Monday, January 29, 2007

Oaxaca, Mexico: Juarez University shut down, again, and yet again..


Well, what is it this time? Friday, it was for a march led by the university's rector, Francisco Martínez Neri, (you remember him from here, and here, and here, and here, and here), in demand of 80 million pesos in additional money from the state government. Neri said that the university's budget is "a pittance". If one stops by the university to see all of the recently completed buildings and views the ongoing major construction projects, one justifiably could question that pittance description.

Today, Juarez University, as well as satellite campuses in Tehuantepec and Huajuapan, has been closed by the university's teachers union. It is demanding, among other things, bigger food baskets, the elimination of 200 non-union employees, land for housing and better health insurance. That is in addition, of course, to the 80 million pesos that the rector wants.

Relative to the food baskets: It is a common practise, and a popular one, in Mexico to give some portion of a worker's pay in the form of food. This is popular because the cost is deductible for the business and is non-taxable income for the employees. In most Mexican businesses, everybody up to and including the top executives receive a weekly food basket, called a "canasta básica". The rules are pretty strict. Everybody gets the the same sized "basket" and there is a limit to the value of the "basket", above which it is no longer deductible. In other words, the boss's "basket" can't contain champagne and a worker's "basket" mere beer. I italicize basket because it's not a real basket. It's usually a sack or box or, most common of all, coupons called "vales de dispensa" which are redeemable at all the grocery stores.

In any event, the rector wants more money and closes the university in demand of his money and the union wants more money and closes the university in demand of its money. With the university closed so often these days, why do they need more money? There is nobody there. But these people don't offfer any suggestions as to how to get that money. They have no ideas for generating any money. They don't proffer proposals for attracting investment or reducing expenses or cutting back here and there to save money.


There was a great article in Reforma or El Universal a few months ago which I can no longer find, in which a Mexican think tank warned the universities, from gigantic UNAM on down, that they had best start looking for ways to raise their own capital, ala the USA. Because of the clauses in the Mexican constitution guaranteeing free education to everyone, everyone has sat back and waited for the money to roll in. Most people think the constitution guarantees a higher education, but it does not. It only guarantees primary and secondary education. However, the historical subsidies paid to the universities have fostered this belief. When that money is not forthcoming, the students, the unions and the university officials all take to the streets.

The think tank suggested that Mexican universities begin to build their own endowment funds which they currently do not have. Try to imagine an American uninversity surviving without an endowment fund. Harvard's is the biggest, at 29.2 billion dollars as of June 30, 2006. That fund's return on investments through the first half of 2006 was more than 16% annualized. That's about 2.75 BILLION DOLLARS in new money added to the fund in 2006 alone. No one at Harvard will be marching in the streets demanding a bigger food basket.

Harvard may be a bad example because it is so big (19,500 students compared to UNAM's mere 155,000 students plus 105,000 high school students . . . ahem). Let's take another example. The endowment fund for tiny Grinnell College in Grinnell, Iowa, student body 1566, is about 1.4 billion dollars. And why does a small liberal arts school in Iowa have such a gigantic endowment fund? Because the school's founders and its administrations down through the years didn't sit on their butts waiting for money from the state or federal governments. They also didn't march in the streets demanding bigger food baskets. They went out and raised money. Their own money. Independent money.

UNAM recieves 90% of its funding from the government. Indiana University receives only 25% of its funding from the state. IU gets another 25% from tuitions paid by students and the rest it gets from endowments, endowment fund income generated by investments, gifts and the selling of its research services to the state, the federal government and private businesses and NGO's. (Crest toothpaste was developed at IU's school of dentistry. How many millions did the schoool get paid by Proctor & Gamble in licensing fees for the Crest recipe?) In other words, the university and its staff, students and teachers must earn half of the money they need to operate the university. That would be anathema to students and educators in Mexico if they were told they actually had to do some work to raise their own money. They'd burn down the universities first.

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Playas de Rosarito, Baja California: Corruption driving away investments

A lady from San Diego, along with her two daughters, was in Playas de Rosarito to finalize the purchase of a $350,000 condominium. They were stopped in their car by a "Preventive Police" officer for some traffic infraction. He demanded 63 dollars in cash and said he couldn't give them a receipt because he "didn't have the proper forms with him."

The lady had some guts. She forked over the money and then proceeded to the meeting with the real estate agents, property owner/seller, the lawyers and the Notary Public. According to a local Chamber of Commerce official who was present,
"She told me she would not live in a place where the police, whose duty it was to serve and protect, were instead doing the stealing."
Hugo Torres Chabert, president of the Consejo Coordinador Empresarial de Playas de Rosarito, lamented that "They demanded 63 dollars and that canceled a 350,000 dollar transaction."

Torres told Reforma that the corruption is not only slowing foreign investment, it's driving it away. He said that in the past year alone, 12 investers, principally real estate developers, told him they were leaving the city due to the lack of security. The city has 150 Municipal Police officers for 160,000 residents, the same number of cops it had when it was disjoined from Tijuana and given its own municipal government 9 years ago.

Jesús Alfredo Pérez, director of Seguridad Pública Municipal de Playas de Rosarito since November 22 of last year when two former officials were removed from their offices over corruption, said that he is aware that there are some bad elements in the police force. He admits that the city's lack of rules and procedures for police hiring, a police training facility and reliable controls have all contributed to an influx of undesireables into the police force.
"Yes, we recognize that there are probably some bad elements but we are in the process of evaluation (of individual officers, I presume) so that the person who has no business being here, it would be better that he leave."
Well that's certainly a strong statement. What that tells the bad guys is that they've got at least 5 years, probably more, to continue operating with impunity before the city will be in any position to do anything about it.

To give Pérez the benefit of the doubt, he may be the most honest cop to occupy the director's position in the whole 9 year history of Playas de Rosarito. And he has inherited a nightmare. And he probably has no money with which to work. This in spite of 220 million dollars in land and property sales in 2006. That kind of money should have generated a lot of income for the city, both from the transactions as well as the resultant construction, developement and arrival of inhabitants.

But in Playas de Rosarito as well as in the rest of Mexico, bribes to government officials, black market businesses and off the books transactions rob the municipalities (i.e., the people) of desperately needed funds for municipal and social services.

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Saturday, January 27, 2007

Memeorandum: Gabe Rivera et al are trying to kill me



I'm back. I really should have tried to post yesterday or even Thursday night, but several large boulders fell on me during my R&R in one Mexican hospital or another and I've been trying to dig out from under them. Thank you all for the very kind and concerned comments and Emails. I'll try to answer them as I get time.
This blogger has, for the past 3-4 years, made it a habit -- no -- a ritual, to open each session at the keyboard with a visit to Memeorandum. I probably hit this website 4-6 times per day, every day. I instructed Susan to do the same. She is not a big fan of the political punch-outs that take place daily in the blogosphere and Memeorandum was not a site that she visited on a regular basis.

My only contacts with Memeorandum have been with Gabe Rivera, but I must assume he does not manage this website alone, standing behind a curtain pulling levers and punching buttons a la The Wiz. Hence, the "et al" in this post's title. When I lit up my computer today for the first time in almost 2 weeks, this is what I found awaiting Poppa and his delicate condition (and I give them to you in the exact order in which they appeared before my horrified eyes):

Kerry rips Bush in front of former Iranian president at Davos; Update: Video added - in which a United States Senator and bitter political reject visits the discredited World Economic Forum and rips his own government to the delighted applause of the former president of a country run by anti-Semites, murderers, rapists and child molesters. A government that also is financing and supporting the almost daily murders of American soldiers in Iraq and Afghanistan.


Kerry: U.S. A "Pariah" Nation Under Bush


Kerry Slams US In Davos Summit


John Kerry With the Enemies of America

On to a new subject, but it doesn't get any better ("Oh yeah. This just keeps gettin' better and better." -- Brendan Fraser in The Mummy after defeating 10 or so zombies and being counter-attacked by 50) -- Is Gabe Rivera a zombie bent on Mark in Mexico's destruction?:

Tens of thousands in D.C. protest war -- In which AP reporter Larry Margasak dishonestly bloats a real turnout of barely more than 10,000.


