to them as backing down or not doing their job. Well, the one number that I think is not in dispute is the homicide rate has gone, not just the rate, the number of homicides have skyrocketed. So the number of stops and arrests are going down dramatically. And the number of people being shot and killed are going up dramatically. There's got to be a correlation.

Well, you know, there may be some, you know, but again, I'd have to go back to it's not what the police officers are not doing. It's more about what the criminal offenders are doing. But don't the police play a role? Yeah, we play a role in terms of mitigating it. But it's not being mitigated. No, I wouldn't say that. What we can't measure is the crime that we stop.

Johnson is hiring and promoting a thousand cops in an attempt to get a handle on the violence. But it'll take a year under his plan to get reinforcements to where Flora White lost her son, Jonathan. What good is it going to do? You don't think more police on the street will make a difference? I'm going to hire more people to do a job that's not being done? What sense do that make?

Welcome to Play It, a new podcast network featuring radio and TV personalities talking business, sports, tech, entertainment, and more. Play it at play.it. If you've been thinking about leaving the United States, moving to another country, and changing your nationality, it's never been easier to do. In this era of globalization, citizenship and passports have become just

another commodity to be bought and sold on the international market. All you need is money and a willingness to contribute a few hundred thousand dollars to the treasury of a cash-starved country or acquire a piece of real estate there. It's called citizenship by investment, and it's become a two-billion- industry, built around people looking for a change of scenery or a change of passport, a new life or maybe a new identity, a getaway from the rat race or perhaps an escape from an ex-spouse or Interpol. In any event, it's brought in huge amounts of revenue for the sellers and attracted among the buyers a rogues' gallery of scoundrels, fugitives, tax cheats, and possibly much worse.

If you're shopping for another passport, the top of the line right now is Malta. By investing a million dollars in this Mediterranean island, a Russian or Chinese or a Saudi can become a European citizen with a new EU passport that will allow them to travel just about anywhere without a visa. There are also much cheaper, less discriminating alternatives available in the Caribbean, especially on the tiny island of Dominica, where Lennox Linton is a member of parliament. How much does it cost to get a citizenship? $100,000. You have to come and live in Dominica? No, no. You don't even have to come to Dominica to get the citizenship. You pay the money from wherever you are.

Sort of mail order citizenship? Sort of, something like that. Our introduction to this world of citizenship by investment came in Dubai, the gleaming international bazaar that was hosting the ninth annual Global Citizenship Conference. Gathered here were government officials, lawyers, bankers, and real estate developers who facilitate and profit from the trade of citizenship for cash. Good evening and a very warm welcome. This is the man who more or less invented the business, Chris Kalin,

chairman of Henley & Partners, a consulting firm with offices where else but in Zurich, Switzerland. For a fee and healthy commissions, Kalin helps countries set up their program, rewrite their citizenship laws, and recruit people of means looking for a second, third, or fourth passport, which he sees as just another travel accessory, a passport of convenience. You probably have more than one credit card, I would assume. And, you know, if Visa doesn't work, MasterCard will do. So I think any wealthy person nowadays should have more than one credit card, and likewise, you'd have more than one passport.

But you need to have some money to do this, to be able to do this. Yes, absolutely. It's just for wealthy people, of course. Quite often, these wealthy customers come from politically problematic countries where their passports don't work very well, making it difficult for them to get where they want to go. Global citizens like international lawyer Cyrus Montevassil, a Middle Easterner from Iran who travels on a West Indian passport from St. Kitts in Nevis. And where do you live?

I'm living in Dubai, United Arab Emirates. So you're an Iranian living in Dubai with St. Kitts citizenship? Yes. That's complicated. This is the life. It's the life because Motavassil's St. Kitts passport, available for $250,000 or a $400,000 real estate investment, allows him entry to more than 100 countries without having to get special permission. It's a legal way to circumvent visa controls that nations set up to screen people coming into their country. But it's also an opportunity for shady characters to mask their true identity and avoid suspicion as they travel around the globe.

