Allright, so there are a few articles from today which I'll comment on later -- despite my busy schedule entertaining my houseguests, Pepe and Greg, these ones are too good to not write on. (Just to whet your appetites, Chávez broke into song praising dairy cows -- yes, this one will be good. If I have a crappy afternoon at work, I'll be especially punchy, in which case, my musings will be snarkier than usual.) For the time being, here are some articles worth a read.
Source: Mary Anastaia O’Grady, The WSJ
The Real Uribe Record
Congressional Democrats out to quash the U.S.-Colombia Free Trade Agreement argue that the terror-torn South American country doesn't adequately protect human rights and thus doesn't deserve FTA status. In the Democrats' book, the way to make Colombia more just is to deny it the chance to deepen its commercial relations with the U.S.
This is curious thinking, and all the more so coming from a party that also argues that the U.S. ought to lift its trade embargo on the Cuban dictatorship as a way to help the Cuban people. Given Cuba's dismal track record on human rights and the hard work Colombia has done over the past six years to defend human life, it is hard to square that circle.
Classical liberals might argue that open trade with all countries is an individual right. Human-rights advocates might counter that doing business with a dictatorship props up the tyrant. Isolationists may want to cut everyone off. But it is hard to understand just what rational belief system could support expanding commercial exchanges with a dictator while denying deeper trade relations to a democracy, especially one that has shed so much blood for America's war on drugs.
Vermont Sen. Patrick Leahy is one of many in the Democratic Party who seem conflicted on this subject. Mr. Leahy says he hasn't decided how he will vote on the U.S.-Colombia FTA. But just last month, in a letter published in this newspaper, he accused me of viewing "the assassinations of hundreds of trade unionists" in Colombia as "irrelevant" because I am in favor of boosting trade as a way to consolidate democratic capitalism and increase economic opportunities for all Colombians. I'm still trying to figure out the connection.
Funny enough, Mr. Leahy, like many of his colleagues -- including New York Rep. Charles Rangel in the House -- has no such qualms about trade with the despotic regime in Havana. The senator has said that the U.S. should seek engagement with Cuba by "lifting the embargo" and increasing "contact between Americans and Cubans -- in other words, we should be tearing down the barriers between our countries not building them ever higher."
The Cuba Mr. Leahy wants to get closer to isn't simply accused of failing to prosecute human-rights violators, as is the case of Colombia. It is a human-rights violator. It is regrettable that the senator apparently believes that the murder of thousands of Cubans, the torture and imprisonment of tens of thousands of others, the exile of millions and the denial of all human rights, including the right to organize unions, is irrelevant.
Quite apart from this glaring contradiction, there is also the matter of whether Colombia is even guilty, as Democrats have suggested, of ignoring or being complicit in the murders of Colombian trade unionists. A serious look at the record suggests that left-wing propaganda is trumping the facts in the Democrats' war room. If the party's leadership sustains this view, the outcome will not only harm Colombia but will badly damage U.S. interests in the region.
You wouldn't know it from all the grandstanding by Democrats, but the Colombian government has been very open about the persistence of violence in the country. President Álvaro Uribe talks often and candidly about the issue, as he did in a speech in New York on July 22, and he doesn't sugarcoat the tragedy.
"They still assassinate 17,000 Colombians a year. We would like to show a greater reduction but they used to kill 35,000. Not one town has been destroyed in Colombia this year. In the year before my administration, terrorist groups destroyed 84 towns in Colombia. Our freedom was threatened by terrorism. There were years when they killed 15 journalists. This year they have not assassinated one. We had years when they kidnapped more than 3,000 Colombians. This year they have kidnapped 107. We'd like not to have a single kidnapping. We're gaining on kidnapping but still we have not been able to defeat it."
Unionists have certainly benefited from the improved security. There were years when more than 250 of them were killed, the president said in New York, but recently far fewer have died. In 2006, he said, the violence intensified and the number went up to 60 from 25 in 2005. This year only four trade unionists have been killed and the Justice Ministry says that preliminary investigations indicate that their deaths were not linked to union activism. The government is also investigating the murders of 12 teachers-union members.