Tens of Thousands Demand Iraq Withdrawal -- In which Calvin Woodward, Stephen Manning and Kasie Hunt, all of the AP, join the liar Margasak in repeating his gross overstatement.

Are we having fun, yet? I'm not. Next:

Davos Notes: John McCain Bites My Head Off -- In which a whining Arianna Huffington whines that John McCain recognized her as a huge, though irrelevant, pain-in-the-ass as well as a Patriotic Terrorist, and treated her thusly.


Davos: Senator McCain on China. -- Well, finally a link to someone who asked a question of Senator McCain, listened to his detailed answer with a open mind, and admits that he learned something. Whew!

Next: (I knew this was too good to last.)

Thousands Protest Bush Policy -- In which the New York Times, not to be outdone by the AP, repeats the "Tens of thousands" lie in the first three words of its report. The NYT goes the AP one step further by hinting that there were many politicians involved, when the AP admitted that only 6 actually showed up.

And so it went, from stories about ex-President Bush becoming so angry at his son's unfair treatment by a hostile (and lying) mainstream media that he sometimes finds himself talking back to his television, to Garry Wills in the New York Times splitting hairs over the meaning of "commander-in-chief", to the fat-assed, ethically challenged John Conyers praising America's enemies Code Pink, Hanoi Jane Fonda, Sean "What's a boat's drain plug for, anyway?" Penn, Tim "Bush is My Devil" Robbins and many others too. Well, it was just very disheartening.

I might remind you that Memeorandum updates like every 30 seconds, give or take, so you won't see what I saw. You can, however, scroll down to the bottom of the Memeorandum side bar to the Archives box, type in - January 27, 2007, 10:00 PM - and then click "Go". You'll see just what I saw.

Hemlock, anyone? Salud!

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Monday, January 22, 2007

Oaxaca, Mexico: Bullets instead of ballots still the rule in Oaxaca

Two opposition political leaders have been assassinated in the past five days in Oaxaca state.

On Thursday past, indigenous leader Roberto García was gunned down in San Juan Copala. García had just announced that his indigenous group would declare the town an "autonomous" zone.

In Mexico there are about 500 villages and towns ruled by "usos y costumbres". The federal government permits these indigenous areas to be governed by the people according to traditional indigenous customs, usually by a committee of tribal elders. It is somewhat like the Indian Reservation governments in the United States or First Nations reserves governments in Canada.

But not in San Juan Copala, Oaxaca, Mexico.

The previous day, in Santo Domingo de Morelos, Pochutla, Oaxaca, Fructuoso Pedro García, was gunned down right in front of his wife. He had the day before announced his candidacy for municipal president. He was a member of the PRD.

This news broke several days after the murder because, as allege his family members and political allies, Oaxaca Attorney General Lizbeth Caña sealed the area and released no information to the press, "to avoid the political implications and allow the murderers to escape."

García's family is preparing to come to this, the capitol city, along with a contingent of townspeople to demand Caña's resignation and that the assassins be found and brought to justice.

He was shot nine times in the back by two subjects who escaped. Also wounded in the attack was a 15 year-old girl who happened to be passing by. Her leg is shattered and docors say they will probably have to remove it.

The state PRD accused the current Municipal President, of San Domingo de Morelos, Pochutla, Roberto José Cortez, of ordering the murder.

"The Municipal President knew that Mr. Fructuoso would win the elction and that would be a danger to them (the PRI) because there have been a lot of problems with the municipal government. This must be the first line of investigation," said Raymundo Carmona Laredo, board member of the PRD.

He added that the State Attorney General and not initiated any investigation of any alleged political implications, much less arrested anyone.

In the U.S. and Canada we play Rock, Scissors, Paper. In Mexico they play Lead, Paper, More Lead.

By Susan Waxley, Oaxaca, Mexico

Please visit the Pale Horse Galleries online store
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by Mexican indigenous artists.

Sunday, January 21, 2007

Mark in Mexico: Guest blogger

Mark in Mexico is Mark in the Hospital right now. He has some type of infection and I am going to try to maintain the weblog until he can return. I am an English teacher from BC, Canada.

I will be translating local news reports for you as well as using his Word files because he has several dozen writings stored there that he has never published. If I can figure out all of his secret codes for his links and image locations, I will be able to post these quite informative articles and reports for you.

I helped him put together the quite enlightening report on Petroleos Mexicanos (Pemex), one of Mark's favourite subjects, yesterday but I was able to find only two of the six images that he intended to include. Sorry.

When sitting at another person's computer, it takes a while to figure out how everything is organized. He has some files encrypted and others which are password protected. He has given me instructions on how to open those files but his wife and I cannot get them open. Until we figure out how to open those files, I can only use the reports and analyses that I find in his Word files.

Stay tuned.

Susan Waxley
Oaxaca de Juarez, Mexico

Elba Esther Gordillo
Secretly spends $5 million US per month of union teachers' dues.

Elba Esther Gordillo, leader of the SNTE, the teachers union, has a political action committee, called the Comité Nacional de Acción Política (National Political Action Committee), which has been carefully hidden from view sonce 1999. This has been revealed to Reforma newspaper by three former members of that commitee who now oppose Gordillo and the SNTE as well as by a dissident opposition group with 100,000 members calling itself the Asociación Ciudadana del Magisterio (ACM - Citizens' Teachers' Association).

Noé Rivera-Domínguez of the ACM says that Gordillo's secret political "network" is composed of 372 full time "coordinators" who are paid between 35,000 and 80,000 pesos per month -- in addition to their teachers salaries -- by the union. That is to say, the 372 full time staff members are being paid two salaries concurrently.

Do we wonder where all the money goes? Do we wonder why the teachers, at least in Oaxaca, go on strike every single year for more money? They need it to pay for things like this.

When Gordillo had her falling out with the failed PRI candidate for the presidency, Roberto Madrazo, she formed her own political party, comprised almost wholly of SNTE members, and put forward her own candidate for the presidency. Her party, PANAL (Partido Nueva Alianza), won 1 Senate seat, 12 Deputy seats, has 8 high ranking members of Felipe Calder'ns government, and 4 state Secretaries of Education are members.

Panal means "nappy", or "diaper", in Spanish, if you were curious. That seems a bit odd to me for a choice of names.

Homero Pólito, former SNTE boss in Veracruz who now opposes the union and Gordillo, says that the 372 coordinators recieved computer training in 1999 when the network was launched. He said he was told, "Don't leave anything that can be discovered."
"All aspects of the network are clandestine, from public opinion pollsters to election poll representatives to district representatives. In every SNTE district they have set up offices with computers, each member is equipped with a telephone or calling cards and each memebr receives 100 to 300 pesos per day in travel expenses," said Pólito, now a member of the SNTE dissidents.
Héctor Lara, now the leader of yet another anti-SNTE teachers group in Baja California, said that Gordillo uses teachers' dues to pay for "get out the vote campaigns, poll watchers, observers and opinion pollsters".

I think what we have to remember here is that every peso spent for the personal political gain of Elbla Esther Gordillo is a peso unavailable for a child's education in Mexico.

By Susan Waxley, Oaxaca, Mexico

See also: Mexico City: Do you wonder where the children's education funds are going?

Please visit the Pale Horse Galleries online store
for art, gifts and collectibles -- all hand made
by Mexican indigenous artists.

Cross posted at Pale Horse Galleries

Saturday, January 20, 2007

Mexico City: Let’s take another look at PEMEX

I’ve made many pointed comments about Pemex, Mexico’s staggering state-owned oil company, as well as written a post or two dedicated to the company. I’ve been challenged, or at least questioned, by some readers about my comments. The latest was by reader Petzcuaro Dave. I had written that Pemex wells were running dry. Dave sent me a link to a Pemex website which would seem to negate my statement. He asks for my sources.

Sources? We ain’t got no sources. We don’t need no sources.
I don’t have to show you any stinkin’ sources.

I thought it might be useful to delve into this Pemex business a bit deeper So, here goes.

First of all, let’s take a look at what international oil production means to us. Last year, the world extracted just about 1 cubic mile of oil. That’s about 26.22 billion barrels at the 42 gallon/barrel US standard. If, as some experts and all the greenies predict, the world will essentially run out of oil in the next 50 years, here is what the world would have to do, starting right now, to replace that cubic mile of oil over the next 50 years.

