CHARLES HARRIS is in Mexico posting his version of Old West
WANTED: A clean Mexican judge.
REWARD: $300,000 for anybody who can collect an unpaid loan in a
Mexican court without paying a bribe or illegally influencing the
Since 1982, Mr. Harris has been trying to recoup a $110,000 loan
made to the director of a Spanish language school in Michoacan.
Although the loan was made here in front of Mexican witnesses,
Mexican courts have ruled they have no jurisdiction because Harris
and the school director are United States citizens. The US courts
say they have no jurisdiction over a Mexican business contract.
Now on his fourth lawyer, Harris says: "All my lawyers tell me
that I'm not winning because I'm not paying the judge."
The Harris challenge - and other recent cases of alleged
corruption - touch on a familiar complaint by foreigners doing
business in Mexico: Even under reform-minded President Carlos
Salinas de Gortari, bribes are a standard operating procedure and
there is no legal recourse for those who buck the system.
Many acknowledge that President Salinas has reduced red tape and
made it easier for foreign businesses to operate without resorting
to illegal payoffs. But the problem remains well-entrenched, they
say. And the issue of corruption is now starting to catch the
attention of those opposing the North American Free Trade Agreement
"High-level government complicity in corruption is a powerful
argument against free trade. It will be one of the most important
issues in next year's elections and it would be extremely naive not
to be concerned about it," says Ricardo Pascoe, a close adviser to
Cuauhtemoc Cardenas, presidential candidate for the left-leaning
Party of the Democratic Revolution.
In the US, Sen. Ernest Fritz Hollings (D) of South Carolina has
questioned whether NAFTA would open the door to more "free trade or
Politicians and organizations questioning the wisdom of uniting
widely disparate business cultures and legal systems under NAFTA
are likely to focus not just on the Harris case but also on the
potentially more explosive International Business Machines
Corporation (IBM) scandal.
The story broke Feb. 3 in The Financial Times, where British
businessman Kaveh Moussavi alleged that IBM's division in Bethesda,
Md., lost a $21 million bid to update Mexico's air traffic control
system because it failed to pay a $1 million bribe.
Mr. Moussavi was approached on Nov. 9, he says, by three men in
the lobby of the Hotel Nikko in Mexico City. They refused to give
their names, but as "credentials" they showed Moussavi government
confidential documents and discussed how IBM could "win" the bid.
"I was IBM's agent. I was eating, sleeping, and dreaming this
tender. But these guys knew it better than I did," says Moussavi in
a telephone interview.
Moussavi returned to his room and called his boss in the US.
They agreed US law forbids such payments. But the payment could be
legal if the three men could prove they weren't Mexican officials
or the money wouldn't go to government officials, he recounts in a
detailed account published in Proceso, a Mexican news magazine.
Moussavi went back to the lobby, but the men refused to reveal
their identities. Ten days later, the bidding was canceled. In
December, a new round of bidding was held under new specifications
and French and Italian firms won the contract. …