In Colombia, unionists are killed much for the same reasons peasants are murdered. They are caught in the crossfire between paramilitaries and guerrillas. As Mr. Uribe explained in his New York speech, "paramilitaries kill unionists, accusing them of collaboration with the guerrillas and guerrillas kill unionists, accusing them of collaboration with the paramilitaries." Now even the two main guerrilla groups, in certain regions of the country, are battling one another. "The [rebel group] ELN kills a unionist because they say he's a friend of the [rebel group] FARC and the FARC kills another because they say he's a friend of the ELN."
Still, homicides of unionists are down by two-thirds since Mr. Uribe took office and the government is bending over backward to protect union members. A special protection program for vulnerable individuals, which allows anyone who feels threatened to appeal for special help, now covers more than 5,000 individuals. According to the government, 1,500 of them are unionists. Last year it spent $24 million protecting union leaders and their families, it says. The attorney general's office has established a special program to investigate human-rights violations against union members. As to unsolved murders, the AG sat down with union leaders and agreed on a list of 200 cases that now have high priority for investigation and prosecution.
Mr. Uribe's government has demobilized 43,000 illegal armed combatants. Some 33,000 were paramilitary members and 10,000 were guerrillas. But the president notes that the country started with some 60,000 "terrorists," so there is still work to be done.
Even if none of this progress had occurred, it would make little sense to reject the FTA. Colombia needs the free trade agreement, Mr. Uribe said in New York, because it's how "we can generate more employment of a higher quality, send more of our products to the U.S. market and in this way we will have less illicit drugs, less terrorism, more peace, more security, more well-being for the Colombian people." If only the government in Havana cared as much about the Cuban population.
Source: Tales Azzoni, The Miami Herald
Brazil's Lula da Silva opens energy-plan tour
President Luiz Inácio Lula da Silva began a six-day, five-nation tour Sunday to develop energy and biofuel agreements in Latin America and the Caribbean.
Lula da Silva and Mexican President Felipe Calderón today are expected to sign a memorandum of understanding on biofuel as part of a wide-ranging energy agreement. They will also discuss an accord on deep-water oil exploration, said the Brazilian leader's spokesman, Marcelo Baumbach.
About 50 Brazilian executives will accompany Lula da Silva to Mexico in an effort to expand bilateral trade, which reached $5.75 billion in 2006, the Brazilian foreign ministry said.
However, Foreign Minister Celso Amorim said that a trade accord between Brazil and Mexico is not on Lula da Silva's agenda.
The countries are the two largest economies in Latin America, accounting for about two-thirds of Latin America's gross national product, according to the International Monetary Fund.
Lula da Silva will travel Tuesday to Honduras, where he is also expected to sign a biofuel agreement, the foreign ministry said.
He will then visit Nicaragua and Jamaica, where he will attend inauguration of an ethanol dehydration plant owned by Jamaican and Brazilian investors.
In Panama, Lula da Silva is expected to sign a memorandum of understanding for joint biofuel development and to promote the participation of Brazilian companies in Panama's planned expansion of the Panama Canal.
Brazil, the world's leading ethanol exporter, has been touting its sugarcane-based biofuel around the world as a cheap, eco-friendly alternative to fossil fuels amid soaring oil prices and global warming concerns. Brazil signed a biofuel accord this year with Chile and the Dominican Republic.
The Latin American trip will give Lula da Silva somewhat of a respite from the crisis dogging his administration since the July 17 crash of a TAM Linhas Aereas SA jetliner in Sao Paulo -- Brazil's deadliest -- and the ensuing aviation-industry chaos.
Since the crash that killed all 187 aboard the plane and 12 on the ground, Lula da Silva has replaced the country's top aviation official and the head of the national airport authority, while vowing the ensure the safety of the country's airways.