The business was born here in St. Kitts when Chris Kalin struck a deal with the government a decade ago following the collapse of the island sugar industry. Since then, passports have become its major export, providing hundreds of millions of dollars in income. In fact, in 2014, the last year for which there are government statistics available, 40 percent of the government's revenue came from selling passports. It's provided St. Kitts and Nevis with hundreds of millions of dollars for infrastructure projects, private development, and tourism. But a lot of the money is unaccounted for. More than 10,000 people have purchased citizenship here, but it's almost impossible to tell who they are, because the information is not public.

Chris Kalin doesn't like the word citizenship for cash, or any suggestion that all you need is money to get a passport. You have to go through a process. You have to apply, and you have to answer a million questions, and you have to undergo a background verification, and you have, at least in the properly run programs, you have to be a reputable person. And that's checked. But evidently not that carefully. About the only way to identify people who have purchased St. Kitts' citizenship is if they happen to turn up on a list of

international fugitives or get in trouble with the law. And St. Kitts' Nevis has more than its share for two sleepy little islands. Its passport holders include a Canadian penny stock manipulator, a Russian wanted for bribery, a Kazakh wanted for embezzlement, two Ukrainians suspected of bribing a UN official, and two Chinese women wanted for financial crimes. I think it's no secret that these islands have made decisions that are not always optimal. They've taken some bozos, as you would call them. Yes, exactly. What about crooks?

Yes, it goes all the way down to crooks, absolutely. And it tended for some time to attract quite a few people that I would never let into the country. But I'm not the government of St. Kitts and Nevis. But you set up their program. We helped to set up the program. But, you know, as it is, advisors advise, ministers decide. The island nation drew the ire of the U.S. Treasury Department two years ago after three suspected Iranian operatives were

caught using their St. Kitts passports to launder money for banks in Tehran in violation of U.S. sanctions. It also had to recall more than 5,000 passports because they either didn't include a place of birth or were issued to people who had changed their names. Since then, a number of reforms have been made, but questions remain. They're not transparent programs. They're not safeguards in place. Until 2014, Peter Vincent was the top legal advisor for U.S. Immigration and Customs Enforcement, part of the Department of Homeland Security, which he says is well aware of all the vulnerabilities. In fact, the person in line to take over Homeland Security, General John F. Kelly, expressed concern in a report last year that cash for passport programs could be exploited by

criminals, terrorists, or other nefarious actors. Does that present a security threat, do you think? It does. In my opinion, the global community has established a very effective global security architecture to prevent terrorist attacks. I see these cash for citizenship programs as a gaping hole in that security architecture. But it's not stopped the programs from multiplying across the Caribbean. Dominica, Grenada, St. Lucia and Antigua are all competing with St. Kitts now for customers and badly needed cash. So what are we supposed to do? Sit back and do nothing? You tell me. Gaston Brown, the Prime Minister of Antigua and Barbuda, says the revenue from its three-year-old program has kept the government from defaulting on its international loans and has turned the economy around. Antigua also claims to have among the strictest programs in the Caribbean. You actually have to show up

here to get citizenship, albeit very briefly. Our law provides them to spend at least five days here. That sounds like a vacation. Yes, and I understand. However, we have made sure that at least there must be some face-to-face contact so we know who these people are. For five days? Minimum. What kind of people are you looking for? We're looking for high-net-worth individuals, people who are established business people who are well known, and to make sure that we get the creme de la creme. If so, they're recruiting them in some odd places.

Last summer, Antigua announced it was opening an embassy in Baghdad, hoping to sell passports to Iraqis. It didn't work out, but it's doing better next door in Syria after hiring a relative of President Bashar al-Assad to represent them. Have you had any applications from Syria? Yes, we have had applications from Syria. And you've approved them? Syria is one of the areas in which we have had some concerns, but did not place it on a restricted list. Prime Minister Brown told us instability breeds opportunity. Besides Syria, Antigua has sold citizenship to Iranians, Libyans, Pakistanis, and the people who bought condos in this half-built complex in the desert outside Dubai,

7,300 miles away from Antigua. Its website advertises, buy a villa in the UAE and get citizenship of Antigua. You said that you were looking for the creme de la creme. Creme de la creme. I mean, there's a developer in Dubai. Yes. Sweet Homes. Yes.

