Carlos Slim & CIA

by JASON | 9:16 PM in |

Microsoft founder Bill Gates looks to have lost his title as the world's richest man, toppled from top spot by the Mexican telecoms tycoon Carlos Slim.

Three months ago the cigar-chomping Mr Slim quietly slipped past legendary US investor Warren Buffett to take second place in the global wealth league.

Now, thanks to a surge in the shares of his America Movil group, Mr Slim has claimed pole position, according to the Mexican online financial publication, Sentido Común.

It was Sentido Común's founder, Eduardo Garcia, who highlighted Mr Slim's rapidly rising wealth in April, although by his calculations the Mexican had not only beaten Mr Buffett in the wealth stakes by then but also edged past Mr Gates.

Now, however, Mr Garcia says there is no doubt that the little-known Mexican has finally captured the coveted top slot, following a surge in America Movil's shares over the second quarter. This is estimated to have boosted his fortune to an estimated $67.8bn (£33.6bn) - equivalent to 8% of Mexico's gross domestic product - compared with $59.2bn for the Microsoft mogul, putting him in the lead by a decisive $8.6bn.

"When I put Slim ahead three months ago Forbes bumped him up to second place (in world rankings) a few days later," Mr Garcia told Reuters.

Carlos Slim, the Mexican billionaire whose $250 million cash infusion bailed the New York Times out of a tight cash crunch last week, has long-standing business ties with wealthy Mexican businessmen suspected of involvement in Mexico's so-called “Cartel of the Southeast,” the drug trafficking organization (DTO) based in Cancun which came to light two years ago with the crash on Mexico’s Yucatan Peninsula of an American-registered (N987SA) Gulfstream jet carrying nearly four tons of cocaine.

A long-time lieutenant of Carlos Slim's, Fernando Chico Pardo, left Slim's employ to take over ASUR, a publicly-traded corporation which observers accuse of moving large quantities of cocaine through Cancun International Airport, which the company runs and manages.

ASUR controls a total of a dozen Mexican airports, and exemplifies the “corporatization” which has transformed the drug trade in the same process of vertical integration and market consolidation which has left, in other large industries, like automobiles, a handful of global multinational players dominating market share worldwide.

Slim's big investment represents an encroachment into the ownership of an icon of American democracy of a man, and a massive fortune, whose provenance have gone largely unexamined. But on the topic of Slim's shady dealings, all eyes seem to be curiously averted. However it seems highly doubtful the Times' ownership is unaware of them.

The barely-concealed facts regarding Carlos Slim’s shady connections are well-known to journalists in Mexico. They deserve to become more well-known here in the U.S., because links between Mexico's exploding narco-economy and current-world's-richest-man Carlos Slim don’t end with Fernando Pardo's ASUR.

Regardless of how his investment in the New York Times does, analysts say, Carlos Slim comes out a winner. His quarter-billion dollar investment buys him prestige as an owner of one of the world's best-known and most-influential newspapers that his status as the world's second-richest man cannot.

Owning a piece of the New York Times, goes this reasoning, provides the kind of “cover” which credit card commercials call “priceless.”

"Carlos Slim's stake is a danger to the New York Times," said the Seattle Times in a scathing editorial. While calling it "an ominous move," the editorial neglected to mention any of Slim's more unsavory connections. American newspapers don't mention "narco-politicos." It is something approaching a taboo.

Start with a universally acknowledged fact: Despite occasionally valiant efforts by our Southern neighbor, Mexico’s chief growth industry is drug trafficking.

Is Carlos Slim being tainted unfairly for having risen to the top in a troubled country better-known as a corrupt cesspool of gangsters and narco-traffickers than as an incubator for world-class entrepreneurs ready to take on Warren Buffett for the title of "world's richest man?"

Let's take a look. We pretend to no great accounting expertise. We never worked for Arthur Anderson. (Well, maybe that's a bad example.)