The world would have to design, build and launch, beginning right now and continuing every year for the next 50 years:

104 coal fired plants -- every year for 50 years = 5200 plants


4 dams the size of the massive Three Gorges Dam on the Yangtxe River in China -- every year for 50 years = 200 gigantic dams


32,850 wind turbines per year -- every year for 50 years = 1,642,500 turbines


91,250,000 solar panels -- every year for 50 years = more than 4.5 billion panels


52 nuclear power plants -- every year for 50 years = 2600 nuclear plants
Now, I’m not sure how the authors of the above intend to use energy from, say, the wind turbines to produce plastic. That technology doesn’t yet exist and may never exist. Look around your house. Try to imagine it with no plastics content. Your computer, telephones, TV’s would all disappear. No cables or wiring would have any insulation. Your car would be gone. Airplanes would be too heavy to fly. You’d have no nail polish remover. Your roof would leak for lack of shingles. It is really unimaginable.

Let’s just say, for the sake of keeping this argument simple, that we need oil, we need it badly, and that need is not going to disappear in the foreseeable future.

So, we need oil supplies. And countries, such as the third world country from which I write, need the income from that oil.

So what is Pemex doing to assure that it can not only supply as much oil as possible but also maximize the income to the Mexican people? Not too much. Before I continue any further, let me emphasize that, when I talk about Pemex, I’m really talking about the government of Mexico, since it is the sole owner of Pemex.

Pemex was formed after 1938 when President Lázaro Cárdenas nationalized Mexico’s oil industry. When a government nationalizes its oil industry, that means that the government steps in and confiscates all of the equipment, drills, pumps, buildings, refineries, vehicles, ships, airplanes, offices, records, bank accounts etc. of the private companies to which that same government had previously sold leases and other rights.

In other words, the government sells licenses to various foreign investors to attract them to invest billions of dollars, then steps in and steals it all. In almost all cases, the government blames the foreign companies, and often the foreign governments, for "robbing" the people’s energy inheritance. Except, of course, when a US company is involved, in which case the local government always blames the US government.

And, frequently, America gets blamed even when there are no US companies involved at all. In Bolivia, the Bolivian Gas War was brought on by a minority group’s charge that the United States was absconding with the Bolivian people’s natural gas inheritnce. But the companies that had extraction rights are all European companies. If an American energy company wanted Bolivian gas, it had to buy that gas from and pay market prices to a European energy company that was extracting that gas. Oh well.

When a company’s property is stolen by a foreign government, there’s not much the company can do except go to its government and ask for help. That’s what a lot of companies had to do in 1938, like, 17 of them. And both the US and Great Britain responded. They boycotted Mexican oil. The only customer Cárdenas could find for Mexico’s oil was Adolph Hitler. And the Nazis couldn’t buy enough to replace the Americans and the British.

Mexico was drowning in oil and going bankrupt. The US and British governments were demanding hundreds of millions of dollars in reparations for the private property that was stolen and the contracts that were paid for and then shredded by Cárdenas. Mexico didn’t have the money.

Then, along came WWII. Oops. Now the US and Britain needed Mexico’s oil. The poker game started. The US and Britain told Cárdenas they’d return to buying Mexican oil only if he agreed to a reparations payment schedule. The bluff worked because Mexico was running out of cash.

Cárdenas had to sign an agreement which put Mexico deep into debt, a national debt which it has never been able to erase. But the oil began to flow again to the north and the east. In order to even make the initial down payment on the reparations debt, Cárdenas had to beg the Mexican people to help. Tens of thousands of people came forward with donations of cash, jewelry and other personal property to help. That may be why, today, Mexicans abhor the thought of any foreign investment except under such onerous conditions that no foreign investors in their right minds can accept.

So the Mexican government and a whole slew of Mexican governments since 1938 have had control of the Mexican oil industry through a government controlled company called Pemex. You know how that had to go. Badly. And it has.

These governments have, year after year and decade after decade, used Pemex as a private funding source. It is estimated that Pemex loses a cool billion dollars a year just to internal corruption.

All of that corruption has little to do with oil extraction or oil availability or oil reserves. What it does do however, is cause gasoline at Pemex gas stations -- the only ones allowed here -- to cost the Mexican consumer about $1.00 per gallon more than that same oil costs once it is shipped to the United States. At an Exxon station in Laredo, Texas, you pay $1 per gallon less for gasoline than you do at a Pemex station just a couple of miles to the south. And that’s for gasoline produced from oil from the same Mexican well.

What that corruption also does is bleed money away from Pemex that should have been reinvested in the company. That loss, along with the Mexican government’s skimming off 60% of all Pemex revenue to pay for all the sub-standard public services that the bloated Mexican constitution guarantees to the Mexican citizens, leaves no money for exploration or drilling for new sources or the technology development necessary to tap those new sources nor even enough to maintain its existing facilities.

That lack of investment in simple maintenance has led to the frequent and disastrous spills, fires, explosions, sinkings, injuries and death, not to mention the environmental catastrophes.

A key number which all US companies watch very closely is the "reserve-to-production replacement ratio". US companies keep that ratio at 100%. This means that a company must have oil in reserve, that is, located but not yet being tapped or oil that remains in deposits that are being tapped, equal to that which it is currently extracting.

Pemex’s reserve-to-production replacement ratio is only 9.6%. That means that for every barrel of oil Pemex removes from its deposits, it only knows of 1/10th of a barrel with which to eventually replace that barrel. In other words, Pemex is running out of oil. Exxon, on the other hand, already has under lease a full barrel of oil to replace every barrel it currently extracts.

Companies must continue to explore and drill test wells to locate and prove new reserves. That costs billions and billions of dollars. Money that Pemex does not have and cannot borrow because its current debt is already a staggering 45 billion dollars.

The Pemex oil field at Cantarell, the second largest in the world after the Saudi’s huge deposit, is going dry. Pemex estimates that Cantarell’s production will fall by an average of 14% per year. That, along with the falling price of oil, spells economic disaster for the country.

And Pemex’s already bleak forcast may be too optimistic to be believed. In 2005, Pemex estimated that 2006 production from Cantarell would be 1,905,000 barrels per day. In fact, up until October of 2006, daily production from Cantarell averaged only 1,778,000 barrels per day. In October, that number dropped even more to 1,653,000. At $26 per barrel (that’s all Mexico gets paid for its heavy Maya crude because of its low quality), that’s an economic blow to the Mexican treasury of $6,552,000 US per day, 2.4 billion dollars this year.

Now, Mexico knows of other deposits. But they aren’t all they’ve been cracked up to be, either.

Pemex reported that it had over-estimated reserves in the Abyssal Plain by 53 percent, making exploration in that area no longer economically viable. In other words, "Poof!" It’s gone.

Pemex’s other proven reserves, the Ku-Maloob-Zaap (KMZ) complex further out in the Campeche Sound, and the Chicontepec deposit off Veracruz, present technological challenges that Pemex cannot overcome. Only the American companies have invested billions in the technology required to extract this oil. Pemex lacks the technology, the engineering expertise and the money to get this oil.

So Mexico is up against a wall. Pemex is running out of oil and doesn’t have the money or the credit to try to replace it. Only foreign companies have the resources available. But Mexico will not allow direct foreign participation in its petroleum industry.

Populist (read; socialist) politicians like AMLO have declared that Mexico will not allow that direct foreign investment, saying, "That’s not for us."

Pemex is headed towards bankruptcy. The company (the Mexican government, really) is 45 billion dollars in debt with 88 billion in total liabilities. Its revenue stream is only 77 billion annually but 60% of that gets skimmed off and sent directly to Mexico City and another billion gets lost to corruption. Its output is dropping by more than 14% per year and it can only replace 9.6% of what it is extracting. It knows of other possible reserves but lacks the technology and the money to prove them, let alone begin extracting. It needs to drill 20,000 new wells to replace its fading ones and that is more than it has drilled in its 70 years of existence.

Felipe Calderón is no fool. He can see what is happening and where it is all leading. He has gone to Congress and gotten some assurances that Mexico will modify its laws to allow some foreign invstment. But he has not yet put that to the test and he has not yet had to face AMLO’s mobs in the streets.

