by J Michael Waller, Insight, December 27, 1999.
A former head of the secret police is the Mexican ruling party’s new presidential candidate. His challenger is a free marketeer who wants to end 70 years of kleptocracy.
It’s a sure sign that a corrupt regime is on its last legs when the head of the secret police becomes the anointed presidential candidate of the ruling party. This specter not only is appearing in far-off Russia, where the icy KGB veteran Vladimir Putin runs the government day to day and plans to succeed ailing President Boris Yeltsin. It also is right on the U.S. border.
Seventy years of rule by the Institutional Revolutionary Party, or PRI, has plunged Mexico into a state of lawlessness from intense street crime to multibillion-dollar payoffs of politicians, judges and police by drug kingpins. Francisco Labastida, the 57-year-old PRI presidential candidate for the July 2000 elections, is portraying himself as the tough guy who will clamp down on unprecedented criminality that has been tearing Mexican society apart.
But the PRI faces its strongest opposition ever. It has lost control of the federal Congress to a coalition of the large conservative and leftist opposition. The main opposition leader, Guanajuato governor Vicente Fox, is a charismatic free-market politician with a positive message and a growing, pro-U.S. National Action Party, the PAN. And Labastida is dogged by allegations — yet unproved — that he cut deals with drug traffickers while governor of Sinaloa, a Pacific-coast state, a decade ago.
Labastida’s presidential candidacy is unique in that he assumed the PRI’s mantle not by the traditional dedazo, the fingering by the incumbent PRI president, but in a competitive party primary. His come-from-behind win in the Nov. 7 primary was organized by former secret-police chief Fernando Gutierrez Barrios with some help from U.S. pollster Stan Greenberg and President Clinton’s political hatchet man James Carville. And the man who would be Mexico’s next president has plenty of other tricks up his sleeve. From January 1998 to last May he was the second-most-powerful man in Mexico as secretary of government, the chief political enforcer of the PRI who headed the party’s secret political police network and held a massive array of levers to keep the corrupt party in power. Mexico’s current president, Ernesto Zedillo, tapped Labastida to deal with the Marxist insurgency in Chiapas and to mobilize the PRI machinery and resources of the state against the opposition Congress.
On Labastida’s watch, opposition politicians discovered a nationwide electronic eavesdropping system used to spy on political opponents, journalists, businessmen and others. Even Rep. Santiago Creel of the center-right PAN party found his offices had been wired. Creel had been investigating corrupt PRI governors and headed a congressional committee to find ways to put them on trial. At one electronic spy center in Campeche, investigators found seven years’ worth of tapes and transcripts documenting the private lives of opposition figures and others. When the left-wing PRD party won control of the Mexico City government in the last mayoral election, the secret police packed the offices with hidden cameras and microphones.
As PAN’s presidential candidate, Fox says, he assumes the government is spying on his every conversation as well. Fox found proof in March 1998, during Labastida’s secret-police tenure, that the government was tapping his telephones. Now that he is Labastida’s leading challenger for the June 2000 election, say regional specialists, it is likely that every imaginable spying and covert disinformation scheme is being mounted against Fox.
As a longtime insider near the epicenter of the party’s system of payoffs and patronage, Labastida is nothing if not a dangerous opponent in a country teetering on anarchy. During the 1970s he was subdirector of President Luis Echeverria’s euphemistically titled Public Investments office and chief of fiscal promotion for the finance secretariat under President Jose Lopez Portillo. He served as undersecretary of budgeting and planning from 1979 to 1982 when Lopez Portillo nationalized the banks and went on to become secretary of energy, mines and para-state industry at the dawn of the country’s fantastically corrupt privatization process.
Few politicians, if any, can rise in the PRI and not be tainted by corruption. But Mexican and U.S. observers are deeply concerned about those alleged Labastida ties to drug traffickers since his term as governor of Sinaloa from 1987 through 1992. Home to the resort city of Mazatlan, Sinaloa became an important transshipment point for cocaine and other illegal drugs from South America to distribution networks in the United States. A new PAN report obtained by Insight says that the party’s gubernatorial candidate in Sinaloa, Emilio Goicochea Luna, claimed that the narcotraffickers’ power in the state was so strong that “Labastida had to negotiate with them to be able to govern.”
That’s an understatement compared with reports in Mexico’s respected El Financiero newspaper, generally regarded as pro-PRI, which reported in 1995, “It was the politicians who brought in the narco invasion, not the reverse.” The article alleged that in 1982 senior Mexican officials plotted to manage and control the cultivation and distribution of drugs, mostly in northern states including Sinaloa, and to build a network of clandestine airstrips in Sinaloa and elsewhere for cocaine and heroin flights from South America.
Sinaloa police were out of control. During Labastida’s six years in office 26 major prison breaks occurred in Sinaloa in which 362 criminals escaped. In April 1989, when he was on a scuba-diving trip with his friend, billionaire PRI functionary and reputed drug kingpin Carlos Hank Gonzalez, federal troops swooped into Culiacan, the state capital, in a surprise raid and arrested his police chiefs on drug-trafficking charges. The army reportedly detained the entire Culiacan police force as well as the local juridical police chief, who stood accused of offering protection to major drug operations. Labastida did crack down on certain drug capos in Sinaloa and was sent abroad as ambassador to Portugal reportedly after receiving death threats.
The CIA certainly believes that Labastida collaborated with the drug traffickers. When Labastida became secretary of government in early 1998, Washington Times national-security correspondent Bill Gertz revealed a top-secret CIA report which stated, “Labastida’s appointment could prove costly to the Zedillo administration should reports become public that he has maintained ties to narcotraffickers since his time as governor of Sinaloa.”
The CIA document stated, “Labastida has denied receiving payoffs but has acknowledged privately that he had to reach unspecified agreements with traffickers and turn a blind eye to some of their activities.” U.S. government sources tell Insight that security agencies have no concrete proof to substantiate the denied allegations and press reports are short on specifics. However, the allegations continue to dog the candidate.
Labastida is much more of a populist than the often-colorless technocrats who have ruled Mexico during the last 18 years. His stump speeches call for “recovering” Mexico’s lost middle class and increasing the social focus of economic programs, calling for more government spending on social programs. “One cannot ask a market economy what it cannot provide” he says. “A strong state that satisfies the social demands is required.”
But Mexico under the PRI still lacks a market economy, according to a new Wall Street Journal/Heritage Foundation global economic study, which ranks Mexico “mostly not free” and among the worst places to do business in Latin America. One of the problems is government corruption and the palsied hand of the law. The free-market PAN party “fully agrees with these findings,” calling them “the result of a political economy whose objective is the perpetuation of a `crony capitalism’ that benefits the constituent parts of the ruling PRI.”
Labastida opposes privatization of the state-controlled PEMEX oil monopoly or of other oil resources, and he won’t say whether he would privatize electrical utilities. “He witnessed, and sometimes participated in, most of the major events that have shaped the modern economic history of Mexico” according to a PAN report. “He witnessed the first major devaluation with Echeverria, the nationalization of the Mexican banks by Lopez Portillo, the design and implementation of the first ‘Pactos’ [to open up the economy] with De la Madrid and the ‘mother of all Mexican crises’ with Zedillo.” Says the PAN review, “In all cases, he loyally stayed with the system.”