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Carlos Slim & the 'Narco-Politicos'

February 3 2009
by Daniel Hopsicker

 


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Carlos Slim, the Mexican billionaire whose $250 million cash infusion bailed the New York Times out of a tight cash crunch last week, has long-standing business ties with wealthy Mexican businessmen suspected of involvement in Mexico's so-called “Cartel of the Southeast,” the drug trafficking organization (DTO) based in Cancun which came to light two years ago with the crash on Mexico’s Yucatan Peninsula of an American-registered (N987SA) Gulfstream jet carrying nearly four tons of cocaine.

A long-time lieutenant of Carlos Slim's, Fernando Chico Pardo, left Slim's employ to take over ASUR, a publicly-traded corporation which observers accuse of moving large quantities of cocaine through Cancun International Airport, which the company runs and manages.

ASUR controls a total of a dozen Mexican airports, and exemplifies the “corporatization” which has transformed the drug trade in the same process of vertical integration and market consolidation which has left, in other large industries, like automobiles, a handful of global multinational players dominating market share worldwide.

Slim's big investment represents an encroachment into the ownership of an icon of American democracy of a man, and a massive fortune, whose provenance have gone largely unexamined. But on the topic of Slim's shady dealings, all eyes seem to be curiously averted. However it seems highly doubtful the Times' ownership is unaware of them. 

The barely-concealed facts regarding Carlos Slim’s shady connections are well-known to journalists in Mexico. They deserve to become more well-known here in the U.S., because links between Mexico's exploding narco-economy and current-world's-richest-man Carlos Slim don’t end with Fernando Pardo's ASUR. 


Too Rich and Too Slim 

Regardless of how his investment in the New York Times does, analysts say, Carlos Slim comes out a winner. His quarter-billion dollar investment buys him prestige as an owner of one of the world's best-known and most-influential newspapers that his status as  the world's  second-richest man cannot.

Owning a piece of the New York Times, goes this reasoning, provides the kind of “cover” which credit card commercials call “priceless.” 

"Carlos Slim's stake is a danger to the New York Times," said the Seattle Times in a scathing editorial. While calling it "an ominous move," the editorial neglected to mention any of Slim's more unsavory connections. American newspapers don't mention "narco-politicos." It is something approaching a taboo.

Start with a universally acknowledged fact: Despite occasionally valiant efforts by our Southern neighbor, Mexico’s chief growth industry is drug trafficking.

Is Carlos Slim being tainted unfairly for having risen to the top in a troubled country better-known as a corrupt cesspool of gangsters and narco-traffickers than as an incubator for world-class entrepreneurs ready to take on Warren Buffett for the title of "world's richest man?"

Let's take a look. We pretend to no great accounting expertise. We never worked for Arthur Anderson.  (Well, maybe that's a bad example.)  

But Carlos Slim's numbers don’t add up.


The Narco-Politico's

Start with a 10-year old wire service story about a former top Mexican drug lord, Amado Carrillo Fuentes, which will provides us with some useful benchmarks.  Because of his vast armada of planes, Fuentes was known in Mexico,  as “Lord of the Skies."

Fuentes died in 1997 while undergoing plastic surgery during an attempt to engineer the ultimate “Extreme Makeover.” In wire service stories reporting his  death,  his wealth was compared with that of Carlos Slim, who had just been named Forbes magazine’s  'Richest Latin American."

When Fuentes died, he was worth $25 billion, said the story.  Carlos Slim was worth $6 billion. 

Other published reports at the time agree with this assessment of Slim's wealth.  For example, the May 7, 1999, Mexico City newspaper La Jornada fixed Slim's fortune at “something like $6 billion.”

At about the same time Latin Trade magazine pegged Slim as being worth $7.2 billon.

After working hard for more than 40 years, Carlos Slim was worth a hefty $6 billion.


A 50 Billion Dollar Decade?

Fast forward to news reports about Slim's New York Times investment last week. They state Slim is  currently worth, variously, between $57 billion and $60 billion dollars.

After already making six billion dollars,  a time when most might be tempted to relax and enjoy, Carlos Slim made over $50 billion just in the next ten years.

We can't even begin to imagine what that works out to per hour.  But we're sure its a lot. But... is this possible?

Drug Lord and Lord of the Skies Amado Fuentes, recall, managed to salt away no more than $10 or $15 billion a decade. And he was in the cocaine business, where counting your money can be a bigger problem than making it.

Carlos Slim owned Sears.  Was there an epic  sort of run in Mexico on Kenmore washer-dryers?  

Has anyone ever made $50 billion before--or anything close--in just ten years?  

We think not. We think something about Carlos Slim smells fishy.


The Cartel of the Southeast

Numerous well-sourced reports in the Mexican press accuse Fernando Chico Pardo's Grupo Aeroportuario del Sureste, S.A. de C.V., (ASUR) of playing ball in the drug trafficking major leagues, pointing a finger at the company's reported complicity in the big "drug move" in September of 2007 which ended with an American Gulfstream jet carrying 4 tons of cocaine crashing in the Yucatan.

Pardo and Slim are not casual business acquaintances. Pardo was Carlos Slim's right-hand man for more than 16 years before striking out on his own, with Slim’s blessing. He  retained a seat on the board of Slim’s holding company. And his brother, Jaime Chico Pardo, remains the President of Slim’s major holding, Mexican telecommunications giant Telmex.

Two years ago Pardo attended a big conference, along with some top American "swells" (to use a word popular during the U.S.'s last Great Depression) on "North American Integration" at the Banff Hotel in Canada,  according to Michel Chossudovsky of the Center for Research on Globalization. 

Former Secretary of Defense  Donald Rumsfeld was there. So too was  former CIA Director James Schlesinger, and former Reagan Secretary of State George Schultz.

These are, of course, not the kind of guys one thinks of as sipping a little something apres-ski while discussing "Current Trends in Drug Trafficking."

But then there is the matter of the provenance of the American-registered Gulfstream, which was caught in the Yucatan carrying almost four tons of cocaine, which  exposed the workings of the Cartel of the Southeast

As it happens, the Gulfstream (N987SA) was known to belong to the CIA in Columbia and Central America, and to fly for the DEA as well, and it had even flown extraordinary renditions,  according to exclusive reporting in Narco News.


More than the usual number of unanswered questions

With all its manifold faults, the New York Times is an American journalistic institution.  Shouldn't preserving the tattered shreds of what Walter Cronkite used to call “the people’s right to know” be worth a few hundred million that might otherwise be going to Wall Street bonuses?

Shouldn't ownership of the New York Times be treated as a matter of national security, just like that of, say, Raytheon?   And most puzzling of all, why has a revered (well, semi-revered)  institution like the Times let Slim buy his way to such a large stake?

The answer to that last questions was answered indirectly last week, by the Executive Director of the United Nations' crime and drug watchdog group, UNODC.  "Money made in the  illicit drug trade has been used to keep banks afloat in the global financial crisis," Reuters quoted Antonio Maria Costa.  

"In the midst of the current world financial crisis, drug money is,  in many instances, currently the only liquid investment capital," said Costa. "With little unemployment, the drug trade at this time could be the world's only growth industry."

Most people, perhaps naively, think of drug money as bad.  Carlos Slim's investment in the N.Y. Times, on the other hand, may illustrate that some don't consider all drug money to be bad. 

Does Carlos Slim represent our drug money? That portion of drug trafficking proceeds which are--of necessity--being regularly re-invested back into the United States?

 

TUESDAY:

Why Carlos Slim's shady connections don't seem to bother the owners of the Times.