2003International Reporting

The Union Boss is the Only Man to See

By: 
Kevin Sullivan
Washington Post Foreign Service
December 26, 2002;
Page A01

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NANCHITAL, Mexico -- The pilgrims began arriving before dawn, with hope in their hearts and folders in their hands. They wanted jobs, pensions, favors, loans. They stood in line for hours, even when the rain came slashing down sideways, waiting outside a fancy stone house to plead their case to the man with the power: Ramon Hernandez Toledo.

"Uncle Ramon," as he is known to all here, is the local union boss of Petroleos Mexicanos, or Pemex, the national oil monopoly and one of the world's largest producers of crude oil. With annual sales of nearly $50 billion, Pemex accounts for about a third of government revenue in Mexico. That makes its 117,000-member union the most powerful in the country. And as boss of the union's largest chapter, Hernandez's word is law in this town built on oil.

"If he doesn't say so, we don't get it," said Alfredo Canepa Martinez, 63, a retired union worker. "If he says the wind shouldn't blow, the wind doesn't blow."

In Nanchital, 400 miles east of Mexico City near the Gulf of Mexico, Hernandez directly controls the lives of more than 13,000 union workers, from chemists to truck drivers. They cannot hold their jobs, get a promotion, take a vacation or earn retirement benefits without his blessing.

His influence is everywhere. Children in this town of 28,000 grow up studying in schools and playing in parks paid for by the union and worshiping in a church built by the union. They eat food bought at union-owned grocery stores, take medicine bought at the union-owned pharmacy and, more often than not, eventually become union workers themselves. When people need a loan, they often turn not to banks but to the union. When they die, the union-owned funeral home sends them on their way.

But the few people here who dare criticize Hernandez say his power is corrupt, and describe him as a sort of shadow emperor. Angry oil workers allege that he has stolen millions of dollars, draining union coffers to become wealthy and fund political campaigns. They say he benefits from Mexico's weak system of justice, under which those with the right political connections are accountable to no one.

Critics say Hernandez is the true power in town hall, which the union built. Many people interviewed here said the mayor, a union member, could not have been elected without Hernandez's say-so and could not govern without his largesse. When the mayor needs a new road or school or garbage truck, he said he often asks Hernandez for the money or the land.

Alberto Olvera, a professor at the University of Veracruz who studies the union, said Hernandez's influence extends to the justice system. Oil workers angry at Hernandez said they don't bother complaining to local prosecutors and judges, because justice officials work in a building owned by the union and aren't about to rule against their landlord.

"He has the power to influence the decisions of judges, so the judicial power is unable to have autonomy," Olvera said. "You are looking at a place where the past is still alive."

There are hundreds of local strongmen like Hernandez across Mexico, according to human rights groups and academics. Some are union leaders, some own large amounts of land, some are simply well-connected thugs. What they have in common is that they are the de facto government and law for tens of thousands of people. They pass out favors to friends and punish enemies, protected by a system that thrived during seven decades of authoritarian, one-party rule in Mexico.

"It's like a medieval royal court where the king sits there, people line up to see him, and he makes all the decisions," said historian Lorenzo Meyer of the Colegio de Mexico in Mexico City.

President Vicente Fox, elected two years ago after campaigning against corruption, is trying to establish a justice system based on laws, not on the arbitrary decisions of powerful individuals. But local bosses remain a powerful obstacle to those efforts.

As federal authorities try to tear down old castles of corruption, the most explosive scandal is known as Pemexgate. The government alleges that $170 million in Pemex money was illegally diverted to political purposes. They are investigating Pemex and union leaders, including Hernandez, for allegedly shoveling money to Institutional Revolutionary Party, or PRI, for its unsuccessful 2000 presidential campaign.

During the PRI's 71-year rule of Mexico, which ended with Fox's election, it used Pemex as its not-so-secret piggy bank, Meyer said. He said it skimmed off vast amounts of oil money for campaigns and favors, and the looting of Pemex became part of the political culture. Many here say that is a key reason a country with such vast oil resources can't adequately feed and educate its people, more than half of whom live in poverty.