But Carlos Slim's numbers don’t add up

Start with a 10-year old wire service story about a former top Mexican drug lord, Amado Carrillo Fuentes, which will provides us with some useful benchmarks. Because of his vast armada of planes, Fuentes was known in Mexico, as “Lord of the Skies."

Fuentes died in 1997 while undergoing plastic surgery during an attempt to engineer the ultimate “Extreme Makeover.” In wire service stories reporting his death, his wealth was compared with that of Carlos Slim, who had just been named Forbes magazine’s 'Richest Latin American."

When Fuentes died, he was worth $25 billion, said the story. Carlos Slim was worth $6 billion.

Other published reports at the time agree with this assessment of Slim's wealth. For example, the May 7, 1999, Mexico City newspaper La Jornada fixed Slim's fortune at “something like $6 billion.”

At about the same time Latin Trade magazine pegged Slim as being worth $7.2 billon.

After working hard for more than 40 years, Carlos Slim was worth a hefty $6 billion.

Fast forward to news reports about Slim's New York Times investment last week. They state Slim is currently worth, variously, between $57 billion and $60 billion dollars.

After already making six billion dollars, a time when most might be tempted to relax and enjoy, Carlos Slim made over $50 billion just in the next ten years.

We can't even begin to imagine what that works out to per hour. But we're sure its a lot. But... is this possible?

Drug Lord and Lord of the Skies Amado Fuentes, recall, managed to salt away no more than $10 or $15 billion a decade. And he was in the cocaine business, where counting your money can be a bigger problem than making it.

Carlos Slim owned Sears. Was there an epic sort of run in Mexico on Kenmore washer-dryers?

Has anyone ever made $50 billion before--or anything close--in just ten years?

We think not. We think something about Carlos Slim smells fishy.

Numerous well-sourced reports in the Mexican press accuse Fernando Chico Pardo's Grupo Aeroportuario del Sureste, S.A. de C.V., (ASUR) of playing ball in the drug trafficking major leagues, pointing a finger at the company's reported complicity in the big "drug move" in September of 2007 which ended with an American Gulfstream jet carrying 4 tons of cocaine crashing in the Yucatan.

Pardo and Slim are not casual business acquaintances. Pardo was Carlos Slim's right-hand man for more than 16 years before striking out on his own, with Slim’s blessing. He retained a seat on the board of Slim’s holding company. And his brother, Jaime Chico Pardo, remains the President of Slim’s major holding, Mexican telecommunications giant Telmex.

Two years ago Pardo attended a big conference, along with some top American "swells" (to use a word popular during the U.S.'s last Great Depression) on "North American Integration" at the Banff Hotel in Canada, according to Michel Chossudovsky of the Center for Research on Globalization.

Former Secretary of Defense Donald Rumsfeld was there. So too was former CIA Director James Schlesinger, and former Reagan Secretary of State George Schultz.

These are, of course, not the kind of guys one thinks of as sipping a little something apres-ski while discussing "Current Trends in Drug Trafficking."

But then there is the matter of the provenance of the American-registered Gulfstream, which was caught in the Yucatan carrying almost four tons of cocaine, which exposed the workings of the Cartel of the Southeast

As it happens, the Gulfstream (N987SA) was known to belong to the CIA in Columbia and Central America, and to fly for the DEA as well, and it had even flown extraordinary renditions, according to exclusive reporting in Narco News.

The answer to that last questions was answered indirectly last week, by the Executive Director of the United Nations' crime and drug watchdog group, UNODC. "Money made in the illicit drug trade has been used to keep banks afloat in the global financial crisis," Reuters quoted

Antonio Maria Costa.

"In the midst of the current world financial crisis, drug money is, in many instances, currently the only liquid investment capital," said Costa. "With little unemployment, the drug trade at this time could be the world's only growth industry."

Most people, perhaps naively, think of drug money as bad. Carlos Slim's investment in the N.Y. Times, on the other hand, may illustrate that some don't consider all drug money to be bad.

Does Carlos Slim represent our drug money? That portion of drug trafficking proceeds which are--of necessity--being regularly re-invested back into the United States?

