Raul And Carlos De Gortari Essay, Research Paper
Salinas de Gortari scandal started?
How Lozano got involved
In recent weeks, Mexicans were glued to their televisions to watch a tale of drugs,
corruption and murder. It was a ?telenovela?, one of Latin America?s countless soap operas. But,
unlike most, this one, on the upstart Azteca channel, had heard of politics: to be exact, of the
intrigue around ex-president Carlos Salinas de Gortari and his brother Raul Salinas de Gortari. It
even started with the murder of an attorney-general, have displaced the ?telenovela?. President
Ernesto Zedillo dumped his attorney-general, Antonio Lozano, a lawyer from the right-wing
opposition PAN, The National Action Party.1
Lozano gets some evidence on Raul
Mr. Lozano?s bid to solve the later murder of Jose Francisco Ruiz Massieu, a top PRI
official, had done not that good. He surprised many by ordering the arrest in early 1995 of Raul
Salinas de Gortari, as the alleged mastermind, but failed to convict him. It looked as if he might
get the evidence he needed, when his men found a decaying corpse at a ranch owned by Raul. Mr.
Lozano tipped off reporters.2 His men suggested these were the remains of a missing
congressman, Raul?s supposed accomplice.
The finding of mysterious money on Raul
Could it be that, even in failure, Mr. Lozano had gone too far? Swiss investigators, and
others elsewhere later, turned up millions of dollars in secret accounts controlled by Raul Salinas
de Gortari.3 Just where had the money come from? Drugs? Influence-pedding? And if so, the
natural question was, influence with whom? The natural answer was not made natural by brother
Carlos Salinas de Gortari?s flight from the country after Raul?s arrest. The ex-president, by then
in Ireland, had to testify in the Colosio case; he may have to do it again about the other murder.
Mr. Zedillo often said Mr. Lozano had a free hand. None of this has reflected glory on the PRI.
Swiss prosecutors visited Almoya Prison in December 1995.4 There, the ex-president?s
brother described the techniques he used to conceal the ownership of accounts containing $100
million, and the role played by Citibank executives in setting up offshore companies and trusts.
In his zeal to avoid ?political scandal.? Raul Salinas de Gortari did everything possible for
six years to conceal ownership of bank accounts that eventually built up to the amount of $100
million. Confronting Swiss Federal Attorney Carla del Ponte, the brother of the Mexican
ex-President wove detailed tale of his financial acrobatics. In this odyssey he invented fictitious
persons, placed complete trust in Citibank, whose ranking executives engineered some of his
financial operations; set up paper companies with Swiss bank accounts took over trust funds
inherited by his wife and had dealings with four Swiss banks.5
REFORMA is in possession of a copy of the transcript of Salinas’s interrogation by Del
Ponte and Valentin Rorschacher, head of the Swiss Central Office for Drug Trafficking, which was
conducted at Almoloya de Juarez Prison in December 1995 as part of the investigation of Raul
Salinas de Gortari as an alleged participant in money laundering and drug trafficking operations.6
During the interrogation, Salinas detailed his Swiss accounts and the names under which they were
opened. According to his statement, his money was deposited in Banque Pictet, Citibank Zurich,
Julius Baer Bank and Banque Edmond de Rothschild. The accounts were opened under the
fictitious names of “Juan Guillermo Gomez Gutierrez” and “Juan Jose Gonzalez Cadena,” as well
as a company, Novatone, and the Trocca Limited and Dozart trusts.7
Raul Talks about his mysterious millions of dollars
Raul gets interrogated by Swiss prosecutors.