Oil workers have also filed federal complaints alleging that Hernandez has siphoned off money from a union bus transportation business. They claim he has bought houses and cars and enriched himself with funds that should have gone to workers' housing, loans and pensions.

Hernandez declined repeated requests for an interview for this article. A local union spokesman said Hernandez ordered the union to provide "no help" to reporters. A spokesman for the national union said Hernandez and the other union leaders accused in Pemexgate have done nothing illegal, and he accused Fox of conducting a "political witch hunt." Officials from Pemex, Mexico's largest company, declined to comment.

On the streets of Nanchital, many people interviewed said they were only vaguely aware of the allegations against Hernandez, which have gone mostly unreported in the local press.

"He buys reporters," said Jorge Caceres, who covers the union for a local newspaper. Caceres said the union helps pay reporters' long-distance phone bills at a union-run press room, and Hernandez has handed checks for as much as $600 to reporters who earn as little as $2 a story. Caceres said he had never taken Hernandez's money but knows many reporters who have. "You don't have freedom of expression," he said, "if you cannot criticize the person who is giving you money."

Workers here who have created a dissident wing of the union to protest what they see as its abuses say that Hernandez laughs at efforts to hold him accountable while, they say, looting the union for himself and the PRI.

"He does whatever he wants with the money, and nobody can touch him," Canepa, the retired oil worker, said. "People tolerate it and don't demand their rights because they are afraid. If they did, they would get no loans, no raises, no jobs. We're in a circle that we can't get out of."

Awash in Wealth

The union's local chapter receives millions of dollars in annual dues, as well as fees paid by Pemex and profits from union-owned businesses. Hernandez has no legal obligation to tell rank-and-file members how he spends it. By tradition, powerful union bosses have no check on their authority to spend union funds as they please.

"You simply cannot imagine how much money he has," said Elda Luz Palma Martinez, who worked with Hernandez in the union's leadership for five years in the 1990s. Speaking in her small home here, with a concrete floor and few furnishings, Palma said Hernandez forced her out for questioning his financial dealings.

Palma said she saw Hernandez regularly hand union money to PRI candidates. She said other money simply went missing. "He lives totally above the law," she said.

Federal Authorities investigating Hernandez have not filed any charges against him. PRI officials are openly discussing plans to place him in the national Congress next year, where he would be immune from prosecution.

Many here say Hernandez is one of Mexico's many "untouchables." Martin Aguilar, a researcher at the University of Veracruz, said most workers are afraid to criticize him. Others, he said, are so accustomed his power that they see nothing wrong with it. "Corruption is tolerated as long as the union provides them with jobs, schools, health care and other benefits," Aguilar said.

It's a balance that has long existed here. Hernandez's predecessor, Francisco "Chico" Balderas, spent millions of dollars on the town. People here say he too was corrupt, but that he was also beloved because of his generosity.

Union leaders used to be even more powerful, said Arturo Alcalde, a labor lawyer in Mexico City. After major oil deposits were discovered in Mexico in the 1970s, union bosses were so strong that they controlled even the most intimate corners of everyday life: They arranged marriages, named babies and decided on punishments for cheating husbands.

Old-style bosses silenced dissent by bashing heads, Alcalde said. Today, he said, they are just as nefarious, but more subtle: They keep people loyal by providing jobs and benefits, smiling to their faces while stealing behind their backs. "They are just like the Mafia," he said. "They offer people protection, and they are corrupt."

When Balderas died in 1991, Hernandez won a power struggle and was elected to lead the union. Analysts said it has been under his control since, despite his stints in other positions, including Congress, when one of his loyalists nominally served as union head.

Julio Cesar Rodriguez, a leader of dissidents who claim 500 workers locally and 9,000 nationwide, said workers are suffering. He said corruption within the union had robbed workers of money that should be used for loans for homes or to send their children to college. And he said it should have been used to improve the town where they live.