A poll released Sunday, however, showed the aviation crisis has not affected Lula da Silva's popularity. Forty-eight percent of Brazilians said Lula da Silva's government is good or great, the same percentage as before last month's crash, according to a Datafolha polling institute survey published in Brazil's largest newspaper, the Folha de S. Paulo.
Datafolha said Lula da Silva maintained his approval rating after the TAM crash because most Brazilians are poor and do not travel by plane. A robust economy also helped, it said.
Datafolha interviewed 2,095 people across Brazil on Aug. 1-2. The survey's margin of error was 2 percentage points.
Source: James C. McKinley Jr., The NY Times
Fate of 5 in U.S. Prisons Weighs on Cubans’ Minds
HAVANA, July 29 — In Cuba, they call them “the five.” Their faces are plastered on walls and billboards everywhere. Merely being a relative of the five grants celebrity status. Even children know them by their first names — Gerardo, René, Ramón, Fernando and Antonio.
They are not a boy band.
They are middle-aged men who have been sentenced to long prison terms for spying, Cuban officials maintain, not on the United States government, but on right-wing Cuban exiles in Miami who are considered terrorists by the government here.
“The whole country knows their story by heart,” said Elena Portala, a 50-year-old bookbinder, as she walked by a blocklong wall with the men’s names and inspirational quotations from each of them. “The radio and the press talk constantly about them. They should be let out of prison. They haven’t done anything wrong.”
These days, many Cubans are pinning their hopes on a hearing set for Aug. 20, before the United States Court of Appeals for the 11th Circuit in Atlanta, where federal judges will decide on whether the evidence was insufficient to support the convictions.
The five men were among 10 Cuban immigrants arrested in September 1998 and accused of being part of a spy ring called the Wasp Network. Four others were indicted but never apprehended. Prosecutors presented evidence that the network had infiltrated Brothers to the Rescue and other militant exile groups in Miami. Some were also accused of seeking United States military intelligence.
Half of the arrested men pleaded guilty, but the famed remainder stood trial in Miami after a Federal District judge, Joan A. Lenard, denied a motion to move the proceedings to another venue. In June 2001, a federal jury in Miami convicted them. No Cuban-Americans were on the jury.
All five — Gerardo Hernández, Ramón Labañino, Antonio Guerrero, René González and Fernando González — were convicted of acting as unregistered foreign agents and conspiracy to commit crimes against the United States. Three were also convicted of conspiracy to commit espionage, on the strength of evidence that they had gathered information on military activity at a naval air station in Key West. In addition, Mr. Hernández was convicted of conspiracy to murder in connection with the deaths of four Cuban exiles whose two light aircraft were shot down by the Cuban Air Force over the Straits of Florida in 1996.
Judge Lenard threw the book at them. Mr. Guerrero and Mr. Labañino were sentenced to life in prison. Fernando González was sentenced to 19 years, and René González to 15 years. (They are not related.) Mr. Hernández was sentenced to two consecutive life terms.
Since their convictions, the five have been on a legal roller coaster. In August 2005, a three-judge federal appellate panel in Atlanta threw out the verdicts, saying the defendants could not receive a fair jury trial in Miami because of anti-Castro bias among the exiles. Two months later, a majority of the 11th Circuit reinstated the convictions but agreed to hear an appeal on the sufficiency of the evidence, among other issues.
Meanwhile, the “five heroes” have become the biggest propaganda tool that the one-party, Communist government of Cuba has come up with since Che Guevara. Their names and faces appear on walls and signs all over Cuba, with the word “volverán,” meaning “they will return.” Cuban officials never fail to mention them as heroes in official speeches and ceremonies.
One reason for their popularity is the government’s simplified version of their ordeal: brave men who tried to ferret out right-wing terrorists determined to hurt Cuba while sheltered in the United States.
That approach carries the message that Washington is hypocritical in its “war on terror,” jailing the five for the equivalent of trying to find Osama bin Laden in his presumed haven of Pakistan.
