3,018 words

    Mexico Sets a Good Example

 By: Lorenzo Dee Belveal

Every Gringo with interests or property south of the Rio Grande seems to have been following events in the Punta Banda area of Baja California, Mexico.  My mail on this topic has exceeded all else, since the almost breath-taking government eviction order was approved, some three weeks ago.

Since I hold a Residency in Mexico, complete with Mexican wife, and a deep interest in land frauds (see URL: http://ldbelveal.net) many frequenters of my WebSite  are urging me to put the Punta Banda land problems into historic and comparative perspective with the well-known and long-standing real-estate irregularities that are one of the prominent defining characteristic of life on the Honduras island of Roatan, especially.  So I shall.

Begin with elastic laws and hungry administrators -- 

The notorious flexibility of Mexican “Catastro” (read: land) laws is of long standing and has cost foreign investors heavily – both in terms of actual investments, and in commercial confidence.  But while investors have been heavily penalized by the corruption and notorious elasticity of Mexican courts – up to and including the Mexican Corte Suprema de Justicia, Mexico itself has been penalized even more.

 The Mexican confiscation of American and British oil production properties, in March, 1938, disrupted commercial relations between the United States and Great Britain deeply.  Mexico took the view that its sovereignty provided a license for almost any kind of commercial abuse it might choose to inflict on its foreign investors.  The United States took the view that, while Mexico might make this kind of outrage work once, they would never have a chance to repeat the performance.  Washington slammed the commercial door on Mexico, and it stayed closed for more than twenty-five years.

A case of cause and effect -- 

American investments in Mexico dried up like one might turn off a faucet.

Not only did American dollars stop flowing across the Rio Grande, British pounds precipitously slowed as well.  Mexico, then in the 40th-year of the perennial Partido Revolucionario Institucional (PRI) run, quickly discovered that it takes more than mere ‘sovereignty’ to run a country.

Most importantly, it takes financial resources – of which Mexico has always had much less than it needed.   Thus began the economic “bleeding of Mexico”, as at least one perceptive historian has called it.

When the expropriation of the oil properties took place, it took about eight (8) “old Pesos” to buy one U. S. Dollar.  As this is being written, straight-line accounting reflects the comparative effects.  Today, it would require more than two-thousand-five-hundred (2,500) Mexican Pesos to buy one American dollar!  This is big time inflation.  And keep in mind that in the same sixty years, the U. S. dollar has also lost roughly half of its 1935 value.  The peso deterioration has been financed by steady impairment of the national standard of living, and abject impoverishment of most of the Mexican population.

 Crime does not pay, except in the short term --

It only took about ten years for insightful Mexican thought leaders to begin pushing the idea that, whatever else happened, Mexico had to have American capital investments and industrial cooperation to survive.  While primitive agricultural activities might keep the nation marginally fed, no amount of beans, rice and Tequila could ever be expected make it prosperous.  Hard times were coming down.  And they did.

While the Marshall Plan was restructuring the industrial machinery of America’s erstwhile WW-II enemies, Mexico remained firmly outside the favored circle of  Gringo largesse.  The seriousness of the situation was perhaps best dramatized by the increasing flood of “wet-backed” Mexicans who waded the Rio Grande, in search of a better life on the other side.

American policy blinked at this illegal incursion, since agriculturalists in the southern and western sectors of the United States especially, welcomed it.  They needed the cheap labor that the ‘braceros’ represented.  Mexican authorities fumed about the flight from "la Patria" – while  urging its expatriates to send ‘hard money’ dollars back to their families, who remained trapped in the corruption-ridden and  under-performing domestic Mexican economy.

The infusion of U. S. dollars sent back into Mexico by the 'ilegales' on the north side of the Rio Grande were a major assist in keeping much of the country from actual hunger, through the 1950's and '60's.