At the outset of the interrogation, Salinas expressed his admiration for the European
country that was now investigating his financial operations. “It is a country that we have loved and
respected for many years. My wife studied in Switzerland, I have taken part in equestrian
competitions in Lucerne, my nephews went to school there and two of my daughters are in school
Salinas requested the indulgence of the Swiss prosecutors before answering their questions:
“I also want to offer my apologies to the Swiss government and the country’s financial
institutions…and I’m going to explain why I acted as I did and assumed different identities,
basically, because at the time the accounts were opened under different names, I was unfamiliar
with the system Citibank proposed to me, so fictitious names were used to avoid creating a political
scandal; if I had known beforehand about Confidas, Citibank’s system, I wouldn’t have resorted to
Authorities have identified Confidas as a Citibank subsidiary corporation, legally
domiciled in Panama and with offices in Switzerland. As of this date, officers of this banking
institution have repeatedly denied that its executives have engaged in any violation of ethical
behavior or financial regulations targeting money laundering.
The case against Raul Salinas has led US experts and officials to ask questions about gaps
in the legal machinery for detecting the laundering of money from sources other than drug
Doubts have also arisen concerning the actions of US banks which accept deposits from
foreigners incapable of justifying the source or size of their assets.
In the interrogation, conducted under terms of the mutual legal assistance treaty and
transcribed in 16 single-spaced pages, Salinas denies that the funds frozen in Switzerland were the
fruit of any unlawful activity.10 While continuing to suspect a connection with drug trafficking,
Mexican authorities also believe that part of the funds deposited in Switzerland and other countries
was obtained from corruption and devaluation of the Mexican Peso with the government headed by
his brother (ex-President Carlos Salinas de Gortari).11 Such commissions were believed to have
been pocketed even after Salinas stepped down from public office in 1992. Nonetheless, Salinas
also rejected this charge in the course of the interrogation.
“This money did not come from and has nothing to do with any activity related to my work
as a public official; in other words, it is not dirty money, it is completely lawful…there was never
any situation with the corruption in the devaluation of the Peso or abuse of power in the institutions
where I worked as a public official.?12 This was the explanation given by Salinas for the origins
of the 100-million-dollars.
According to Salinas, the plan was to bring together a group of businessman friends who
would put a “financial mass” together outside of Mexico, for reasons of safety and in order not to
remain aloof from the political toils of President Salinas’s term in office. Some people invested in
the form of loans, others as seed money for various projects.
One of the first questions: ” In whose name were these accounts opened?” Initially with
some confusion, then with greater clarity, Salinas began to provide facts and remember details of
the transactions. With his answers to a dozen questions on the same point, after thinking, repeating
himself and tendering a few names that were then supplemented with others, Salinas provided an
x-ray of his Swiss fortune.
At Banque Pictet, headquarters in Geneva, an account in the name of Juan Guillermo
Gomez Gutierrez. There was another before, now closed, under the fictitious name of Juan Jose
Gonzalez Cadena. There should be another under the name of Juan Manuel Gomez Gutierrez, a
real person.13 Margarita Nava Sanchez was one account holder for a group of accounts that
existed between 1989 and 1993.
An account at Julius Baer Bank in Zurich in the name of Raul Salinas de Gortari, and
another in the name of a company, Novatone.14 Applications to open these accounts were
submitted from Mexico. A number of accounts at Citibank, Zurich. Salinas could not say how
many account holders there were, or their names, because the application was made from Citibank
in New York through a Swiss subsidiary, Confidas. There is also a trust called Trocca Limited. A
trust named Dozart at Banque Edmond de Rothschild, “originally set up by my present wife’s first
husband with funds originating in the inheritance of her husband, Alfredo Diaz Ordaz.?15 There
should also be an account in the name of Raul Salinas de Gortari at that bank.
Citibank?s role in the operation
On a number of occasions during his conversation with the Swiss investigators, Salinas
mentioned Citibank, some of its ranking executives and its role in opening accounts in various
countries. For example, he stated that the Citibank Zurich accounts were opened in the name of
Trocca Limited, a trust set up through the intermediary of Confidas at the bank’s advice.16
Citibank — specifically, its New York office — devised the entire strategy with Ms. Amy Eliot, and
she knew the first investor who made transfers, and Ms. Eliot’s correspondent in Zurich was a
woman named Mailey Plange Rohner, who no longer works for the bank.17
Salinas also noted that accounts were set up in the US and England in accordance with this
strategy, and that Eliot was free to execute these movements, which included the opening of
accounts under names not stipulated by Salinas. “I don’t remember the number of the account, but
I remember the name. They were among the many handled through Citibank and Confidas officers,
as well as through some other bank, but they were opened by bank officers. I didn’t open them
directly. Even today I couldn’t tell you what names the officers used to open the accounts, because
I don’t have all the files,?18 Salinas replied.