Who is advertising that he's giving away passports to anyone who buys a condominium there. You don't believe that, right? Like, you open a bank account, you get a free toaster. That is not so. Brown dismissed the Sweet Home's ads as advertising hype, saying citizenship is not free or guaranteed. Somebody has to come up with the $250,000 for Antigua, and condo buyers must pass a background check. You have to go through all of the due diligence. What kind of due diligence do you do?

Well, that is where the crux of the due diligence. What kind of due diligence do you do? Well, that is where the crux of the matter lies. The prime minister claims that the names of all applicants for Antiguan citizenship are now screened by American intelligence and law enforcement agencies. And generally speaking, due diligence in the Caribbean has improved substantially since the scandals in St. Kitts. The small island offices with a few people are now backed up by international firms that take the screening to a higher level. But ultimately, it's up to each country to decide who gets a passport, and the Caribbean has a rich history of turning a blind eye to official corruption. It's affected the way passports

are handed out, especially diplomatic passports that entitle the bearer to all sorts of special privileges, which Peter Vinson says represents a much more serious security threat. The border officials at the receiving country, even without a visa, almost always admit an individual carrying a diplomatic passport. In addition, border forces are not entitled to search the luggage of diplomats like they are for regular tourists. They simply wave them through. The sale of diplomatic passports is not part of the Citizenship by Investment program,

but it goes on under the table, particularly in Dominica, which has had a most impressive core of dodgy diplomats. We had a diplomatic passport in the hands of Francesco Corallo, who at the time was on Interpol's list of most wanted criminals. Parliamentarian Lennox Linton says no one in Dominica had ever heard of Corallo until he was stopped by authorities in Italy. He said, you can't detain me. I'm a diplomat. I said, diplom he was stopped by authorities in Italy. He said, you can't detain me. I'm a diplomat. I said, diplomat? Diplomat of where? He said, Dominica. Then there's Dominican diplomat Alison Maduke, a former Nigerian oil minister arrested for suspected bribery and money laundering. And Rudolph King, a Bahamian fugitive from U.S.

justice who was Dominica's ambassador to Bahrain. What we were doing with an ambassador in Bahrain, I don't quite know, but they seemed to think that there was some benefit in there for us. I assume that you've asked the prime minister. Yes. How he ended up appointing these people diplomats. Yes. And what was the answer?

The prime minister doesn't answer those questions. With vast sums of money flowing into these island nations and more and more countries selling their citizenship, there's consensus that still more oversight and transparency is needed. But privacy and secrecy have always been a major selling point for people buying multiple passports, including Chris Kalin, the man who invented the business plan. How many do you have? I have multiple. So you don't want to tell us how many you have?

There's a few things in my life that I don't talk openly about that I keep for myself. But I'm Swiss originally, and many people think I'm very Swiss. And so I'll leave it at that. Welcome to Play It, a new podcast network featuring radio and TV personalities talking business, sports, tech, entertainment, and more. Play it at play.it. The relationship between Cuba and the United States was stuck in pretty much the same bad place for half a century. But things have been changing at a dizzying pace in the last couple of years. President Obama started the thaw in the relationship by reestablishing diplomatic relations and easing restrictions on travel. Now, President-elect Trump is threatening to undo all those moves,

and Fidel Castro, who spent 50 years poking his thumb in the eye of every American president, has died. Whatever happens, there's already a war underway that has the U.S. and Cuba on the rocks. It's a war over rum, specifically over two different versions of Havana club rum. And it's as bitter as the Cold War ever was. It's a Tuesday afternoon at El Floridita in Old Havana, and we and lots of other visitors to Cuba are filing in and filling up at the bar that calls itself the Cradle of the Daiquiri. Head bartender Alejandro Bolivar needs to double up on rum bottles just to keep up with demand.

