Fox, Inc. Takes Over Mexico

by John Ross

Maria Alonso Fernandez arises before dawn to catch the crowded truck to the gates of the San Cristobal ranch so that she will be first in the fields by 7:00 a.m. With 10 brothers and sisters whose upkeep she contributes to, Maria will spend the next eight hours stooping to pick brussel sprouts and broccoli for the U.S. export market. The day will net her 62 pesos, 372 for a six-day week, about $34.

Maria Alonso should not be working at all. She is 12 years old and barred from picking in the fields by Mexican labor law. Even if she was 14, she would still be restricted to a six-hour day.

But Maria and the 30 other children who have been forced by family circumstances to drop out of school and toil at the San Cristobal ranch will have a hard time finding a sympathetic ear to end such exploitation. Child labor is traditional out in the Guanajuato fields. Even if the kids could get a hearing before Mexico's new labor secretary, Carlos Abascal, a former director of the nation's most prestigious business council, it is highly unlikely that he would take legal action against his boss, President Vicente Fox - the owner of the San Cristobal ranch.

On July 2, 2000, Vicente Fox, the candidate of the conservative National Action Party (PAN), became the first member of Mexico's opposition in seven decades to take the presidency away from the Institutional Revolutionary Party (PRI), heretofore the longest ruling political dynasty in the world.

The Fox upset of the aging ruling party involved smoke and mirrors, a dazzling display of media marketing replete with negative TV ads, designer polls and U.S.-style image management engineered by such high-paid political consultants as Dick Morris, Bill Clinton's former prized advisor. But mostly Vicente Fox soundly thrashed the PRI because Mexicans were ready for a change after 71 years of top-down, authoritarian rule that thrived on rampant corruption and brutal violence.

On December 1, Vicente Fox was sworn in as Mexico's first-ever businessman president - his PRI predecessors have all been revolutionary generals, shady lawyers and, for the last 20 years, technocrats trained as economists at prestigious Ivy League universities.

Who is this 6'6" upstart who finally toppled what novelist Mario Vargas Llosa once termed "the perfect dictatorship" from power?

The Making of a Businessman President

Vicente Fox was born on the ranch where Maria Alonso illegally labors, a hacienda or estate founded by Spanish conquistadores in 1591.

As a pioneer exporter of vegetables destined for the U.S. market, Vicente's father Jose Luis Fox Ponts accumulated a tidy fortune. Vicente grew up a child of wealth.

The new president's education was an elite one. When he graduated from the Jesuit-run Iberoamericana University in Mexico City, future banking association president Jose Maradiaga and Roberto Hernandez, president of Banamex, the nation's number one bank, were among his silver-spoon classmates. They have remained firm friends and business associates ever since.

Unlike many male Mexicans of his social milieu, Vicente Fox did not take a doctorate at a high-tone U.S. university. Rather, his graduate school was the Coca Cola Corporation, where he began in 1962 as a route driver across the Guanajuato state line in Michoacan. The president's talents for selling "the real thing" were such that he quickly expanded his sales territory into all of the Bajio, the fertile lowland of central Mexico, and then north into Sinaloa and Monterrey.

By 1969, Fox and his new wife, Liliana de la Concha, a Coca Cola receptionist, moved to Mexico City, where he went to work as a marketing hotshot at Coke's main offices. Vicente earned multiple promotions. In 1974, he was named president of Coca Cola Mexico, a sinecure he held until 1979.

Offered the Latin American directorship of the corporation, Fox instead chose to strike out on his own. But the contacts and friendships he developed during his years at Coke served him well for many years to come, and eventually played a key role in elevating him to Los Pinos, the Mexican White House. Such Coca Cola cronies as Lino Korrodi and marketing genius Jose Luis Gonzalez would form the nucleus of the "Amigos of Fox," the grouping that propelled and financed his campaign. Burton Grossman, the inheritor of Mexico's first Coke bottling factory, emerged as Fox's political patron.

According to Mexican investigative journalist Carlos Fazio, Grossman was the new president's U.S. money man until his death in Texas in 1999.

