Political Fallout From the 62 Police Arrested in Tijuana

In Mexican towns, the chief of police serves at the pleasure of the mayor. The current chief of police of Tijuana is Julián Leyzaola Pérez, a retired Mexican army colonel. The current mayor of Tijuana is Jorge Ramos, whose term is up this December. The mayor-elect is Carlos Bustamante.

As soon as the mayoral elections were over, last July 4, there was speculation on whether mayor-elect Carlos Bustamante would retain Chief Leyzaola, or seek a new police chief. Last Thursday, 62 current and former police officers were rounded up in Tijuana, charged with working for drug cartels, and whisked away to prison in Veracruz.

Among the people arrested last Thursday, were 40 Tijuana municipal police officers, all of whom had presumably passed the “confidence tests” administered by Leyzaola to weed out crooked cops. Several of those arrested were very high-ranking police officials with access to sensitive data. One is said to be godfather to one of Leyzaola’s children.

Fulano’s opinion is, in light of the foregoing, it now would be all but impossible for mayor-elect Bustamante to keep Leyzaola on as Tijuana’s chief of police.


FAA downgrades Mexico’s air safety rating

(AP) WASHINGTON — Mexico’s aviation safety rating was downgraded Friday due to concerns about the country’s safety oversight, the Federal Aviation Administration said. The action won’t stop flights between the two countries, but it will prevent Mexican airlines like AeroMexico and Mexicana from expanding service to the United States, the FAA said.

Mexican airlines also will not be able to carry passengers to or from the United States in so-called code-sharing agreements with U.S. airlines. Code-sharing means one airline puts its code or symbol on another carrier’s flight and sells the seats as if the plane were its own.

Delta Air Lines Inc., the world’s largest airline, has a code-sharing arrangement with Aeromexico, and AMR Corp.’s American Airlines has one with Mexicana.

Delta spokesman Kent Landers said the airline will remove its code from AeroMexico flights. About 140 AeroMexico flights per day operate with Delta’s code.

“Our customers are still permitted to travel on AeroMexico, but must be rebooked with an AeroMexico flight number to do so,” Landers said in a statement. The airline said it will work with the affected AeroMexico codeshare passengers so there is “minimal impact to their travel plans.”

Passengers who bought tickets aboard an Aeromexico flight with a Delta flight number will have to be re-ticketed or booked on a Delta flight, Landers said.

Link to the entire news article
I told Pepe it was a really bad idea to pretend to pass out while he was flying.


Lesson #6: So You Thought You Owned That Mexican Real Estate?

Look at it as a blind trust…You give me your money and I will administer it!

Mexico has always been on edge about foreign usurpers coming in and taking their land. Everybody knows the story of The Alamo and how Mexico lost Texas to Americans who moved into Mexican territory and took over. And Mexico lost the Southwest to the US in the Mexican-American War of 1846 – 1848. Less known is that Mexico used to extend all the way down to what is now Costa Rica. Mexico lost all that too. Guatemala, El Salvador, Nicaragua, Costa Rica, and Honduras were once a part of Mexico. Mexico is not even one-half of its original size.

When Mexico wrote its new constitution, after the Mexican Revolution, it placed restrictions on foreign ownership of Mexican lands. Up until 1973, any land located within 50 kilometers of the coast, and within 100 kilometers of the border, was a “restricted zone.”  Only Mexican citizens could own land in the restricted zone.

In 1973, the Mexican Constitution was changed to allow a form of quasi-foreign ownership in the restricted zones through a vehicle known as a “fideicomiso.” Fideicomiso translates into English as “trust,” but as we will see in a moment it is NOT a trust. The original law allowed a fideicomiso for a period of 30-years. This was then extended to 50-years through a blanket modification in 1994. All 30-year fideicomisos then in existence where extended to a 50-year period, upon application by the owner. In other words, an additional 20-years was added to the fidecomisio when it’s 30-year term expired. Mexico did not extend the 30-year period out of the goodness of its heart. It was a requirement placed on Mexico by the US and Canada in order to push through the NAFTA agreement.

The Two Big Lies

Just about every advertisement for Mexican real estate I have ever seen contains two big lies:
1. A fideicomiso is a trust.
2. A fideicomiso has a 50-year term which can be renewed forever.