Mexico learns its morality lesson --

By the beginning of 1970, it was obvious that Mexico had experienced a serious change of heart concerning the big neighbor on the other side of the Big River.  The stark side-by-side contrast of American affluence and Mexico's widely-shared poverty was a visible and functional imbalance that could no longer be tolerated.  Dark hints about revolution were regularly heard in the private clubs in Mexico City, Monterey and elsewhere.  The Partido Revolucionario Institucional maintained its corrupt strangle-hold on the levers of political power, but it could not surmount the national economic shortfall by its own devices.  It had to have outside help, and liberal financial assistance if it ever hoped to begin emerging from the grinding poverty that progressively tightened its grip on the country, and in the rural areas, especially.

In the meantime, the impovrished and increasingly restive civil population publicly called on its government for economic help, while privately talking about extreme measures - should public needs go unanswered. 

It was not until the seventh decade of the twentieth century that Mexico really got serious about regaining membership in the North American “family” of nations.  Having experienced thirty years of economic hardship and a kind of industrial ‘blacklisting’, Mexican political leadership  had finally - and most reluctantly - arrived at the conclusion that rampant corruption was costing it much too much;  that international cooperation - and honest dealing with the wealthy neighbors – was not just a choice, it was the only possible alternative -if Mexico ever expected to find its own  place within the ranks of the affluent First World.

The awakening had only arrived after decades spent in the school of hard knocks. Enlightenment had been a long time coming.

Sweeping up the broken glass --

Along the way, the peso had declined precipitously and constantly.  To the extent that, at the end of the Administration of Carlos Salina de Gortari, (1994) default on Mexican National bonds was imminent and unavoidable without direct outside intervention.  Only a US$20-billion direct loan from President Bill Clinton, to Presidente Ernesto Zedillo averted a frightening potentially calamitous fiscal disaster that carried hemispheric monetary implications.  The rest of Latin America held its collective breath, as the Mexican peso tottered on the edge of the economic abyss. With this near-miss economic crisis behind them, Mexico got extremely serious about its political  reformation.

The law-and-order folks also got serious about their responsibilities, much to the discomfiture of the lawless ‘political upper crust’, who had previously languished under a tacit immunity blanket that made laws – as applied to them – a bad joke.

A couple of broad-daylight assassinations of political celebrities were seriously investigated for a change. Indictments were handed down, and people who had engineered the political "hits" went to prison for long periods of time.

One of these incomprehensible jail-birds was Mario Salinas, brother of the outgoing Mexican Presidente, Carlos Salinas de Gortari!  The shock-waves jarred their way through the body politic like a series of lightning strikes.

To the extent, in fact, that ex-Presidente Carlos Salinas de Gortari left the Palacio Presidencial,  and immediately opted for exile in Ireland, rather than remain in Mexico, and predictable residence in a Mexican prison – along with the seizure of his wealth obtained by brazen “illicit enrichment”.  It is now generally agreed in the high levels of government that, should ex-Presidente Carlos Salinas return to Mexico, he will surely be grabbed, tried, imprisoned, and his Swiss bank accounts seized by government order.

Need it be added, this would have been considered unthinkable just five years ago.  Success in Mexican politics has carried with it a companion immunity  ‘license’ to engage in any kind of corrupt activities, for as long as memory runs. Personal enrichment at the public expense has been a standard "perk" of political office in Mexico for at least a century. 

Some political historians insist that Honduras learned its corrupt tricks of the trade from the Mexican example 

A Mexican miracle at the ballot-box -- 

The crowning achievement of Mexico’s reformation, came in the form of a PRI defeat at the ballot box , when the Partido Revolucionario Institutional lost its year 2000 election. This was the first time in seventy – that’s right, SEVENTY – years for such an unthinkable result to occur.  Even more surprising, as soon as the result became apparent, the outgoing Presidente, Ernesto Ponce de Leon Zedillo, went on public radio and T-V, to graciously concede the defeat of his own party, and congratulate the victor, the former chief executive of Coca Cola in Latin America, Vicente Fox.

As this is being written, the entire country is in a general state of euphoria and near-disbelief.  After seventy years of PRI corruption, political murders, social dominance and blatant criminality backed up by de-facto immunity, the prospect of an honest government, to people who – through their entire lives have never known one – is an extremely heady experience.

