Mexican Teachers Union Boss Gordillo Arrested; Authorities Allege Theft of $150+ Million

Teacher union scandals have been occurring in this country with disturbing regularity. Yet even the worst cases pale in comparison before one now unfolding south of the border. On Tuesday evening, February 26, Esther Gordillo (in photo), the autocratic head of Mexico’s National Union of Education Workers, was arrested upon landing at Toluca Airport near Mexico City on a private jet from San Diego. Authorities whisked her and two unnamed associates to prison to await charges of looting the 1.5 million-member union of anywhere from 2 billion to 2.6 billion pesos, or about U.S.$150 million-$200 million, between 2008 and early 2012. She is not eligible for bail. If the charges hold up – and the outlook isn’t good for the 68-year-old Gordillo – she likely will spend her years in prison. The details of the case underscore the dangers of merging union and political power.

Elba Esther Gordillo Morales is a colorful character. Then again, so is Cruella DeVil. In May 2008, Union Corruption Update profiled the teachers’ union leader at length. At the time, the Washington, D.C.-based Center for Immigration Studies had just published a report about her by College of William & Mary political scientist George Grayson titled, “‘Jimmy Hoffa in a Dress’: Union Boss’s Stranglehold on Mexican Education Creates Immigration Fallout” (see pdf). I wrote at the time: “Actually, the main title seems somewhat unfair – to Jimmy Hoffa. Not even at his most ruthless did Hoffa steal funds or wield political influence on the scale practiced by Ms. Gordillo and her cronies.” Those words are as true today as they were nearly five years ago. For many years, Gordillo and her allies ran an efficient and feared patronage machine in the form of her union, Sindicato Nacional de Trabajadores de la Educacion (SNTE), or the National Union of Education Workers. At her behest, the union padded school payrolls with no-show teachers’ jobs and fired those who asked the wrong questions. Though once a teacher herself, she came to resemble a mob boss.

Police and prosecutors in the administration of the Mexico’s new president, Enrique Pena Nieto, certainly think so. The investigation began last December, just after Pena Nieto took office and indeed just one day after he signed into a law a comprehensive educational reform bill. Banco Santander had alerted authorities to possibly illegal transfers worth billions of pesos. In a press conference held only minutes after Gordillo’s detention, Mexican Attorney General Jesus Murillo Karam announced that the labor leader had been accused of embezzling from union coffers. “We are looking at a case in which the funds of education workers have been illegally misused, for the benefit of several people, among them Elba Esther Gordillo,” said Murillo. At the news conference, Assistant Attorney General Alfredo Castillo displayed an elaborate series of charts, featuring dozens of arrows denoting flows of funds from union accounts to those of unauthorized parties: Nora Guadalupe Ugarte Ramirez; Isaias Gallardo Chavez; Jose Manuel Diaz Flores; and a real estate company. Directly or indirectly, all the arrows led to Esther Gordillo.

For two dozen years, Ms. Gordillo, known throughout Mexico as “La Maestra” (“The Teacher”), exerted extraordinary control not just over her union, but over the entire country’s system of elementary and secondary schooling. It is hard to think of any equivalent in our own country’s teacher unions. Under her command, the SNTE union effectively controlled school hiring, promotion and firing, while raking in about $60 million annually in dues, subsidies and other income. A large portion of that power involved placing family and friends in teaching jobs that weren’t real ones. As Union Corruption Update earlier had reported, her operation hired at least 9,000 persons who collected teachers’ paychecks without teaching any classes and enabled another 14,000 real teachers to take unjustified fully-paid extended leaves of absence. She took the principle of “Reward your friends, punish your enemies” to a new level. Her rivals at one point accused her of orchestrating a murder, though prosecutors declined to charge her in that case.

If a union member was disloyal, Ms. Gordillo was sure to hear about it and discipline that person through firing, transfer or some other action. She reportedly organized a network of female spies to seduce male dissenters within the union and open them to blackmail. By contrast, loyalists made out well. For a 2008 conference, Gordillo bought a fleet of nearly 60 new Hummers for regional union bosses (she would raffle off the vehicles when the purchases brought unwanted media attention). Her power reinforced her illusion of invincibility. This past February, only days before her arrest, a television interviewer suggested to her that she was the most hated woman in Mexico. The response by Gordillo: “There is no one more loved by their people than I. I care about the teachers. This is a deep and serious dispute about public education.” And despite her many enemies, she had plenty of allies – that’s how she became president-for-life of her union. Members of the National Union of Education Workers marched in the streets against the pending education reform law during the weeks prior to her arrest.

If the lady was a holy terror, a major reason was her participation in Mexican politics at the highest levels. She was appointed head of the National Union of Education Workers in 1989 by then-President Carlos Salinas, leader of that country’s Institutional Revolutionary Party (PRI). It was a reward for a job well done, having served as the PRI’s Secretary of Organization of the National Executive Council during 1986-87. She flourished during the first half of the Nineties under Salinas and then became General Secretary of the Council of National Popular Organizations under the subsequent PRI administration of Ernesto Zedillo. The election of Vicente Fox as president in 2000 (Note: Mexican presidents are elected for a single six-year term), breaking a more than 70-year continuous PRI power grip, caused her to shift gears. She cultivated an alliance with Fox and his National Action Party (PAN) – a case, perhaps, of the old mobster adage, “Keep your friends close and your enemies closer.” Despite her overtures to a rival party, Gordillo became General Secretary of the PRI National Executive Council, the second most powerful position within her own party. She also headed the PRI faction in the Chamber of Deputies in the Mexican Congress.