Raul?s suspicions concerning Amy Elliot
Salinas was emphatic during his meeting with the Swiss officials. He was speaking in all
honesty, he said, because he had nothing to hide, not even the names of his businessmen
friends…although he would name them only in private. He could not understand why Switzerland
had lifted and violated banking secrecy, which had been one of the reasons he had chosen this
country for his investments.
“Paula Castanon de Salinas went to go withdraw the money only because she was
following my instructions, because we were sure that — since the money had nothing to do with
drug trafficking — the accounts hadn’t been frozen. If I had been at all concerned, because my
accounts had somehow been linked to drug trafficking or because of the money that was said taken
from the outcome of the devaluation of the Peso, I wouldn’t have gotten my wife involved. We
never expected that someone would have lied and that the accounts would be frozen for the crime
of drug trafficking. What we did know was that the Mexican authorities had learned of the
existence of a fake passport in the name of Juan Guillermo Gomez Gutierrez, and that the money
had to be moved.?19
“I removed the contents of the safe deposit boxes only because we knew that the fake
passport that the Mexican authorities were looking for was in that safe deposit box, along with
documents concerning Citibank, and if the Mexican authorities knew about the name Juan
Guillermo Gomez Gutierrez, they had to be removed from that safe deposit box. Moreover, Amy
Eliot advised my wife to move those funds. I suppose that Ms. Eliot wanted to keep Citibank out of
this problem, or had been advised of the accusation of drug trafficking, I don’t know, but she
helped lead my wife into that trap, since we had trust in Swiss banking secrecy. Two factors
contributed largely to the decision to move those funds: the fact that the Mexican authorities knew
about the existence of the fake passport, and Ms. Eliot’s advice.?20
Throughout the interrogation, Salinas denied that all the assets were his, asserting that he
simply managed the accounts. “I couldn’t say that I was the owner or beneficiary of the total
amount,” which is “on the order of $100 million,?21 he stated.
“The returns that I received for managing this group of accounts would have to be divided
into two parts, since the end goal was to generate business with this money…and I was to share in
the profits if and when this business was realized, depending on the structure and financing of each
deal…My consulting and promotional activity generated significant profits for me to make use of
(and which in fact I did make use of), all derived from the management and advice that I provided
for each of the investors.?22
With regard to a series of transaction in 1993, in which about $25 million was transferred
to another account, Salinas said: “I remember having ordered this transfer, which was done
through my wife, to a friend for a business deal. It was a lawful transaction; moreover, the total
amount to the recipient was higher (the $15 million wasn’t the total amount). It was just a part, and
there was nothing illicit about it… That $5 million was part of this block that was moved, and
various conduits were used; that’s the way the participants agreed to do it, and we agreed to do it
that way because that’s how the recipient wanted it, and I think it would be very easy for the Swiss
authorities to find out who the recipient was and to realize that the people involved have nothing to
do with drug trafficking. The $3 million are a continuation of the $15 million transfer. The $15
million and the $3 million were delivered to the same recipient.?23
Consequences to Mexico
The devaluation on the Mexican Peso.
It is believed that the mysterious millions of dollars found on Raul Salinas de Gortari had
to do something with the devaluation of the Mexican Peso. Nothing can be proven to this point to
where Raul and hid brother Carlos Salinas de Gortari can be accused of abuse of power and of
theft. But this has lead Mexico in great debt. Mexico’s devaluation came at a time when many
international investors, including U.S. mutual funds and pension plans, were beginning to test the
Mexican market. The enactment of the North American Free Trade Agreement (NAFTA) and
Mexico’s entrance into the Organization for Economic Cooperation and Development (OECD) led
investors to believe that Mexico had committed to a macroeconomic and fiscal conservatism that
would continue well into the future.24 Indeed, much of the new confidence that international
investors had in the Mexican economy was based on its continuity of macroeconomic policy.