We’ll see what he does.

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Friday, January 19, 2007

La Paz, Bolivia: The natural gas war is a tempest in a teapot

A Bolivian tin teapot, no less. After looking at some numbers, it becomes apparent why Bolivia's Evo Morales wants to rocket the country back into the cocaine business. Get out your calculators. You won't need a scientific or accounting type calculator, the little one your 10 year-old uses will suffice.

Bolivia's natural gas reserves, proven, probable and possible, total 80 trillion cubic feet. The wellhead price for natural gas closed at the end of December at $6.65/thousand cubic feet.

The wellhead price is the cost that buyers must pay the company that owns the extraction rights for the gas, usually by means of a long term lease won in open bidding against other extractors -- the big energy companies. The way this is done in the civilized world is that the company that owns the rights to the well pays the owner of the rights to the gas, in this case Bolivia, a royalty for every cubic foot of natural gas removed from the well.

I've done a lot of checking and I cannot determine the royalties currently being paid to Bolivia by the European energy companies which have extraction rights today. However, in the United States, the federal government charges between 12 and 16 percent of that well head price for royalties. Admittedly, these royalty deals with the companies that remove natural gas from US wells are sweetheart deals for the big energy companies. And they have been for more than 100 years of oil and gas exploration, drilling, pumping, refining, wholesaling and retailing. That's the way it has always worked in America.

But Bolivia does not necessarily have to play by those rules. Let's say that Bolivia demands and can receive, oh, 20% royalties on the wellhead price for Bolivian natural gas. Therefore: .20 x 6.65 = $1.33/thousand cubic feet.

What does this represent in dollars to the Bolivian government?
80,000,000,000,000/1000 x $1.33 = $80,000,000,000 (80 billion dollars).

And what does this represent in dollars each to the 8.6 million Bolivian citizens?
$80,000,000,000/8,600,000 = $9,302.00 per person. Period. That's it. They'll be all out of gas.

And that is only if Bolivia could somehow wave a magic wand or snort enough coke to extract all that gas in the next year. Or in any year, for that matter.

If Evo could hand out $9,302 to each and every living Bolivian citizen this year, it would be more money than 95% of Bolivians had ever seen, much less held in their hands, at one time. Whoopee. And what would Evo do next year for an encore? There ain't no more gas. Bolivians, after only one year of mere grinding poverty, would slide back into abject poverty, right where they are today, except sans natural gas.

Of course, the above example is not how it is supposed to all work. The way it is supposed to work is that Bolivia signs leases with the energy extraction companies and begins collecting $1.33 per thousand cubic feet of gas removed from its sovereign dirt. Then, the government invests that money in schools, teachers, technology and infrastructure to attract foreign investment. That means jobs, incomes, taxes, lifestyles etc.

It shores up its executive, legislative and judicial branches to protect those foreign investments, leading to more foreign investment. That means more jobs, higher incomes, more taxes, better lifestyles etc.

The World Bank and the United Nations and the International Monetary Fund and the New York Yankees all get a big warm and fuzzy and loan the country even more money - well, the Yankees wouldn't loan them one red cent but might consider playing a game or two there in their lavish new national stadium, named, appropriately, Evo Ravine. Try saying that 3 times as fast as you can without bursting into laughter. Yankees or no, that all means even more jobs, even higher incomes, even more taxes, even better lifestyles etc.

That's the way it is supposed to happen. But that's not the way it's going to happen.

First of all, the Bolivian Gas War in which Evo was a leader and which drove two consecutive Bolivian presidents from office was over the demands by a minority of the people that Bolivia sell no gas at all. Forward looking leaders such as Evo realized that Bolivia has gas reserves sufficient for its own uses that will last 2000 years.

Now, thinking outside the box, geniuses like Evo have decided it would be better for Bolivians to remain in abject poverty (as opposed to the ever so much more attractive grinding poverty) by refusing to sell their natural gas; for 2000 years.

2000 years - Time since the birth of Jesus the Christ, approx.
2000 years - The length of the pharaohs'' rule in ancient Egypt, approx.
2000 years - Four times the length of the Roman Republic, approx.
2000 years - Four times the length of the Roman Empire, approx.
2000 years - Double the length of total Roman rule, approx.
2000 years - The age of the Dead Sea Scrolls, approx.
2000 years - The sum total of the years of persecution and murders of Jews, which began in 70 BC with the murder of 1 million in Jerusalem by the Romans and continues to this day in, well, just about everywhere, approx.
2000 years - The age of the necktie, first worn by China's emperor Shih Huan Ti, approx.
2000 years - The age of the universe's oldest known supernova, approx.
2000 years - The age of Bam, Iran's ancient city, when it was destroyed in the earthquake of December 26, 2003, approx.
2000 years - The time since the completion of China's Great Wall, approx.
2000 years - The age of what was originally a Roman camp, now Bonn, Germany, approx.
2000 years - The length of time between the last enshrinement of ashes and bones of Lord Buddha and the latest, in Mumbai (formerly Bombay), India, October, 2006, approx.
2000 years - The head start the Chinese had over the Italians in making pasta, approx.
2000 years - since the Persian empire under Cyrus was more respectful of women's rights than are the Iranians of today, proving that not only the Bolivians are capable of advancing backwards, approx.
2000 years - The history of the Ugyhur culture which China is attempting to erase forever, approx.
2000 years - Since the construction of the Fort Ancient mounds by the Hope-wells in Oregonia, Ohio, approx.
2000 years - Since the last known cannibal feast in the British isles, approx.
2000 years - The head start Cyprus winemakers had on everyone else, including the haughty French.
2000 years - Since ginseng root recipes first appeared in a Chinese medical journal, approx.
2000 years - Since the development of durable leather shoes by the Chinese, approx.
2000 years - Since the ancient Celts first celebrated the Samhain festival, now known as Halloween, approx.
2000 years - Since the end of the Neolithic, or "food producing" period, when the majority of earth's peoples switched to farming, rather than hunting, approx.
2000 years - Since Hippocrates said, "Ars Longa, Vita Brevis," which means, "Bob Knight will win at least one more NCAA championship," approx.

Evo will go ahead with his plans to nationalize the gas fields. Foreign investment, already only a trickle compared to what it was just 10 years ago, will completely evaporate. But Evo will discover that he has to sell gas. Bolivia has nothing else that anybody wants except, of course, coca paste. Evo's socialist government will skim off every penny it possibly can from the gas sales (Hello? PEMEX?) leaving no money for simple maintenance, let alone exploration.

The Bolivian population, believing that Evo has come to save their day, will demand every penny in free, sub-standard education (Hello? Mexico?), free, sub-standard medical care (Hello? Mexico?), low cost, sub-standard and downright dangerous public transportation (Hello? Mexico?) and thousands of kilometers in poorly designed, poorly built and poorly maintained roads, bridges, tunnels and airports (Hello? Mexico?), among a host of other freebies supported by natural gas sales cause there ain't nothing else. Except, of course, coca paste.

And when the whole thing comes crashing down, Evo will get tossed out of office by angry mobs in the streets, just like the last two Bolivian presidents. And the Bolivians can start all over again with a new populist (read; socialist) leader who promises them all manner of things that he cannot possibly deliver; not today, not tomorrow, not ever.

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La Paz, Bolivia: Evo Morales says Fox "Humiliated me. And Calderón is doing the same."

Bolivian President Evo Morales, speaking at a Mercosur conference in Rio de Janeiro, claims that Mexican ex-president Vicente Fox humiliated him. And he says that President Felipe Calderón "is of the same tendencies." What Morales is whining about is a statement made by Fox about Bolivia's refusal to sell natural gas to willing buyers. Fox said, "Well, they'll either have to consume it all themselves or they're going to have to eat it."

That doesn't sound particularly humiliating to me. It sounds more like common horse sense. Now, Fox could have said, "wear it," or "snort it," or "swim in it," or "wait until the Gringos arrive in force to take it away from them," or any number of other allusions to Evo's illusions. If Evo were really concerned about being humiliated, perhaps he would consider avoiding being photographed like this:

Chavez to Evo: "Hungry? Here, eat this microphone."

Evo receives the Staff of Ra as Spielberg weeps in frustration.

