Hard Times Find the Salinas Brothers
Washington Post Foreign Service
Wednesday, March 13, 1996; Page A15
By all accounts, Raul Salinas de Gortari had to content himself with being the swashbuckling ladies' man in the family while his younger brother Carlos, a Harvard-trained economist, took over the leadership role normally assumed by the eldest son. As Carlos made his ascent through the upper ranks of the ruling Institutional Revolutionary Party (PRI), Raul tended his business contacts. When Carlos became president, Raul although ostensibly just a mid-level bureaucrat became one of the most powerful men in Mexico.
Today Raul Salinas, 49, is behind bars, accused of being the mastermind behind the assassination of his former brother-in-law, Jose Francisco Ruiz Massieu, the second-ranking official in the PRI. Ruiz Massieu was shot to death by a hired gunman in September 1994 as he left a breakfast meeting at a Mexico City hotel.
While Raul Salinas stands trial for murder, authorities in Mexico, the United States, Switzerland and other countries say they keep running across his name as they probe the many shocks and scandals that have rocked Mexico over the last two years. Investigators have sought to link him to drug trafficking, embezzlement, influence peddling, kickbacks, hidden real-estate interests and bulging Swiss bank accounts.
Raul Salinas maintains his innocence. Meanwhile, his brother Carlos, who once seemed destined to go down in history as the savior who brought Mexico into the developed world, now is so unpopular that he lives in self-imposed exile, glimpsed only fleetingly in sunny havens like Cuba and the Bahamas.
With Raul Salinas as a central figure, investigations may ultimately shed light on the extent to which Mexico's political and judicial institutions have been compromised by drug money. They may also test President Ernesto Zedillo's announced commitment to carry through meaningful reform and root out the corruption that infects the Mexican political system.
The Case for Zedillo
Supporters say Zedillo is committed to change. They point to last year's arrest of Raul Salinas which shattered a long-standing tradition of ignoring allegations of wrongdoing by past presidents and their families and the recent arrest and deportation of alleged drug kingpin Juan Garcia Abrego as clear signals that Zedillo intends to fulfill his promises.
Zedillo's boosters also point to his decision to appoint Antonio Lozano, a member of the opposition National Action Party, as attorney general in charge of the probes.
Many analysts, however, see signs that little has changed. They say that as the investigations drag on they look thinner and politically motivated, built on weak circumstantial evidence, under-funded and overly ambitious and perhaps less likely to uncover the truth than to produce a scapegoat. "Clearly this is an attempt by the government to [cast Raul Salinas as] the only major corrupt figure in the last administration and to blame him for everything," said Mexican author and political analyst Jorge Castaneda. "And at the same time, there's no doubt that he is infinitely corrupt."
"What's so complicated is whether it's conceivable that any one individual could have been responsible for so many misdeeds without anyone else being involved, starting with his brother," Castaneda said.
Carlos Salinas has not been charged with any crime, and U.S. and Mexican officials say he is not the target of any investigation. But U.S. officials, who praised him lavishly while he was in office, now contend that major drug dealers had influence on his administration. Polls in Mexico indicate that more than 90 percent of the public believes Carlos Salinas knew of his brother Raul's activities, including the alleged role in Ruiz Massieu's murder.
Other observers say that despite warnings, Carlos Salinas remained willfully ignorant as Raul Salinas, never very well paid in his government post, somehow amassed a fortune.
"My sense is that he probably knew and chose not to know," said a diplomat here, noting that Raul Salinas was widely referred to as "Mr. Ten Percent" the scale of the kickbacks he allegedly demanded for directing lucrative federal contracts to friends.
The national comptroller has documented how Raul Salinas's personal wealth ballooned during his government service, while his final salary when he left in 1992 was about $192,000 per year. When he first joined the government in 1983 he owned 18 pieces of real estate and when he left he owned 39, according to the comptroller's report. It said that in his last 15 months with the government, deposits totaling the equivalent of about $7.1 million were placed in five Mexican bank accounts in the names of Raul Salinas and his wife. The couple is reported to have as many as 45 bank accounts in Mexico and real estate holdings amounting to as much as $14 million.
Raul Salinas spent most of his government career as a director of the Basic Commodities Distribution Co. (Conasupo), which distributes subsidized basic food items to the poor. A congressional committee is investigating the alleged waste of hundreds of millions of dollars at Conasupo and numerous irregularities and scandals during his six-year posting there, including the disappearance of freight cars containing powdered milk, distribution of radioactive milk and purchase of rotten beans from China and carcinogen-contaminated U.S. corn.
According to the Mexico City daily newspaper Reforma, internal Conasupo documents indicate Raul Salinas spent agency funds to speculate in the stock market and finance his brother's presidential campaign.
Raul Salinas's attorney did not return repeated telephone calls seeking comment on the investigations.
Raul Salinas's European fortune came to light last November when his wife, Paulina Castanon, was arrested in Geneva while attempting to withdraw funds from bank accounts holding $84 million. The accounts were in the name of Juan Guillermo Gomez Gutierrez, an alias adopted by her husband, complete with a fake birth certificate and a passport with Salinas's photograph. Investigators subsequently discovered another $19 million in other Swiss accounts and $20 million in banks in London.
Swiss federal prosecutor Carla del Ponte said the funds were "suspected to be from the laundering of money related to narcotics trafficking." Mexican and U.S. officials have claimed that some of the money came from alleged drug trafficker Garcia Abrego, who was arrested in Mexico last month and deported to the United States. Mexican newspapers and magazines have reported that Raul Salinas was suspected of being Garcia Abrego's "protector" during his brother's presidency.