Investment bankers by definition do not like surprises, and the devaluation was certainly a surprise.
For example, CS First Boston, a U.S. investment firm, believed in August 1994 that there was only
a 20 percent probability of Mexico enacting a maxi-devaluation.25 They arrived at this conclusion
by polling a number of investment bankers in New York and London. The majority of those polled
believed that Mexico would combat its high interest rates by gradually accelerating the pace of the
peso’s daily devaluation rather than by a one-time devaluation.26 The remainder of the bankers
thought that there was no imminent crisis and that the macroeconomic instability was merely a
temporary result of the volatile election campaign. Everybody looked at Raul and Carlos Salinas
de Gortari when this surprise came about.
The ?pueblo?s? low economic system
This affected all Mexican citizens. The devaluation of the Peso was a nightmare for the
rich and the poor. This economical crisis was specially affecting the people who lived of the
commerce system. The selling of industrial cars went down a 70%.27 More than 10,000 of the
stores in which people relied for financial support were closed and many were threatened by the
vicious circle or paralyzed selling and unpayable debts. More than one million person were fired,
and the the record of laid off people was reached of 13%.28 One didn?t have to do much to see the
crisis; every day you can see more and more women on the streets selling own made goods and
more people washing car windows on the streets. The statistics of assaults and thefts were
To conclude this research paper of Raul Salinas de Gortari?s Case I personally believe
that it wasn?t right what Raul Salinas de Gortari did to his own country. I believe that that is why
Mexico is not in a very high position today, it?s because of it?s week presidents. I think that we
can improve later on in history by being more carefull to who we choose as presidents and we can
also improve by us standing up for ourselfs and defending our rights and letting the government
know that we exist and that we deserve to be successful.
Atta, Van D., Mexican citizens unhappy and suffering. Readers Digest, volume 149,
pages 61-62. September 1996.
Atta tells in his article about the loss of more than 10,000 people.
Atta also says that more than 13% of the normal people were laid of because
of the economical crisis caused by Raul Salinas de Gortari. He finally tells
how the people are trying to overcome the crisis. Although this article is short,
it is a very informative article on the affects of the Mexican crisis on the
Duffy, B., Citibank?s Mexican money troubles: R. Salinas de Gortari case. United
States News and World Report, volume 12, page 53-54. July 1, 1995.
Duffy puts together some facts of when Swiss prosecutors visited
Almoya Prison in December 1995. This article also has good information of
Citbank?s role in the operation. It tells some interesting facts of Raul Salinas
de Gortari?s declaration on behave of the ownership of accounts
containing $100 million.
Lake, G. B., Great devaluation of the Mexican Peso. National Revelation, volume 39
pages 40-41. July 3, 1995.
Lake puts together an article containing the information of the
devaluation of the Mexican Peso. It also talks about the international
investors that had investments in Mexico and the international investors do
not like surprises and certainly the devaluation came as a surprise to them.
This article has great information on the devaluation of the Mexican money.
Robinson,L.S., Mexico?s great Salinas soap. Economist, volume 341, page 39.
December 7, 1996.
Robinson puts together this magazine article which explains mainly
how the Raul Salinas de Gortari case got started. Robinson explains how Mr.
Lozano got involved in this case. Robinson also tells how Mr. Lozano got
some evidence to prosecute Raul Salinas de Gortari. This is an interesting
article that compares this case to a ?Mexican telenovela? (soap opera).
Smith, G., He put his trust in Switzerland and Citibank. Frontline, volume 114,
pages 15-20. October 25, 1996.
This article contains mainly most of the interrogation answers asked to
Raul Salinas de Gortari by the Swiss prosecutors. Smith gets some real good
information of how Raul Salinas de Gortari explained his millions of dollars in
fictious names on phony bank accounts. It also contains information of
Raul?s suspicions concerning Amy Elliot. This article contains the most
important facts of the Raul Salinas de Gortari case.