Evo wearing a coca wreath and sprinkled with a well known coca by-product.

A brief history of Evo Morales. He's from the tin mining area of Oruro, but the tin mining business collapsed. It collapsed because of the 1952 revolution that nationalized the industry. Hello, PEMEX? The state run company COMIBOL raised miners' wages by 50% but skimmed so much money from the mines that there was none left for re-investment, so the mines went under. Hello, PEMEX?

His family, along with thousaands of other out-of-work mining families, had to move away. They moved to Yungas to try agriculture. But the Bolivian agriculture sector lay in ruins from the same 1952 revolution that took "unproductive" land away from its owners and gave it to the indigenous campesinos. However, the onerous controls over the land rights and the usual incompetent legal ownership controls led to Bolivia having to import food, on the dole, to feed its people.

Stop Bush from what? Sending any more money? Uh . . . OK.

So, giving up on agriculture, Evo moved again, this time to Chapare, the coca growing center. At its high point, this area had 100,000 acres planted in coca. And almost all of that coca was processed into cocaine. Evo Morales grew coca for cocaine. He was a cocaine farmer. But when the anti-drug campaigns reduced the 100,000 acres to 7000, Evo became an political activist.

Note: Coca has been used for centuries by the indigenous in Bolivia. The leaves are chewed to alleviate hunger and are used in a wide variety of folk medicines. However, almost all of that coca is grown on small family plots, not massive fields of coca. Morales's vow to legalize coca growing for "traditional use" is a mere smokescreen to cover up Bolivia's re-emergence as a major cocaine provider.
He said his drug policy will be "zero cocaine and zero drug trafficking, but not zero coca or zero cocaleros," Morales said.

But since Bolivia's mostly successful campaign to control the coca industry, the drug cartels have found other suppliers for their coca paste, namely Columbia and Peru. So how will Morales inject Bolivia back into the mix? There is only one way and that is by offering a lower price than the cartels are now paying. Which, of course, means that the indigenous campesinos will be receiving less money for their coca paste and will remain mired in poverty. Congratulations!

Let them chew coca leaf, I guess.

Now, as Bolivia's first ever indigenous president, Morales wants to revisit the tin mining disaster, this time with the natural gas fields. Worse, he also is refusing to even sell his country's natural gas. Hence, Fox's "humiliating" comment. He has also announced that he intends to take over "unproductive" land and give it to the peasants. That idea was tried and failed already.

He vows to repeat the disastrous nationalizing which destroyed Bolivia's tin industry, repeat the disastrous land reforms that caused the country to import food for the last 50 some years, food for which it has never been able to pay, and again become the world's #1 supplier of coca paste for cocaine. One has to wonder if this guy is capable of any original thought.

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Thursday, January 18, 2007

Tabasco, Mexico: Ex-governor Humpty Dumpty Andrade continues to fatten up with the peoples' money

Ex-governor Manuel Andrade Díaz of Tabasco must have been seriously misinformed by his staff. Someone convinced him, erroneously and, I am sure, unintentionally, that the citizens of Tabasco all had more than they could possibly wish for. Hence, there was nothing left for the state to do with its overfilled coffers but spend money like, well, Massachusetts Democrats.

The humungously fat ex-governor, famous for being invited to a tamale festival and gorging himself on 12 of them in front of horrified onlookers, spent more than 20 million pesos refurbishing the governor's mansion in Tabasco, known as the Quinta Grijalva. He installed new cedar and oak woodwork, new marble floors, a new kitchen, a new dining room, an office for his wife, another office for his private secretary, a nursery bedroom for his newborn son and even bought a forklift for "unloading food".

Manuel Andrade bragging that he lost 44 kg (100 lbs.) last year. Mercy!
He says he accomplished this by taking walks and "driving his own car".
The new forklift will also be used to help him get into and out of the car.
Note in the above photo that the Reforma photo editors, in order to get anything else in the picture besides the governors paunch, had to squash the image. Hilarious.
The additions also included an upstairs spa, a billiard room and yet another kitchen and dining room. The design was supervised by Elvira Pola de Andrade who is neither architect nor design engineer but does happen to be his wife.

The 20 million peso figure is the announced cost for the new construction only. The total cost for all of the modern conveniences, furniture, contemporary art, historical art and sculpture and the billiard room as well as the luxury appointments has not been released.

To top it all off, Andrade commissioned a 199 page cocktail table book detailing the planning and work that went into the project along with 40 photographs. He was, however, clever enough to avoid posting said photos on the net thereby keeping them out of the greedy hands of Mark in Mexico who surely would have splashed the colorful tributes to his wife's interior decorating skills all over this web page.

Governor Andrade also spent some 33 million pesos to refurbish the government palace during his tenure. That's more than 53 million pesos (and still counting) in 4 years spent to improve the lives of the average Tabasqueño provided, of course, that any average Tabasqueño could ever gain admittance to either of the opulent installations.

Andrade unveils monument to the "taco de cochinita", his favorite junk food.

Not yet finished with the dispensing of what must have been a disturbingly fat and unspent state budget surplus, Andrade commissioned a giant 40 foot monument to . . . himself. This fantasma is slowly having its ugly head raised smack in the middle of the Reforma-Dos Bocas highway in Villahermosa, the state capitol.

MA -- Monumental Ass

The cost of this mega project, whose usefulness and advantage to the average $2 per day wage earning Tabasco campesino has yet to be determined, has yet to be announced. The current state administration's Secretary of Communications, Héctor López Peralta, says the budget for the Monument to a Fat Man is, "under restriction". That means that the cost of this particular white elephant is none of anyone's damned business.

The Secretary of Communications defended the monument as being indicative of the governor's ability to spend federal funds on highways. "I think that it is worthwhile in that it will remain as a symbol that will be representative of the governor's administration." If he was referring to the ablity of Andrade to flush tens of millions of pesos down the sewer of incompetance and corruption as well as self-agggrandizement, then I'm sure we must all whole heartedly agree.
Note: After the completion of the 22 million peso (and still counting) fix-up of the governor's mansion, Andrade held an open house. He invited Tabasqueños to all come and visit a home such as they could never dream of occupying. He gave out lollipops to the children, one each, and a glass of punch to the adults, also one each.

He handed out little flyers to everyone which stated that the upstairs included 4 bedrooms, an alcove and an 8-sided sitting room. He then made sure that no one was allowed uptairs to see the second kitchen and dining room, the spa, the bar, the billiard table or the nursery. The 199 page cocktail table book with the 40 color photographs was also, er, scarce.

If you go to this webpage, you can see that two photos are posted of the open house. Both photos show people lined up to get into the mansion. There were originally 6 photos. Four of them seem to be missing. There does not seem to be a single photo available of the inside of the mansion. Reforma had one posted yesterday but I cannot find it today. When you snooze, you lose, I guess.

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Wednesday, January 17, 2007

Oaxaca, Mexico: "Human rights" group blames government for everything

A group of activists from Europe, calling itself La Comisión Civil Internacional de Observación de Derechos Humanos (CCIDH), has issued a report to the press which blames the state government for all of the civil unrest which has occurred over the past 8 months here in Oaxaca. I don't know who these people are, but they are not to be taken too seriously for a whole host of reasons.

  • The CCIDH released this report to the press without first or at least simultaneously giving it to the government.

    This would indicate to me that the group is more interested in self promotion than in actually accomplishing anything. As of this morning, the state government still did not have a copy of the report but government officials were being questioned about it. Not yet having even seen the report, let alone read and analyzed it, they were unable to respond.

  • The CCIDH blames 20 deaths of APPO activists on the government police and/or paramilitary hit squads. The group's spokesman, one Ignacio García, says,"There is not one shred of evidence that any of these deaths occurred in armed confrontations."

    That is, to put it succinctly, a bald faced lie.

  • The CCIDH says, "The government's prosecutors and judges have not respected, in every single case, the rights of due process not have they acted as guarantors of the application of the law."

    Let's examine that statement for just a moment. A federal policeman (PFP) has a nail laden rocket fired at him from almost point blank range on Macedonio Alcala. Surviving that attack, the PFP officer and his compatriots chase down and arrest the gunner. The gunner is hauled off to jail. The state prosecutor (Ministerial Publico) takes the report from the police officers and files formal charges against the rocketeer. A judge reads the report and issues an order to keep the gunner in jail and sets a bail amount. A week or so later, someone pays that bail and the APPO thug is back on the street, awaiting his trial date.