Back home in Guanajuato, Vicente Fox dedicated himself to managing the hacienda and its commercial subsidiaries - the "Vegetables Frescos" packing complex, El Cerrito Farms, Fox Brothers, and "Botas Fox," the family boot plant in Leon whose product became the logo of his successful 2000 campaign.

In the mid-1980's, Fox was seduced into participating in PAN politics by Manuel Clouthier, a former director of both COPARMEX, a business council sometimes described as "the businessman's union," and the powerful Sinaloa state export growers association.

Clouthier was a "neo-PANista" who, like many northern-based impresarios, had grown disgusted with the party's passivity after the disastrous nationalization of the banking system in 1982, the last desperate act of boom and bust oil president Jose Lopez Portillo.

When Clouthier ran for the presidency in 1988, Fox won a congressional seat in Leon.

In 1991, Fox ran for governor of Guanajuato. Although he probably won by a narrow margin, PRI manipulations cheated him of the seat.

In 1995, Vicente Fox won the governorship of Guanajuato handily, firmly establishing himself as a PAN presidential front-runner for the 2000 "presidentiales." Smitten early by the idea of occupying Los Pinos, Fox opened commercial offices in Dallas, Los Angeles, Chicago and New York; ostensibly to promote Guanajuato commercial opportunities, the outposts served to advance his candidacy - and solicit campaign funds - in the United States.

In April 1997, more than three years before election day, Vicente Fox tossed his sombrero into the ring during an interview with the Miami-based Univision, a move he made official in July soon after left-center Cuauhtemoc Cardenas won the mayoralty of Mexico City, a precedent that demonstrated opposition candidates could finally win high federal office in Mexico.

Fox's Guanajuato

In Fox's Guanajuato, the rich got a lot richer but the poor continued to migrate north to the United States at rates that make the state's emigration rate the most voluminous in Mexico. Through a state agency that scouted jobs for the U.S. H2R guestworker program, Governor Fox even capitalized on this desperate trek north by contracting with U.S. entrepreneurs seeking a guaranteed low-wage, highly mobile workforce - dozens of Guanajuatenses were signed on to work as gardeners on a private golf course in the state of Michigan.

During Vicente Fox's years in the state house, public services such as transportation were privatized. So were Guanajuato's few archeological sites - a pyramid near San Miguel Allende was sold outright to a German businesswoman as part of a 15,000 hectare agribusiness deal, and access to the public closed off. The privatization of such ruins as Teotihuacan and Chichen-Itza is a PAN project originally proposed by private collector Mauricio Garza, a former senator from Monterrey.

Vicente Fox also "maquilerized" the Guanajuato industrial base, luring 72 maquiladoras (foreign-owned assembly plants) to the state, most of them garment sweatshops paying the minimum wage. On the agrarian front, Fox completed the transnationalization of the Bajio - during his reign, Green Giant, Bird's Eye, Campbell, and Del Monte became dominant players in the field.

Fox's social policies were grounded in the Social Christian doctrine of good works. Although he paid lip service to the poor, his activities on their behalf was limited to developing an extensive system of micro-credits - small loans that would allow the marginalized to pull themselves up by their boot straps and open up a changaro (storefront), and purchase a vochito (Volkswagen Bug) and a tele (television), as the then-governor defined the most pressing needs of his poorest constituents.

Who Paid the Bills?

Fox spent millions of pesos on his marathon three-year-long presidential campaign, featuring enormous swatches of TV time, thousands of full-page newspaper ads, and the wit and wisdom of Dick Morris. Who paid the bills remains unclear.

During the last dizzying days of the campaign, the PRI leader in the lower house of Congress, Enrique Jackson, produced a wad of checks that apparently had been shuffled between the United States, Belgium, and Mexico before being deposited in the Amigos of Fox bank accounts - most were funneled through a Belgium technology company into the U.S. First National Bank and thence to something called the Institute for International Finance in Puebla, Mexico, where they were then dispensed to the famous Amigos. The checks on display had clearly been obtained through means which violated Mexico's elaborate banking secrecy laws. The PRI never filed charges of illicit campaign financing since the evidence would not have been admissible in court.