That argument has become even more persuasive to Cubans since May, when Luis Posada Carriles was released from jail in the United States. The Cuban government has long accused Mr. Posada Carriles, now 79, of plotting to assassinate Mr. Castro and says he masterminded the 1976 bombing of a Cuban airliner, which killed 73 people, and a string of bombings of Havana hotels and nightclubs in 1997. Efforts to extradite him to Venezuela, where he is also wanted in the jetliner bombing, have failed.
“I am convinced they are real heroes,” said an accountant who, like many Cubans, preferred to remain anonymous to avoid possible harassment from the police. “Any person who is against terrorism has to be for them. And the government of the United States is very unjust to have them locked up while Posada Carriles is free.”
Even 13-year-olds here follow the government’s argument. “They are like brothers to us,” said Lizbet Martin, a schoolgirl. “They shouldn’t be jailed.”
In a recent interview with the BBC, Mr. Hernández acknowledged he was gathering information about what he described as paramilitary groups determined to topple the Cuban government. He maintained that the Cuban government informed the Federal Bureau of Investigation about the groups.
“They are people who’ve got training camps there in paramilitary organizations and they go to Cuba and commit sabotage, bombs and all kinds of aggressions,” he told the BBC. “And they had impunity, so at a certain point Cuba decided to send some people to gather information on those groups and send it back to Cuba to prevent those actions.”
But Mr. Hernández denies vehemently that he helped the Cuban Air Force shoot down the two exile planes. “They needed to blame somebody, and they chose me,” he said.
Alicia Valle, a spokeswoman for the United States attorney’s office in Miami, declined to comment on the case. According to court documents, the United States government agreed that the five had spied on anti-Castro groups like Brothers to the Rescue and Movimiento Democratico.
But the United States government maintained that they were well-trained spies, not amateurs, involved in a range of espionage, and that none of them informed the government of their presence, as federal law requires, court documents show.
The case of the Cuban five has spawned some strange commentary. High-ranking officials in the Cuban government, which regularly jails people without public trial for speaking out against Communism, talk at length and in detail about the lack of evidence in the case, and they rail about the lack of “due process” in American courts.
In a recent interview, Ricardo Alarcón, the president of Cuba’s National Assembly, said the men’s sentences were excessive in comparison with other spy convictions and insisted they were not seeking information about the United States government. He noted that in July a former F.B.I. analyst, Leandro Aragoncillo, had received only 10 years for passing top secret documents to the Philippine government.
The families, too, have become celebrities, if to a lesser degree. They are asked to appear at all sorts of state affairs. In one week in July, family members attended a graduation of Cuban doctors and the annual National Rebellion Day celebration. Speakers at each event tipped their hats to the families, calling the jailed men heroes.
But after the hoopla, back at home, some said, they must face the task of raising children without fathers and living without husbands.
“It has turned my life upside down,” said Olga Salanueva, the wife of René González, who was a pilot at an airport where one of the exile groups kept airplanes. “No one is prepared to live so separated from her husband. And to see a person so humane, so noble, suffer again and again.”
She added: “We don’t have much confidence in the justice system of North America. We know it is very difficult, because it has become a political matter.”
Ms. Salanueva said that the United States had repeatedly denied her a visa to visit her husband on the grounds that she was deported in 2000 and under current rules can never apply for a visa again.
Adriana Pérez, the wife of Gerardo González, has also been turned down every year for a visa to visit him. State Department officials declined to comment on the women’s visa applications. Elizabeth Palmeiro, the wife of Mr. Labañino, said she feels pained every time she looks at their two daughters, now 15 and 10, and realizes how much of their lives he has missed. One girl was an infant and the other was 5 when he was imprisoned.
“I feel a mixture of pain, of sadness, of fury, and pride,” she said.
Source: David Luhnow, The WSJ
Secrets of the World’s Richest Man
Carlos Slim is Mexico's Mr. Monopoly.