Esther Gordillo hardly operated in isolation.  SNTE members by the thousands held positions in Mexico’s Ministry of Public Education, including Gordillo’s son-in-law, Fernando Gonzalez Sanchez. Another loyalist, Miguel Angel Linares, ran the State Workers’ Social Security System. Government officials didn’t stand up to her because in large measure they didn’t want to; they owed their jobs to her political largesse. Why mess with success?

Gordillo didn’t win every political battle. Yet even when she lost, she could turn defeat into victory. After losing a close battle with chief PRI rival Roberto Madrazo that resulted in her ouster from congressional leadership, she grew increasingly supportive of PAN and critical of PRI. A group of PRI dissenters banded together in 2006 to kick her out of the party. She promptly responded by forming the New Alliance Party (PANAL), which by many accounts provided the razor-thin margin of victory for PAN candidate Felipe Calderon in the presidential election of that year. It also provided her with an extra edge in negotiating concessions for her union. The Calderon administration, reluctantly or not, was sanctioning SNTE corruption.

All this meant an accretion of money as well as power. And Esther Gordillo had plenty of money to throw around. Her $90,000 annual salary was merely a cover for the far larger sums she pulled in illegally. She regularly moved funds from union accounts to accounts in the name of family members and cronies. Some of the money, says current Assistant Attorney General Alfredo Castillo, wound up in banks in Liechtenstein and Switzerland. In one case, union officials transferred $1 million to a Swiss bank account held by a company that was 99 percent-owned by Gordillo’s mother and than applied the money to the purchase of a home in the San Diego, Calif. suburb of La Jolla. This didn’t include the union funds used by Gordillo to buy a palatial home on the peninsula of Coronado, also near San Diego, now assessed at $4.72 million.

Conspicuous consumption was a specialty of the Gordillo gang. Those San Diego-area homes and dozens of Hummers were only part of the picture. Esther Gordillo and her cronies reportedly used union funds to buy as many as 10 high-end residential properties in Mexico City’s Lomas de Chapultepec and Polanco neighborhoods. She also used SNTE funds to cover roughly $3 million in charges for merchandise at Neiman-Marcus, not to mention union money for cars, a yacht and a private jet. Millions of dollars also went toward the purchase of computer equipment and other school supplies for union member personal use. Gordillo also siphoned off at least $17,000 in union funds for plastic surgery, giving her a somewhat ghoulish appearance that made her the subject of many jokes among her countrymen.

If Gordillo had an American equivalent, that probably would be Melissa King, the convicted and sentenced benefits administrator for New York’s Laborers Local 147 (the “Sandhogs”), who ripped off more than $42 million from three union benefit funds over a six-year period. But even this is an imprecise parallel. King was an outside consultant, not a union boss. And her taste for the finer things in life at union expense, while appalling, couldn’t match that of Elba Esther Gordillo. It’s important to remember that Gordillo’s $150 million-plus take represented sums pilfered during or after 2008. Yet when Union Corruption Update first visited this story back in May of that year, SNTE already had a reputation for skimming funds, including those supplied by taxpayers. The union reportedly had diverted $186 million worth of Education Ministry subsidies earmarked for computer purchases into a secret bank account. The true sum of union and public money embezzled may never be known.

The election last year of PRI member Enrique Pena Nieto as president proved to be Esther Gordillo’s undoing. Though her New Alliance Party negotiated an alliance with the PRI, the talks broke down. The calls for education reform in Mexico had grown louder by the month – too loud, apparently, for Pena Nieto to ignore. The new reform law created a merit-based system of uniform standards for teacher hiring and promotion. It also authorized the first census of the Mexican education system; with Gordillo controlling the budget and personnel, nobody really knew how many schools, teachers or students there were in the country. The day after passage of the law, federal agents were waiting at Toluca Airport for the arrival of Gordillo and her small entourage. They arrested the suspects when they stepped off the aircraft and transported them to Santa Martha Acatitla Prison.

However her case turns out, it is inconceivable that Elba Esther Gordillo has a career left. Tone-deaf to appeals for reform, she had become a national laughingstock, even as she still coaxed loyalty from many rank and file members. But it was a loyalty born of fear. And now the fear is gone. “She lost clarity,” noted Raymundo Riva Palacio, columnist for the Mexico City daily newspaper El Universal. “Having so much to lose on the issue on which they finally got her, the money, she calculated badly.” Even before her arrest, Ms. Gordillo may have sensed the end was near. At a speech she delivered on her 68th birthday this past February, she announced: “I want to die with the epitaph: Here lies a warrior. She died like a warrior.” She’s still at war, but she’s not going to be at her command post anymore. Mexican public school teachers and pupils alike should be thankful.

Related:

Mexican Teachers Union Boss, Cronies Wrecking Education