    That happened 144 times on November 25 and in the weeks that followed. But the CCIDH says that "in every single case" the government has not followed due process.

  • The CCIDH rejected the idea that APPO was a violent group and had any "armed elements".

    Obviously, the CCIDH had no representatives on the ground here in Oaxaca from mid May through the end of November. If it did, those observers were deaf and blind.

  • The CCIDH report does not mention, states not one word about barricades in the streets interfering with the daily lives of innocent people, the loss of 4 months of the school year for 1.3 million school children throughout the state, the hijacking of government and privately owned buses, trucks and cars, the torching of those vehicles in the streets, the spray painting of public and private property all over the state requiring some 300 million pesos to clean up, the economic disaster brought on by APPO's violent acts in the streets, the kidnapping of and assaults on both government employees and civilians, the torching of privately owned businesses, the vandalism and robberies of both government and private property nor even the assaults on the homes of Double Whoppers with Cheese and Big Macs where the children's play areas bore the brunt of the vandalism.

Have there been human rights abuses on the part of the government? Of course there have been. Has the state government violated the law? Of course it has. But if one, or more specifically, a group wants to take the government ot task for those violations, it must be fair and even handed. The CCIDH has gone public as a mouth piece for APPO. The organization should not, therefore, be taken seriously.

When a report such as this is issued that is pock marked with inconsistencies, glaring discrepancies, omissions and statements of fact that are easily refuted by just looking around, then the entire report is suspect. One has to question the report in its entirety when there are so many obvious errors. And one has to question the goal, scope, scheme and agenda of such a group.

In fact, this website says that the CCIDH did not arrive until 18 December and yet it has already issued its report. In less than four weeks this organization has managed to investigate - it claims to heve interviewed "more than 350 APPO members and state and federal government employees", research and write and issue a "report" - to the press.

For its part, the state government has responded through the state Secretary General of Government, Manuel García Corpus, who told reporters he had not yet received the reports of the various human rights groups operating in Oaxaca. He reminded reporters that the state government would respond only to the National Human Rights commission, The Inter-American Human Rights commission and the United Nations' High Commission on Human Rights. All three of these organizations have staffs in Oaxaca and are working on their respective reports.

I don't expect those various reports to be particulary complimentary to the state government. But I also don't expect those reports to absolve APPO goons of any and all responsibility for what occurred here from mid May through November of 2006. I they do, then those reports are not to taken seriously either.

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Tuesday, January 16, 2007

Mexico City: Tortilla prices - you can't have it both ways

Allan Wall sends me an article from Mexidata about the controversy over rising tortilla prices. The article points out, without Allan belaboring the point, how politics and clear-headed economic analysis just don't mix.

Now, Allan lives in Mexico and likes to be a polite guest, which I wholeheartedly respect. His article is to-the-point and filled with logical, however polite, economic and political analyses. Mark in Mexico labors under no such self imposed restrictions.
Note: Here in Oaxaca we are now paying 10 pesos per kilo (about $0.91 or $0.41 per pound US) for white corn tortillas. The price for yellow corn tortillas is the same but should not be. I won't touch yellow corn tortillas because I don't like the taste. Many places claim they produce their tortillas from white corn but in fact use yellow corn meal or a mixture of the two. It is easy to detect the difference just from the smell if they are using all yellow corn. It is more difficult, at least for me, to discern the difference between pure white corn tortillas and those made with a blend of yellow and white corn meals. You buy once and don't return if you discover from the taste that the lower quality corn meal has been used.
Mexico cannot produce enough cheap yellow corn, used for animal feed in the USA but ground into meal and processed into tortillas which are eaten by poorer people here. Nor can Mexico produce enough white corn which is preferred by most people here, even if they cannot afford it. When a country cannot produce enough food to feed itself, especially when that food is and has been the number one staple for more than a thousand years, then the food must be imported from someone who can. It is really pretty simple.

Additionally, when that basic foodstuff becomes more and more rare, buyers must bid more to acquire it. The sellers can hold out for the highest bid before shipping their white or yellow corn to the tortilla makers. When the price they pay for corn increases, the tortilla makers have to increase the price they charge for the tortilla. That is pretty basic economics. There is nothing spooky or magical or mysterious about it.

Case in point: Pay a visit to two new car dealers. At the Ford dealership, you can wheel and deal and negotiate, seemingly for hours, over almost every new Ford on the lot. Then cross the street to the Toyota dealer. You will find a completely different ballgame. In fact, there's no ballgame there at all. The Toyota dealer is selling every vehicle his factory can ship him. The Ford dealer is not. The Toyota salesman will negotiate over delivery date and that's about it. You pay the sticker price. If you don't, the next buyer will.

That's what Mexico is up against. And the president and his economic team know this. To get the prices for tortillas down, Calderón must allow the importation of more corn. In fact, he has to encourage it. The state of Iowa alone is capable of burying Mexico in a mountain of cheap and quite affordable corn meal, be it yellow, white or any other color.

When that cheap corn meal hits Mexico, the country's own producers, in most cases the small. already dirt poor farmers, will be out of business. They cannot survive on their sales at their current higher prices, let alone compete against American producers at much lower prices. So, something's got to give.

If Mexicans want to enjoy lower tortilla prices, they'll have to buy corn meal from Iowa. There is no other way. I use the word "enjoy" loosely. For millions of Mexico's poor, the tortilla is about all they've got and all they've ever had. And now they cannot afford even that.

So, what says the opposition? They are demanding that the new president's new Secretary of the Economy resign. They want his head because he and Calderón, at least so far, have refused to follow the time honored Mexican procedure of immediately shifting billions of pesos to stopgap this problem and away from another serious problem somewhere else where those billions were initially destined.

It's a shell game. If you move the shells quickly enough the people cannot ever find the peanut and you make it through your six year term and you get monuments, streets, parks and maybe a pier or two named after you. And, 25 years hence, people will still fondly remember what a great president you were because HE LOWERED THE PRICE OF TORTILLAS, DISALLOWED THE IMPORTATION OF THE GRINGO'S DIRTY CORN AND KEPT THEIR VORACIOUS HANDS OFF OF PEMEX!!!!

The opposition is demanding a halt to the programmed elimination of protective tariffs on corn imports. The opposition is demanding government price supports for Mexico's poor and inefficient corn producers. The opposition is demanding lower tortilla prices fer everbody.

The opposition is demanding "nutritional sovereignty" to go along with their "energy sovereignty" which has created the nightmare in the oil, gas and electricity sectors, their "political sovereignty" which has led to Chavez, Fidel and, well, whomever, operating freely inside the country to feed money and weapons to whatever guerilla army and their "law enforcement sovereignty" which has led to at least six Mexican states falling under the control of one drug cartel or another. What a bunch of incompetent morons.

It kind of reminds me of our own incompetent morons. At least they understand basic economices, even if they ignore it in pursuit of their own feathered nests. Nancy Pelosi and her nanny state Democrats just raised the minimum wage from $5.15 to $7.25. Now, Nancy and her minions understand that by raising this minimum wage, tens of thousands and maybe hundreds of thousands of jobs will be lost. They just don't say so -- openly.

Especially in American Samoa where Del Monte and Star Kist maintain their tuna canning plants and are, by far, the largest employers in the islands. And Nancy, remembering her 17 million dollars in Del Monte stock, proposed and had exempted American Samoa from the new minimum wage. That is, until she got caught. Being a native Spanish speaker is no requirement whatsoever for being a four-flushing, two-timing, snake-in-the-grass liar.

And, uh, oh yeah, Star Kist is 75% owned by Del Monte which is, in turn, 75% owned by Heinz, whose largest single stockholder is Teresa Heinz Kerry, wife of failed presidential candidate and highly successful buffoon, Senator John Kerry.

