Wednesday, March 10, 2004
The Theft of Mexico: How the 1988 Mexican Presidential Election Was Rigged
De la Madrid
The following article examines this 1988 Mexican electoral fraud, one of the first "computer-assisted" electoral frauds that we know of, in detail. It considers how the fraud was perpetrated, the interests that it served, the corporate and government collaborators who knew about it at the time but kept still, and its far-reaching consequences for Mexico and the rest of Latin America.
Of course Mexico's electoral rigging was not unique. While this case had unusually far-reaching results, similar frauds have occurred in many other developing countries, as well as some "developed" ones. As the technology for organizing and conducting elections becomes more and more digital, some have hoped that we'd able to build in automatic checks and balances that would make traditional "paper ballot-stuffing" more difficult, if not impossible. As we've recently seen in the initial US experiments with electronic voting, however, and as this Mexican case also demonstrates, even sophisticated computer technology is not sufficient to avoid determined fraudsters -- especially high-level ones -- when the stakes are this high.
From the standpoint of First World foreign policy, this is yet another example of the fundamental ambivalence that First World powers like the US, France, and the UK continue to display toward popular movements and democratic choice in developing countries.
Where popular choice favors policies and interests that the First World supports -- as in Iran, Syria, Belarus, North Korea, and perhaps Iraq today -- the First World is all in favor of "democracy." Where popular choice favors policies and interests that it opposes, however -- as in this 1988 Mexican case, Chile in 1973, Venezuela in 2002, South Africa until the fall of apartheid, Nicaragua in 1984, China in 1989 and since, Indonesia until the fall of Suharto, the Philippines under Ferdinand Marcos, Mobutu's Congo, the West Bank/Gaza, Morocco, Haiti in 1991 and perhaps today, and Pakistan -- the First World has little compunction about supporting authoritarian regimes.
We might have hoped that this schizophrenia about authoritarianism was just a Cold War relic, which would have faded along with it. But it continues to this day, and seems to express a much more fundamental, unresolved tension between the First World's desire for "stable conditions and free markets" in these countries, and its desire to see them develop representative political systems.
We arrived at work on the morning of July 6, election day, at the central computer and statistic official.When we got there we discovered that the rooms were empty and our computers weren’t there. We were ordered into a minibus and taken to the Government House (in Mexico City), to a room with blacked-out windows. Our computers had been set up there, complete with the voter database.We started to enter the data. As the supervisors saw that Salinas was losing, they ordered us to leave aside votes for the PRI and only enter opposition votes. Then, at about 3 A.M. on July 7, the supervisor called a halt, and with tears in his eyes, he told us: ”If you care for your families, your jobs, and your lives, enter all votes from now on in favor of the PRI. I went back to work and did as I was told. I wanted to cry, but I had to do it. They kept us there until five or six in the evening the following day. When I’d finished my work, I called up the voting record for my uncle, and to my astonishment the computer record showed that he, an opposition supporter, had voted for Salinas.That was when I realized why we had been told only to enter opposition votes in the beginning. While we were away from the computers, they had reversed all the data from the first session of data capture so all those votes showed up as Salinas votes.
In the first instance, the 1988 electoral fraud made de la Madrid's successor, Carlos Salinas de Gortari, the President of Mexico, and also made him a very wealthy man. It also supplied him with many honors, including a Wall Street Journal board seat (from the early 1990s until April 1997), a near-nomination by President Bill Clinton in 1995 to head the World Trade Organization, and numerous speaking engagements at leading US universities like Stanford and Harvard, his alma mater.
More important, as discussed in more detail in our new book The Blood Bankers, it also cleared the way for Mexico's neoliberal "reforms" of the early 1990s, which set the pace for the entire rest of Latin America. These measures included the North American Free Trade Agreement (NAFTA); the privatization of Telmex, Mexico's state-owned telephone monopoly, Mexico's entire banking sector, and many other state-owned companies; and the rapid opening and deregulation of Mexico's capital markets that ultimately led to the catastrophic 1995 "Tequila" debt crisis.
At the time, these measures delighted Mexico's elite, foreign banks, and leading multinationals, as well as multilateral financial institutions. Even before his “election,” Salinas was already the favorite son not only of Mexico’s oligarchs and party bosses, but also of leading multinational investors like GE, Allied Signal, Alcoa, and GM, commercial banks like Citibank and JP Morgan, investment banks like Goldman Sachs and Morgan Stanley, and, unofficially, the US Government and its financial acolytes, the IMF and the World Bank. In two years before the l988 elections, these two government institutions alone provided Mexico with $4 billion of new credits, while private banks had helped out by by rescheduling $43 billion of Mexico’s outstanding debt -- huge amounts at the time. Before and after the election, a parade of First World leaders, including George H.W. Bush (who was good friends with Salinas’ father, Raul Sr.), Paul Volcker, Citibank Chairman John Reed, newly-elected World Bank President Lewis B. Preston (formerly of JP Morgan), IMF Director Michel Camdessus, and many lesser officials and bankers descended on Mexico to encourage its new-found passion for free markets. They praised the quality of the PRI’s Ivy-League-trained economists and touted Mexico as a model of stability and growth -- much as they had done with Ferdinand Marcos in the Philippines two decades earlier.