The Amigos of Fox also solicited contributions on the Internet.

Individual campaign contributions are not a particular concern of the Federal Electoral Institute, which pays more attention to how government subsidies are being spent - and sometimes embezzled. The best bet is that the Amigos of Fox coffers were swelled by big bucks from the Mexican north, and specifically the border state of Nuevo Leon and its gleaming stainless steel and glass capitol of Monterrey. "The Sultan of the North" has long been an industrial and banking powerhouse adorned with pockets of great wealth and vast zones of impoverished colonias.

For a hundred years, the venerable Monterrey business group has been dominated by the various branches of the Sada and Garza families, traditionally the money bags for the PRI's political aspirations.

But the northern moguls' allegiance began to shift swiftly after the PRI-sponsored collapse of the peso in 1994-95. One tycoon, Alfonso Romo, snapped to the press that he had lost $10 million an hour on December 19, 1994, the day the peso plunged to a record low. Juan Sanchez Navarro, the 90-year-old ideologue of the group and the owner of Modelo Brewery, purveyors of Corona beer, was an early convert. Another was Lorenzo Zembrano, owner of Cemex, the cement giant which has made a hobby of buying up U.S competitors.

Another major booster was almost certainly Federico Sada, who heads up Grupo Vitro, Mexico's first multinational, which 10 years ago purchased the U.S. glassmaker, Anchor Hocking. Fox did substantial business with Vitro, which manufactures Coke's unique bottle.

Fox's Coke connection brought on board another tycoon, the aforementioned Alfonso "Poncho" Romo, who is married to the niece of Eugenio Garza Leguera, the owner of Femsa, the distributor of Coke in Mexico. Like Zembrano, a perpetual on Forbes magazine's annual list of billionaires, Romo owns insurance companies, brokerage houses, formerly the La Moderna tobacco empire (recently sold to Brown & Williamson), and Pulsar International, whose biotech subsidiary Semnis is internationally dominant in some genetically engineered food seeds.

Romo has been tapped by Fox to bring jobs and investment to the rebellion-riddled state of Chiapas. Pulsar has long-standing plans for Eucalyptus tree plantations in Chiapas [See "Big Pulp vs. Zapatistas," Multinational Monitor, April 1998]. Romo is also involved with the Monsanto Corporation in the Saiva project, which is mapping the genome of plants taken from the Lacandon jungle for commercial profit - the rebel Zapatista Army of National Liberation, based in Chiapas, accuses Saiva of bio-piracy.

Although both Sada and Romo were appointed to Vicente Fox's transition team, they initially declined positions in the new government, perhaps considering that they will be well-represented by Fox's selection of their proxies.

Fox Incorporated

A preliminary x-ray of the Fox cabinet shows telltale signs of both Monterrey group and multinational influence.

Actually the new cabinet is really three distinct cabinets operating under the rubrics of "Growth with Quality," "Human Development," and "Order & Respect," each of which is similarly tainted by commercial considerations. One caveat: many members of Fox Incorporated were not selected by Fox at all but rather by a consortium of four U.S. corporate head-hunters coordinated by Korn-Ferry & Hazzard.

Here is a thumbnail sketch of who will be setting economic policy for Mexico for the next six years:

