On the Stump, Not the Ballot, in Mexico

In this election season, he has drawn crowds throughout the nation with his plan to strengthen Mexico’s economy. He speaks at conferences on reducing poverty. Some journalists hang on his every utterance.

Mexican telecom billionaire Carlos Slim Helu isn’t on the ballot for Sunday’s presidential contest. But his presence is being felt in a nation that many say is at a crossroads in its development.

The world’s third-richest man -- behind Microsoft Corp. founder Bill Gates and investment wizard Warren E. Buffett -- Slim has amassed a fortune estimated at $30 billion in enterprises as diverse as air travel, tobacco and home loans. His best-known companies are Telmex and America Movil, which dominate telephone service in Mexico.

With his children now tending to the day-to-day operations of his business empire, the 66-year-old has turned his attention to Mexico’s future. He has not chosen sides in the contest, contributing to all three major candidates equally. Instead, he has crisscrossed the country on his own campaign to forge a national consensus to bolster Mexico’s economy and institutions regardless of who is elected.

His detractors say his efforts are self-serving and that one of his new companies -- and other business elites -- stand to benefit from his campaign.

Despite his critics, Slim has obtained thousands of signatures on a document that he helped author known as the Chapultepec Accord, a sort of nonpartisan Mexican version of the U.S. Republican Party’s 1994 Contract With America. Named for the palace once inhabited by colonial elites where the proposal was unveiled last fall, the lengthy manifesto calls for Mexicans to unite behind a common set of objectives. They include a crackdown on crime and corruption and a revamp of the justice system.

The document demands better management of state-owned businesses such as oil giant Pemex. And it calls on more public-private partnerships to help Mexico invest in much-needed projects such as schools, highways, power plants and ports.

“It’s important for Mexico to break the barrier of underdevelopment,” Slim said at a signing ceremony in the central Mexican state of Zacatecas. He declined to be interviewed for this article.

Slim’s campaign is unusual for one of Mexico’s corporate titans, who typically wield their influence behind the scenes. That’s a sign, some pundits say, of the business community’s fear that the leftist wave sweeping Latin America is about to wash over Mexico.

Leftist Andres Manuel Lopez Obrador is locked in a dead heat with conservative Felipe Calderon in a race that has become a referendum on free-market economics. The bitter campaign has pitted those who blame privatization and free trade for failing to lift nearly half of Mexico’s population from poverty against those who say the country must shed more of its state-controlled past to reach its full potential.

Some analysts have praised Slim for trying to rally his compatriots at a time when the nation is deeply divided and losing ground to trade competitors such as China. A talented businessman, he has a keen eye for spotting undervalued companies and a Midas touch for making them profitable.

Among those who have signed the accord are two of the top three presidential candidates: Calderon of the National Action Party and Roberto Madrazo of the former ruling Institutional Revolutionary Party.

Front-runner Lopez Obrador refused to add his name, saying the document didn’t include enough about fighting Mexico’s staggering poverty.

There is also no mention, critics say, that an infrastructure company that Slim set up last year would benefit handsomely from higher spending on big-ticket public works projects, one of the main tenets of the Chapultepec Accord. And there isn’t a word about dismantling the private-sector oligopolies, chief among them Slim’s telecom empire, that have come to dominate key parts of Mexico’s economy, socking consumers with high prices.

“There is a disconnect between what [Slim] is saying and what he is actually doing.... He is protecting his own interests,” said Pamela Starr, a Latin America analyst with Eurasia Group in Washington

The son of Lebanese immigrants, Slim began buying stocks as a youngster, amassing a tidy sum by the time he left the National Autonomous University of Mexico with an engineering degree. He snapped up companies on the cheap after a 1982 financial meltdown in Mexico.

But the real gold mine was Telmex. Slim was part of a consortium that purchased the state-owned phone monopoly in 1990 as part of a privatization program.

He used the utility to jump into mobile telephone service and telecommunications ventures throughout Latin America.

Telmex and the cellular spinoff, America Movil, control the vast majority of the country’s fixed lines, cellular service and Internet service. U.S. trade officials have complained repeatedly about tactics used by Telmex to keep rivals out.

Mexico’s respected central banker, Guillermo Ortiz, accused Slim of charging businesses and consumers some of the highest rates in the world.

Combined, Telmex and America Movil posted revenue of $31 billion last year, the lion’s share of that coming from Mexican consumers. Meanwhile, a majority of Mexicans still lack telephone service, and Telmex has come to exemplify why many here see no benefit to privatization.

Slim fired back in the media, saying that Telmex rates had dropped 59% since he purchased the firm. He said he had invested billions to upgrade service.

But Mexico’s chief antitrust official, Eduardo Perez Motta, isn’t impressed. He told Bloomberg News this month that the Federal Competition Commission planned to use recently passed legislation to force Telmex to open its network to cable television competitors that want to offer phone service.

Even if Perez Motta succeeds, it would still be impossible to escape Slim’s influence. His sprawling Grupo Carso conglomerate controls businesses that manufacture such things as auto parts, industrial cables, cigarettes and ceramic tile.

All told, his publicly traded Mexican companies account for 40% of the nation’s benchmark stock index, known as the IPC.

In the United States, Slim’s holdings include a 9% stake in telecom company Global Crossing Ltd. and the CompUSA consumer electronics chain.

His Telmex Foundation provides thousands of university scholarships annually and funds eye surgeries and other medical treatments for needy Mexicans.

In March, the billionaire announced that he and his family were transferring a 29% stake in their infrastructure company to the Carso Foundation, another Slim nonprofit. The gift, worth nearly $1 billion by one estimate, is no small shakes for a nation with little tradition of philanthropy. Some observers say it’s a way for Slim to show that his call for Mexico and other Latin American countries to spend heavily on infrastructure projects is based on concern for the region’s development rather than personal gain.

Slim told an audience this month at the Inter-American Development Bank in Washington that Mexico should be spending around $100 billion annually on infrastructure improvements. With Telmex’s revenue growth slowing in Mexico and government coffers brimming with oil revenue, public works would appear a lucrative new opportunity for the veteran entrepreneur.

“This will make [Telmex] look like child’s play,” said Celso Garrido, an economist at the Autonomous Metropolitan University in Mexico City.