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Germán Larrea in the Spotlight, Again


Mexico’s fourth-richest man, Germán Larrea Mota-Velasco. Photo: Diario de Coahuila

By RICARDO CASTILLO     

Every now and then, more often than not, the name of Mexico’s fourth-wealthiest man, Germán Larrea Mota-Velasco, dominates the media with controversial reports. In fact, at the Environment and Natural Resources Secretariat (Semarnat), there are a myriad of files open charging Larrea with crimes of pollution. And if we gauge the amount of media space devoted to polluters, he’s definitely in first place.

Yet, pretty much like in the case of Howard Hughes, Germán Larrea is not a public figure and is seldom visible, much less accessible to the press. Although he is listed as living in Lomas de Chapultepec in Mexico City, near where the headquarters of his humongous multi-tasking company Grupo México is located.

Germán Larrea, however, is said to spend most of his time far from the Mexico City madding crowd at his vineyard in Tuscany, Italy.

Now, Larrea is back in the news as one of his outfits, located in the Gulf of California at the port of Guaymas, Sonora, accidentally spilled 3,200 liters of sulfuric acid into the sea out of a hazmat plant it operates at the Guaymas Port Authority facilities. The plant has been temporarily shuttered by Semarnat pending an investigation.

The public outcry in Mexico now is over whether Larrea will go into hiding again, as he has in the past? This “meaningless spill” – as defined by a Grupo Mexico public relations spokesman – only adds more allegations to the Larrea already-long file of alleged wrongdoings. But so far, he has always found successful legal means to get himself free of any charges. This writer can forecast, based on previous legal swamps Larrea has swam through, that he will clear this one too, and the Guaymas case will only be one more notch on his gun of pollution in Mexico.

Though I have seen Germán Larrea in person several times, definitely the most memorable time was back in 1994, immediately after his father, tycoon Jorge Larrea, maneuvered through then-President Carlos Salinas de Gortari the purchase of one of the continent’s largest copper mines at Cananea, also in the state of Sonora.

It was in Mexico City at the central courthouses located on Niños Heroes street in Colonia Doctores. Germán quietly sat there waiting for Judge Sergio Higuera Mata to declare his company the “winner” of the “bidding” for the mine. In those days, Jorge Larrea was already touted as the “copper king” of Mexico. He wielded about 40 percent of total production. But after, Salinas de Gortari literally donated the Cananea mine to the Larreas, the family could legitimately bragging rights of being the nation’s copper kings. By getting the previously declared bankrupt mine and then-government property, the family may not have had a kingdom, but they definitely had a monopoly.

I remember having asked Higuera Mata if he was not breaching the antimonopoly law, which he was, of course – by letting the Larreas gain control of 94 percent of the national production of copper. The judge said no because “copper prices are ruled by international markets and do not affect local national markets.”  So it was!

Another monopoly instance in which Germán Larrea participated indirectly – and which I witnessed personally  – was in 1997, when he was awarded by the administration of President Ernesto Zedillo one of five railroad lines in which the then-nation-owned railroad system was broken into.

That would have been fine if he had gotten only one the western Mexico railroad networks, which covers from Sonora to Coahuila in the north and from Mexico City to Nogales.

At the same time, Larrea received this divested network, Mexico’s prime tycoon, Carlos Slim, bid for the Mexico City-Veracruz line and got it. Slim is no railroad man, so as soon as he managed to get the company making money, he put it up for sale and guess who wanted to buy it? Larrea.

Since Slim no longer wanted to operate the rail line, and could not sell it to Larrea directly, the two struck a deal and Slim let Larrea manage and operate the line through his outsourcing agency, Grupo Mexico. That’s where things stand today, and Larrea runs the two lines, making him the nation’s largest railroad operator. It’s not a monopoly, since Kansas City Southern Industries Mexico operates the other line that goes from Lázaro Cárdenas port to Nuevo Laredo. But it is almost a monopoly.

Regarding the environment, Larrea’s name made the news back in August 2014, when the Buenavista del Cobre mine – the one Larrea got in the bidding to close the monopoly – spilled 40,000 cubic meters of anhydrous copper sulfate into several creeks and the 64-kilometer long Sonora River. It was deemed the worst environmental disaster in Mexico by Semarnat.

But that’s not all folks. Another disaster attributed to Grupo Mexico happened in the Pasta de Conchos coke coal mine Pasta de Conchos in February 2006 in San Juan de Sabinas municipality in the state of Coahuila. Explosions at coal mines are a working risk, but in this case, 65 miners were caught inside one of the several shafts. It is still their grave as Grupo Mexico declined to continue the search for their corpses after declaring the mine a danger for rescuers.

These two past incidents pretty much have the “Larrea” brand all over them, even though Germán has not been even near those mines or processing plants in years.

And by the way, last year, Larrea lost a political battle. President Andrés Manuel López Obrador’s party the National Regeneration Movement (Morena) appointed Larrea’s foe union leader Napoleón Gómez Urrutia, who during the Felipe Calderón administration fled to Canada where he got political asylum, a senator. Napoleon is now in power and has a president backing him.

In any case, although Larrea’s name may be mud in the Mexican news media, he’s still the leading Grupo Mexico investor and wields a $13.4 billion fortune (at last count) and most likely is not very concerned with the latest disaster under his aegis.

What would I do if I were Germán Larrea Mota-Velasco?

What else? Take care of my vineyards in Tuscany.

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Categories: Crime, Environment, Mexican politics, Mexico, Opinion, Politics, UncategorizedTags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

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