• Secretary of Finance - Javier Gil Diaz, chief tax collector in the Salinas administration, and more recently director of Avantel, a WorldCom affiliate. Gil Diaz was hailed as "an authentic Chicago boy" (he took his post-graduate degree at Milton Friedman's University of Chicago) by Rudi Dornbusch, the MIT free-market economic guru.
• Secretary of Commerce - Luis Ernesto Derbez spent 14 years working as an economist at the World Bank, during which time he was also on the board of directors of Vitro.
• Secretary of Energy - Ernesto Martens headed up Union Carbide in Mexico for 18 years before that conglomerate self-destructed after Bhopal. Like Derbez, he worked at Federico Sada's Vitro. One of Martens's first projects will be to privatize electricity generation, a process begun by Fox's predecessor, Ernesto Zedillo.
• Director of PEMEX (the nationalized petroleum monopoly) - Raul Munoz Leos was president of Dupont-Mexico for 12 years. As PEMEX director, Munoz Leos is charged with selling off its petrochemical branch - an asset for which Dupont is a bidder. On the eve of George Bush's visit to Fox's San Cristobal hacienda in February, Fox also appointed Carlos Slim, the richest man in Latin America, as well as his old friends Romo and Zembrano to the Pemex board of directors.
• Secretary of Communications & Transport - Brought into the new government by Fox head-hunters, Pedro Ceresola is a veteran privatizer who made his bones selling off Telmex, the government phone company, to the lowest bidder, Carlos Slim, and Cintra, the holding company for the two national airlines.
• Secretary of Agriculture - Javier Usabiaga, who is known in the Bajio as "the King of Garlic." Usabiaga and Foxes have been partners in the export vegetable business for 50 years, exploiting child labor in Guanajuato and reaping fortunes. He will continue to remove protections and supports for Mexico's non-corporate small farm sector, a project begun long ago by the nation's three previous neo-liberal presidents, Miguel de la Madrid, Carlos Salinas and Ernesto Zedillo.
• Secretary of Foreign Relations Jorge G. Casteneda is the liberal son of a patrician family (Casteneda's father was once foreign minister too). Along with National Security advisor Adolfo Aguilar Zinser, Casteneda is a liberal who once worked with Cuauhtemoc Cardenas before signing on with Fox Inc. for the 2000 campaign. Zinser ran Cardenas's 1994 presidential campaign. Other notable staff positions in the Fox Inc. hierarchy include National Water Commissioner Clemente Jaime, president of the milk distribution giant Lala and the nation's leading commercial water bottler; and Secretary of Government (sometimes referred to as the Secretary of the Interior) Santiago Creel, whose agency supervises internal security, and who is the scion of the Creels of Chihuahua, whose mining and timber interests devastated the northern Tarahumara sierra. Perhaps the most vital figure in this corporate boardroom of a government is Francisco Ortiz Ortiz, a man who literally sells soap to the Mexican people for a living - he headed up marketing at Proctor & Gamble for 11 years. Ortiz Ortiz now heads up the all-important Office of the Image of the President.

The Great Divide

It is no secret that Vicente Fox embraces neo-liberalism and free trade. Last August, he and George W. Bush held hands in Austin to extol the extension of NAFTA all the way to Tierra del Fuego, through the Free Trade Agreement of the Americas. In October, when Fox returned to Austin for the annual Global Fortune forum, he was greeted by a standing ovation from the heads of the U.S.'s 500 richest corporations. "Fox! Fox! Fox!" the CEOs chanted, "Hoy! Hoy! Hoy!" ("Today! Today! Today!" - his campaign slogan). "Okay boys," the Mexican president-elect boomed from the podium in his earthiest tones, "let's all roll up our sleeves and help build a new nation."

But the policies and personages exhibited by Fox Incorporated will not build a new Mexico. Indeed, above all Fox promises more of the same when it comes to economic and trade policy.

Mexico continues to be home to 70 million poor people, according to Julio Bolvitnik, an economist of poverty and a Fox social adviser, 27 million of whom live in extreme poverty. The United Nations defines extreme poverty as not earning enough in a single day to meet their nutritional needs.

The neoliberal song and dance that "trickle down" economics will cause "all boats to rise" is a fallacy in an economic landscape where there is no trickle down. Fox's mind-set of Social Christian "good works" and volunteerism, micro-credits and the Bank of the Poor will hardly feed the millions mired in extreme poverty, or address the structural problems which generated it. The changaro, the vochito and the tele that Fox so demeaningly asserts poor Mexicans desire, have little to do with the true aspirations of those on the bottom rung of this gravely divided society.

The stark polarization of wealth and power in Mexico will always bode social explosion, guerrilla outbursts and out-of-control violence unless a radical redistribution of wealth is undertaken - and such a radical redistribution is clearly not the business of Fox, Incorporated.

John Ross is a Latin American correspondent and novelist. He is the author of numerous books, including The War Against Oblivion: The Zapatista Chronicles.