And in the end, who has to pay for all of this "sovereignty"? PEMEX, of course. You remember PEMEX, don't you? The state owned oil company which has and continues to create environmental disaster areas in the states of Veracruz and Tabasco. The state owned oil company that is sitting by as its oil wells dry up because it doesn't have enough money to explore for more. The state owned oil company that supplies Mexico with 70% of its total anual operating budget. The state owned oil company that watches helplessly as 58 pesos of every 100 it collects from its customers get skimmed and sent off to Mexico City. The state owned oil company that loses a cool 1 billion dollars per year to internal corruption that no one has as yet the courage to step in and stop.

The state owned oil company that the politicians in Mexico City will never allow to be tainted by foreign investment or threatened by foreign competition. No, they'd rather its destruction be 100% Hecho en Mexico.

The morons in the PRD and the PRI and the PVEM (who threaten all manner of trouble if genetically engineered corn is allowed into the country) want cheap corn, cheap tortillas and no competetion from imports. In their pea-sized brains, it is as easy as a presidential decree. Presto, Change-o! Cheapy-cheapy tortillas forever in Aztlan.

Sorry, boys. Your president knows better even if, in the end, he is forced to start shifting around the shells so no one can follow the peanut. And I really don't think he much gives a damn whether there is ever a Parque Calderon.

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Saturday, January 13, 2007

Cancun, Mexico: Raúl Martíns and a plot too thick to get much thicker

This whole story of Cancun pimp chief Raúl Martíns is so intriguing that I cannot let it go.

On July 18, 1994, the Asociación Mutual Israelita Argentina - AMIA - building in Buenos Aires, Argentina, was destroyed in a suicide bomb attack. 86 people died in Argentina's and possibly South America's worst terror attack.

What does a terror attack in Buenos Aires, Argentina, 7 1/2 years ago have to do with a couple of whorehouses and a pimp in Quintana Roo, Mexico? A lot, apparently.

Claudio Lifschitz, ex-attorney for Cancun's pimp chief Raul Martíns, has come forward to spill the beans on his former client. If you are a bit behind on this story, you should stop here and first read this post and then this one. Then come back.

Former Argentine president Carlos Menem launched an investigation into the terrorist bombing. He named Argentine federal Judge Juan José Galeano to head the investigation. This investigation would be run parallel to another probe into a 1992 blast at the Israeli embassy in Buenos Aires that killed 28. That investigation had borne no fruit.

Claudio Lifschitz, prior to becoming Raúl Martíns personal attorney, was appointed "prosecretario" to Judge Galeano's investigative team. A prosecretario is, depending on what source you read, either the judge's personal secretary, the #1 or #2 or #3 man in charge of the investigative team. I opt for #2 man-in-charge.

As such, Lifschitz was privy to a lot of hanky panky being carried out by Judge Galeano. When the investigation began to turn up evidence implicating the Iranian government and Hezbollah in the attack(s), Judge Galeano began to steer the investigators away from the Iranians. He did this because, attorney Lifschitz charges, President Carlos Menem was paid off.

Lifschitz laid out his charges in a book he published in Buenos Aires, titled, "AMIA". Lifschitz alleges that Menem, after being informed that the Iranians were behind the attack(s), sent a "bearded man" to Tehran to meet with Iranian President Akbar Hashemi Rafsanjani. During this meeting, Lifschitz alleges, Rafsanjani agreed to pay Menem $10 million dollars. That money has subsequently been discovered hidden in a Swiss bank account in Menem's name.

Lifschitz further alleges that ex-president Menem, because of his Syrian ancestry, allowed two Syrians to escape from Argentina shortly after the AMIA bombing and then covered up their escape by ordering airline passenger lists and Argentine immigration records destroyed. One of those Syrians, Lifschitz alleges, was a cousin of Syrian President Assad.

Indeed, Judge Galeano tried to affix responsibility, or at least complicity in the attacks, on a car thief named Carlos Telleldín and various Argentine provincial police officers engaged with that thief in a car theft ring. When a video tape of Judge Galeano surfaced where he was recorded offering Telleldín $400,000 US to implicate the provincial police, Galeano and his investigative team were in hot water.

Judge Galeano and two of his top prosecutors were subsequently impeached and removed from office for "serious irregularities and breach of duty". In fact, only the car thief and a handful of Argentine police officers have ever been prosecuted and jailed in relation to the terrorist bombings that killed 114 people. And they are in jail for being unlucky enough to steal and later sell a van to the suicide bomber.

Current Argentine President Nestor Kirchner has called the botched investigation "a national disgrace". Additionally, Kirchner's government has issued arrest warrants for various Iranian government officials, including former president Rafsanjani, himself.

You still don't see the connection to a pimp in Cancun? Have patience and refer to the post's title where I declare "a plot too thick to get much thicker".

Raúl Martíns and his now deceased first wife were both players in the Argentine military junta's dirty war against the leftist opposition during the 70's and 80's. That dirty war included the governments of Brasil and Paraguay which form, with Argentina, the "Triple Frontier". It is through this lawless expanse of real estate that many Arab terrorists have entered South America and, probably, made it into the United States.

Before proceeding further, I would, in the interest of fairness, point out that the leftist opposition to the Argentine government was not all innocence and light. The opposion had evolved into several bloodthirsty Marxist and Maoist groups which murdered with impunity and financed their operations with kidnappings carried out against Argentine businessmen, political leaders and their respective families. It is estimated that the kidnapping operations alone netted the opposition some $70 million US during the 70's and early 80's and they murdered thousands of people.

In any event, Martíns was a big player in 13 years of government kidnappings, assassinations and the disappearances of somewhere between 9000 and 30,000 Argentine citizens.

When the military junta turned power back over to an elected president after their disastrous war with Britain over the Islas Malvinas, now known as the Falkland Islands because the Spanish speakers lost the war to the English speakers, a sham prosecution was launched against the former junta and its leader, General Jorge Rafael Videla. This fake prosecution was supposedly conducted to bring to justice all those who had spent more than a decade conducting a terror campaign against the Argentine people.

A bought off President Raúl Alfonsín and a bought off Congress made sure that the prosecutions didn't go too far when they passed a law called the "Due Obedience Law" which stated, among other things, that officers and employees of the military junta who carried out the dirtiest details of the dirty war could not be held responsible for following the orders of their superiors.

A lot of money was changing hands. A whole lot of money. And the payoffs continued.

New President Carlos Menem sealed the fate of the dirty war prosecutions when he took office by issuing presidential pardons to more than 200 top officials and military officers, including General Varela himself. This allowed operatives like Raúl Martíns and his now deceased first wife to breathe a sigh of relief and get on to other business.

That other business consisted of opening 11 sex clubs in Buenos Aires and catering to the whims of "VIP's". As we know, many of those VIP's were video taped during the exercise of their whims, however whimsical.

When current Argentine President Nestor Kirchner conducted his presidential campaign in 2002, however, all of that changed. Kirchner vowed that, if elected, the dirty war prosecutions would be restarted and the terrorist bombings of the Israeli embassy and Jewish AMAI building would be revisited. Raúl Martíns decided to high tail it out of Argentina.

He left the 11 sex clubs in the care of his son, Agosto, in Buenos Aires and then skated to Tijuana, Mexico. In tow he brought along his personal attorney, Claudio Lifschitz, who by now was quite unpopular in many circles in Argentina.

And Martíns made the right move. Kirchner was duly elected Argentine president and, as promised, he went to work. He and the new Congress squashed the Due Obedience Law, apologised to Israel and Argentina's Jewish population (at 200,000, the largest outside the USA in the Americas), and reopened both the terror bombing investigations as well as the dirty war prosecutions.

Lifschitz, after publishing his bombshell book which helped to lower the boom on ex-president Menem and his crooked Judge Galeano, was now engaged in defending various members of the old military junta. The fit with Martíns was a perfect one. His close association with a former employee of the military junta as well as the vast expanse of territory that lies between Buenos Aires and Cancun would serve to protect him from reprisals.

However, once a spy, always a spy. Martíns, still in close contact with his old intelligence service buddies, began to get pressure to, in turn, put some pressure on his attorney. Lifschitz says that Martíns began to insist that Lifschitz recant some of the charges made in his book. Martíns also began to demand that Lifschitz destroy evidence that Lifschitz had squirreled away as a life insurance policy.

Lifschitz says that various friends began to warn him that his life was in danger. Lifschitz says that he himself began to wonder when "my body might turn up someplace". Lifschitz kissed off Martíns and has now gone public.

