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Mar 1, 2013 | 11:00 GMT

5 mins read

Mexico: Consolidating Control Amid Reforms

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The controversial and influential leader of Mexico's largest union, Elba Esther Gordillo, was arrested Feb. 26 on charges that she embezzled union funds. While the arrest is notable in its own right, it is indicative of a larger trend under way in Mexican politics: President Enrique Pena Nieto and the Institutional Revolutionary Party, better known by its Spanish acronym PRI, are consolidating support for the more controversial and politically sensitive of their reforms, and elements that refuse to support these issues will either be co-opted or forced out of the political system. Gordillo's arrest shows the PRI's willingness to strategically uncover corruption scandals that challenge those with vested interests in maintaining the status quo. In tackling the most controversial of the proposed upcoming reforms — the tax, telecommunications and energy reforms — the PRI will need to turn inward and extend this process to dissenting elements from within the party.

In the evening on Feb. 26, just one day after Pena Nieto signed Mexico's new education reform into law, the Financial Intelligence Unit of the Secretariat of the Interior accused Gordillo, head of the National Education Workers' Union, of embezzling 2.6 billion pesos ($200 million) between 2008 and 2011. Gordillo had long been suspected of corruption, and the curious timing of the announcement suggests that the move was politically motivated.

The recently passed reform outlines three major changes to the country's education system. First, it gives autonomy to the National Institute for the Evaluation of Education, which evaluates teachers. Second, it tasks the National Institute of Statistics and Geography with implementing a census of students, teachers and schools to better understand how funds are being used. And third, the reform will create 40,000 new full-time schools. Gordillo and the National Education Workers' Union, which represents more than 1.5 million teachers throughout Mexico and which over the years has developed into a powerful political force, opposed the evaluation system for teachers. The union claimed that the reform threatens labor stability, but in reality it undermines the union's power and autonomy. The union had grown powerful enough to prevent the Ministry of Education from implementing its own independent agenda. This lack of autonomy irked Pena Nieto's new Secretary of Education, Emilio Chuayffet Chemor, and likely led to Gordillo's downfall.

The disagreement between the central government and the teachers' union over the education reform is just one manifestation of a larger trend. Since the late 1990s, competition between Mexico's major parties created political gridlock that prevented successive governments from passing economic and political reforms, even in areas where there was consensus among Mexico's politicians on the need to reform. Mexico's labor law had not been significantly reformed since the 1970s, a major overhaul of the education system has not happened since 1993 and three attempts at energy reform in 1999, 2002 and 2008 failed to change the constitution to allow for private investment in the energy sector.

Returning to the presidency after a 12-year hiatus, the PRI quickly got Mexico's other two major political parties — the National Action Party, better known by its Spanish acronym PAN, and the Party of the Democratic Revolution — to sign off on the Pact for Mexico, a baseline agreement to reform the education, telecommunications, tax and energy sectors. Even though all three parties agreed in principle, the PRI will need to work closely with the second largest party, the PAN, to obtain a two-thirds majority in congress and the approval of a majority of state legislatures needed to pass reforms that require constitutional amendment.

The PAN and the PRI, despite being rivals, share many similar ideas on how to reform the country's economy. Voting together, the two parties passed labor and education reforms with surprising speed. Labor reform was passed in November 2012 after roughly three months of debate, and education reform was passed in February 2013. Looking forward, Pena Nieto's biggest challenges may lie in generating consensus within his own party, rather than getting the PAN and others to agree to the reforms.

To understand how Pena Nieto will go about sidelining opposition and building consensus behind his reforms, it is helpful to look back to 1989, when then-President Carlos Salinas de Gortari attempted to move forward with his own legislative agenda. At the time, the PRI had a majority in both houses of congress and thus felt little pressure from outside parties and politicians. Without outside pressure, dissent mostly came from within the PRI, and Salinas moved in quickly to purge the party of threatening figures. First, in January 1989, the leader of the PEMEX union and PRI member, Joaquin "La Quina" Hernandez Galicia, was arrested on charges of homicide and illegal arms possession. In April 1989, PRI member Carlos Jonguitud Barrios was deposed as leader of the National Education Workers' Union and replaced by Gordillo. Deposing leaders who threatened the president's agenda became referred to as "El Quinazo."

Elba Esther Gordillo was a convenient first target, and her arrest sends a big message to those who oppose Pena Nieto's reforms. While her arrest may incur political costs, it will not greatly affect the Pena Nieto administration. Gordillo had a very public disagreement with Secretary of Education Chemor, and in 2006 she was kicked out of the PRI for forming her own party, New Alliance. Controlling just two seats in the Senate and 10 seats in the Chamber of Deputies, Gordillo became more of a nuisance for the PRI than a legitimate political force.

This move is a warning to those who may get in the way of future reforms. PRI senator and head of the PEMEX union Carlos Romero Deschamps could be a potential next target if he decides to try to prevent energy reform. Like Gordillo, Romero Deschamps has been similarly accused of corruption and living an opulent lifestyle off a modest union paycheck. While there is no hard evidence of wrongdoing, there may be increased scrutiny in the future if he continues to oppose the reformist agenda of Pena Nieto, Minister of Energy Pedro Joaquin Coldwell and new PEMEX chief Emilio Lozoya.

After 12 years of PAN rule, Pena Nieto and the PRI are reasserting their control over the country's institutions by confronting hostile, uncooperative elements in other parties and within their own.

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