Head of Mexico's powerful teachers' union jailed

E. EDUARDO CASTILLO OLGA R. RODRIGUEZ Associated Press Published:

MEXICO CITY (AP) -- Mexico's most powerful woman was formally charged with a massive embezzlement scheme on Wednesday, standing grim-faced behind bars live on national television in what many called a clear message that the new government is asserting its authority.

The country watched rapt as national teacher's union head Elba Esther Gordillo heard the charges against her read by a judge in a grim prison in eastern Mexico City. It was a dizzying fall from power for a woman who traveled on private jets and maintained properties worth millions of dollars in Southern California.

Gordillo was charged with embezzling 2 billion pesos (about $160 million) from union funds and was arrested Tuesday afternoon as she returned from San Diego for a meeting of leaders of the 1.5 million-member National Union of Education Workers she has led for nearly a quarter-century. She was heading the union's fight with President Enrique Pena Nieto's administration over the country's most sweeping educational reform in more than 70 years.

Her arrest came a day after the president signed the reform into law.

"This is a case that has absolutely no political motivation," Attorney General Jesus Murillo Karam told the Televisa television network.

But most Mexicans scoffed at the idea that prosecutors had just found out that Gordillo -- known for her designer clothes, luxury cars and plastic surgery -- might be corrupt. Many saw it as a shot across the bow of potential foes by the Institutional Revolutionary Party, or PRI, which ran the country for seven decades, was thrown out of power in 2006 and won back the presidency last year.

The message: Don't commit Gordillo's mistake of publicly opposing the president's reform efforts.

"The message is that, if this can happen to Elba Esther, it can happen to anyone," former Mexico City Mayor Manuel Camacho Solis told MVS Radio. Prosecutors said they had detected nearly $3 million in purchases at Neiman Marcus stores using union funds, as well as $17,000 in U.S. plastic surgery bills and the purchase of a million-dollar home in San Diego.

The arrest immediately sparked calls for prosecutors to bring similar cases against other union leaders known for lavish spending. The main opposition parties specifically named the leader of the country's oil workers' union, accused by local news media of giving his son a $2 million Ferrari, a report that has never been confirmed or denied.

The arrest of Gordillo sidelines a powerful opponent of the PRI while showing the party as unafraid to take on a figure many blame for the dire state of the Mexican education system. Gordillo was a PRI leader for decades before splitting from the party, which was accused of corruption and authoritarian practices during its decades in power.

"This can be something very good for the country, but also for the government and for the PRI," said Jose Antonio Crespo, a political analyst at the Center for Economic Research and Teaching in Mexico City. "It cleans up the image of the PRI, as if to say, "Yes, we will be a different PRI, we're moving forward, not backward."

Pena Nieto is also proposing reforms that would open the state-owned oil company to more private investment, a move that could awaken similar opposition from that union.

But teacher's union members had been the only ones marching in the streets against reform in recent weeks, and the fiery Gordillo, who rose from teenage school teacher to a maker of presidents, vowed to keep fighting.

"I want to die with the epitaph: Here lies a warrior. She died like a warrior," Gordillo said in a speech on her 68th birthday this month.

Her union's secretary-general said Gordillo still had the group's loyalty, solidarity and affection, but there was no immediate sign of plans for protests.

Asked if he would go after other corrupt union bosses, as opposition parties have demanded, Murillo Karam said "I don't have evidence as clear as in this case."

In a news conference minutes after Gordillo's detention, he said the investigation started in December, just after Pena Nieto took office, when Banco Santander alerted authorities to transfers of billions of pesos, according to the attorney general.

Some funds eventually ended up in bank accounts in Switzerland and Liechtenstein, according to Assistant Attorney General Alfredo Castillo, who said that in one case, $1 million went to a Swiss account for a company owned by Gordillo's mother. Those funds were then used to buy a million-dollar house on the Coronado peninsula near San Diego.

For years, Gordillo has beaten back attacks from union dissidents, political foes and journalists who have seen her as a symbol of Mexico's corrupt, old-style politics. Rivals have accused her of corruption, misuse of union funds and even a murder, but prosecutors who investigated never brought a charge against her.

She was expelled from Pena Nieto's Institutional Revolutionary Party in 2006 for supporting other parties' candidates and the formation of her own New Alliance party. Her support was considered key in giving a razor-thin victory that year to former President Felipe Calderon.

After Pena Nieto's victory, his first legislative achievement was a reform that creates a system of uniform standards for teacher hiring and promotion based on merit instead of union connections. It also allows for the first census of Mexico's education system, which Gordillo's union has largely controlled for decades, allegedly padding the payroll with thousands of phantom teachers.

So great is the union's control that no one knows exactly how many schools, teachers or students exist in Mexico.

The Mexican education system has been persistently one of the worst performers among the world's developed economies, with few signs of improvement.

Mexico spent a higher percentage of its budget on public education than any other country in the Organization for Economic Cooperation and Development except New Zealand but had the lowest expenditure per child in 2009.

Nearly every Mexican 4-year-old is in pre-school, but only 47 percent are expected to graduate high school. In the U.S., the number is closer to 80 percent.

In a television interview last week about education reform, the interviewer told Gordillo that she was the most hated woman in Mexico.

"There is no one more loved by their people than I," Gordillo answered. "I care about the teachers. This is a deep and serious dispute about public education."

Columnist and political analyst Raymundo Riva Palacio said Gordillo is an experienced political fighter who may have lost the keen sense of political calculation that kept her in power for so many years.

"She lost clarity," Riva Palacio said. "Having so much to lose on the issue on which they finally got her, the money, she calculated badly."

Gordillo's arrest recalled the 1989 arrest of another once-feared union boss, Joaquin Hernandez Galicia, known as "La Quina." The longtime head of Mexico's powerful oil workers union, Hernandez Galicia was arrested during the first months of the new administration of then-President Carlos Salinas.

In 1988, he criticized Salinas' presidential candidacy and threatened an oil workers' strike if Salinas privatized any part of the government oil monopoly, Petroleos Mexicanos, or Pemex. On Jan. 10, 198, -- about a month after Salinas took office -- soldiers used a bazooka to blow down the door of Hernandez' home in the Gulf Coast city of Ciudad Madero.

He was freed from prison after Salinas left office.

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Associated Press writers Mark Stevenson, Adriana Gomez Licon and Michael Weissenstein contributed to this report.