The New York Times has persuaded a Mexican billionaire to bail it out of impending shipwreck.

Well, not just any Mexican billionaire. Carlos Slim is usually ranked Numero Dos on the Forbes Hit Parade with $60,000,000,000 under his mattress. Heavily invested in stocks, market plunges may have cost him a third of that boodle - Slim's corporations comprise about a third of those that trade on the Mexican Stock Exchange.

The big guns of Slim's empire are Telmex, the Mexican phone monopoly that charges higher rates than any other such enterprise in the wide world, with which he was gifted in an excess of crony capitalism by the reviled ex-president Carlos Salinas, and American Mobil - the Mexican tycoon's cell phone companies dominate 70% of the Latin American market. Also in the Slim portfolio: Inbursa banks; Carso Construction; Prodigy Internet (Mexico's top provider); the Sanborn's restaurant and department store chain; double digit chunks of Sears and Saks Fifth Avenue; the Mixup record store chain; El Globo, the nation's top pan dulce outlet; "La Cigarera", his tobacco cartel in Nayarit state; and most of the neighborhood where I live, the Historic Center of Mexico City.

Partnering with leftist leader Andres Manuel Lopez Obrador, then the Monstruo's mayor, Slim financed the renovation of 34 blocks in this colonial jewel box, a U.N. World Cultural Heritage site. The tycoon's attachment to the old neighborhood is significant - his father was a penniless Lebanese merchant who began with a pushcart on Jesus y Maria Street. Now Carlos Slim owns up to 160 buildings in the old quarter and dominates rental property.

The Forbes Mag's second richest man on earth is a political chameleon who has been a business associate of both Carlos Salinas and the ex-president's archenemy Lopez Obrador. The billionaire recently had the current president, the highly unpopular Felipe Calderon, fulminating when he decried the calamites that Calderon's management of the economy has caused Mexicans. Political pundits cast the tycoon as a master pragmatist whose campaign slogan is "what’s good for Carlos Slim is good for Mexico (and visa versa.")

Slim built his empire on corporate cannibalism and sees weaknesses in enterprises where we mortals do not. There is little else to explain his $250,000,000 investment in the Times, a seriously sagging institution that had only $46,000,000 cash on hand and $1,100,000,000 in debt when the Mexican tycoon came to the rescue. Since his initial investment, Slim has expanded his holdings to 7.4% with the possibility of increasing his shares to 17% ownership - only the Sulzberger family owns more.

Carlos Slim's Midas touch will be seriously tested by the Times. The Sulzbergers dug themselves into a $600,000,000 ditch when they moved into their new corporate headquarters and are desperately trying to sell off the house - the new building has just been sold on a leaseback.

In explaining his Byzantine business strategy, Carlos Slim attributes his attempt to save the New York Times from shipwreck to nostalgia ("I'm a member of the newspaper generation") and altruism ("The New York Times is worth saving.") Indeed Slim has invested in newsprint before, iconoclastically coming to the rescue of left-wing papers in Mexico City (he is a founding investor in La Jornada) and London (The Independent.)

The Slim-New York Times connection suggests a solution for the ailing U.S. newspaper industry. Among possible Mexican investors: Joaquin "El Chapo" (Shorty) Guzman, the capo of the Sinaloa cartel recently listed by Forbes in its up-and- coming billionaire rankings. Drug cartels in Sinaloa are said to already own several dailies in that Pacific coast state.

Total immunity as a perk of employment

Carlos Gutiérrez de Velasco is the paterfamilias of the influential Veracruz-based family which owned the Casa de Cambio Puebla currency exchange, accused of laundering enough drug money through U.S. banks to buy as many as 100 American planes for use in drug-running.

In a recent interview with Mexico City’s Reforma newspaper, Gutierrez, who is also the father of a fugitive from prosecution in the case, claimed his family is the victim of selective prosecution, and alleged a cover-up of the involvement of influential Americans.