There is no such thing as a trust in Mexico. A trust is an entity well-established in English common law countries, like the United States. A legal trust has three parties: a trustor, a trustee and a beneficiary. The trustor is the person who establishes the trust and who transfers his assets to the trust. The trustee is the person who administers the trust. The beneficiary is the person who gets to use or benefit from the assets of the trust. Under English common law, a trust is recognized as a separate person. It owns the assets and it has standing to sue in court. If the trustor goes bankrupt, his creditors cannot go after the assets he placed in the trust (in the absence of some kind of fraud.) [In Lesson #7, we will learn that the IRS has ruled that a Mexican fideicomiso is a Foreign Trust for income tax reporting purposes. This should not be confused with a determination that it is a real trust.]

In Mexico, a fideicomiso in nothing more than a two-party contract between a bank and the person who is “buying” the property. The bank takes legal title to the property and the contract dictates what the bank can do with it. In the usual case, the fideicomiso instrument says the bank is to do what the “buyer” tells it to do. Not being a legal person, a fideicomiso has no standing to sue in a Mexican court. Contracts cannot sue. People sue. There are laws in Mexico that protect the property the bank holds in a fideicomiso from the general creditors of the bank.

The law that determines how long a fideicomiso on property owned by a foreigner can last and under what terms it can be renewed can be found in Articles 13 and 14 of the Law of Foreign Investment. The rules are so short, that I will just reprint them here for you:


ARTÍCULO 13.- La duración de los fideicomisos a que este capítulo se refiere, será por un periodo máximo de cincuenta años, mismo que podrá prorrogarse a solicitud del interesado. La Secretaría de Relaciones Exteriores podrá verificar en cualquier tiempo el cumplimiento de las condiciones bajo las cuales se otorguen los permisos previstos en el presente Título, así como la presentación y veracidad del contenido de los avisos dispuestos en el mismo. Párrafo reformado DOF 24-12-1996
ARTÍCULO 14.- La Secretaría de Relaciones Exteriores resolverá sobre los permisos a que se refiere el presente capítulo, considerando el beneficio económico y social que la realización de estas operaciones implique para la Nación.

Without laboriously translating that word-for-word, let me give you the meat of it. It says, “The duration of the fideicomisos to which this Chapter applies shall be for a maximum period of 50-years, which MAY be extended upon request.” I added the emphasis to the word MAY here as it is the crux of the matter. It does not say it SHALL BE extended, it does not say it MUST BE extended.

This becomes clearer when I translate the next part, in Article 14: “The Secretary of Foreign Relations shall decide on the permits referred to in this chapter, considering the economic and social benefits that these activities imply for the Nation.”

That means the Mexican government gets to look at you, look at your house, look at your pocketbook, look at anything and everything — or nothing — before deciding if it will renew the fideicomiso. Renewal of a fideicomiso is not mandatory under the law. The first fideicomiso to expire will be around 2024. Even the most expert Mexican lawyers cannot say what will happen then.

The Calvo Clause

Under Mexican law, every fideicomiso in Mexico has a Calvo Clause. A foreign investor in Mexico, when obtaining a fideicomiso, is agreeing to the Calvo Clause, which is based on an Argentinian lawyer called Dr. Carlos Calvo. This clause basically states that the foreigner will not attempt to utilize their home country law or government to settle disputes regarding their Mexico property. Instead, they will consider themselves as Mexicans and utilize the Mexican law in any such matters.

Why is this an issue?  Mexican real estate agents, especially those who are working for transnational brokerage firms with familiar sounding names well known in the US, are touting to their customers that they are US real estate brokers, who use US title companies and escrow companies. This gives the false impression that there will be US legal remedies if issues arise with their Mexican real estate purchases.


