Candidates in Mexico Seeking Checks, Balances

In the past, no one wanted Fernando Schutte’s money. When Mexico’s presidential elections rolled around, the ruling party turned to the government or a clutch of billionaire businessmen for campaign funds.

But these days, the real estate executive is participating in a new kind of democratic exercise. Schutte is not just opening his mouth; he’s opening his checkbook.

Schutte is one of thousands of Mexicans who for the first time are raising funds for candidates. As Mexico faces its most competitive elections ever in 2000, presidential aspirants are holding benefit breakfasts, taking up collections and establishing networks of fund-raisers such as Schutte.

Jose Antonio Gonzalez Fernandez, the president of the ruling Institutional Revolutionary Party, or PRI, announced last month that the party will hold a benefit pop concert and raffle off cars to raise money. It is even selling PRI watches, backpacks and the latest in ruling-party chic--blue jeans with the PRI logo.

But while many Mexicans welcome the chance to participate in campaigns--and to lobby candidates--fund-raising is proving controversial. Alleged abuses have emerged as a central issue in the lead-up to Mexico’s elections.

“This is a new way of doing politics,” said Schutte, who acknowledged his hopes that, in exchange for his fund-raising, his candidate will take into account the concerns of the real estate sector.

In the past, political fund-raising was practically an unknown concept in Mexico. For decades, the PRI and the government were barely distinguishable. Then, as the PRI began to wean itself from official life-support, its candidates turned to wealthy businessmen who had benefited from their government ties.

But their contributions led to huge scandals. In 1993, Mexicans were outraged when newspapers reported on a cozy dinner at which 30 leading businessmen pledged $750 million to the PRI campaign.

More recently, a controversy erupted over huge, and possibly illegal, donations to President Ernesto Zedillo’s 1994 campaign by Carlos Cabal Peniche, a banker who later fled Mexico amid fraud charges.

To prevent such abuses, Mexico’s Congress strictly regulated campaign donations in 1996 and guaranteed federal money for roughly 90% of presidential campaign expenses.

But the law doesn’t cover pre-campaign activities such as the current primaries. Candidates are now scrambling to raise money for ads in this crucial prelude to the elections.

Schutte is one of hundreds of business leaders scouting donations for Francisco Labastida, a Zedillo ally. In an effort to show he is not beholden to them, Labastida is limiting contributions to $1,500 per person.

Schutte contributed the maximum, then enlisted 30 friends in real estate to seek contributions. Each friend received a book of receipts to monitor donations. So far, the group has raised more than $200,000.

In the past, “we had no opportunity” to have contact with the candidate, Schutte said. “Most businessmen didn’t participate [in the campaign],” he said. “Now I think there’s a big difference. . . . Society is participating.”

But fund-raising has become one of the most contentious issues in the PRI primary. Labastida’s campaign has charged that Roberto Madrazo, a PRI upstart who has surged in the polls, has already surpassed the spending cap of $4.4 million imposed by the party.

“Roberto Madrazo’s resources are limitless,” Labastida’s campaign manager, Esteban Moctezuma, told a group recently, according to the Mexico City daily Reforma. He charged that Madrazo was receiving funds from “those who really represent the most traditional wing of the PRI, the most corrupt wing.”

Madrazo responded Friday with newspaper ads challenging Moctezuma to prove his allegations. Madrazo had earlier accused Labastida of committing violations of his own, by receiving support from PRI governors using state resources. Labastida denied the charge.

The PRI candidates aren’t the only ones eagerly drumming up donations. The conservative National Action Party, or PAN, has sought private funds in the past, but never with the ferocity of Vicente Fox, the party’s current presidential candidate.

His fund-raising organization, Amigos de Fox, has raised about $6 million in two years of raffles, dinners and appeals. But the campaign is nearly out of money.

“We’d like to raise millions and millions of pesos, because if not, we’re going to disappear from the media,” Carlos Rojas, a fund-raising official, told a news conference Wednesday.