How many bottles do you go through a day in the area? So it's between 60 and 80 bottles per day. That's a lot of daiquiris. Yeah, plenty of empty bottles. Oh my gosh. Is this just from today? Yeah, today. All those bottles were filled with Havana Club rum,

produced by a 50-50 joint venture between the Cuban government and the French beverage giant Pernod Ricard. Salut. Salut. Which sent Jerome Cotin-Bizon to Cuba to run the business. We met him in a place that's rarely open to outsiders, a warehouse stacked to the ceiling with oak barrels full of Rome. We've built a very great success with Vanaclub. When we started the partnership

in 1993, we sold 5 million bottles a year. Today we sell 50 million bottles a year. 50 million bottles, 11 million Today we sell 50 million bottles a year. 50 million bottles, 11 million of them sold here in Cuba. The tourists drinking Havana Club are obvious. But we went looking down the side streets and found locals drinking it too at domino games and dance halls and discos and sipping it along Havana's seafront promenade,

the Malecon. To distill and age all that rum, the Cuban government and Pernod Ricard rely on Asbel Morales, Havana Club's master rum maker. He loves talking about rum, but he says to really understand it, you have to drink it. The first sip will impact you the most, he said, and make you anxious for a second. I am anxious to continue the second sip. And the third and the fourth. We don't have anything else to do today, do we? And the Cohiba cigar that he says pairs perfectly with this Havana Club. As we drank and smoked, Morales told me Cubans are born with a rum gene. And to be real Havana Club rum, he said, it must be made from Cuban sugar cane and aged in the hot and sticky Cuban climate. Here's where it gets confusing.

This is another bottle of Havana Club rum. Exact same name, but you can see right here, this one is made in Puerto Rico, and it's made by Bacardi. How in the world can you say Havana Club when you're making it in Puerto Rico? Just the way that you say I'm calling it Arizona iced tea and I'm not making it in Arizona. Rick Wilson is an executive at Bacardi, originally a Cuban company and now the largest privately held liquor business in the

world. The true Havana Club made with the recipe of the original founders is the Havana Club that Bacardi is making and selling here in the United States. Bacardi bought that original recipe from the family of this woman, Amparo Arechabala. And it was one of the wealthiest families in Cuba before the revolution. Definitely. The Arechabala fortune was built on sugar and shipping and rum, Havana Club rum. Like hundreds of other Cuban companies, theirs was confiscated shortly after Fidel Castro's revolution in 1959.

They took over the company on December 31st, 1959. Do you remember that day? I remember that day vividly. My husband came home. He went to work early and then he came home and he says, they've thrown us out. It's over. It's over, he said. He said it's over. All of their assets gone and Paro and her husband Ramon were ordered to leave Cuba with only the clothes on their backs. And how much money did you have in your pockets? Absolutely nothing. Nothing, nothing, nothing. What was it like when you got on the plane? Everybody in the entire plane was crying. And I remember I look out the window as we were taking off, and I say to my husband, take a good look because you're not going to see it again.

In Cuba, the Arechabalas and Bacardi had been competitors, each making and selling popular brands of rum. But when the revolution came, Rick Wilson says Bacardi had an advantage. Bacardi, unlike most other Cuban families and companies, had assets outside of Cuba. Is that the reason they were able to survive? Yes, because we could continue to produce and sell our product, unlike the Arachabalas. The Arachabalas, everything they had was in Cuba. Everything. Everything except the recipe for Havana Club rum. The Arechabalas eventually sold it to their old rival Bacardi, which makes this version at its distillery in Puerto Rico. They did it to compete

with this version, made by the Cuban government and their partner, Pernod Ricard. That set off the longest bar fight ever. It has been fought both in the courts, where the latest lawsuit is pending, and the marketplace between two of the world's largest liquor companies. Pernod Ricard produces Absolute Vodka, Chivas Regal Scotch, Beefeater Gin. Bacardi makes Great Goose Vodka, Dewar Scotch, and Bombay Sapphire Gin. And now they both make Havana Club Rum, and they both try to claim the moral high ground. And it wasn't that Pernod Ricard had just stepped up and they looked to be a competitor to you. No, I mean, we don't mind competition from Pernod Ricard or anyone else. Pernod Ricard, though, did and is partnering with the Cuban government,

who has confiscated the assets of a family. No compensation paid. It's hard to believe that a company like Ricard is just making a moral argument. We're not. We're making a moral and a legal argument. And the legal argument is? Theft. I mean, it comes down, it's stolen property. That's what it comes down to.