It's hard to spend a day in Mexico and not put money in his pocket. The 67-year-old tycoon controls more than 200 companies -- he says he's "lost count" -- in telecommunications, cigarettes, construction, mining, bicycles, soft-drinks, airlines, hotels, railways, banking and printing. In all, his companies account for more than a third of the total value of Mexico's leading stock market index, while his fortune represents 7% of the country's annual economic output. (At his height, John D. Rockefeller's wealth was equal to 2.5% of U.S. gross domestic product.)
As one Mexico City eatery jokes on its menu: "This restaurant is the only place in Mexico not owned by Carlos Slim."
Mr. Slim's fortune has grown faster than any in the world during the past two years, rising by more than $20 billion to about $60 billion currently. While the market value of his stake in publicly traded companies could decline at any time, at the moment he is probably wealthier than Bill Gates, whom Forbes magazine estimated at $56 billion last March. This would mark the first time that a person from the developing world held the top spot since Forbes started tracking the wealthy outside the U.S. in the 1990s.
"It's not a competition," Mr. Slim said in a recent interview, fiddling with an unlit Cuban cigar in a second-story office decorated with 19th century Mexican landscape paintings. A relatively modest man who wears ties from his own stores, the mogul says he doesn't feel any richer just because he is wealthier on paper.
How did a Mexican son of Lebanese immigrants rise to such heights? By putting together monopolies, much like John D. Rockefeller did when he developed a stranglehold on refining oil in the industrial era. In the post-industrial world, Mr. Slim has a stranglehold on Mexico's telephones. His Teléfonos de México SAB and its cellphone affiliate Telcel have 92% of all fixed-lines and 73% of all cellphones. As Mr. Rockefeller did before him, Mr. Slim has accumulated so much power that he is considered untouchable in his native land, a force as great as the state itself.
The portly Mr. Slim is a study in contradiction. He says he likes competition in business, but blocks it at every turn. He loves talking about technology, but doesn't use a computer and prefers pen and paper. He hosts everyone from Bill Clinton to author Gabriel García Márquez at his Mexico City mansion, but is provincial in many ways, doesn't travel widely, and proudly says he owns no homes outside of Mexico. In a country of soccer fans, he likes baseball. He roots for the sport's richest team, the New York Yankees.
Admirers say the hard-charging Mr. Slim, an insomniac who stays up late reading history and has a fondness for reading about Ghengis Khan and his deceptive military strategies, embodies Mexico's potential to become a Latin tiger. His thrift in both his businesses and personal life is a model of restraint in a region where flamboyant Latin American business tycoons build lavish corporate headquarters and fly to Africa on hunting jaunts.
To critics, however, Mr. Slim's rise says a lot about Mexico's deepest problems, including the gap between rich and poor. The latest U.N. rankings place Mexico at 103 out of 126 nations measured in terms of equality. During the past two years, Mr. Slim has made about $27 million a day, while a fifth of the country gets by on less than $2 a day.
"It's like the U.S. and the robber barons in the 1890s. Only Slim is Rockefeller, Carnegie, and J.P. Morgan all rolled up into one person," says David Martínez, a Mexican investor who lives in Manhattan.
Monopolies have long been a feature of Mexico's economy. But in the past, politicians acted as a brake on big business to ensure that the business class didn't threaten their power. But political control faded in the 1990s with the privatization of much of the economy and the slow death of the Institutional Revolutionary Party, which held power for 71 years until 2000.
"It is surprising how big companies have captured the Mexican state. This is a risk to our democracy, and is suffocating our economy," says Eduardo Perez Motta, the country's antitrust chief.
As the face of the new elite, Mr. Slim presents an acute challenge for the country's young president, Felipe Calderón. He must decide whether to try and rein in Mr. Slim despite the mogul's standing as the country's largest private employer and taxpayer. Congress routinely kills legislation that threatens his interests, and his firms account for a chunk of the nation's advertising revenue, making the media reluctant to criticize him.
During the past few months, Mr. Calderón has looked to cut a backdoor deal with Mr. Slim. In a series of face-to face meetings -- the details of which have surfaced for the first time -- the president has tried to convince Mr. Slim to accept greater competition, according to people familiar with the talks. The government holds an important card: Mr. Slim can't offer video on his network -- a big potential market -- without government approval.