Improve Your Spanish #3

Yesterday’s story of the 62 police officers who were rounded up in Tijuana and carted off to jail in Veracruz really has legs. Everybody is talking about it in Mexico. The internet is buzzing with comments. One of the policemen was caught on video shouting, “fui fiel hasta el final” [I was loyal to the end.] That phrase is being repeated over and over again, as it seems to now have a life of its own. Somebody has already written a ballad about it. Here’s the Spanish version, with Fulano’s less than eloquent translation:


fue fiel hasta el final
es lo que gritaba el policia
en la calle le decian el animal
por tanta porqueria que haciá

por mi que todos chingen a su madre
incluyendo todo el gobierno
los agarran y culo les arde
que se vayan todos al infierno

ahora se dicen inocentes
que son unas blancas palomitas
es una una bola de prepotentes
no son bonitas gatitas

cuando menos portense como hombres
no se pongan a chillar
confiesen,y digan nombres
de todas maneras se los van a chingar


“I was faithful to the end”
that’s what the police shouted
on the street they’re called animals
for all the crap that they make

in my view, may they all chingen a su madre
including the whole government
they got caught and now their assholes burn
may they all go to Hell

now they say they’re innocent
that they are just little white doves
they’re a bunch with arrogance
not pretty kittens

at least act like men
don’t be screaming
confess, and give names
they’re going to screw you over anyways


Los Zetas Caught Littering the Highway in Tamaulipas

Yesterday, Mexican police received numerous complaints from motorists of bodies littering the highway between Matamoros and Ciudad Victoria, in the Mexican state of Tamaulipas. Upon arriving at the scene, police found the bodies of 15 unidentifed people — 13 men and two women. All showed signs of torture and were finished off with a bullet to the head. Each body had the letter “Z” spray painted on it.


Lesson #5: With Mexican Real Estate, Mexicans Hold All the Cards

Hugo Torres

The current mayor of Rosarito is Hugo Torres Chabert. Mayor Torres is well-known for his promotion of Rosarito as a tourist-friendly resort town. Through his companies he owns the Rosarito Beach Hotel and several other highrise condominium developments in the Rosarito area. The La Jolla de Rosarito condo’s were built by Desarolladora de las Californias S.A de C.V, a company owned by Hugo Torres Chabert and his family. That company is operated by Julio Cesar Mendivil Arguelles. A few years ago he was kidnapped in Rosarito and held for ransom. But they don’t talk about that too much, especially not in front of gringos looking to buy a condo from them.

Some trusting American bought one of the condo’s at La Jolla de Rosarito, and paid for it in full. Then in 2008, he decided to sell it. He found a buyer and entered into a contract to sell his condo unit. That is when he found out he could not sell it, because he could not deliver a lien-free title. It turns out that even though the condo owner had paid Hugo’s company the full purchase price, Hugo’s company never paid off the underlying construction loan used to build the La Jolla de Rosarito project. Without a lien release, the condo could not be sold. Here is an excerpt from a web page where this victim is telling his story to the world:

I have recently (Since August 2008) attempted to sell my condominium unit at La Jolla de Rosarito that I purchased through Desarolladora de las Californias S.A de C.V – Developer of Oceana Condominiums, Oceana Casa del Mar, La Jolla de Rosarito, Oceana Plaza and possibly other developments around Rosarito Beach and Baja Mexico. The property has been paid off in full, but apparently has a lien against it which the developer Desarolladora de las Californias S.A de C.V took out a secondary loan against the property without my knowledge or consent.

Furthermore I and the buyer have a purchase/sell agreement being handled through escrow in Baja Mexico and we have been waiting for over 220 days for the lien to be released in order to move forward with the closure of the sale. Due to this excessive delay I have come to the conclusion that what we in the US expect from escrow is not what you get in Mexico from escrow, it’s simply a name used in Mexico to give US investors false security that their dealings will be handled in an honest and safe manner.

Desarolladora de las Californias S.A de C.V represented by C.P. Julio Cesar Mendivil A. received the final payment balance owed on the property $57,337.00 USD. On September 4th, 2008 as a pre condition they set prior to the lien being paid off by them, which they have not turned over to the bank holding title and security mortgage on the property as of this date.

I met personally with C.P. Julio Cesar Mendivil A. on October 22, 2008 to discuss why things were taking so long and he blatantly told me that he had spent the money that was turned over to him on other commitments. I immediately contacted the bank holding the title directly to explain the situation and spoke to the branch manager and the person directly in charge of the Desarolladora de las Californias S.A de C.V account who expressed to me that they could do nothing for me since their client is Desarolladora de las Californias and that I must deal with them directly or by legal means as he stated I had all the necessary elements to file a lawsuit.