Coping with a shameful past -- 

The expulsion of the illegal occupants from the Punta Banda land in Baja California is just the most recent evidence of  Mexico’s requisite resolve to turn over a vastly overdue “new leaf”.

The sleazy details of the Punta Banda situation have been gracefully skirted with the explanation that -  “Mexico's highest court ruled last week (October 25, 2000) that because of a bureaucratic mistake nearly three decades ago, a Mexican company known as Purua Punta Estero was wrongly stripped of land on the peninsula”.

My ‘inside’ informants tell me that the “bureaucratic mistake” involved some hefty bribes  paid into the outstretched hands of  “Catastro” officials, who then transferred land belonging to an absentee owner, Purua Punta Estero, to a group of  crooks who proceeded to set up the Lengueta Arenosa, otherwise known as “Sandy Spit” real-estate development.  The land transfer involved forged and fraudulent documents and the rest of the land-thieves bag of tricks.  All of this banditry is included – some thirty years after the fact – under the highly elastic label of  “bureaucratic mistake”.

Background on the 1938 oil expropriation --

In mid-August 1947, I was on assignment in Mexico, and had an opportunityto interview  a man who had been in the middle of it.  Jack Slatterty, had been a Field Engineer with Standard Oil of California, when the Mexican expropriation took place.  An excerpt from that interview will go far to explain the international reputation of Mexico, at that point in time:

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Belveal:  Are you telling me that Standard of California could find no way to  avoid the confiscation of its properties by Mexico?

Slatterty:   Certainly we could have avoided it.  We even knew how much it would have cost at that time.  – For five-million U. S. dollars, the Mexican Supreme Court would have declared the expropriation unconstitutional, and we would have been able to continue operating our properties.

Belveal:  Your properties must have been worth lots more than that.  Why didn’t you cut the deal?

Slatterty:  Because we had no confidence in the integrity of the Mexican Court.  As the institution is set up, each time the structure of the Court is changed – even a single Court judge replaced by another appointee – the Court may, on its own motion, review (and reverse) any previous decisions of earlier Courts.

Belveal:  So?

Slatterty:  So, had we paid the first five-million, they could have shuffled the Court a bit, and called our case for ‘reconsideration’ in six months or a year. A favorable decision the second time around might have cost us six- or seven- or ten million.  This game can be played as many times as necessary.  Mexico wanted our oil fields and sooner or later, Mexico was going to get them.  We decided to save money, and not even start down that dead-end road.

The key consideration in all of this was that Standard Oil of California and its British associate, had no confidence in either the Cardenas government, or the politically appointed and motivated Supreme Court, that was bound to follow instructions, regardless of law, logic or established, civilized, judicial practice.

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Without confidence, business can not proceed.  The foreign oil companies, who had invested a mountain of money in their Mexican venture, simply quit the game.  And in following this well-publicized example, a host of potential international investors also left - or stayed away in droves! 

An object lesson for Honduras --

The parallels between Mexico, during the first half of the 20th Century, and contemporary Honduras, are too obvious to require painstaking recitation - but with a single exception:  Honduras has no oil.  With this single glaring difference, all of the flaws in Mexico’s approach to international relationships in 1938, are present in The Honduran national mind-set today.  Let’s check them out:

First:  Honduras clearly believes that national sovereignty is a national license to engage in any and every kind of legal skullduggery that can be invented, so  long as it is blessed by the vastly underpaid and politically motivated Honduras Corte Suprema de Justicia.

Second:  Honduras seeks to function as if its identity as one of the most corrupt nations on earth is a secret from its past and potential creditors.  This is sheer absurdity.  Honduras is an atrocious credit risk, and has been for as long as the litany of its defalcations on fiscal obligations runs.  Potential lenders, whether private, institutional or international, are fully aware of this and are accordingly guarded in an kind of dealing with Honduras.  It could hardly be otherwise since, if history is any indicator, whatever obligations undertaken will probably not be performed upon. 