But U.S. sources who originally tipped off the Swiss about the funds and their alleged connection to drugs said recently that a direct narcotics link has not been found. "We don't have definite proof, but there's certainly reason to believe drugs were involved," said a senior U.S. official familiar with the investigation.
In a recent twist, billionaire Mexico City cellular phone tycoon Carlos Peralta said he gave $50 million of the funds in Raul Salinas's Swiss accounts to him in April 1994 to launch a venture capital fund. Peralta, whose company once employed Raul Salinas's mistress, Maria Bernal, offered no documentation for his claim to have supplied the money.
Raul Salinas's Trial
Raul Salinas is being held in a maximum-security prison outside Mexico City while he stands trial for Ruiz Massieu's murder. The trial is supposed to end soon, according to a spokesman for the attorney general's office here. But the case is based primarily on circumstantial evidence and is widely described as weak.
According to the attorney general's office, the main evidence against Raul Salinas is that a key suspect in the planning of the assassination a former PRI congressman named Manuel Munoz Rocha took shelter in one of Salinas's homes after the killing, used some of Salinas's credit cards during his escape, and received $80,000 that was traced back to Salinas. Munoz Rocha has been charged in the murder but has not been seen since the assassination and could be dead, officials say.
Numerous theories have been floated for the motive in the slaying, but 15 months after the assassination, Mexican authorities admit they still have not settled on a single theory of why Raul Salinas would want to kill his former brother-in-law. "We don't need to know the motive to prove he was involved," said an official in the Mexican attorney general's office.
Much of the confusion stems from the fact that the case bridges two governments. Salinas's administration developed one set of theories; then Zedillo's incoming administration wiped the slate clean, launched its own probe, and emerged weeks later with different motives and suspects:
Jose Francisco Ruiz Massieu once was married to Carlos and Raul Salinas's sister, Adriana, and there was said to be lingering resentment between the families following the couple's 1978 divorce. Other theories include conflict over real estate dealings in the Acapulco area, and simple political rivalry between Ruiz Massieu, who was known as a reformer, and Raul Salinas, known as an old-style boss.
Ruiz Massieu had his political power base in the state of Guerrero, which includes Acapulco. "Ruiz Massieu didn't want Raul in business in the state in general because they were political enemies," said Juan Angulo Osorio, editor of the Acapulco newspaper El Sur.
Some investigators suggest an unfinished development near Acapulco known as Punta Diamante is a key piece of the mosaic. Once the project was so promising that it drew the interest of such potential investors as Donald Trump and the Harrah's hotel chain.
Officials said that Raul Salinas's name does not appear on any ownership documents associated with the Punta Diamante development or other related developments nearby, although Mexican newspapers report he has a hidden stake through associates.
"I have never seen any interference by Mr. Salinas in this project," said Miguel Garcia Maldonado, the top state official involved in Punta Diamante, which is a joint venture between the Guerrero state government and private developers. Asked about persistent reports that the development is a conduit for laundered drug money, he said, "I suppose you cannot control the investments you have from laundered money, because the sources of the money are very difficult to trace."
Diamante in the Rough
Today, after eight years in development, only $8 million has been spent, and Punta Diamante is still little more than an ambitious dream to recapture Acapulco's past glory. With a lone road down the peninsula's spine, two partially completed houses and a clearing for one hotel, local officials say that many would-be investors are hoping for gambling to be legalized while waiting for Mexico's recession to end and controversy to die down.
Perhaps the most bizarre loose end in all the overlapping investigations involves Mario Ruiz Massieu, the dead man's brother. As the top anti-narcotics official under Carlos Salinas, he cracked down on Garcia Abrego. Next, when Jose Francisco Ruiz Massieu was murdered, Salinas put the surviving brother in charge of the investigation.
In rapid succession, Mario Ruiz Massieu resigned from the government and called his brother's murder a PRI conspiracy; blamed drug traffickers and an anti-reform PRI faction for the March 1994 assassination of PRI presidential candidate Luis Donaldo Colosio; then got arrested in Newark, N.J., for trying to bring thousands of dollars in cash through U.S. Customs without declaring the money.
Mexican authorities now say the surviving brother covered up Raul Salinas's role in the murder, and want him extradited to Mexico on charges of embezzlement and obstruction of justice. Why would a man cover up for the killer of his own brother? Some officials speculate the answer has something to do with the $9 million found in Mario Ruiz Massieu's bank account in Houston money investigators have sought to link to drug trafficking.
The U.S. Customs Service seized the money, claiming it "is in violation of drug and money laundering laws of the United States," said Ken Magidson, an assistant U.S. attorney in Houston. U.S. and Mexican officials have said in interviews that they believe some of the money in the Houston bank account came from Garcia Abrego. But they admit that their evidence might not hold up in a U.S. court.
So far, in fact, it hasn't. Federal judges have refused to order Mario Ruiz Massieu extradited, and last month a judge also rejected efforts to deport him.
"This is all fantasy," said Tony Canales, Mario Ruiz Massieu's attorney in Houston. "The mere fact that you have cash is not proof of its illegality. In the U.S., you have to have a factual basis for that belief, not what you think or the conclusions of Mexican officials or what it's cool to say to reporters."
© Copyright 1996 The Washington Post Company