Now, what Hugo’s company did to this poor schnook would be a fraud and a breach of contract in the US. Not in Mexico, if you are a rich Mexican. Nobody is going to go up against the King of Rosarito. No assistant prosecutor is going to pursue a lawsuit against him. Nothing will be investigated. There is an old saying in Mexico: “Mejor un mal acuerdo que un buen pleito.” A bad deal is better than a good lawsuit.

Velia and Steven’s real estate brokerage in Rosarito is currently listing several La Jolla de Rosarito condo’s for sale. I wonder what AMPI fair disclosure they are giving to potential buyers? There is not one word about this little problem in the property descriptions on the broker’s web pages.


US Consulate in Ciudad Juarez Closed for Security

AP – MEXICO CITY — The U.S. closed its consulate in the Mexican border city of Ciudad Juarez on Thursday pending a security review, an unexpected decision that comes months after drug gangs killed three people tied to the consulate.

The U.S. Embassy announced the consulate will “remain closed until the security review is completed” and said it would reschedule appointments for visa applications.

In other news, the US Embassy in Baghdad, Iraq remains open for business.


62 Police Arrested by Mexican Army in Tijuana

Photo: TijuanaHoy

Since late last night the Mexican army in Tijuana has been arresting police officers involved in kidnappings, killings and who worked to protect organized crime in the region. The information leading to the arrests came from the FBI and its “Operation Green Light,” which is the same operation that led to the arrest of the high-ranking international liaison for the Baja Attorney General, Jesús Quiñónez Márquez.

According to unconfirmed reports, so far approximately 10 ministerial police, 30 Tijuana municipal police officers and five Baja state police officers are in the custody of the Army. The Mexican government uses its Army for these types of operations because the police departments are so full of crooked cops.

Link to article in Spanish.

Update Thursday afternoon, July 29, 2010:

Later news now reports there were 62 police arrested, of which 16 were ministerial police and the remainder were Tijuana municipal police officers. No Baja state police were detained. The article that lists all their names is here.

Here’s a picture of the panzotes:

Source: Frontera

Newer update, Thurday evening:

Later in the day TIJUANAPRESS.COM released a video of a ruckus that broke out while the arrested police where doing their perp walk before the press. Some of the arrested men are saying, “I’m an honest cop” [fui fiel] and hurling accusations at the soldiers. Others are tossing insults, such as “cobardes” [cowards] and “chinga tu madre,” which is a coarse insult about performing a sex act on ones mother. Here is the video:


Improve Your Spanish #2

The Spanish alphabet has more letters than the English alphabet. Just how many more letters is subject to much debate. Not all authorities agree on which letters make up the alphabet. Some don’t include w (sometimes referred to as doble ve) and k, which exist almost exclusively in words of foreign origin, such as kilowatt. And some lists count rr (erre), which isn’t pronounced the same as r.

The extra letters that everyone agrees upon are ñ (called the eñe) and ll (called elle). That little squiggly line over the ñ is called a tilde. Ñ is pronounced like the ny sound in “canyon.” This is an important distinction. For instance, the Spanish word for “year” is año. The Spanish word for “anus” is ano — without the tilde. Big difference!

There are many Americans living down in Mexico. Not that many of them have ever taken the time to learn the language, much less the culture. They tend to be a cloistered group, who are content to spend the autumn of their lives in gringo ghettos associating only with other gringos, usually the one on the next bar stool. There are many who have spent decades in Mexico and cannot even say something like, “Help! I’ve fallen off the barstool and cannot get up.” [¡Ayudame! He caído del taburete y no puedo levantarme.] Little things like a tilde are under their radar.

While these expatriates don’t have much Spanish, that does not stop them from trying to impress some other gringos who have been down in Mexico even less time than them with their “expertise” in all things Mexican. To accomplish this, they will sprinkle their English with the few Spanish words they know. A lot of these people hang out at their internet watering hole, BajaNomads.

If you want to have a chuckle, just hang out there around New Years and count how many of those Mexico experts wish each other, “Feliz Ano Nuevo,” which is to say, “Have a Happy New Asshole.”