Mexico Pensions at Center of Controversy

Caving in to a derisive public outcry, a 49-year-old Mexican Cabinet minister said Tuesday that he will give his $4,500 monthly early retirement pension to charity for as long as he keeps working in government.

Finance Minister Jose Angel Gurria, one of the most respected leaders in the government, had become a lightning rod for protests since it was revealed last month that he has been receiving a government pension since 1994, when he was 44.

By bowing to the protests, Gurria in effect affirmed a dramatic evolution in Mexican institutional life in recent years--from an insular, privileged system for insiders to a more robust, open and scrutinized arena.

The pension that now amounts to $4,500 a month was awarded for Gurria’s nearly 20 years of service in government financial institutions.

While the pension was ruled legal last week by the auditor general, the disclosure that Gurria was getting the hefty sum in addition to his Cabinet member salary provoked scornful protests. Retirees gathered earlier Tuesday in front of Gurria’s Mexico City office to moan bitterly about their $110 monthly checks and to proclaim Gurria the “retiree of the millennium.”

Gurria insisted in a statement that he had done nothing wrong and that “I am the target of a calumny.” But he added: “I am conscious that the case has raised controversy and irritation in public opinion.”

Therefore, he said, he will split his pension between two charities, one for cerebral palsy victims and the other for women with cancer, for as long as he holds a public position. He added that he will not take a tax deduction for the donations.

Several other senior bureaucrats besides Gurria--including Tourism Minister Oscar Espinosa, who started getting a smaller pension at age 40--are under congressional investigation because of their stipends.

Opposition legislators and the media have cited the pensions as proof that the system treated a few favored bureaucrats very well while ordinary people struggled to survive.

A commission of the Chamber of Deputies--the lower house, controlled by opposition parties since July 1997--is hurriedly investigating more than 1,100 pensions from one government bank alone, Nacional Financiera.

The commission was scheduled to grill top executives of Nacional Financiera on Tuesday about the pensions, including those granted to Gurria and Espinosa.

What’s new in the pensions dispute, said social analyst Carlos Monsivais, is that “a fundamentally moral dispute has developed so much impetus and provoked so much political resonance.”

“The difference between what’s illegal and what’s illegitimate is at the heart of this debate,” Monsivais said in a radio commentary. “The way in which the issue of legitimacy is overtaking mere legality seems to me a great advance.”

The head of the civil servants federation, Joel Ayala, told reporters Monday that he had called on Gurria to renounce his pension or face the wrath of Mexico’s 351,000 federal employees.

In the Zocalo--the central square of Mexico City facing the National Palace, where Gurria maintains an office--about 500 members of the pensioners association gathered Tuesday to protest their small pensions, which, unlike Gurria’s, do not contain automatic protection against inflation.

One protester held aloft a banner declaring “Mr. Gurria, you are the ‘great triumph’ of the struggle of the retirees and pensioners. Therefore, our movement has named you the retiree of the millennium.”

Ernesto Ortiz, an 81-year-old who retired after 55 years of working in a bakery, waved social security receipts in the air showing he gets 789 pesos, or about $84, a month. Of Gurria’s pension, he said: “It’s not fair. They should have left that money for those of us who earned it, sweating for so many years.”

A laborer, Tomas Gutierrez, 63, called the Cabinet members’ pensions “a tremendous thievery. They don’t kill themselves working, and they get all the money, and meanwhile the people are dying of hunger, we are left out on the miserable street.”

In general, Mexicans can retire at age 65 or after 30 years’ work. Most of the 1.4 million public service retirees receive the minimum pension, equal to the daily minimum wage of 34 pesos, or $3.62.

The disclosure of Gurria’s pension occurred in dramatic fashion. Congressman Marcelo Ebrard, a perpetual thorn in the side of the government from a small centrist party, stood up during testimony by Gurria last month on the upcoming federal budget and confronted him with the allegation. Gurria declined any response then except to say his pension was legal.

Later, he wrote to Congress accusing Ebrard of blindsiding him and hiding behind congressional privilege with false insinuations.

Gurria worked in the Finance Ministry and other government positions for nearly 20 years before joining Nacional Financiera for less than a year in 1993. The institution counted up all his government service in granting him a full pension in 1994. Months later, he became foreign minister, and then finance minister.

Political scientist Sergio Aguayo of the Colegio de Mexico, a human rights campaigner, wrote in a recent column: “Gurria is no ordinary citizen. He is responsible for collecting taxes and sharing out our money and, as such, he should be a mirror of impeccability and democratic transparency.”

Espinosa, the current tourism minister, began receiving his pension in 1993 and at an even younger age. His pension decree also took into account his service in various government jobs. His office says his net pension is just $600 a month, although commission figures put it at $1,300.

The congressional commission is also looking into pensions granted to several prominent bureaucrats from other institutions, including the Central Bank.

The head of the investigative panel, Congressman Jesus Martin del Campo of the center-left Democratic Revolution Party, said in an interview that he hopes the probe will lead to legislative reforms to end the discretion that allowed “a regimen of privileges for a few functionaries.”

“There is weak legislation which permits discretionary agreements that give high pensions to some people at a very young age when most people are squeezing their belts and just surviving,” Martin del Campo said.

He said the growing strength of opposition parties, which led in July 1997 to the first opposition majority in the Chamber of Deputies, has improved oversight of a government that was controlled for seven decades by one party, the Institutional Revolutionary Party, or PRI. That dominance allowed the PRI to get away with “abuses and excesses that favor a small number of people,” he said.

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Jose Diaz Briseno of The Times’ Mexico City Bureau contributed to this report.