Ex-Pemex Chief Leaves Prison : In Mexico, ‘The King’ Is Free--and Still Defiant

The former director of Mexico’s national oil company, a one-time presidential hopeful jailed for embezzlement under a government anti-corruption campaign, walked out of federal prison Saturday to a crush of photographers, fans and mariachi musicians singing “The King.”

Dressed in a blue suit and tie and looking more like a movie star than an ex-convict, Jorge Diaz Serrano, 67, donned an oil workers’ cap and proclaimed his innocence of the multimillion-dollar fraud charges for which he was locked up five years ago.

Diaz Serrano, tanned and fit with gray-streaked hair, became something of a political folk hero in prison, where he taught tennis, French and music appreciation to other inmates and married his former secretary in a jail-house ceremony on visitors’ day. The 1986 wedding was billed at the time as “the most important social event in Mexico’s prison system in 20 years.”

“I return to freedom not because there has been justice,” Diaz Serrano told the crowd gathered outside Mexico City’s Southern Penitentiary on Saturday. “I have served five years of an unjust sentence.”

Diaz Serrano, a former business associate of Vice President George Bush, headed Petroleos Mexicanos, the giant Mexican oil monopoly known as Pemex, during the oil boom years from 1976 to 1981, when Mexico jumped from the world’s 24th to the fourth-largest oil producer. He served under President Jose Lopez Portillo, also believed to have been one of Mexico’s more corrupt officials, and was expected to be the president’s successor.

Lopez Portillo, however, picked Miguel de la Madrid, who, during the presidential race, campaigned against government corruption in the form of nepotism, speculation, kickbacks and institutionalized bribes called mordidas --literally, “the bites.” Six months after he took office, De la Madrid’s administration moved against Diaz Serrano, then a federal senator. In 1984, the government also brought tax-evasion charges against Mexico City’s ostentatiously wealthy police chief, Arturo (Blackie) Durazo, before the campaign fizzled.

$34 Million in Kickbacks

In 1983, Diaz Serrano was stripped of his congressional immunity and arrested on charges of taking $34 million in kickbacks for the purchase of two oil tankers. He contended that he was a scapegoat and the victim of a political vendetta.

After a four-year trial during which he remained in custody, Diaz Serrano was convicted last year, sentenced to 10 years in prison--including time already served--and ordered to pay more than $50 million in damages. But two months ago, a federal appeals court judge reduced the sentence to five years.

He has not paid the damages. In an interview, Diaz Serrano said he does not have the money.

At his early morning release, the mariachi band sang these fitting lines from a popular ranchera song: “With money or without money, I always do what I want, and I am still the king.” His friends and family cheered.

Although Diaz Serrano’s release would seem to signal the end of De la Madrid’s moribund “moral renovation” campaign, there were no protesters at the prison, and there has been little reaction in print.

A private oil contractor before entering government, Diaz Serrano made himself a millionaire by the age of 25. His investments straddled the U.S.-Mexican border. In the 1960s, his Permargo drilling company bought a floating oil platform from Bush’s Texas-based Zapata Oil Co., and a representative of Bush’s company sat on the board of directors of Permargo for a month, Diaz Serrano said.

As a result of those dealings, Diaz Serrano was forced to appear before Mexico’s Congress in 1979 to defend himself against accusations that he was a business associate of the former CIA director--a political sin among nationalists.

“I told them there was a George Bush the politician, Bush the CIA director and Bush the businessman in oil drilling,” Serrano said. “I did business with Bush the oil driller.”

There were no indications of wrongdoing in the Bush-Diaz Serrano business dealings. Diaz Serrano said that while he was director general of Pemex, the company never did business with Bush and that he has not seen the vice president since visiting him in the White House in 1982. However, several companies that Diaz Serrano founded and that were owned by Mexican politicians reaped some of the $75 billion in lucrative Pemex contracts that were let while Diaz Serrano was at the helm.

Claims Son Was Kidnaped

While in jail in 1984, Diaz Serrano charged that his son, also named Jorge, was kidnaped for five days and tortured by police trying to obtain a confession to the murder of newspaper columnist Manuel Buendia. Government officials denied any connection with the alleged kidnaping.

For the last five years, he has lived in Cell 7 of Zone 3, Dormitory 4, with a television set, radio, newspapers, a small personal library and visitors four days a week. Prison guards referred to Diaz Serrano with respect, calling him by the title engineer. During an interview Thursday at a prison restaurant--reserved for inmates with good conduct--Diaz Serrano pledged his continued loyalty to the ruling Institutional Revolutionary Party and said he would return to government if invited.

“I feel strong,” he said. “If I am offered employment in public service, I would accept.”

Ever the politician, Diaz Serrano lauded De la Madrid’s anti-corruption campaign as “a noble idea” and said he does not seek revenge for his “false imprisonment.” He said he learned about people and power in jail.

“It is said that in bed and in jail, you find out who your friends are,” he said. “Here I have not lacked for friends.”