But even some within Mr. Calderón's camp privately say the closed-door talks play into Mr. Slim's hands by letting him circumvent the country's regulators, underscoring the weakness of Mexico's democratic institutions. Unless Mr. Calderón extracts big concessions from the mogul, they say, he may become too powerful to control. For his part, Mr. Slim says that his companies are "in constant contact" with regulators, but played down the notion of a secret negotiation.
A talkative man who is generally avuncular but who can easily lose his temper, Mr. Slim rejects the monopolist label. "I like competition. We need more competition," he says, sipping a Diet Coke. He stressed that many of his companies operate in competitive markets, and pointed out that Mexico accounts for only a third of sales at his cellphone company América Móvil SAB, which has clients from San Francisco to Sao Paolo.
Mr. Slim's strategy has been consistent over his long career: Buy companies on the cheap, whip them into shape, and ruthlessly drive competitors out of business. After Mr. Slim got control of Telmex in 1990, he quickly cornered the market for copper cables used by Telmex for telephone wires. He bought one of the two main suppliers and made sure Telmex didn't buy any cable from the other big supplier, eventually prompting the owners to sell the company to him.
His control of Mexico's telephone system has slowed the nation's development. While telephones have long been standard in any American home, only about 20% of Mexican homes have them. Only 4% of Mexicans have broadband access. Mexican consumers and businesses also pay above-average prices for telephone calls, according to the Organization for Cooperation and Economic Development.
Mr. Slim agrees that many industries in Mexico are dominated by big companies. But he sees no harm as long as they offer good service and prices. "If a beer in Mexico costs 1 peso and in the U.S. it costs 2 pesos, then I don't see the problem," he says.
Despite countless measures over the years that show his companies charge high prices, Mr. Slim steadfastly rejects that notion. During an interview, he orders an aide to fetch his own telephone bills. "See? We charge $14 per month for basic phone rental, cheaper than the U.S.," he says, pulling up a seat next to the reporter. That may be so, but additional fees in Mexico make most phone bills more expensive than in the U.S. Mr. Slim's total phone bill at his own house was a whopping $470 last month. "I have a lot of maids and my sons make calls," he says.
Mr. Slim says his success comes from spotting opportunity early, something he learned in part from reading futurist writer Alvin Toffler, who wrote the best-seller "Future Shock" in the 1970s, and who sends the mogul manuscripts to review. Pulling a dog-eared copy of Mr. Toffler's last book, "Revolutionary Wealth," Mr. Slim leafs through it and shows off his comments in the margins. "Some of his numbers were out of date," he mutters.
Mr. Toffler says he first met Mr. Slim on a trip to Mexico in 1993. Mr. Slim approached him after a speech, surrounded by his family and carrying one of Mr. Toffler's books, heavily underlined. The two have been friends ever since. "If you didn't know he was the richest guy in the world, you'd just think he was a likeable and intelligent guy," says Mr. Toffler.
The fifth of six children, Mr. Slim was born wealthy. His father, Julian Slim, made his fortune on a general store in downtown Mexico City called "The Orient Star." His father died when Mr. Slim was only 13.
Early on, Mr. Slim showed an aptitude for numbers that would help his career. He taught algebra at Mexico's largest public university while finishing his thesis, titled "Applications of Linear Theory in Civil Engineering." His love of numbers also drew him to baseball, a lifelong hobby. "In baseball...numbers talk," he once wrote. Even today, he enjoys discussing baseball, telling a reporter that slugger Barry Bonds should be remembered more for his walk ratio than his home runs.
After college, Mr. Slim and some friends became stockbrokers in the country's fledgling market. Trading by day and playing dominoes by night, the clique became known as "Los Casabolseros," or "The Stock Market Boys." Despite the success, friends say Mr. Slim, less of a party boy and more private than the rest, wanted to run companies rather than trade. "He never liked money as much as the rest of us. He just wanted to be a good businessman," says Enrique Trigueros, one of the casabolseros.