So, there you have it. We go from leftist terrorists in Argentina, Brasil and Paraguay in the 60's and 70's to the Argentine government's dirty war in the 80's to suicide bombings by Arab terrorists financed by Iran's government of Jewish targets in Argentina in the 90's to a whorehouse and a pimp and a loose-lipped Argentine lawyer in Cancun, Mexico in 2007. Fascinating.

Where else could you learn all this on a Saturday afternoon?

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Friday, January 12, 2007

Cancun, Mexico: Ex spy chief, now pimp chief, to Mexican authorities: "You want to close my clubs? Watch for film at 11."

UPDATED: Please scroll down.

It has now become a little more obvious how Cancun's pimp chief, the Argentine ex-spy chief Raúl Martins, manages to keep his prostitution operations alive and well. He films the movers and shakers during their visits to his clubs as they get moved and shaken.

It appears that Argentine authorities' attempts to get Martins back are not being moved by desires to bring him to justice for his activities during the Argentine military's dirty war agasinst its opposition. It seems that Martins was blackmailing those he relied upon for protection for his businesses to assure that they continued to, er, cooperate.

His protector-chief in Buenos Aires was Federal Judge Norberto Oyarbide, accused of receiving $15,000 US per month in bribes from Martins. When it looked like Judge Oyarbide was going to bail out on him, Martins released to Argentine television a video of the federal judge committing hanky panky with a young boy at one of Martins's gay clubs. Kind of a warning shot to other protectors who might also have been thinking of jumping ship.

In 2002, federal investigators got warrants to search Martins's family members' safe deposit boxes in Buenos Aires banks. There, among other things, they found a video of the head of the Buenos Aires Crime Commission, Judge Mario Filosof, playing some "games" with two young ladies in Martins's employ. Quite embarrassing. And that's what led Martins to visit Mexico on a 180 day tourist visa -- in 2002 -- and never leave.

Now the authorities in Cancun and Quintana Roo State have been forced to answer after Reforma's reports hit the wires yesterday. And the answer is more than typical of politicians and bureaucrats caught like deer in the headlights. They're pointing fingers and blaming everyone else.

The Cancun representative of the Mexican Attorney General's office, Pedro Ramírez Violante, whose name and private phone numbers appear in Martins's little black book, blamed another branch of the federal government, the Immigration Institute. He said that, for 1500 George Washingtons, INM officials grant FM3 work visas to the foreign girls being housed against their will at Martins's clubs.
"They come here on tourist visas and, taking advantage of the supposed connections between this gentleman Martins and immigration officials, they receive visas which allow them to stay and work in our country in exchange for, I believe, 1500 dollars."
One might pause here to ask why, if the PGR is well aware of this, prosecutor Pedro has not taken any action. One might.

Quintana Roo Governor Félix González Canto quickly agreed to an interview to disassociate himself and his state government from any responsibility for Martins's untouchability in Cancun and Playa del Carmen by blaming the federal courts:
"The business known as The One (the Cancun bordello) operates under the protection of federal "amparos" (restraining orders) which prohibit the city government, the authority with jurisdiction here, from closing the night club."

"In 2006, the municipal government tried three time to initiate procedures to close The One but federal amparos prohibited these actions."
The Secretary General of the Cancun city government took the state governor's lead, but added a hooter of his own. He agreed that the amparos issued by federal judges impeded any action by the Cancun government against the clubs. Besides, he added, "the neighbors don't complain."
"The One has not generated any citizen complaints, like those we received for 23 other locales (other clubs closed by the city government between 2006 and Hernan Cortez's arrival in 1519)."
Hmmm. Does that mean I could set up a suitcase nuke factory in Cancun and remain under the legal radar so long as the "the neighbors don't complain"? I certainly hope Osama doesn't hear about this.

Raúl Poveda, legal representative for the "tolerance zone" Plaza 21, who should know a little about such things, says that Martins's "health clubs", as he so discreetly called them, have not been touched in spite of the fact that the federal amparos are "clearly invalid".

I'm not too sure what the Plaza 21 "tolerance zone" is, so if any readers know, please send an Email and enlighten me.

So, city, state and federal officials are all blaming one another and everybody is blaming federal judges for issuing amparos which a not disinterested competitor calls "clearly invalid". What has everyone really shaking in their boots is the quite real possibility that their "exercises" at the "health clubs", The One in Cancun and Maxim in Playa del Carmen, have been filmed and may well hit the 11 o'clock news.

UPDATE I: A little more info on Plaza 21, the "tolerance zone" in Cancun. Apparently, the city government has been trying, albeit half-heartedly, to confine all the strip joints and table dance clubs to one zone in Cancun. Plaza 21 is supposedly set up as the area, kind of like a red light district, for such activities. The problem is that Cancun authorities just can't seem to get Raúl Martins and his Argentine lovelies to relocate there.

And there have, indeed, been actions taken against The One, his club in Cancun; just not too seriously. In 2004, the ex-spy's Cancun club, The One, was closed by city authorities 3 times, on 14 May, 15 Ooctober and 8 November. Each time, the club was able to re-open in spite of not having a valid operating license and owing back taxes on the property.

The initial operating license for The One was issued by Mayor Juan Ignacio García Zalvidea in 2002. That license was good fro one year but has never been renewed.

Ex-mayor García is a member of the PVEM, the Green Party, another of Mexico's "parties of the people". Ex-mayor Garcia was just released from jail after cooling his heels for over a year behind bars after putting up a 70 million peso bail. He is accused of all manner of economic crimes against the city. A 7 million dollar bond requiremment is high for even the USA, but is extraordinary for Mexico. Where did he come up with that kind of money?

Further light is also shed on the Cancun government's silly assertion that The One stays open because "the neighbors don't complain". In a June 6 operation against "black market" sex clubs, the city closed a number of them, but all were outside the "hotel zone" because "the citizens in the hotel zone didn't complain."

There are no citizens living in the hotel zone. It's all hotels. And, in any event, the people who stay in the hotel zone are not citizens. And what tourist is going to take time out from his very expensive Cancun vacation to spend an entire day filling out paperwork at the local prosecutor's offic lodging a complaint against a night club? Ridiculous.

The city government admits that The One operates outside of Plaza 21, the only area permitted for the strip joints and table dance clubs. But, again, the city government blames the federal amparos for tying its hands.

Raúl Poveda of Plaza 21 (again -- this guy is just asking to get shot, ain't he?) says that the federal amparos carry no weight when "hygiene" and public health are involved. He says that there are combined responsibilities for health and hygiene inspections carried out by The State Department of Hygiene, the city government and the state's Public Health Commission and federal amparos cannot stop those inspections. So, he says, in these cases Martins uses force.

This past year, a contingent of inspectors arrived at The One to conduct their health and hygiene inspections but were met outside the front door by Martins's goons and were driven away by force. The city's answer was, er, to do nothing.

And, on December 16 of last month, in Playa del Carmen, Martins's club Maxim was raided by immigration officials. Seven Argentine beauties were hauled away. However, after paying a $1400 dollar fine to the Playa del Carmen city government, Maxim reopened. All Martins had to do, beside grease some palms, was promise to confine the club's business activities to "bar and restaurant".

UPDATE II:And now the Argentine ambassador to Mexico, Jorge Raúl Yoma, weighs in, sort of, while also playing dumb. He says he has sent a note to the Mexican foreign relations secretariat offering any help to Mexican law enforcement agencies that Argentina could provide. He said, however, that any crimes related to prostitution in Mexico and visa violations must be handled by Mexican authorities.

He also said that he had sent a note to Argentina's foreign relations secretariat, informing tham that an Argentine citizen, one Raúl Martins, was causing some trouble here. He said that he had asked his government if it had any outstanding charges against Martins for the ex-spy's activities during the Argentine Military Junta's dirty war. And, if so, that Argentina would seek the extradition of Raúl Martins to face justice in that country.

Right. They are so happy to be rid of Raúl Martins that I doubt they ever want him to set foot on Argentina's soil again. Their worry is, no doubt, how many video tapes he might be carrying with him should he return.

Please visit the Pale Horse Galleries online store
for art, gifts and collectibles -- all hand made
by Mexican indigenous artists.

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