Ruiz Massieu Details Origins of Funds

Former Deputy Atty. Gen. Mario Ruiz Massieu says he never counted the money that day in January 1994 when his elder brother Francisco handed him eight or nine suitcases stuffed with cash. Francisco told him that it was about $3 million--a fraction of the family fortune--and Mario says he believed him.

After all, Francisco Ruiz Massieu was not just “the moral authority” and “patriarch” of one of Mexico’s most prominent families, Mario says; he also was the second-ranking official of the political party that has ruled Mexico for seven decades.

“The degree of trust was so strong that it was not necessary to count . . . or to see it,” the 44-year-old Ruiz Massieu told lawyers on Nov. 17 in a private room at the federal courthouse in Newark, N.J., where he is in U.S. custody. A judge there Wednesday threw out the U.S. government’s request that he be deported to Mexico, where he is accused of several crimes.

Ruiz Massieu stated in the November deposition, which he gave through an interpreter, that he took the bags of money home and threw them in a closet.

In the year that followed, he dispatched his chief aide to Houston more than two dozen times to deposit it--hundreds of thousands of dollars at a time--into an account in Mario’s name at Texas Commerce Bank.

It was all family money, Ruiz Massieu says--not payoffs or laundered money from Mexico’s powerful drug cartels, as U.S. and Mexican investigators assert.

These details are just the beginning of the former prosecutor’s version of how he accumulated more than $9 million in the Texas account during the nine months he served as Mexico’s second-most-powerful law enforcement official.

The sworn deposition, reviewed by The Times in Houston federal court, sheds little light on his alleged drug links, which have emerged as one of the most dramatic examples of Mexican “narco-politics”--ties between top Mexican politicians and the cartels that supply nearly three-fourths of the cocaine sold in the United States.

In his first detailed defense on record, the former prosecutor takes a stand likely to provoke authorities back home, where he was once hailed as a free-spirited reformer but now faces charges including illicit enrichment, torture and obstruction of justice.

In his six-hour deposition, Ruiz Massieu spoke extensively about the financial dealings of his brother--murdered in Mexico City in September 1994 in an assassination that threw Mexico into turmoil. And he raised serious questions about the practices of his family’s chief political patron, former President Carlos Salinas de Gortari.

Ruiz Massieu suggested that he and his brother were the cutting edge of a capital flight that sent billions of dollars out of Mexico--a universal practice, he said, among Mexico’s ruling elite.

He claimed that his brother was trying to shelter the $9 million from potential devaluation or political crisis.

“He did not wish, because of his political career, to have an account in the U.S.,” Ruiz Massieu stated. “It is not well-regarded in Mexico to have money in the U.S., although the majority of people who can do this do it.”

The rest of the $9 million, he said, was the proceeds of multimillion-dollar “bonuses” that President Salinas doled out every year to his Cabinet and other top officials--among them Francisco, who was also Salinas’ former brother-in-law.

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The younger Ruiz Massieu, imprisoned in Newark since his arrest nearly a year ago on charges--since dismissed--that he violated U.S. currency laws, said he has no documents to prove that the $9 million came from liquidating family assets in Mexico.

U.S. and Mexican investigators privately called his assertions less than credible.

But several former officials from Salinas’ administration confirmed that the practice of lavish bonuses was routine. One former official estimated that such payments ran into the tens of millions of dollars annually, drawn from the Mexican Treasury during the years leading up to the nation’s worst economic crisis in recent memory.

U.S. federal prosecutors in Houston, who filed a civil case seeking to seize Ruiz Massieu’s millions, said they stand by their assertion that the bulk of the $9 million is linked to the cross-border narcotics trade.

“We believe we have established probable cause that it [the $9 million] is in violation of drug laws and federal money-laundering laws,” said Assistant U.S. Atty. Kenneth Magidson, whose office filed suit to seize the money.

There are, in fact, no public documents on file in the Houston case that support the U.S. claim.

The presiding judge recently ruled that a government affidavit presumably making its case will remain secret. U.S. prosecutors have also never established ties between Ruiz Massieu and the drug cartels.

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Ruiz Massieu hinted at Salinas’ bonuses at one of the Newark hearings, but he discussed them in detail in his deposition.

For example, near the end of Francisco Ruiz Massieu’s April 1993-May 1994 tenure as head of Mexico’s National Housing Institute, his younger brother said, Salinas gave him a $1-million bonus. He said similar bonuses were awarded to all top appointed officials in a nation where 40 million people--about half of the population--live in poverty.

He said he too got a $300,000 gift when he left Mexico’s attorney general’s office, two-thirds of it in a personal check from Salinas.

“It is the way, really, in which Mexico pays its functionaries,” he said in the deposition.

Just days before Ruiz Massieu contends that his brother handed him the suitcases of cash in January 1994, an armed rebellion had broken out in the southern state of Chiapas, triggering a chain of events that ultimately sent the Mexican economy into a tailspin.

Three weeks after Ruiz Massieu’s aide started depositing the money in Houston on March 3, the ruling party’s presidential candidate was assassinated. Six months later, Francisco was gunned down outside a downtown Mexico City hotel.

“There was a great deal of worry, fear,” Ruiz Massieu said in the deposition. “It was considered the safest thing to do--to have it in the United States--because Mexico was no longer a safe country.”

In all, the former prosecutor stated, Francisco “told me he was going to be able to send around $5 million. My brother Arturo could send perhaps a little more than $1 million, my parents around $2 million or a little more, and I around $500,000 or $600,000.”

Not once during the deposition did Ruiz Massieu suggest that the $9 million investigators found in his Houston account wasn’t his.

“Basically, fundamentally, it’s my money,” he said. “It’s money that is in my name. . . . I decide on those resources, as I decide whether I brush my teeth or not, because it’s my money and my teeth.”