He called on Mexico’s President Felipe Calderon to become personally involved in forcing the DEA to explain why only Mexicans are being tracked down and jailed.

The Americans who sold planes to the Sinaloa Cartel buyers enjoy official immunity from prosecution, Gutierrez suggested, while people like his fugitive son, José Antonio Gutiérrez, were being tracked down and hung out to dry.

"Mexican authorities acted based only on information from the United States,” Gutierrez told Reforma, pointing to evidence unearthed by this reporter’s investigation, which revealed the high-level Republican connections of the people selling planes to the Sinaloa Cartel.

Ricardo Ravelo, a reporter for Mexico City' Proceso, has already picked up our evidence of the interlocking ownership of the two American drug-running airplanes ( a DC9 and a Gulfstream business jet) busted in the Yucatan.

The owners of both planes were also in business together in a massive ($300 million) financial fraud, we have previously reported, along with CIA fixer and Saudi arms merchant Adnan Khashoggi.

"'Facts that will never see the light of day' for $500, Alex."

Gutierrez told Reforma, “The U.S. is offering a deal if my son turns himself in. But if he does, the complicity of the aircraft owners in the U.S. will never come up at trial. We need to corroborate and include information uncovered by journalist Daniel Hopsicker and get to the truth.”

Mexicans are being punished for crimes for which their American counterparts are getting a pass, said Gutiérrez, pointing to the dossier which requested the extradition of his family, in which the DEA admits the Americans who sold the planes knew their clients were criminals and drug traffickers. But the sellers are not being pursued, Gutierrez told Reforma, and he wants to know: what's up with that?

Given this background, his relative does not intend to surrender in Mexico seek relief, he stated.

How to walk on a 10-ton coke beef

The scandal began with the bust of the two American planes; but it took off when the Mexican Attorney General’s Office traced the drug money used to purchase the planes to Casa de Cambio Puebla.

That information exposed a major money laundering conduit between Mexican drug traffickers and American banks, notably Wachovia and the International Bank of Commerce in San Antonio Texas, which, the Mexican Attorney General’s office announced, had been used over the last several years to buy as many as 100 aircraft in the U.S. from American owners.

Our investigation, meanwhile, uncovered a paper trail of documents, including FAA registration records, which illuminated previously-hidden connections between Mexico’s Sinaloa Cartel, led by Shorty Guzman, and their (officially non-existent) American partners.

The dual discoveries were a major breakthrough in unmasking the identities of people who the DEA strenuously insists don’t even exist:

The American Drug Lords.

The case, at the very least, is a major political embarrassment in the U.S.’s so-called war-on-drugs. Both of the drug-running American planes—a DC9 airliner (N900SA) and a Gulfstream II business jet (N987SA)—had previously been flown or been connected to U.S. Government Agencies: the CIA and the Department of Homeland Security.

"The Shuffleboard Mob?"

There is more than a whiff of official corruption on both sides of the border, swirling around the story. In the U.S., it is a situation with obvious and serious national security implications.

A U.S. Government connection helps explain the curious fact that both planes were operating out of the sleepy retirement community of St. Petersburg on Florida’s Gulf Coast, a city perhaps previously known primarily as the home of the International Shuffleboard Hall of Fame, or the birthplace of the canary-yellow leisure suit; and confirmation would halt idle speculation about the existence of some previously-unknown crime family in St. Petersburg, FL.

There is no Shuffleboard Mob.

What there is, however, is an airport, Clearwater St-Petersburg International, which has been a federal installation since it was used to train General Claire Chennault’s famous “Flying Tigers” during World War II.

The Flying Tigers, alert readers will recall, is an outfit around which swirled rumors of international narcotics trafficking in support of the Nationalist Chinese.
Small world.

DEA: A Homeland Security internal investigation

In the U.S., the guilty involvement of individuals in the Department of Homeland Security was confirmed to us earlier this year by a high–level DEA official in Miami.