The Bacardi family will say that this Havana Club is stolen property. Well, you see the place. We are here in our distillery. It was built in 2007. And none of these facilities were used before the revolution? None of these facilities were used before the revolution, no. And as Belmoralis dismisses the argument that the Havana Club rum he produces for Pernod Ricard in Cuba is not the real thing because it's not made from the original Arechabala

family recipe. The recipe remains in this land, he said. It is here, in this climate, the culture. It's very simple. To make a Cuban rum, you need to make it in Cuba. It doesn't take more than that. You cannot make Cuban rum in Puerto Rico. And the Arechabalas cannot, he insists, claim to own the Havana Club brand decades after abandoning it. How do you feel that they used that word about the family saying they abandoned the brand? They can say whatever they want. They can say that we abandoned. We didn't abandon anything. They threw us out. The Castro government did that. The French company, Pernod Ricard, came along much later

and turned the Cuban Havana Club into a global brand and an icon of Cuban culture. Havana Club. We found the logo everywhere we went in Cuba, on every glass, in every bar, on taxi drivers and parking attendants, on the chairs we did our interviews in, and at the tourist market, on artwork and tote bags and T-shirts, right alongside other symbols of Cuba. Do you sell more Che T-shirts or more Havana Club T-shirts? Saints. About the same.

When we sell a bottle of Havana Club in France, in England or in Chile, we not only sell the liquid, we sell the soul of the country. The one place in the world they can't sell their Havana Club at the moment is the United States because of the trade embargo on Cuban products that has been in place since 1962. But there is a way for Americans to have the Cuban version. President Obama recently lifted limits on how much rum and cigars tourists can bring home from Cuba. Will you be bringing rum home with you? Yes. Lots of rum. We stocked up. Now we just need another case to bring it back in. The makers of Cuban Havana Club aren't satisfied with just

sending suitcases full of rum home with tourists. They want to ship containers full when the trade embargo is lifted. In Cuba, we know how to be patient. Look at all the rum sitting around us, all these barrels. It's years and years of aging, years and years of work, of dedication. We know that one day we'll be able to sell our rum, Havana Club, the true Cuban rum made in Cuba, and that the U.S. consumer will have the chance, the opportunity to enjoy it. Consumers in the U.S. drink 40 percent of the world's rum,

which explains why they're stacking barrels sky-high in Cuba in preparation. This is all ready to go. This is all ready to go. This is all ready to go. For now, though, the trade embargo continues, and so does the court fight over who has the right to use the Havana Club name. On the streets of Havana, there's no disagreement on that point. Hola! We took a few bottles of Bacardi's version there to sample reaction.

Do you drink rum? Have you ever seen this before? These men we found playing dominoes on an old Havana side street were more than happy to try it. Similar. It's good, he said, but the Cuban is better quality. Color is different.. Color is different. The stamp is different. This is a real Havana club.

It's a symbol. In a bar called Sloppy Joe's, manager Ernesto Isnaga wanted no part of Bacardi's Havana club. You don't even want to try it? No. You can just have a sip. You don't have to drink the whole bottle. No. No. You can just have a sip. You don't have to drink the whole bottle. No. No. Sorry. These are the front lines, two bottling lines in two countries, each one producing Havana Club rum, each claiming that its version is the only real

and authentic one, not so far apart in miles, but worlds apart in the Rum War. In the Mail comments on our story about the Pope's Choir, which we broadcast both two weeks ago and again on Christmas night. I thought it was wonderful. I sat there with tears in my eyes, enjoying every moment. Thank you. But we also heard from viewers who found the story lacking. Someone made the statement the only things missing from the choir are wings.

I disagree. What is missing from the choir is women and girls. I'm Steve Kroft. Happy New Year. We'll be back next week with another edition of 60 Minutes.