Friday, March 01, 2013

From rags to riches to jail; Mexico's top union leader

By Simon Gardner and Anahi Rama

MEXICO CITY (Reuters) - She was Mexico's most powerful woman, feared by presidents and held the future of millions of school children in her hands, but the head of one of Latin America's biggest trade unions now languishes behind bars on corruption charges.

Elba Esther Gordillo, leader of Mexico's teacher's union, addresses the audience during an event in Puebla May 25, 2011. REUTERS/Imelda Medina

With a penchant for plastic surgery, designer purses and luxury villas, Elba Esther Gordillo, the 68-year-old leader of Mexico's main teachers' union, has come to embody the abuse of power by the country's political class.

She now wears a prison uniform at Santa Martha Acatitla women's prison on the edge of Mexico City, facing charges of embezzling around $200 million (131.8 million pounds) from union coffers to fund a lavish, jet-set lifestyle.

She has denied all the allegations against her. Reuters could not immediately contact her lawyers.

Her downfall came this week when she was arrested after openly defying a bid by new centrist President Enrique Pena Nieto to push through education reforms and weaken the power of the union she has led for 24 years in a school system that badly lags international peers.

Openly flaunting her wealth, wearing watches costing tens of thousands of dollars and with a fortune way beyond the means of the 1.3 million union members she led, Gordillo kept successive governments on tenterhooks thanks to the potential votes she commanded, political analysts say.

Gordillo's nickname is "La Maestra" ("The Teacher") and she was once dubbed "Jimmy Hoffa in a dress" after the notorious Teamsters boss in the United States by the late M. Delal Baer, a former director and senior fellow at the Centre for Strategic and International Studies' Mexico project.

Born into a poor family in Chiapas in southern Mexico, an unqualified Gordillo started working as a teacher at 15, following in her mother's footsteps.

Widowed at 18, she moved to Mexico City, befriended the union leader of the day and started to rise through the ranks. Since then, prosecutors say she built an impressive real estate portfolio well beyond the means of any teacher or union leader.

"Anything that gives me comfort and makes me feel good, I do it. I like to eat well, I like works of art. I have weaknesses. No, I'm not perfect. But where is the crime in that," she said in a recent television interview, although she flatly denied allegations of corruption.

"I earn it with the sweat of my brow, I don't steal it," she said. "I am a woman of values."

Videos of the interview posted on YouTube triggered a barrage of insulting comments and expletives.

Gordillo owns two waterfront properties in San Diego's Coronado Cays, Mexico's Attorney General Jesus Murillo says.

One elegant villa was acquired in 1991 under the name of Gordillo's now-deceased mother and has its own boat dock. It was transferred to a company called Comercializadora TTS in 2007, deed records show.

A check to cover a $27,474 property tax bill from Comercializadora bounced in December, San Diego county records show.

Comercializadora is registered at the same property, which was empty when Reuters called. No-one was available for comment.

Murillo says Gordillo's mother owned 99 percent of that company's shares. The property was valued by the San Diego County tax assessor at $4.7 million.

A second property owned by the same company in the same development was purchased for $4 million in 2010. Gordillo also has a clutch of upscale properties in Mexico City.

Murillo said Gordillo's declared income of 1.1 million pesos (56,753 pounds) a year between 2009 and 2012, was well below the bank deposits and purchases they say she made during the period.

She used to hand out laptops to teachers at conferences, and has often been photographed clutching Louis Vuitton or Hermes purses. Newspapers this week published collages of photographs of Gordillo showing a series of facelifts and surgeries.

GRAFT AND 'GRANDPA'S INHERITANCE'

In denying the accusations of graft, Gordillo says she was simply wise in administering an inheritance from her grandfather.

She has also repeatedly denied accusations that she ordered the murder of a union rival in 1981. She was accused by the slain teacher's relatives.

For many years, Gordillo was a powerful figure in Mexican politics and once led Pena Nieto's Institutional Revolutionary Party (PRI) in the lower house Chamber of Deputies.

"Gordillo represented the incredible hold that vested interests have had over Mexican politics, the economy and society over the past 20 years or so," said Duncan Wood, Director of the Woodrow Wilson Centres Mexico Institute.

The union long had a cosy relationship with the PRI, and Gordillo's arrest could help reset the party's reputation, which has long been synonymous with cronyism, corruption and backroom deals.

Gordillo broke with PRI party leaders before the 2006 presidential election and founded the small New Alliance Party. That may have made her more vulnerable to investigation, especially once she made it clear she would oppose any reforms that weakened her union.

Politicians close to Gordillo were notably reluctant to defend her. The New Alliance Party said in a statement it would not issue opinions on the judicial process. Gordillo's daughter has said she does not want to talk about it.

Pena Nieto has insisted the arrest of Gordillo has nothing to do with politics, but inside Mexico it is widely seen as a clear message from his government that it will push ahead with economic and political reforms and will go after troublesome officials who try to block change.

"This goes way beyond education. It's about sending a signal to other unions in particular that they need to come on board to the government's program," Wood said. "As it has played out, I think it has been a stroke of genius."

Mexico's public education system is in a mess, dragging on the potential growth of Latin America's No.2 economy, and many people blame Gordillo and other union leaders for blocking efforts to improve teaching standards.

Some teachers often skive classes themselves, while final year students doing social service are sent in as substitutes for teachers who take jobs within the union and continue to receive their pay packets.

Teaching positions can be passed down through families even in the absence of qualifications, or are simply sold under the table or bartered for cars or other assets.

And with no annual collective bargaining contract for teachers, Gordillo has had the power to demand pay raises and an array of benefits for teachers from the government.

The education revamp aims to tame the union, lift teaching standards and workers' education levels. It was signed by Pena Nieto on Monday, but still requires a new law on implementation.

(With reporting by Anahi Rama and Liz Diaz and Dave Graham in Mexico City and Marty Graham in San Diego; Editing by Kieran Murray and Leslie Gevirtz)