Rodriguez said Nanchital was once a "model city," but that since Hernandez took over, it has steadily deteriorated. The postcard-pretty town square is filled with teenagers eating tacos from a stand in the red-tile-roofed gazebo or using computers at the "American Internet" cafe. But just a few blocks away, the roads are poorly paved, and many houses are crumbling. Workers complain that their salaries have not kept up with inflation, and Hernandez is stingy with home loans that were once plentiful. Rodriguez said many workers can't afford to buy houses that the union built for them.

Mayor Ricardo Castelo Castillo said Hernandez has spent less on the town than his predecessor did, but only because the union has less money now. But even Castelo, one of Hernandez's closest allies, paused when asked if Hernandez had stolen workers' money. "I don't want to say that he steals or he doesn't steal money," he said. "I don't know about that."

Rodriguez said oil workers see the obvious when they look around their worn-down town.

"If the benefits that Pemex gives to the union for the workers actually reached them, the workers would live better," he said. "But the benefits don't arrive. The only one who benefits is Hernandez. If there were an honest use of the money, the streets of Nanchital would be paved with gold."

Centuries of Strongmen

The system of local bosses, who are known as caciques, was introduced by the Spanish conquistadors 500 years ago as a way for a relatively small number of Spaniards to control many Mexicans. When the PRI was created after the Mexican Revolution, in the early 20th century, its leaders realized that the local strongmen could be as useful to them as they had been to the Spanish, said Meyer, the historian.

These people helped build the PRI into the 20th century's longest-running political machine. The PRI gave caciques government money, and they handed out milk for babies, seed for corn fields, cash for school pencils. In exchange, recipients were counted as automatic votes for the PRI. The disloyal were cut off from perks and jobs, and, in some cases, punished violently.

Although the party was defeated by Fox, the PRI system survives in many areas. The PRI still controls half the nation's governorships and mayors and the leadership of many unions.

The long-standing connections between the former ruling party, the oil monopoly and the union endure. Hernandez is president of the PRI in Coatzacoalcos, the nearby oil town where he lives. He also sits on Pemex's 11-member board, a group that includes four of Fox's cabinet members.

Despite the investigations, Hernandez moves about as he always has. He rides in his chauffeur-driven Chevrolet Suburban to the popular restaurant his family owns, to the PRI offices and to union headquarters.

And every morning, crowds looking for favors line up at his home in his expensive neighborhood.

One recent morning, Adela Hernandez waited like a sad statue beneath her umbrella, her bright blue dress and thin shoes soaked through. Her husband, an oil worker, died five years ago, and his pension payments suddenly stopped. With her money running out, she said she is desperate.

So the 62-year-old widow, who is no relation to the union boss, has come here twice a week for two years, lining up with the others to plead her case to Hernandez as he leaves his house in the morning.

"I know he is going to help me," she said. If Hernandez didn't restore her only source of income, however, she said she had nowhere else to turn -- no one else has the power to help her.

At about 8 a.m., a guard told her and a dozen others waiting in the rain that the boss would be out soon. One young woman, who declined to give her name, said her father was retiring from Pemex, and she wanted to inherit his union job and become a Pemex accountant. Under union rules, jobs can be passed to a relative -- but only if Hernandez approves.

"It's so hard to see him at the union office," she said, as the sun rose over Hernandez's house, outfitted with Christmas lights and surveillance cameras. "He's so busy with all the things he's in charge of. It's easier to come here. But now we just have to wait until he wakes up."

Asked if she was bothered by allegations against Hernandez, she looked surprised. "No," she said. "The señor helps us a lot. If we need something, he gives it to us."

Hernandez's chauffeur pulled up. He ran past the waiting workers through the puddles, carrying a package of soft, hot tortillas for his boss's breakfast. That was a good sign, everyone agreed, because Hernandez usually comes out right after he eats. They know his every move, like well-informed students of the local monarchy.

An hour later, however, Hernandez's wife appeared with a bodyguard holding her umbrella. As she stepped into her car, she told the crowd that her husband wouldn't be granting any audiences that morning.


--Researcher Mireya Olivas contributed to this report.