Mr. Slim soon got his chance. After turning around a soft-drink company and a printing firm in the late 1960s and mid 1970s, he made his first big move in 1981, buying a big stake in Mexico's second-biggest tobacco company, Cigatam, maker of Marlboro cigarettes in Mexico. The company generated the cash Mr. Slim needed to go on a buying spree.
A good time to buy came in 1982, a year that would shape Mr. Slim's destiny. That year, the collapsing price of oil threw Mexico into a tailspin. When departing president José López Portillo nationalized Mexico's banks, the traditional business elite feared the country was becoming socialist, and ran for the exits. Companies were selling for as little as 5% of their book value. Mr. Slim picked up dozens of leading firms for bargain-basement prices, a move that paid off when the economy recovered in the following years. He bought Mexico's largest insurer, Seguros de México, for $44 million. Today, the company is worth at least $2.5 billion.
"Countries don't go broke," an unflappable Mr. Slim told friends at the time. Indeed, Mr. Slim always says his inspiration to invest during the downturn came from his father, who bought out his partner in their general store during the worst days of the 1910-1917 Mexican revolution -- a bet that made his father a fortune when the fighting ended.
Mr. Slim still spots good values. From 2002 to 2004, he amassed a 13% stake in bankrupt carrier MCI, later selling it to Verizon Communications Corp. for $1.3 billion. "He has never overpaid for anything," says Hector Aguilar Camín, a historian and friend. While the pair were on holiday in Venice, Mr. Slim once haggled with a store owner for several hours to get a $10 discount on a tie.
Despite his abilities, many here believe his biggest break was the rise to power in 1988 of Carlos Salinas, a Harvard-educated technocrat bent on modernizing the country. The two men had struck up a friendship in the mid-1980s, and Mr. Salinas spoke of Mr. Slim as the country's brightest young businessman. Local wags dubbed the pair "Carlos and Charlies," after a popular local restaurant chain.
Under Mr. Salinas, hundreds of state companies were sold, including Telmex in 1990. Mr. Slim, together with Southwestern Bell and France Telecom, won the bid over one of his closest friends, Roberto Hernandez, who got together with GTE Corp. Mr. Hernandez later suggested the auction was rigged, something both Mr. Slim and Mr. Salinas have long denied. Regardless of whether there was favoritism in the sale of Telmex, the privatization process created a new class of super-rich in Mexico. In 1991, the country had two billionaires on the Forbes list. By 1994, at the end of Mr. Salinas's six-year term, there were 24. The richest of them all was Mr. Slim.
In retrospect, it is easy to see why Messrs. Slim and Hernandez considered Telmex a prize worth losing their friendship. Although countries like Brazil and the U.S. broke up state monopolies into a number of competing firms, Mexico sold its monopoly intact, barring competition during the first six years. And while countries like the U.S. initially barred local "baby bell" carriers from offering long-distance and cellular service in their same area, Telmex got to do all three at once, and across the entire country. Indeed, it won the only nationwide cellular-telephone concession, while rivals had to settle for concessions that were limited to certain regions. When competition was allowed in long distance, foreign carriers were limited to a minority stake in the fixed-line business. Mexico didn't even bother to set up a telephone regulator until three years after the sale.
Dan Crawford was one of those who took on Mr. Slim and lost. In 1995, the California native became chief operating officer of Avantel, a long-distance company partly owned by MCI and the bank of Mr. Hernandez, Mr. Slim's erstwhile friend. Avantel spent around $1 billion building a new network, but it soon ran into trouble trying to connect to Telmex's network -- something it needed to complete calls to and from Telmex clients. Telmex executives simply ignored phone calls or failed to turn up for meetings, Mr. Crawford recalls.
