Mexico Teachers Union Leader Arrested on Embezzlement Charges

Elba Esther Gordillo, a former Institutional Revolutionary Party leader who has headed Mexico’s biggest teaching union for more than two decades, was arrested and charged with using workers’ funds to pay for personal expenses from a private plane to plastic surgery.

Attorney General Jesus Murillo said Gordillo and others are accused of misusing more than 2 billion pesos ($156 million) in union funds. Gordillo, leader of the 1.2 million-strong National Education Workers Union, was taken into custody yesterday at the airport in Toluca, about 40 miles from Mexico City, he said.

The arrest came a day after President Enrique Pena Nieto, who took office Dec. 1, signed into law the biggest education overhaul in seven decades, seeking to foster competition for teaching jobs and promotions based on performance. Gordillo, once a power broker in the PRI, as Pena Nieto’s party is known, was expelled from it after the 2006 presidential campaign and ran her own candidate, Gabriel Quadri, against Pena Nieto last year under the New Alliance Party.

“We’re facing a case of illegal diversion of resources of education workers, benefiting many people, among them Elba Esther Gordillo,” Murillo told reporters at a televised news conference in the nation’s capital. “Under this government, no one is above or outside the law.”

Plastic Surgery

Gordillo used bank accounts in her mother’s name in Switzerland and Liechtenstein to divert funds to pay for a house in San Diego and art gallery items among other purchases, Deputy Attorney General Alfredo Castillo said at yesterday’s news conference. Between 2011 and 2012 a third party transferred more than $17,000 to plastic surgery clinics in the name of Gordillo, he said.

From 2009 to 2012, third parties used union money to pay off a $3 million Neiman Marcus credit card bill that included purchases by Gordillo, Murillo said.

A telephone message left at Gordillo’s office after business hours seeking comment on the charges wasn’t immediately returned.

“She has a network of political accomplices that she’s built over several decades that has a lot of money behind it because of the teachers union dues,” Jorge Chabat, a political science professor at the Mexico City-based Center for Economic Research and Training. “She’s been a constant element of power in all governments.”

Mexico is seeking to overhaul an education system that ranked last out of 34 countries for enrollment rates of high school-age students, behind Chile, Argentina and Brazil, according to a 2011 study by the Paris-based Organization for Economic Cooperation and Development. Mexico also spent more of its public budget on education than 33 countries in a separate OECD survey.

In a January interview with Milenio TV, Gordillo said she opposed parts of Pena Nieto’s education bill related to the removal of teachers that don’t meet performance standards.

To contact the reporters on this story: Eric Martin in Mexico City at emartin21@bloomberg.net; Nacha Cattan in Mexico City at ncattan@bloomberg.net

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net