And the Mexican currency exchange operated out of Mexico’s largest airports, requiring a high level of official sanction, obtained in Mexico only through having cronies in high places.

The aforementioned Carlos Gutierrez, for example, has been widely reported in the Mexican press to have been a major behind-the-scenes force during recent Mexican President Vicente Fox’s rise to power.

Amigos de Fox...and Bush?

Claims of selective prosecution notwithstanding, for the past five years the Casa de Cambio Puebla currency exchange was itself getting something of a pass.

Far from being the surprise discovery portrayed by the DEA and the Mexican Attorney General’s office, the Casa de Cambio Puebla money laundering conduit recently shut down has been well known to law enforcement for years.

Case de Cambio Puebla played a central role in the “Friends of Fox” Mexican campaign finance scandal which dogged Vicente Fox after his 2000 election.

The exchange was first fingered by investigators, and in the Mexican press, more than six years ago for laundering overseas money into the 2000 presidential campaign of soon-to-be President of Mexico Vicente Fox, which is illegal under Mexican law.

Worse: The money was coming from DEHYDRATION TECHNOLOGIES INC., a dummy front company located in Alexandria, Virginia… right next door to the CIA.

Worse yet: For the next six years, law enforcement in both the U.S. and Mexico did nothing about it.

And they both use Tony Canales...

The story is reminiscent of the blatant fraud engaged in by Jack Abramoff in the U.S., whose generically named Capital Foundation laundered money with little pretense of philanthropy.

During the run-up to the Mexican Presidential election in 2000, an aide to Vicente Fox named Miguel Hakim incorporated, in Puebla, the generically-named “Institute of International Finance.”

The company existed to receive money (a half-million dollars) from an overseas source: Dehydration Technologies in Alexandria Virginia.

In a sophisticated tri-cornered scheme, the money was then washed through the Casa de Cambio Puebla, before ending up in the pocket of PAN Presidential candidate Vicente Fox.

Mexico's Miguel Hakim and Texas' Tony Sanchez, the owner of one of the banks named in the scheme, IBC of San Antonio, both use one of the best drug lawyers around, a man named Tony Canales.

Enter a Polish Count working for the World Bank

As if the cast were not already colorful enough, Dehydration Technologies was run by Paul Popiel, an apparent Polish Count who escaped Poland when the Russians took over after World War II, and who spent 20 years working at the World Bank.

When reporters from Mexico City newspaper "La Reforma" visited Dehydration Technologies ‘headquarters’ in Belgium, they found that the company’s listed address was a private home, whose long-time residents had no idea what they were talking about, and had never heard of the company.

While there, they picked up a copy of the company’s financial statement, required to be filed by all companies "headquartered" in Belgium.

What immediately attracted their attention was that, for a firm with no visible product, sales, or even an office: Dehydration Technologies was moving a lot of money around.

Everybody's got to be good at something.

"It smelled really bad. We mean, like...really bad."

“Between 1994 and 1997 Dehydration Technologies Belgium SA received loans from an unidentified third party totaling $15 million, while recording losses of $2.2 million, on sales of… $330,000.

Three financial experts contacted by Reforma all agreed.

“It smelled really bad,” they stated.

The financial consultants then asked the magazine not to reveal their identities. Reporters die unnatural deaths with some regularity in Mexico...

Apparently financial analysts are not immune either.

"The Homeland Security Rackets"

The Homeland Security Rackets Scandal offers perhaps the best opportunity to catch a glimpse of the shadowy forces behind the illicit drug trade in America since the cocaine trafficking made visible by the Iran Contra Scandal some twenty years ago.

Not since the downing of a C-130 military cargo plane over Nicaragua in 1986 with Eugene Hasenfus onboard—kicking off the Iran Contra Scandal while revealing massive cocaine trafficking involving Reagan Administration stalwart Oliver North—has an aviation incident been remotely as important or as fraught with significance.

And not since the massive cocaine smuggling through Mena, Arkansas has the CIA’s hand been so flagrantly caught in the cookie jar.


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