When Telmex did connect the calls nearly a year later, the price was so high that Avantel paid 70 cents of every dollar it made to Mr. Slim's company, according to Mr. Crawford. When Avantel took Telmex to court for monopolistic practices, Telmex responded by asking a judge to issue an arrest warrant for Avantel's top lawyer in Mexico, Luis Mancera, on trumped up charges, Mr. Crawford says. Mr. Slim confirms the story, but says a Telmex lawyer acted rashly, and that the judicial proceeding was dropped. Mr. Mancera declined to comment.
"Slim is very aggressive," says Mr. Crawford, who recently retired from MCI. Avantel eventually defaulted on its debts in 2001, much of which were scooped up by Mr. Slim and later sold for a profit. Avantel was sold recently to another Mexican firm for $485 million -- a fraction of what it invested in Mexico.
For his part, Mr. Slim says Avantel and others mistakenly focused on the long-distance market, which was in decline, rather than wireless, which was growing.
It hasn't been much easier taking on Mr. Slim in the wireless market either. In 2004, Spain's Telefónica SA began selling handsets at a loss here to build market share. But it soon realized that tens of thousands of phones were purchased but never used. According to a case currently at Mexico's antitrust agency, Telefónica says that Telcel distributors bought the phones to keep them off the market, in some cases swapping the phone's existing chip with their own and reselling the handset.
When asked about this practice, Mr. Slim says "It could be. That happens to all of us. If you sell something for $50 or $20 that costs $100, someone's going to buy it." His spokesman and son-in-law, Arturo Elías, says the distributors acted without Telcel's knowledge.
Attempts to regulate Mr. Slim's companies have largely failed over the years. Mexico's telephone regulator, Cofetel, was so weak in the 1990s that Telmex's rivals dubbed it "Cofetelmex." When the regulator did try to act, Mr. Slim's lawyers blocked it in the country's Byzantine courts.
The Telmex chief also had friends in high places. Vicente Fox, Mexico's first opposition president when he won in 2000, tapped a former Telmex employee, Pedro Cerisola, to be his minister of communications and transport. During his tenure, Mr. Cerisola rarely moved against Telmex, say executives from rival telephone companies. Mr. Cerisola declined to comment.
Using money from his telephone empire, Mr. Slim has expanded into Latin American markets as well as new industries in Mexico. His cellphone company América Móvil has 124 million customers and operates in more than a dozen Latin American nations. In Mexico, he has focused on industries that depend on government contracts. His new construction company, Ideal SAB, is currently bidding to run some of Mexico's biggest highways. His new oil-services company recently built the country's biggest oil platform.
Some of Mexico's business leaders say in private that they feel Mr. Slim has grown too greedy. The death of his wife, Soumaya, from kidney disease in 1999 left him without an anchor, says Mr. Trigueros, Mr. Slim's friend from his stockbroker days. "She was a special woman, the kind who keeps a guy in line. Nowadays, he only has business to think about," he says.
Mr. Slim's empire is so vast here now that doing business without him can be difficult. Two years ago, Hutchison Port Holdings and U.S. railroad Union Pacific teamed up to bid on a $6 billion port and railway in Baja California to compete with Long Beach port. But Mr. Slim felt the project had been arranged behind closed doors and was against the idea of the country's biggest project going to foreigners. He made his feelings known to the Baja California governor and the project was stalled. Mr. Slim has since worked to put together a rival consortium, which includes Mexican rail company Grupo Mexico and U.S. railroad Burlington-Northern. He says his potential bid is a better option for the country because the railroad will run along Mexico's north and help spur development. Union Pacific and Hutchison both declined to comment.
Mr. Slim has recently given more money to philanthropy, but he has often said his most important legacy is his family. In 2000, a few years after heart surgery, he put his sons and sons-in-law in charge of his businesses. He also started a group called "Fathers and Sons" that invites Latin American billionaires and their heirs for annual meetings, where they sip fine wines and attend seminars like "How to Run a Family Business."
There is no obvious successor to the patriarch's empire. That gives some Mexican officials hope that one day the state can regulate his companies. Says one high-ranking official: "When Slim dies, we can finally regulate his kids."