Third:  The Honduras judicial system, rather than the guardian of the nation's honor,  is the first line of defense for criminally inclined politicians, as witness the Constitutional “Immunity Blanket” and its companion piece, the “Publicity Gag-Law”.  In combinations, these infamous inventions make licensed criminals out of the full range of elected (and some appointed) officials. Should immunity not suffice, the "Publicity Gag-Law" makes it a crime for editors,  reporters and broadcasters to inform the public of  the sorry truth concerning corrupt, conniving and peculating public officials.  Honduras occasionally fires a miscreant judge, when his or her perversions of law and reason reach intolerable levels of unreasonableness.  But the almost automatic "Judicial Reviews" that obtain in more civilized venues, are virtually unheard of in Honduras.

Needless to say, firing a crooked judge is phyrric at best, unless the abuses of power that occasioned the sacking are also reversed.

Although it took some thirty years for the judicial misdeeds surrounding Punta Banda to get official attention, it is a credit to the Mexican Supreme Court that, urged on by an honest election, they finally acceded to the request of the long-deprived victim, and agreed to accord Judicial Review to the shameful, if dust-covered particulars.  And once those learned law-givers saw what had transpired, they had the forthrightness to order Reversal.

Better late than never --

This Mexican case makes a bad joke out of the implicit promise of ‘swift and speedy justice’ and a mockery of the reminder that “justice deferred is justice denied”.  But  most will surely agree that ‘late’ is preferable to ‘never’, where justice is concerned.

The fact that there is no statute of limitations on fraud seems to carry its own message to both perpetrators and victims:  Where conspiracy, collusion, aiding and abetting in the commission of crimes of property are concerned, civilized law is never content to “forget about it”.  As long as documentation exists to verify the excesses of felonious activities on the part of common criminals and venal judges and officers of the court, the machinery of justice calls out for recognition and correction of the errors.

This ancient protocol in judicial procedure goes under the name of “Judicial Review”.  Its very existence is tacit admission that, try as honest men might, laws, courts and procedures are not perfect.  But an honest and honorable juridical system stands ready to re-examine its mistakes and – within the limits of human mortality – to reverse the errors of judgment and procedure that stand as ugly stains on the judicial escutcheon.  A court system that is not willing to afford Judicial Review to victims of flawed adjudication, incompetent or corrupt judges or other departures from the pertinent laws and facts, is an abomination to the nation that allows it to continue to function.

Corruption as a 'system of government' --

By enacting a constitutionally mandated "immunity blanket" for elected officials - and some appointed ones - Honduras has shamelessly inscribed the enabling act that make 'licensed' criminals of the very people who are charged with public administration throughout La Republica.  This in itself is so perverse as to boggle the mind of anyone with a scintilla of perspective concerning the obligations and the honorable mandate of an elected government.

By thus perverting and prostituting the sacred charge of popular government, Honduras has succeeded in making its federal structure a laughing stock throughout the world, and its citizens objects of pity in the eyes of  free people everywhere.  Until this changes, nothing else will.

Honduras is suffering for the cumulative misdeeds of those who have - one after the other - promised to lead the nation out of its corrupt morass, and into the respectable company of its sovereign contemporaries. Repeatedly, this pledge has proved to be an amalgam of hollow promises and arrant lies. Each successive administrative cadre works its own modifications on the abuses of its predecessors, and the descent into abject national poverty continues unabated.  

It is no accident of fickle fate that Honduras is universally recognized as one of the five or six most corrupt nations on this planet.  The ugly wounds are self-inflicted, and any Honduran citizen can name at least a few of the self-described "national saviours" who bear major responsibility for the awful  outcome.

Mexico, a model --

The Mexican example in ending seventy years of rigged elections, and an honest attempt to clean up its rotten court system, points in the only direction that promises surcease to backward, corruption-ridden, economically devastated Honduras.  There is no viable alternative, since Honduras has little or nothing left to either steal or exploit - except the hollow claim to hypocritical 'sovereignty'.

Sovereignty no longer impresses the global neighbors as it once did.  The sovereign failures are too obvious to be missed.  The sovereign breaches of honor and common decency are too glaringly cavalier to be overlooked.

The international message to Honduras is too clear to be misinterpreted: The time has come to either clean up your act, or suffer the consequences of your own sovereign sins.

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Lorenzo Dee Belveal, Author

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