Corruption: Stealing the family silver

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Corruption: Stealing the family silver

From mafia ties and drug trafficking to bribery and insider dealing, allegations of corruption have tainted numerous privatizations around the world. As governments, bankers and investors are learning, to create stable market economies it is necessary to do more than shift assets out of governments' hands. The process also needs transparent procedures to monitor into whose hands they fall - and to determine who reaps the benefits. Michelle Celarier reports.

When Enrique Molina Sobrino, one of Mexico's wealthiest businessmen, tried to expand his empire by buying the state-owned Sugar Corp which Puerto Rico was hoping to privatize last year, charges of drug trafficking against him finally brought the sweet deal to a screeching halt. The accusations against Molina Sobrino, chairman of Consorcio Azucarero Escorpion and the Gemex (Grupo Embotellador de México) soft-drink-bottling company (Mexico's biggest distributor for Pepsi-Cola), were made by Eduardo Valle, an intelligence officer in the Mexican justice department during the administration of Carlos Salinas de Gortari.


In May 1994, Valle says he fled to the US after he began to realize that drug traffickers had permeated the top levels of the Salinas government, which had undertaken an ambitious privatization programme. Valle took copies of over 100 files of ongoing investigations with him. Included among them was a warrant for the arrest of Molina Sobrino, whom Valle claims is a businessman for Mexico's drug kingpins, the Gulf Cartel. "He's a bad guy," says Valle. "In Mexico, Molina Sobrino was widely known as the only Pepsi bottler who distributes 'coke'."


The highly respected former investigator, who wrote a best-selling book in Mexico called Segundo Disparo (Second Shot) about the corruption of the Salinas government leading to the murder of presidential candidate Luis Donaldo Colosio, is now in hiding in the US.



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