Thread: WIkileaks: Cable identifies Mexico's richest businessmen

WIkileaks: Cable identifies Mexico's richest businessmen

By Diana Washington Valdez / El Paso Times
Posted: 02/22/2011 12:16:11 AM MST

A leaked U.S. diplomatic cable named Mexico's 10 richest businessmen, their companies and how they achieved and maintain their wealth.

Some of the men are household names in Mexico, while others like Carlos Slim Helu have made Forbes' list of the richest people in the world more than once.

"The net wealth of the 10 richest people in Mexico -- a country where more than 40 percent of the population lives in poverty -- represents roughly 10 percent of the country's GDP (gross domestic product)," according to a confidential U.S. document disclosed by online government watchdog WikiLeaks.

Besides Slim, the top 10 list includes German Larrea Mota-Velasco, who served on the board of Grupo Mexico, which owned the previous

Embassy officials drew some of their information from Forbes magazine's 2008 list of the world's billionaires, and said in the document that the list was not exhaustive.

According to the cable, Slim had a net worth of $60 billion -- nearly 6 percent of Mexico's GDP. In 2004, his net worth was $13.8 billion.

Slim's empire made a big leap after he led a group of investors to buy Telmex from the Mexican government during former President Carlos Salinas de Gortari's administration.

Slim, whose mother was from Chihuahua state, has invested in water infrastructure in the western part of Juárez.

The document said some of the businessmen on the list acquired their wealth through

inheritance and others were self-made entrepreneurs.

"Several of the business dynasties that these individuals own took off in the 1990s, when then President Carlos Salinas de Gortari (PRI) began dismantling Mexico's centralized economy. Salinas sold off more than 1,000 state-run companies from metal foundries to railroads.

"Unfortunately, in some cases, these privatizations ended up creating private-sector monopolies -- benefiting the savvy businessmen and politicians while leaving the average Mexican out in the cold."

Former Texas Secretary of State Tony Garza was the U.S. ambassador to Mexico when the document was prepared. While he was the ambassador, Garza married MarÃ*a A. Aramburuzabala, one of the richest businesswomen in Mexico. Her family owns a stake in Televisa and is associated with Grupo Modelo, a consortium worth about $1.5 billion that brews Corona and Negra Modelo beers.

"The negative aspects of this concentration of wealth and economic power cannot be overlooked because these individuals control the monopolies and oligopolies that hold back economic growth," the U.S. diplomatic dispatch said. "Slim, (Ricardo) Salinas, and others have used their influence to sway economic policy and work the system to further their business interests and hinder their competitors."

Because of their competitors' economic hold in Mexico, General Electric and NBC have been unable to break into Mexico's broadcasting market, U.S. embassy officials said in the document.

The document, however, said Slim has become more open to competition than in the past.

A couple of problems contribute to the lack of business competition in Mexico, the cable said. Mexico's Federal Competition Commission (Cofeco) is weak and unable to impose sanctions and other penalties against the major business leaders whose firms also are able to manipulate the judicial system.

"Another tactic these individuals (and others) use to hamper their competition is criminalizing investment disputes," according to the document. "The misuse of the judicial system is employed by Mexican companies of all sizes to resolve disputes."

The U.S. diplomatic cable cited as an example a case involving a major U.S. insurance company and a Mexican television firm.

A legal dispute arose after the U.S. insurance company challenged the Mexican firm's insistence that the insurer pay an $18 million settlement.

"While the dispute was being heard in commercial court, the (U.S. insurance) company's director general and legal counselor were arrested without warning and thrown in jail," the document said.

"Company executives were told (by the Mexican firm) that the director general would be charged with criminal fraud unless the settlement was paid."

The director general required medical care that was not available in prison, and the U.S. insurer appealed.

The document said a judicial officer involved in the case was rumored to have accepted a bribe of more than $1 million, and refused to release the U.S. director general.

"Ultimately, the insurance company paid ($18 million) as a settlement to have the director general released," according to WikiLeaks' disclosure of the diplomatic cable.

Diana Washington Valdez may be reached at dvaldez@elpasotimes.com; 546-6140.

Mexico's richest businessmen
A 2008 U.S. diplomatic cable provided by WikiLeaks identified the 10 richest businessmen and their businesses in Mexico:

Carlos Slim Helu & family: Telmex, America Movil, Grupo Carso, Sanborn's, an airline, bank, department stores, a construction company, restaurants, music outlets, insurance, auto parts and ceramic tiles. Net worth $60 billion.

Alberto Bailleres: Grupo Bal, includes Industrias Penoles (metallurgical company), the Palacio de Hierro luxury store, as well as insurance, financial and agriculture-related businesses. Father founded Instituto Tecnologico de Monterrey, a top economics university in Mexico. Net worth $9.8 billion.

German Larrea Mota-Velasco & family:"CEO of Grupo Mexico, a mining company and one of the world's top copper producers. The company owned the former Asarco smelter in El Paso. His other businesses include Mexico's biggest railroad. He serves on boards of Grupo Banamex, Bursatil Mexicano, Grupo Televisa and Seguros Comercial America. Net worth $7.3 million.

Ricardo Salinas Pliego & family: Grupo Elektra, TV Azteca, Unefon and Banco Azteca. Net worth $6.3 billion.

Jeronimo Arango: Co-founder of Bodega Aurrera supermarket chain. Associated with Grupo Cifra and restaurants and fashion stores. Cifra partnered with Walmart and then sold its share to Walmart. Net worth $4.3 billion.

Isaac Saba Raffoul & family: Runs Grupo Casa Saba (markets health, drug and beauty products). Joint venture with Telemundo to produce telenovelas in the United States and Latin America. Mexico's top TV networks prevented him from obtaining a Mexican broadcasting license. Net worth $2.1 billion.

Roberto Hernandez & family: Former CEO of Banamex when bank was sold to Citigroup in 2001, which made Hernandez almost $2 billion. Owns resorts on the Yucatan peninsula. Net worth $1.7 billion.

Emilio Azcarraga Jean & family: Chairman of Grupo Televisa that was created from a chain of radio stations. Televisa owns Mexico's two main cable TV and satellite providers (Cablevision and Sky). Serves on boards of Telemex, Univision and Banamex. Net worth $1.6 billion.

Alfredo Harp Helu & family: Benefited from Citigroup's buyout of Banamex. Owns Avantel, Mexico's second largest telephone company, and the Mexico City Red Devils baseball team. Cousin of Carlos Slim. Net worth $1.6 billion.

Lorenzo Zambrano & family: Head of Cemex, one of the world's largest cement makers. Owns part of Axtel, a telecom company. Serves on boards of several large Mexican businesses. Net worth was not listed.

http://www.elpasotimes.com/ci_17442608

They need to add a list of drug billionaires.