Then, at about 3 A.M. on July 7, the supervisor
called a halt, and with tears in his eyes, he told us: ”If you care for your families,
your jobs, and your lives, enter all votes from now on in favor of the PRI.
I went back to work and did as I was told. I wanted to cry, but I had to do it.
1988 Mexican elections
After the 1988 election, foreign investors also stepped forward to ratify Salinas’ agenda. From 1988 to l994, Mexico became the darling of the international investment community, attracting more foreign investment than any other developing country except China. It accounted for nearly half of the $175 billion of new foreign direct and portfolio investment that poured into Latin America in this period. In the wake of the debt crisis, “foreign” investors -- including members of the domestic elite who secretly repatriated flight capital to avoid taxes and conceal their investments -- replaced foreign bankers as the leading suppliers of finance to Mexico and other “emerging markets, ” providing more than three-fourths of Mexico’s entire capital budget.
Much of this capital was attracted by Salinas’ privatization program, one of the most aggressive in Latin America. This involved selling off public assets in key sectors like telecommunications, steel, airlines, and banking, including the re-privatization of all the banks that President Lopez Portillo had nationalized in the early 1980s, and using the proceeds to finance the budget. By l994 this firesale had raised $24 billion, more revenue than in any other Latin American country.
As discussed in our book, in late 1994-95, this balloon was punctured -- Mexico experienced a sharp currency devaluation and a foreign debt crisis, with rising unemployment, declining real wages, and growing inequality. By the year 2000, relative to US per capita income levels, Mexico had fallen below where it stood when Salinas took power in 1988. (World Bank data - 2004).
Neoliberal economists have tended to compartmentalize the analysis of these "reforms," and also consider them apart from their political and social effects, including increased corruption and greater regional tensions within Mexico. Even the World Bank now concedes that NAFTA was "not a substitute for a development strategy," that real wages declined, overall unemployment rose, and poverty and inequality remained huge during the 1990s, and that NAFTA's maximum benefit to Mexico was "a rather small one" of +4-5% of GDP over 10 years -- a rounding error, compared with the -6% impact of the Tequila Crisis in 1995-96 alone. Other analysts, such as Carnegie, are even less enthusiastic.
Salinas' fraudulent election also helped to facilitate the growth of narco-trafficking and high-level political corruption. The connections included Carlos Salinas' own brother Raul, who is now serving 27.5 years for murder. All told, the concentration of wealth and power produced during Salinas' term from 1989 to 1994 amounted to one of the most regressive wealth transfers in Mexico's history. As Don Emilio Azcarraga ("El Tigre"), one of Salinas' wealthiest supporters, told an audience of the PRI's wealthiest backers at a 1994 fundraiser for Ernesto Zedillo, Salinas' own hand-picked successor,
I, and all of you, have earned so much money over the past six years that I think we have a big debt of gratitude to this government. I'm ready to more than double what has been pledged so far, and I hope that most in this room will join me. We owe it to the president, and to the country.
The Mexican magnates responded to this challenge -- that night the PRI reportedly collected $25 million from each of them for a grand total of $750 million. That established a world record for a single evening’s fund-raising. (President Bush, restrain your envy!) Zedillo, a Ph.D. economist who has subsequently returned to Yale as a professor of international economics and Director of the new “Yale Center for the Study of Globalization,” must have been grateful for this incredible act of selfless generosity.
In 1988, with the complicity of powerful interests at home and abroad, as well as many cheerleaders for the neoliberal orthodoxy in the US Government, multilateral financial institutions, and the Establishment Press alike, the Mexican people simply got robbed.
As we approach the US' own 2004 Presidential elections, with all the debate about "electronic voting," it is also interesting to note that computer fraud played a central role in Mexico's 1988 rigged election. UNISYS, the leading US company that supervised that election, has long refused to comment on what happened. But as we'll see below, its Mexico City employees apparently knew all about what was going on.
All told, the consequences of Mexico's 1988 stolen election have been very far-reaching indeed. Some will argue that the gains may have been "worth it" -- that, like Russia's neoliberal reforms in the 1990s, Mexico's ultimately left the country better off, even though they were very imperfect; furthermore, that Cardenas proved to be a disappointment in Mexico City, and if Salinas is to be believed, perhaps even a bit fallible himself.
But all this is really beside the basic point -- ordinary Mexicans were supposed to be allowed to make such judgments for themselves. In 1988, with the complicity of powerful interests at home and abroad, as well as many cheerleaders for the neoliberal orthodoxy in the US Government, multilateral financial institutions, and the Establishment Press alike, the Mexican people simply got robbed again. But perhaps that was such an old story that the US media did not consider it newsworthy.
March 10, 2004 at 03:05 AM | Permalink
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This is an outstanding summary of those until now little-publicized events during Mexico's 1988 election. Those that are recent newcomers to following Mexican politics may find difficult to appreciate just how tightly the information was controlled in Mexico prior to 1994 and how ground breaking is that the information is finally coming to light.
Posted by: sytrek at Mar 11, 2004 12:36:25 AM