Already a Bloomberg.com user?
Sign in with the same account.
CAN ZEDILLO PENETRATE MEXICO'S HEART OF DARKNESS?
President Ernesto Zedillo Ponce de Len broke the unwritten rules of Mexican politics last March by jailing Raul Salinas de Gortari, the brother of the former President, on charges of masterminding a political assassination. That ignited a bitter feud between Zedillo and Carlos Salinas, who wound up going into voluntary exile.
But things really heated up when Raul Salinas' wife was arrested in Geneva last month while attempting to withdraw money from secret bank accounts holding $84 million. Raul Salinas has now been charged with accumulating "illicit wealth" while in government in the 1970s and 1980s. Top Swiss prosecutors have flown to Mexico to question him about possible money-laundering and links to drug traffickers.
The probe into Raul Salinas' activities could be the vehicle for exposing a vast system of business-to-government payoffs that has long been suspected in Mexico. It is already fueling a political battle that could lead to the demise of Mexico's long-ruling Institutional Revolutionary Party (PRI).
BIZARRE FAX. One of the big questions, of course, is what Carlos Salinas knew of his brother's activities--and whether he benefited from them. The former President, who has been charged with no crime, is now engaged in a desperate struggle to save his reputation. In a bizarre eight-page letter faxed Dec. 3 to Mexican news organizations, he denied any knowledge of Raul's activities and moaned about being singled out as Mexico's "favorite villain." He also sought to quash speculation that he was somehow involved in the assassination of PRI presidential candidate Luis Donaldo Colosio in 1994. He suggested that rivals including former President Luis Echeverria were attacking him to destroy his free market reforms.
These denials have not stemmed the mounting skepticism about Carlos Salinas. He has been hurt by the recent comments of former Mexican Controller Mara Elena Vzquez Nava, who said she warned Salinas about reports of his brother's activities. Salinas was worried enough about Raul to banish him to a California think tank in 1992.
Prosecutors are interrogating a wide circle of Raul's friends to try to determine where his millions came from. They're focusing on Raul's role as a top official of CONASUPO, the government distribution agency for corn and other commodities. The Attorney General has also said he has evidence that Raul Salinas may be linked to Mexican drug cartels.
Still, it is unclear whether these probes will go much beyond Raul Salinas and, perhaps, his inner circle. A sweeping anticorruption drive could be a risky undertaking for Zedillo. It might implicate some of his own ministers, many of whom, like Zedillo himself, held senior posts under Salinas. It might also cost the President what support he has left in the business community. "Very rich, powerful Mexican businessmen were involved in some of these deals," says political scientist Emilio Zebadua.
But the outspoken opposition parties and the aggressive press are pushing for full investigations into corruption during the Salinas administration. The left-wing Party of the Democratic Revolution has demanded a probe into the 1990 privatization of Telefonos de Mexico, the phone monopoly. Sales of the state TV networks and the banks could also come under scrutiny.
Even if Mexico's own investigations get bogged down, Swiss and U.S. investigators may present Zedillo with impossible-to-ignore evidence of high-level corruption. The question remains, however, whether Zedillo will cast a wide net or try to finesse the issue by making examples of a few prominent people. The latter option still seems more likely.EDITED BY STANLEY REED By Geri Smith in Mexico City